Electricity Restructuring: Action Needed to Address Emerging Gaps
in Federal Information Collection (30-JUN-03, GAO-03-586).	 
                                                                 
The ongoing transition (or restructuring) of electricity markets 
from regulated monopolies to competitive markets is one of the	 
largest single industrial reorganizations in the history of the  
world. While information is becoming more critical for		 
understanding how well restructuring is working, there are	 
troubling indications that some market participants deliberately 
misreported information to manipulate prices. GAO was asked to	 
describe (1) the electricity information collected, used, and	 
shared by key federal agencies in meeting their primary 	 
responsibilities and (2) the effect of restructuring on these	 
federal agencies' collection, use, and sharing of this		 
information.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-586 					        
    ACCNO:   A07805						        
  TITLE:     Electricity Restructuring: Action Needed to Address      
Emerging Gaps in Federal Information Collection 		 
     DATE:   06/30/2003 
  SUBJECT:   Agency missions					 
	     Competition					 
	     Data collection					 
	     Electric energy					 
	     Electric utilities 				 
	     Energy marketing					 
	     Information resources management			 
	     Monopolies 					 

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GAO-03-586

Report to Congressional Requesters

United States General Accounting Office

GAO

June 2003 ELECTRICITY RESTRUCTURING

Action Needed to Address Emerging Gaps in Federal Information Collection

GAO- 03- 586

Federal agencies collect, use, and share a wide variety of electricity-
related information to carry out their respective missions. Federal
agencies have three principal sources of information: (1) routine formal
data collection instruments sent to industry participants to report on
operations and other industry- related activities, (2) third parties such
as energy news services that package federally collected information as
well as collect original information some of which reflects current market
conditions, and

(3) individual companies under investigation. Agencies use the information
that they collect to carry out their respective missions* ranging from
Federal Energy Regulatory Commission*s (FERC) monitoring of electricity
markets to Energy Information Administration*s dissemination of
information about the electricity sector and Environmental Protection
Agency*s pollution monitoring. Agencies share electricity- related
information through a variety of means, such as using the Internet to
distribute published reports and access their databases, interagency
meetings, and other means. In addition, most federally collected
information is made publicly available, although it is sometimes subject
to delayed release or released in aggregated form in order to protect
business- sensitive information.

Restructuring has substantially changed the collection, use, and sharing
of electricity information at some agencies and has exposed gaps in the
federal government*s collection of this information. Restructuring has
affected FERC dramatically by changing how FERC performs its mission of
assuring just and reasonable prices and by shifting its focus from
periodic review of cost information to monitoring current market
conditions. To monitor these conditions, FERC needs to access market
information on wholesale transactions; however, no federal agency,
including FERC, has access to complete and timely information on
electricity markets and market participants, exposing gaps in key
information. Such information gaps exist primarily because FERC is limited
in its authority to collect information for full and effective market
oversight and it lacks specific authority to collect current information
which may lead to market participants challenging these collection
activities. For example, FERC authority does not generally extend to non-
jurisdictional entities such as the power marketing administrations, other
non- utilities, and North American Electric Reliability Council. As long
as these information gaps persist, FERC will be unable to oversee
electricity markets in a comprehensive manner.

Restructuring*s effects on the sharing of electricity information, coupled
with recent national security concerns, have highlighted the sensitive
nature of some information that federal agencies collect or need. Because

of the importance of having timely, reliable, and complete information, we
are recommending that FERC take action to resolve its information gaps. As
part of this action, we are recommending that FERC present its

findings to the Congress because information- related issues* raised by
restructuring* may require Congressional action to ultimately resolve. The
ongoing transition (or restructuring) of electricity

markets from regulated monopolies to competitive markets is one of the
largest single industrial reorganizations

in the history of the world. While information is becoming more critical
for understanding how well restructuring is working, there are troubling
indications that some market participants deliberately misreported
information to manipulate prices. GAO was

asked to describe (1) the electricity information collected, used, and
shared by key federal agencies in meeting their primary responsibilities
and (2) the effect of restructuring on these federal agencies* collection,
use, and sharing of this information.

Effective oversight of evolving electricity markets requires the
acquisition of and access to timely, reliable, and complete information,
therefore, we recommend that the Chairman, FERC (1) demonstrate

what information it needs, (2) describe the limitations resulting from not
having this information, and (3) ask the Congress for sufficient authority
to meet its information collection needs and responsibilities. FERC
generally agreed with the conclusions,

specifically that its authority to collect information has not kept pace
with the changing electricity

market, and added that it will have the results from its information
assessment at the end of the year.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 586. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact Jim Wells at (202) 512- 3841 or wellsj@ gao. gov.
Highlights of GAO- 03- 586, a report to

Congressional Requesters

June 2003

ELECTRICITY RESTRUCTURING

Action Needed to Address Emerging Gaps in Federal Information Collection

Page i GAO- 03- 586 Electricity Restructuring Letter 1 Results in Brief 2
Background 4 Agencies Collect, Use, and Share Electricity- Related
Information to Meet Missions 7 Restructuring Has Exposed Gaps in Agencies*
Electricity

Information and Has Affected How This Information Is Shared 18 Conclusions
33 Recommendations for Executive Action 34 Agency Comments 34 Objectives,
Scope, and Methodology 35 Appendix I Description of Data Collection Forms
and Legislation Authorizing Collections for FERC and EIA 38

Appendix II Third- Party Data Sources 62

Appendix III EIA Confidentiality Elements 63

Appendix IV Comments from the Federal Energy Regulatory Commission 64

Appendix V Comments from the Department of Energy 70

Appendix VI GAO Contact and Staff Acknowledgments 72

Figure

Figure 1: Major Federal Collectors of Electricity Information 8 Contents

Page ii GAO- 03- 586 Electricity Restructuring Abbreviations

DOE Department of Energy EIA Energy Information Administration EPA
Environmental Protection Agency EPACT Energy Policy Act FERC Federal
Energy Regulatory Commission FPA Federal Power Act ISO independent system
operator NERC North American Electric Reliability Council OMB Office of
Management and Budget OMOI Office of Market Oversight and Investigation
PUHCA Public Utility Holding Company Act PURPA Public Utility Regulatory
Policies Act RTO regional transmission organization

RUS Rural Utilities Service SEC Securities and Exchange Commission

This is a work of the U. S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. It may contain
copyrighted graphics, images or other materials. Permission from the
copyright holder may be necessary should you wish to reproduce copyrighted
materials separately from GAO*s product.

Page 1 GAO- 03- 586 Electricity Restructuring June 30, 2003 The Honorable
Peter DeFazio

The Honorable Jay Inslee The Honorable Adam Smith House of Representatives

Industry experts have described the ongoing transition (or restructuring)
of electricity markets from regulated monopolies to competitive markets as
one of the largest single industrial reorganizations in the history of the
world. Proponents of restructuring expect it to lead to a range of
benefits for consumers, including lower prices and a wider array of retail
electricity services than had previously been available. However,
opponents have raised concerns about restructuring in light of recent
events, such as the extremely high electricity prices and market
manipulation during the electricity crisis in California in 2000 and 2001.

In this changing and uncertain environment, accurate information on
electricity trading and pricing is becoming more critical for not only
evaluating the potential benefits and risks of restructuring, but also
monitoring market performance and enforcing market rules. Information on
the cost of electricity, for example, is critical in determining whether
restructuring is achieving lower prices. Information on existing and new
generating plants is critical in determining whether electricity supply
will be sufficient to ensure reliable supplies. In addition, information
is critical to monitor emissions and comply with air quality standards in
the future. While information is becoming more critical for understanding
how well

restructuring is working, there are troubling indications that the quality
of some information may be suspect. For example, we recently reported 1
that participants at a Federal Energy Regulatory Commission (FERC)
conference raised concerns about the quality of price information due to
the low volume of trading activity in some markets and to some market
participants making inaccurate information available to the public.

1 U. S. General Accounting Office, Lessons Learned From Electricity
Restructuring: Transition to Competitive Markets Underway, but Full
Benefits Will Take Time and Effort to Achieve, GAO- 03- 271 (Washington,
D. C.: Dec. 17, 2002).

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 586 Electricity Restructuring In response to the growing
importance of electricity information and concerns about its quality, you
asked us to describe (1) the electricity

information collected, used, and shared by key federal agencies in meeting
their primary responsibilities and (2) the effect of restructuring on
these federal agencies* collection, use, and sharing of this information.
In addressing these objectives, we primarily examined the information
activities of FERC and the Energy Information Administration (EIA) within
the Department of Energy (DOE). We focused on FERC because it bears the
main responsibility for monitoring electricity markets, is undergoing
major organizational changes caused by restructuring, and has faced
significant challenges in responding to restructuring, as we have
described in previous reports. 2 We focused on EIA because it is the main
U. S. statistical agency with responsibility for providing data and
analysis covering the energy sector. In addition to FERC and EIA, we
examined electricity- related activities at the Office of Fossil Energy
within DOE, the Environmental Protection Agency (EPA), the Rural Utilities
Service (RUS) at the U. S. Department of Agriculture, the Securities and
Exchange Commission (SEC), the Department of Justice, the Federal Trade
Commission, and the Commodity Futures Trading Commission. Due to
limitations in the time frame for our review, we did not perform a
detailed evaluation of these agencies* missions to determine whether
information

and data available to them was sufficient to meet their responsibilities.
Federal agencies collect, use, and share a wide variety of
electricityrelated information to carry out their respective missions.
Federal agencies have three principal sources of information: (1) routine
formal data collection instruments sent to industry participants to report
on operations and other industry- related activities, (2) third parties
such as energy news services that package federally collected information
as well as collect original information, some of which reflects current
market conditions, and (3) individual companies under investigation.
Agencies use the information that they collect to carry out their
respective missions* ranging from FERC*s monitoring of electricity markets
to EIA*s dissemination of information about the electricity sector and
EPA*s pollution monitoring. Agencies share electricity- related
information

2 U. S. General Accounting Office, Energy Markets: Concerted Actions
Needed by FERC to Confront Challenges That Impede Effective Oversight,
GAO- 02- 656 (Washington, D. C.: June 14, 2002) and Lessons Learned From
Electricity Restructuring: Transition to Competitive Markets Underway, but
Full Benefits Will Take Time and Effort to Achieve,

GAO- 03- 271 (Washington, D. C.: Dec. 17, 2002). Results in Brief

Page 3 GAO- 03- 586 Electricity Restructuring through a variety of means,
such as using the Internet to distribute published reports and access
their databases, interagency meetings, and

other means. For example, EIA serves as a repository of historical
industry information and makes it accessible for other agencies to use
through the Internet. In addition, most federally collected information is
made publicly available, although it is sometimes subject to delayed
release or released in aggregated form in order to protect business-
sensitive information.

Restructuring has substantially changed the collection, use, and sharing
of electricity information at some agencies and has exposed gaps in the
federal government*s collection of this information. Restructuring has
most profoundly affected FERC by dramatically changing how FERC performs
its mission of ensuring fair and reasonable prices and by shifting its
focus from periodic reviews of cost information to monitoring current
market conditions. In order to monitor current market conditions, FERC
needs to access market information on wholesale transactions; however, no
federal agency, including FERC, has access to complete and timely
information on the operations of electricity markets and market

participants, exposing gaps in key information. For example, complete and
timely information on the operation of electric generating plants is not
generally accessible to federal agencies, although this information is
generally deemed important to evaluate reliability of the electricity
system as well as to monitor the behavior of electricity generating
companies. Such information gaps exist primarily because FERC is limited
in its authority to collect information for full and effective market
oversight and because it lacks specific authority to collect current
information that may lead to market participants challenging these
collection activities. As long as these information gaps persist, FERC
will be unable to oversee electricity markets in a comprehensive manner.

Restructuring*s effects on the sharing of electricity information, coupled
with recent national security concerns, have highlighted the sensitive
nature of some information that federal agencies collect or need. For
example, electricity generating plant owners consider information

regarding the operation of their plants to be commercially sensitive and
thus are reluctant to provide such information without assurances that the
information will remain confidential.

Because of the importance of having timely, reliable, and complete
information, we are recommending that FERC take action to resolve its
information gaps. As part of this action, we are recommending that FERC
present its findings to the Congress because information- related issues*
raised by restructuring* may require congressional action to

Page 4 GAO- 03- 586 Electricity Restructuring ultimately resolve. FERC
generally agreed with the conclusions, specifically that its authority to
collect information has not kept pace

with the changing electricity market, and added that it will have the
results from its information assessment at the end of 2003.

The overall transition known as *restructuring* in the electricity
industry reflects a shift from a monopolistic to a more competitive
industry. The electric utility industry was considered one of the nation*s
most regulated industries, with states regulating utilities* retail or
intrastate activities and the federal government regulating utilities
wholesale or interstate transactions. In the past, electricity service
providers enjoyed a natural monopoly, providing electricity generated by
their plants, transmitted over their power lines, and distributed to their
customers. Two key factors led that monopolistic structure to move toward
a more competitive marketplace. First, new technologies reduced the cost
and size of generating electricity effectively. Currently, there is a
preference for small- scale production facilities that can be brought on-
line more quickly and cheaply with fewer regulatory impediments. Second,
federal changes were made in the industry*s regulation. Specifically, the
enactment of

the Public Utility Regulatory Policies Act (PURPA) of 1978 initiated the
process for a transition or restructuring to a freer electric power market
by requiring utilities to buy electricity produced by nonutility
producers.

Then in 1992, the Energy Policy Act (EPACT) was enacted and removed
several regulatory barriers to entry into electricity generation and
promoted further competition.

Restructuring is underway for wholesale markets, which involve the sale of
electricity for resale. It is also underway for some retail sales to end
users, which include residential, commercial, industrial, and other
consumers. Federally regulated wholesale power markets already provide
market- based prices. States, however, vary greatly in their response to
restructuring: some states have introduced competition to the retail
markets in their states, others have begun to restructure but then delayed
or suspended these efforts, and others still have taken no steps to
restructure their markets. As the industry adapts to restructuring, many
utilities are facing greater competition from nonutilities and other new
entities such as power marketers. The introduction of competition has
considerably expanded the number and types of business arrangements
involving generation and transmission of electricity. In addition,
proposals for new regulatory structures to oversee the new industry are
emerging. Background

Page 5 GAO- 03- 586 Electricity Restructuring FERC and EIA are the two
leading entities for the collection, analysis, and evaluation of electric
power information. FERC collects information

to assure just and reasonable rates on the basis of costs. FERC also
collects and obtains information from other federal and nonfederal sources
to monitor and regulate competitive markets for wholesale electricity to
similarly determine if these prices are just and reasonable. EIA is
mandated to collect, assemble, evaluate, analyze, and disseminate energy
data and energy information for the Congress, the federal government, the
states, and the public.

The Federal Power Act (FPA) of 1935, PURPA, and EPACT drive FERC*s
information collection activities. FPA authorizes FERC to collect and
record information to the extent it deems necessary and to prescribe rules
and regulations concerning accounts, records, and memoranda. In general,
FPA provides for federal oversight of interstate transmission and
wholesale sales by public utilities. Forty- three years later, the
Congress enacted PURPA in response to the unstable energy climate of the
late 1970s. PURPA authorizes FERC to collect information on the basic cost
and quality of fuels at electric generating plants. FERC uses such data to
conduct fuel reviews and rate investigations and to track market changes
and trends. In addition, PURPA requires public utilities to report on
electric energy shortages and contingency plans to FERC and appropriate
state agencies. In 1992, the Congress enacted EPACT. EPACT created a new
category of power sellers called exempt wholesale generators that are not
subject to regulation under the Public Utility Holding Company Act
(PUHCA), which governs how utilities can be legally organized. These power
sellers must apply to FERC for PUHCA exemption.

Legislation created EIA and defined its information collection activities.
In 1974, the Congress enacted the Federal Energy Administration Act that
created the Federal Energy Administration. The act mandated the Federal
Energy Administration to collect, assemble, evaluate, and analyze energy
information for the federal government, state governments, and the public
and provided it with information collection enforcement authority for

gathering information from energy producing and consuming firms. Two years
later, the Energy Conservation and Production Act established the Office
of Energy Information and Analysis, mandating it to operate a
comprehensive National Energy Information System; possess expertise in
energy analysis and forecasting; coordinate information activities with
federal agencies; promptly provide upon request any energy information to
any duly established committee of the Congress; and make periodic reports
on the energy situation and trend to the Congress. In 1977, by

Page 6 GAO- 03- 586 Electricity Restructuring enacting the Department of
Energy Organization Act, the Congress established EIA as the federal
authority for energy information. This

act gave EIA independence to collect energy data and report energy
information, including all the provisions of its predecessor, and
established an annual survey to gather and report detailed energy industry
financial data. In 1992, EPACT required EIA to expand its data gathering
and analysis in several areas, including energy consumption, alternative-
fueled vehicles, greenhouse gas emissions, fossil fuel transportation
rates and distribution patterns, electricity production from renewable
energy sources, and foreign purchase and imports of uranium.

Federal agencies* information collection activities are subject to the
Paperwork Reduction Act. The purpose of the Paperwork Reduction Act is to
minimize the paperwork burden for all individuals and entities that must
report information to the federal government. The Office of Management and
Budget (OMB) oversees governmental initiatives to reduce the paperwork
burden and improve the management of information resources. The Paperwork
Reduction Act requires federal agencies to submit their data collection
tools to OMB for review. OMB is also responsible for the implementation of
the Government Paperwork Elimination Act, which requires federal agencies,
by October 21, 2003, to allow individuals, or entities that interact with
the agencies, the option of submitting information to agencies
electronically, whenever practicable. The North American Electric
Reliability Council (NERC) is one of the

most important nonfederal entities that collect data from the electricity
industry. NERC, formed as a result of a devastating outage in the
northeast during November 1965, was established to promote the reliability
of the

interconnected electric power system. NERC membership is voluntary,
consists of representatives from utilities across North America, and
provides a forum for the electric utility industry to develop policies,

standards, and guidelines designed to ensure reliability. One of its key
functions is to collect information from its members, among other things,
on power plant operations and outages. NERC reports information in an

aggregated format to protect information its members consider sensitive.

Page 7 GAO- 03- 586 Electricity Restructuring Federal agencies collect
three types of electricity- related information for widely varying
purposes in accordance with their different

missions. Some agencies such as FERC, EIA, RUS, SEC, and EPA collect
information on an ongoing, regular basis, using forms or form- like
surveys. However, there is a time differential between the reporting
period, when the information is collected and when an agency reports the
information. As a result, the information usually does not reflect current
market conditions. Restructuring has led to a greater need for a second
type of information, focusing on current activities, for purposes of
monitoring by FERC in particular. Third- party sources, such as
Bloomberg*s Professional Services, provide current and historical
information on regional electricity and gas markets, including spot and
future prices, market commentary, plant outage information, and energy
news. Investigations create a need for a third type of information, when
an agency such as the Department of Justice gathers information mainly in
conjunction with specific company criminal investigations. To meet their
missions, agencies collect a wide

variety of electricity- related information. FERC and EIA are the primary
gatherers of such information while other agencies, such as the Federal
Trade Commission, have gathered information only for occasional reports.

As shown in figure 1, FERC, DOE*s EIA and Office of Fossil Energy, RUS,
and EPA specifically collect information related to generation,
transmission, and/ or distribution functions of electric power. FERC, EIA,
and RUS collect information related to all three of these functions. In
addition, EIA collects end- user information such as residential,
commercial, and industrial usage. Additionally, DOE*s Office of Fossil
Energy is the only office that collects information related to electricity
imports and exports. Finally, EPA collects emissions information related

to the generation of power. The following graphic depicts federal agency
information collections within these functions. Agencies Collect,

Use, and Share Electricity- Related Information to Meet Missions

Page 8 GAO- 03- 586 Electricity Restructuring Figure 1: Major Federal
Collectors of Electricity Information

Page 9 GAO- 03- 586 Electricity Restructuring FERC, an independent
regulatory agency, was established in 1977 as a successor to the Federal
Power Commission. In addition to regulating

and overseeing the interstate transmission and interstate wholesale sales
of natural gas and electricity, FERC regulates the interstate transmission
of oil by pipeline; licenses and inspects private, municipal, and state
hydroelectric projects; and approves site choices as well as decisions to
abandon interstate pipelines and related facilities no longer in use. In
responding to this mission, FERC stated that it chooses regulatory
approaches that foster competitive markets whenever possible, assures
access to reliable service at a reasonable price, and gives full and fair
consideration to environmental and community impacts in assessing the
public interest of energy projects. Among its other duties, it reviews the
rates set by the four federal power marketing administrations. 3 FERC does
not have legislative authority over electricity generation siting,
construction of transmission lines, intrastate transmission, or retail
sales, all of which fall under state or local jurisdiction. FERC also has
no direct authority over system reliability* that is, ensuring that
consumers can obtain electricity from the system, when, and in the amount,
they want. Furthermore, FERC*s jurisdiction extends primarily to investor-
owned utilities. FERC generally does not have jurisdiction over federally
owned utilities, publicly owned utilities, or most cooperatively owned
utilities. In 2000, FERC created the Office of Markets, Tariffs, and
Rates, which was until recently responsible for regulating and overseeing
competitive energy markets. In 2002, FERC created the Office of Market
Oversight and Investigation (OMOI), which is still under development, to
actively monitor developing competitive electricity markets.

FERC collects information from the electricity industry, among other
energy industries. According to a 2002 FERC memorandum regarding current
information collections, FERC has 19 information collection activities
that apply specifically to the electricity industry. This information
generally focuses on activities related to generation and fuel,
transmission, energy sales and purchases, consumption and distribution,
and financial information. In addition, it has three other information
collection activities that relate to all three energy industries
(electric, natural gas, and oil pipeline). These collection activities
generally focus on information needed to conduct financial and compliance
audits, preservation of records, and complaint procedures.

3 The Bonneville Power Administration, the Western Area Power
Administration, the Southwestern Power Administration, and the
Southeastern Power Administration. FERC Collects

Form- Based and Current Information to Oversee Electricity Markets

Page 10 GAO- 03- 586 Electricity Restructuring Various legislative
authorities authorize FERC*s information collection activities and
compliance is mandatory.

The Office of Markets, Tariffs, and Rates uses the information from these
collection activities to provide historical context and assist it in
regulating and overseeing the terms and conditions for energy transactions
regulated

under the traditional cost- of- service basis, and more recently, approval
of electricity company mergers. Additionally, other offices, such as the
Office of Administrative Litigation, which is responsible for litigating
or resolving

cases set for hearings, use the information as the basis for hearings.
Traditionally, FERC primarily relied on standardized forms to routinely
collect information, authorized by the statute and/ or regulation, from
entities within the electric sector. In the past, most of the information
for these forms was submitted on paper, but FERC is currently moving
toward electronic submissions for all of its information collection
activities. FERC also has established reporting requirements where
entities must make specific information available to it; however, these
requirements are reported using a mix of standardized forms or formats. As
with the forms, reporting requirements are submitted on paper and/ or
electronically. (See app. I for a summary of FERC*s forms.)

OMOI uses FERC*s traditional information collection activities, mentioned
above, to provide historical context to assist in understanding company
activities and during investigations of specific companies. However, in
light of evolving electricity markets, OMOI also subscribes to both
commercial and proprietary information services to access information
related to current market activities. Such services provide electricity
market information such as prices on the spot market and futures
contracts, plant outage information, and historical trend analysis. OMOI
uses this information to oversee electricity markets and ensure market
participants are not manipulating these markets. (See app. II for FERC*s
third- party sources of current market information.)

Two organizations within DOE are primarily responsible for collecting
electricity- related information. These organizations, EIA and the Office
of Fossil Energy (Fossil Energy), rely on forms to collect an enormous
amount of information at regular intervals. EIA collects this information
for a wide variety of statistical analyses and may assume responsibility
for gathering the lesser amount of information for which Fossil Energy has
been responsible. DOE Organizations Use

Forms to Gather a Variety of Electricity Information for Analyses,
Forecasts, Dissemination, and Other Purposes

Page 11 GAO- 03- 586 Electricity Restructuring EIA is the principal source
of comprehensive energy information for the Congress, the federal
government, the states, and the public.

According to EIA* s strategic plan, its mission is to provide high
quality, policy- independent energy information to meet the requirements
of government, industry, and the public in a manner that promotes sound
policymaking, efficient markets, and public understanding. The plan
further states that EIA*s sole purpose is to provide reliable and unbiased
energy information. To meet its goal of providing high- quality energy
information, the plan states that EIA will provide comprehensive
information (data, analyses, and forecasts) for all energy types
(including electricity), stages (production, conversion, distribution,
supply, consumption, and price) and impacts (technical, economic, and
environmental).

EIA currently uses about 75 different forms to collect information on all
aspects of energy, but only 9 of these forms focus on electricity. (See
app. I for a summary of these forms.) All EIA forms are mandatory, with
the exception of one part of one specific form as noted in the appendix.
Information is collected annually or monthly. For its monthly surveys, EIA
collects information from a sample of electricity entities, while the full
universe is surveyed annually. In commenting specifically on its electric
power information collection program, EIA notes that its information can
be categorized into four broad information classes: physical systems,
operational statistics, financial statistics, and organizational
information. Physical system information provides the technical
specifications for the generators, boilers, pollution control equipment,
and transmission lines that make up the industry. Operational statistics
provide the monthly and annual details of how the physical plant is
operated to satisfy customer demand. Financial statistics consist of
balance sheets, income statements, and supporting account information to
determine the cost of producing electricity and providing related service.
Organizational information describes the basic characteristics of the
entities that comprise the electric power industry, including ownership
and control, affiliations, and identification and geographical
information.

EIA and its customers use the information it collects for a variety of
purposes. These include monitoring of market trends in supply, demand, and
prices; analytical activities such as short- and long- term forecasting;
and inputs to special studies, such as responses to congressional
inquiries. EIA is also responsible for making sure its data are available
to the public in easily accessible and user- friendly formats.

Page 12 GAO- 03- 586 Electricity Restructuring Among its other
responsibilities, Fossil Energy is responsible for the federal
international electricity program, which consists of two

elements: (1) granting presidential permits for the construction and
operation of electric transmission lines that cross the U. S international
border and (2) authorizing exports of electric energy to foreign
countries. Fossil Energy collects information on electric power imports
and exports from both presidential permit and authorized export holders.
The mandatory information is used in an annual report that summarizes the
electricity trade between the United States and Mexico or Canada during
each calendar year. A Fossil Energy official told us that EIA will
eventually take over the responsibility of collecting information on
imports and exports of electricity.

EPA*s mission requires it to collect electricity- related information for
regulatory purposes. In this regard, one of EPA*s most important
initiatives is its Acid Rain Program implemented in 1995. The program
specifies that all existing utility units serving generators with an
output

capacity of greater than 25 megawatts and all new utility units must
report their emissions. The emissions that must be reported include sulfur
dioxide, nitrogen oxide, and carbon dioxide. While not an emission, the
unit heat input (the caloric value of the fuel burned) must also be
reported. The program*s overall goal is to achieve significant
environmental and public health benefits through reductions in emissions
of sulfur dioxide and nitrogen oxide, the primary causes of acid rain. In
most cases, utility units use a continuous emission monitoring system.
Units report hourly emissions information to EPA on a quarterly basis. The
information for the three types of emissions and the unit heat input is
then recorded in the Emissions Tracking System, which serves as a
repository of information on the utility industry. At the end of each
calendar year, EPA uses this information to compare the tons of actual
emissions reported with each company*s authorized emissions. If a company
exceeds its limits, then it will be penalized in accordance with the rules
of the program. The tracking system is EPA*s primary, electricity- related
database used for regulatory purposes. It represents a significant
commitment of personnel with about 40 full- time- equivalent staff
currently assigned to its maintenance and use.

In addition to the three emissions included in the Emissions Tracking
System, EPA has focused particular attention on mercury emitted by EPA
Uses a Form- Like

Survey to Collect Information on Emissions for Monitoring Air Quality

Page 13 GAO- 03- 586 Electricity Restructuring coal- fired electric
utilities. An EPA report in February 1998 4 identified mercury emissions
from coal- fired plants as the toxic air pollutant of

greatest concern for public health from these sources. This report and
collected data were used to call for additional monitoring of mercury
emissions so that a regulatory control strategy could be developed. Then,
in November 1998, the agency announced its decision to require coal- fired
electricity generating plants to collect and report such information for 1
year. The agency collected detailed information on mercury during 1999. It
obtained information on (1) every coal- fired boiler in the United States,
(2) mercury in samples of coal used by boilers, and (3) actual mercury

emissions from the stacks of a randomly selected group of coal- fired
boilers. The information, which was used to estimate 1999 nationwide and
plant- by- plant mercury emissions from coal- fired boilers, confirmed
that coal- fired plants are the largest source of human- caused mercury
emission in the United States* about 43 tons of mercury each year.
Further, in December 2000, the agency announced its decision to propose
regulations to control mercury emissions from coal- and oil- fired plants
by December 2003.

EPA has also developed the Emissions and Generation Resource Integrated
Database, the first complete database of emissions and resource mix for
virtually every power plant and company that generates electricity in the
United States. The Emissions and Generation Resource Integrated Database
does not collect original information but assembles information already
collected by EPA*s Emissions Tracking System, EPA*s 1999 mercury study,
FERC, and several EIA forms. 5 Taking advantage of previously confidential
information on nonutility generators, the Emissions and Generation
Resource Integrated Database reports its information for all U. S. power
plants, including nonutility plants. The information, which encompasses
more than 4,600 power plants and nearly 2,000 generating companies, is
used to provide plant- specific analyses of emissions. It can also be
aggregated at various levels, for example, individual states and larger
regions, to provide more comprehensive analyses of issues relating to air
quality.

4 EPA, Study of Hazardous Air Pollutant Emissions from Electric Utility
Steam Generating Units* Final Report to Congress, EPA- 453/ R- 98- 004,
February 1998. 5 EIA Survey Forms 767, 860, 861, and 906 are included in
appendix I.

Page 14 GAO- 03- 586 Electricity Restructuring RUS officials told us that
RUS has a different responsibility from other agencies that also collect
information on electricity. RUS is a lending

agency whereas EIA is a statistical agency and FERC and EPA are regulatory
agencies. For this reason, according to these officials, there are
distinct differences in the nature of the information collected. Because
RUS is a lending agency, it seeks information primarily to determine the
financial status of the entities wanting loans. As part of this effort,
officials are interested in obtaining information on the sale and purchase
of electricity and especially in determining whether their borrowers are
buying and selling power from each other.

RUS officials told us that it provided about $4 billion in loans during
2002 and has a total of about $34 billion in outstanding funds plus new
loans. Potential borrowers have to meet RUS*s criteria as serving rural
consumers and also criteria for financial viability. In reviewing new loan
requests for generating plants, these officials use their database to
identify the need for and viability of each new plant. They analyze the
ability of the

prospective borrower to function in competitive markets. They told us that
45 percent or more of the electricity sold by rural electricity
cooperatives comes from outside sources and that, almost without
exception, they depend on transmission from outsiders. Some loans to
nonprofit cooperatives are for facilities that may become part of a
transmission system operated by an independent system operator (ISO) or a
regional transmission organization (RTO). 6 RUS uses two main forms to
collect the relevant information. Both forms

state their purpose as being to review an applicant*s financial situation.
These forms collect information about the financial condition, assets, and
operations of rural cooperatives.

6 An ISO is an entity encouraged by FERC to manage the transmission system
as the electric industry in the United States restructures. An ISO is to
control the power system or grid without special interest, and is to own
no generation, transmission, or load. FERC Order 888, which was issued in
1996, encouraged utilities to form ISOs to which they could transfer
operating control (but not ownership) of their transmission facilities.
FERC Order 2000, issued in 1999, encouraged transmission utilities to join
the larger RTOs

that would cover the entire nation and supplant ISOs. RUS Uses Forms to

Collect Information Relating to Its Loans

Page 15 GAO- 03- 586 Electricity Restructuring The SEC was established
under the Securities Exchange Act of 1934 as an independent, nonpartisan,
quasi- judicial regulatory agency charged with

administering federal securities laws. SEC*s mission is to protect
investors in securities markets that operate fairly and to ensure that
investors have access to all material information concerning publicly
traded securities. SEC also regulates firms engaged in the purchase or
sale of securities, people who provide investment advice, and investment
companies. To promote the disclosure of important information, enforce
securities laws, and protect investors, SEC requires companies under its
jurisdiction to file transactional, periodic, and annual reports using
standardized data collection forms.

SEC was charged with administering PUHCA, which defines a holding company
as any company that directly or indirectly owns, controls, or holds with
power to vote, 10 percent or more of the outstanding voting securities of
a public- utility company. Intrastate holdings and holdings meeting
certain corporate standards may be exempted from the requirements of the
act. Under the act, SEC regulates public utility holding companies. As of
October 31, 2002, there were 18 electricity- and- gas and 7 electricity-
only, registered holding companies. SEC collects information from exempted
and registered public utility

holding companies through its general filing requirements and a set of
forms designed with the sole purpose of enforcing the act. The registered
holding companies engaged, through subsidiaries, in the electric utility
business are subject to more rigorous reviews for transactions that might
affect their financial and corporate structure. The collection of
information from such holding companies registered under PUHCA ensures
that SEC has comprehensive information on holding companies conducting
substantial activities in more than one state.

Other agencies, including the Department of Justice, the Federal Trade
Commission, and the Commodity Futures Trading Commission, do not collect
information on an ongoing, regular basis. Both the Department of Justice
and the Federal Trade Commission have responsibilities to enforce
antitrust laws, among others. According to an official in the Department
of Justice*s Antitrust Division, the Division gathers electricity- related
information for an informal investigation that may evolve into a case or a
formal investigation associated with a specific case. The impetus for
these

investigations may come from the trade press and other news sources
reviewed by the Department of Justice, a complaining party (a customer or
competitor, for example), a request by FERC, or congressional inquiries.
Referring to the informal type of investigation, the official said that
SEC Uses Forms to Collect

Information on Companies to Protect Investors Other Agencies

Have No Ongoing, Regular Collection of Electricity- Related Information

Page 16 GAO- 03- 586 Electricity Restructuring reviews of the trade press
or other news sources sometimes suggest a potential problem. If a trend
emerges, additional general information is

gathered on the issue. This may lead to a finding that there is no further
ground for concern or to the opening of a formal investigation. The
official added that companies are obligated to file information about
transactions

related to mergers or acquisitions subject to premerger notification
requirements. If further information is needed to assess the effects of
the transaction on competition, the Department of Justice can make a
second request for more detailed information.

The Federal Trade Commission is also responsible for enforcing a variety
of federal antitrust and consumer protection laws and seeks to ensure that
the nation*s markets function competitively. According to testimony
provided by one of the Federal Trade Commission Commissioners, the
application of federal antitrust laws can help in this transition to

competition by making sure that mergers do not aggravate market power
problems or shield incumbent companies from new competition. A Federal
Trade Commission assistant general counsel stated, however, that the
Federal Trade Commission*s current involvement with electricity markets is
minimal and that it has no ongoing information collection or

standardized forms to obtain information on electricity markets. He also
noted that the agency*s activity was largely confined to two reports and
some comments on other federal and state agencies* proposed rulemakings.
The first report focused on features of competition in electricity markets
that would benefit consumers, and the second updated the first with a
greater focus on retail competition. 7 In preparing the second report, the
Federal Trade Commission issued a notice seeking comments and looked at 10
representative states for which information was obtained from state Web
sites and state regulatory commission personnel. The second report
identified *trouble spots* in developing competitive markets and
recommended steps for states to take in addressing problems. It also
identified the barriers for entry into these markets by new suppliers and
the conditions conducive for new suppliers to enter into these markets,
but it did not conclude that such conditions by themselves would cause new
suppliers to not enter the market. With its reports completed, the Federal
Trade Commission has discontinued its information collection on
electricity markets. In addition, the Federal

7 Federal Trade Commission, *Competition and Consumer Protection
Perspectives on Electric Power Regulatory Reform* (Washington, D. C.: July
2000) and *Competition and Consumer Protection Perspectives on Electric
Power Regulatory Reform: Focus on Retail Competition* (Washington, D. C.:
Sept. 2001).

Page 17 GAO- 03- 586 Electricity Restructuring Trade Commission*s role in
reviewing mergers, including those involving the electricity industry, has
declined. The assistant general counsel

commented that the Federal Trade Commission shares with the Department of
Justice and FERC the responsibility for reviewing information relating to
mergers. According to the official, the Federal Trade Commission*s role in
reviewing such information, however, has decreased because the rate of
mergers has diminished recently.

The Commodity Futures Trading Commission, an independent agency created by
the Congress in 1974, regulates commodity futures and option markets in
the United States. The agency protects market participants

against manipulation, abusive trade practices, and fraud. Initially,
agency officials stated that the agency had essentially no role in
collecting information on electricity at present. An agency official said
that, for a period starting in 1996 and ending in 2000, the agency
received information on trading in electricity futures conducted through
the New

York Mercantile Exchange, but this trading was discontinued because its
participants found that electricity futures failed to provide an adequate
*hedge* or protection against intermittent price volatility. However,
according to an agency official, the New York Mercantile Exchange has
since introduced several new electricity contracts, and the Commodity
Futures Trading Commission will obtain information on these contracts.
Such information will include, for example, contract details on prices,
trading volume (purchases and sales), and descriptions of large trades.

Restructuring, which has led to increasingly complex market activities
with greater need for oversight, has highlighted the need for sharing
information. Agencies are increasingly using the Internet and a mix of
other methods to enhance their ability to share information with other
agencies and the public. In the past, agencies provided paper copies of
published reports through

their public reference rooms and upon request. However, since the advent
of the Internet, most federal agencies are using it to allow access to
publicly available documents. For example, EIA regularly publishes reports
providing electricity- related statistics and now uses its Web site to
allow easy access to current and past reports. FERC also makes publicly
available information accessible through its Web site using its Federal
Energy Regulatory Records and Information System, which contains over 20
years of documents submitted to and issued by FERC. Despite the increased
use of the Internet, agencies also maintain public reference rooms where
paper copies of documents are made available. Agencies Share Some of the
Information

They Collect

Page 18 GAO- 03- 586 Electricity Restructuring Although federal agencies
make extensive amounts of information available on their Internet Web
pages, they share information using

a combination of other methods such as meetings, investigations,
conferences, and workshops. Specifically, a FERC official stated that FERC
currently holds quarterly meetings with the Federal Trade Commission and
the Department of Justice to discuss overlapping issues, specifically
focusing on antitrust and market manipulation practices. The official
added that FERC has met with EIA to coordinate and share information on
information collection issues. Another FERC official stated that FERC does
not have formal protocols to interact with other agencies such as SEC, the
Commodity Futures Trading Commission, and the Federal Bureau of
Investigations; however, FERC also interacts with these agencies on an ad
hoc basis to assist them with their information needs and use *shared
access letters* to request information from other agencies* files. For
example, FERC staff coordinated closely with the Department of Justice,
SEC, the Commodity Futures Trading Commission, and the Department of Labor
during their investigation of Enron. Recently, FERC cosponsored a
technical conference with the Commodity Futures Trading Commission to
discuss energy market credit issues and potential solutions to problems
and their implementation. Some agencies, such as Justice and the Federal
Trade Commission, use formal approaches such as interagency agreements and
established protocols to coordinate their work and share information.

Of the eight federal agencies included in our review, we found that
restructuring has significantly affected FERC while other agencies were
affected to a lesser extent. To respond to competitive markets, FERC has
made important changes, for example, creating a new office to actively
monitor markets to ensure they are competitive. These changes have
affected its organizational structure and information collection
activities. However, FERC is limited in the information it is allowed to
collect, primarily because of limitations in its authority. To diminish
gaps in its information, FERC relies on information from third- party
sources, some of which is suspect. Although less affected than FERC by
restructuring, EIA has also made some changes to its information
collection activities. For example, it has increased the number of
entities it reports on and the amount of information collected and changed
how it uses this information. Restructuring has affected other agencies*
collection of electricity information to a more limited extent but has
raised other issues that affect how they share information. Restructuring
Has

Exposed Gaps in Agencies* Electricity Information and Has Affected How
This Information Is Shared

Page 19 GAO- 03- 586 Electricity Restructuring Over the past year, FERC
has changed the way it performs market oversight from one that reacts to
electricity market events to one that

monitors markets on a day- to- day basis. This change has caused FERC to
reassess the information it needs to monitor these markets. During 2002,
FERC created a new office to actively monitor competitive electricity

markets and undertook efforts to identify sources of market information
and better understand its own information needs. Nonetheless, we found
that FERC has gaps in the information it is allowed to collect, primarily
because of limitations in authority. Consequently, FERC has increased its
reliance on information from third- party sources in order to supplement
the information it collects. However, this third- party information also
has gaps, and we question the reliability of some of this information, as
have others. Additionally, FERC plans to have RTOs and ISOs assist it by
monitoring and routinely collecting information on electricity markets,
but the formation of these organizations remains in question. In response
to the evolving electricity markets, FERC realized that it

needed to reorganize and created OMOI in fiscal year 2002 to monitor
increasingly competitive electricity markets. OMOI*s mission is to guide
the evolution and operation of energy markets to ensure effective
regulation and consumer protection through understanding markets and their
regulation, timely identification and remediation of market problems, and
compliance with FERC rules and regulations.

To carry out its monitoring mission, OMOI uses its Market Monitoring
Center that was patterned after market operation centers or rooms of ISOs
and major energy trading companies. The Market Monitoring Center relies on
computers and various software packages to make large amounts of
information on electricity available in a usable format. The center uses
both commercial and proprietary information services to access current
market activities. Electricity market information provided by these
services includes prices on the spot market and futures contracts, plant
outage, and historical information for trend analysis. FERC also
subscribes to another new service provider that offers current information
on the status and output of some generating units. OMOI also uses the
historical information from the traditional FERC data collection
activities to assist in its work. For example, during investigations,
FERC*s forms for routine information collection provide historical
baseline information that may be critical in determining possible market
manipulations and/ or unjustified prices. Appendix II contains information
on the commercial

and proprietary information services FERC uses and descriptions of the
types of information provided. FERC*s Changing

Information Needs Have Affected Its Collection and Use of Electricity
Information, but Gaps Remain

FERC Is Reorganizing and Assessing Its Information Needs

Page 20 GAO- 03- 586 Electricity Restructuring In fiscal year 2002, FERC
completed studies to take stock of the agency*s current and future market
information needs. As a part of this

effort, FERC formed teams that were to identify information that FERC
currently collects and additional information that it might need. The
study on current information needs identified 19 active information
collection and reporting requirements for the electric energy sector and
three that relate to all three energy sectors (electric, natural gas, and
oil pipeline). The study on future information needs identified a core
body of information FERC must know to adequately understand how it might
exercise its oversight authority and information needs to accommodate a
range of regulatory approaches. The core body of information includes
eight categories and the specific data elements, descriptions, and
potential sources of this information. The categories are demand for
electric power,

supply, operations and congestion management, market participants,
transmission transactional information, market design and rules, and
traditional regulatory functions. FERC*s intention was to make the
information catalogues a *wish list* of every conceivable type of
information FERC might ever want or need.

According to OMOI, it is using the information from these two studies as a
baseline to assess FERC*s overall market information needs. OMOI hired an
energy industry analyst to continue with the information assessment
project. The project*s mission statement focuses on information needs both
in the near term and long term. The near- term objective is to ensure FERC
has the information most necessary to perform its duties in restructured
energy markets.

FERC*s current information collection activities do not provide sufficient
information to fully monitor electricity markets. First, the historical
information FERC collects has deteriorated in quality, in part, because of
declines in power plant information reporting. Specifically, FERC has
found that some of the data fields that companies are required to fill out
are left blank in some cases. To improve data quality, FERC officials
stated that FERC recently improved its error checking capability for one
of its recently developed electronic reports. In addition, some companies
have aggregated sales transactions data on the forms in a way that makes
it

impossible to determine specific prices and quantities sold. Further,
FERC*s coverage of power plant operational information has diminished
because some plants formerly owned by utilities are now owned by

nonutilities that are not required to report to FERC. Prior to
restructuring, FERC specifically used the information reported on power
plant fuel costs and quality as a factor to determine electricity rates.
Under restructuring, FERC Has Information

Gaps Primarily because of Limitations in Authority

Page 21 GAO- 03- 586 Electricity Restructuring FERC uses power plant
information to understand power production and available capacity in
specific markets, and to understand what is normal

or anomalous. According to FERC, power outages could be used as strategies
to reduce supply and thereby raise market prices. In June 2002, 8 we
reported that California power supplier behavior described in other

studies we reviewed was consistent with the exercise of market power,
because the prices charged did not reflect the marginal costs of
generating additional megawatt- hours of electricity. Rather, the behavior
reflected an ability to charge higher prices by waiting to commit the
generation to a time when buyers were willing to pay more.

Second, according to FERC and as we previously reported, 9 FERC generally
has no jurisdiction over power sales by federally owned entities, publicly
owned utilities, and most cooperatively owned utilities. These
nonjurisdictional utilities own 27 percent of the U. S. electric
transmission system and are also smaller than investor- owned utilities;
however, they serve large areas of the country and provide service in
conjunction with about 25 percent of the nation*s demand for electricity.
FERC officials note that they have little data and information on these
areas of the country. However, according to FERC officials, information
about the operations of these nonjurisdictional entities is important to
understand these entities* impact on generation and transmission
activities in a given market. For example, the Tennessee Valley Authority
operates a large power system and serves many nonjurisdictional entities
covering a large geographical area across the southeastern United States
located between several FERC jurisdictional entities. According to FERC,
the lack of detailed information about the operations of the Tennessee
Valley Authority system limits its ability to assess the performance of
the markets surrounding this network. Similarly, FERC officials noted that
they also need information on electricity imports from neighboring
countries, particularly Canada, because they participate in and affect
prices of electricity in U. S. markets.

Third, according to FERC officials, they have limited up- to- the- minute
market information needed to monitor electricity markets. FERC does not
collect price information, for example, on up- to- the- minute electricity

8 U. S. General Accounting Office, Restructured Electricity Markets:
California Market Design Enabled Exercise of Market Power, GAO- 02- 828
(Washington, D. C.: June 21, 2002). 9 GAO- 02- 656 and GAO- 03- 271.

Page 22 GAO- 03- 586 Electricity Restructuring prices, fuel costs, and
spot and futures contract prices. In June 2002, 10 we reported that the
Market Monitoring Center did not include detailed information about energy
prices on *exempt* commercial markets,

including the Intercontinental Exchange, a *multilateral* electronic
trader, which invites and matches buy and sell orders for other customers.
According to FERC, it now has access to Intercontinental Exchange but no
longer has access to other Internet- based trading systems such as UBS
Warburg and Dynegydirect, both of which were *bilateral* 11 electronic
traders because they have ceased operations. Such systems

have and continue to provide an important market for both physical energy
(electricity and gas products) as well as energy derivatives 12 to be
bought and sold. In commenting on a draft of this report, FERC stated that
because its authority is ambiguous relative to the trade of electricity-
based derivatives, its ability to collect information on this part of the
market is limited. Additionally, FERC officials said that they have
limited operational information, such as power plant outages and
availability of capacity on transmission lines. Price and transaction
information, as well as operational information, is important in order for
FERC to be able to detect changes in the market, determine the legitimacy
of market outcomes, and if needed, take corrective action.

Finally, FERC officials told us that FERC cannot access other nonfederal
information it needs to assess reliability of the power grid and monitor
overall electricity market performance. Specifically, NERC collects
current electricity market information such as operations of power plants,
flows on key transmission lines, transmission between two parties, and
system frequency (that is, a measure of how well the system is balancing
electricity demand and supply and other reliability information). FERC

officials pointed out that because market performance and electricity
system reliability are mutually dependent, such reliability information
would help them to determine whether market participants are behaving in
an anticompetitive manner. While NERC officials agreed that this
information might be valuable to FERC in determining whether power plant
outages are justifiable, they stated that NERC is prohibited from

10 GAO- 02- 656. 11 Bilateral energy trades involve two parties (for
example, a generator and a supplier) entering into a contract to deliver
electricity at an agreed time in the future. 12 Derivatives are financial
products* for example, options, futures, and other contracts* the value of
which are derived from underlying instruments, such as company stocks,
electricity and natural gas commodities, or other financial instruments.

Page 23 GAO- 03- 586 Electricity Restructuring disseminating such
information without obtaining the companies* permission* which companies
are reluctant to grant due to the

business- sensitive nature of the information. Further, NERC officials
told us that their database is deteriorating in quality because companies
are increasingly concerned about sharing detailed information, for fear
that competitors may gain an undue advantage. In particular, many new
market entrants to the electricity generating industry have not joined
NERC or provided NERC with information about their plant operations. In
commenting on a draft of this report, FERC stated that language in
proposed legislation creating FERC jurisdiction over a designated electric

reliability organization should assist in addressing issues related to
access to NERC information.

As we previously reported, 13 FERC lacks authority to gather all the
information it needs from all segments of wholesale electricity markets
primarily because it derives much of its legislative authority from
mandates that were enacted over 75 years ago* when the industry was

structured as regulated monopolies and rates were based on the cost of
service. Further, we reported, 14 FERC lacks regulatory authority over all
entities in wholesale electricity markets and is therefore unable to
gather all of the information it needs to understand markets across the
nation. Specifically, section 309 of the Federal Power Act provides FERC
with the authority to prescribe the forms of all reports to be filed with
it and the information to be reported. 15 This authority does not
generally extend to nonjurisdictional entities such as the power marketing
administrations, other nonutilities, and NERC. For example, FERC has
identified problems in getting data on individual power plant operations
that it needs in order to evaluate the functioning of the transmission
system. Information on nonjurisdictional entities is important because
they also participate in the same electricity markets as jurisdictional
entities and directly influence market activities, including prices.
Senior FERC officials told us that, in

general, FERC*s authority to collect information from nonjurisdictional
market participants is predicated on developing a specific legal argument
that the information supports a specific investigation, rather than for
more general monitoring of market performance. Furthermore, regarding 13
GAO- 02- 656.

14 GAO- 02- 656 and GAO- 03- 271. 15 S:16 U. S. C. 825h. FERC also has
authority in sections 311 (S: 16 U. S. C. 825j) and 304 (S: 16 U. S. C.
825c) of the Federal Power Act and section 133 (S: 16 U. S. C. 2643) of
PURPA.

Page 24 GAO- 03- 586 Electricity Restructuring entities within FERC*s
jurisdiction, FERC does not have specific authority to collect up- to-
the- minute detailed information on market activities.

While long- standing general authority may enable FERC to collect the
information it needs, the lack of specific authority for obtaining this
information may lead to challenges from market participants. In this same
vein, FERC officials added that FERC also faces challenges related to the
Paperwork Reduction Act in terms of the long lead time and the level of
effort necessary to obtain OMB*s approval for additional information
collections. Additionally, FERC*s legislative framework does not allow it
to levy

a meaningful range of penalties against companies that choose to
intentionally underreport or misreport required information. Although the
Federal Power Act allows FERC to levy criminal fines and civil penalties
against market participants, they are insufficient to discourage
underreporting or misreporting information. Thus, FERC*s traditional
legislative authority may no longer be in sync with today*s developing
competitive electricity markets. In competitive energy markets, adequate

and reliable information is important to FERC*s ability to fulfill its
regulatory mandate and ensure the market participants are not engaging in
anticompetitive behavior. In commenting on a draft of this report,

FERC stated that market transparency provisions in proposed legislation
prohibits the filing of false information and increases FERC*s criminal
penalty authority for noncompliance. FERC increasingly relies on third-
party information to help offset its

limited authority to collect all of the information it needs to monitor
electricity markets. OMOI subscribes to several energy- related services
to increase its access to current markets and make key decisions related
to market performance. (See app. II for a complete listing and description
of information that third parties provide to FERC to assist its monitoring
of electricity markets.) While these third- party sources fill some of
FERC*s information gaps, they do not have full or complete coverage of the
information FERC needs but lacks. For example, while Genscape measures
power plant operations for some power plants, it does not have full
coverage of the electricity system. Moreover, OMOI does not have access to
a third- party source for price or quantity information on most bilateral
transactions of wholesale electricity. In addition, FERC and others have
raised concerns about the quality of the published price information these
third parties provide. Specifically, FERC reported that published prices
are subject to manipulation and cannot be independently validated. FERC
surveyed reporting firms for both natural FERC Increasingly

Relies on Third- Party Information, but Gaps Remain and Some Information
Is Suspect

Page 25 GAO- 03- 586 Electricity Restructuring gas and electricity and
found that these firms lacked formal verification or corroboration and
sufficient internal controls to ensure information

reported to them was reliable. FERC also found that these entities relied
instead on traders or bid/ ask prices reported by traders and other market
participants. As a result, FERC reported that this lack of verification
allowed an opportunity for entities to deliberately misreport information
in order to manipulate prices and/ or volumes in electricity.

In at least one recent instance, FERC used such third- party information
as a basis of a key decision regarding California*s electricity market*
the information, however, later turned out to be inaccurate. Specifically,
in 2002, FERC instructed an administrative law judge, who was considering

a request for refunds related to the western electricity crisis, to use a
methodology that relied on third- party data for natural gas prices. The
methodology, developed by FERC staff, was intended to set a proxy for
market prices that would have been produced had the western market been
competitive. The methodology estimated the cost of producing electricity
for key generators based on operating cost, including fuel. Using this
methodology, the judge ordered refunds of about $1.8 billion to the state
of California. Subsequent to the order, FERC found, in August 2002, that
the natural gas prices underlying the methodology had been subject to
erroneous reporting and manipulation. In March 2003, FERC presented an
alternative methodology for determining refunds, which is expected to
substantially increase the previous award.

In commenting on a draft of this report, FERC stated that it is working on
options-- based on staff recommendations and through a docket proceeding--
to improve third- party data. FERC added that market transparency
provisions in proposed legislation allow for establishing an electronic
system that provides information about prices in electricity markets, in
addition to the prohibition for filing false information and increased
criminal penalty authority noted in the previous section.

In addition to the third- party information, FERC plans to rely
extensively on RTOs and ISOs to assist in its monitoring efforts. FERC
plans to use the market monitors, created as part of ISOs, to perform up-
to- the- minute market monitoring activities and routinely collect
information on their electricity markets. FERC officials stated that the
market monitors have a better ability to understand and observe market
changes, can react more quickly to changing market conditions, and can
take stronger corrective action than FERC. In addition, as part of the
rules sanctioning these entities, FERC officials said they expect to have
access to all the data FERC Plans to Use

RTO/ ISO Information, but RTO Formation Remains Incomplete

Page 26 GAO- 03- 586 Electricity Restructuring collected by the market
monitors, which FERC views as considerable. According to FERC, it
currently obtains timely information from some

existing RTO and ISO monitors to help support its market oversight
processes. However, FERC officials said that, relative to the Paperwork
Reduction Act, they are not sure whether the market monitors will be able
to collect information on FERC*s behalf that FERC itself has not been
authorized to collect. In commenting on a draft of this report, FERC
stated that it is mindful of the potential burden imposed by additional
information collections. FERC added that it has been inventive in
developing ways to monitor markets, particularly restructured markets with
RTOs and ISOs, using data generated as an integral part of market
operations.

Further, as we previously reported, several of the market monitors rely on
different methods to evaluate market power, there is a lack of uniformity
in what information is collected, how it is analyzed, and what is
reported, making potential cross- market comparisons difficult at this
time. More importantly, FERC*s effort to expand the number and/ or market
coverage of RTOs as well as standardize electricity market rules has met
with resistance from the Congress, state commissions, and others. At
present, according to FERC, two organizations have been approved as RTOs
while five others have been conditionally approved. Overall, even if these
additional RTOs are fully approved, FERC*s coverage will not extend to
markets outside of its jurisdiction. Thus, FERC*s reliance on RTOs to help
it diminish data gaps, particularly in the next several years, will likely
provide only limited help. In commenting on a draft of this report, FERC
believes that market transparency provisions in proposed legislation will
address issues related to jurisdictional entities that do not participate
in RTOs.

Page 27 GAO- 03- 586 Electricity Restructuring Among the other agencies,
EIA has been the most affected by restructuring while the remaining
agencies have been affected only slightly. At EIA, restructuring has led
to changes in the number of

entities from which EIA collects data, the volume of data collected on
electricity markets, and the way in which EIA uses the data to complete
its mission of examining the energy sector. EIA officials recognized that
restructuring could affect them and examined the potential implications in
two reports. 16 According to a senior EIA official, the first, and most
important effect of

restructuring on EIA was its revision of its forms to require the same
information from utilities and nonutilities. Historically, nonutilities
were exempt from many of EIA*s reporting requirements. Adding these new
entities has expanded EIA*s database by about 2,000 new sources of
information and has nearly doubled its database. The second effect of
restructuring on EIA is the increase in the volume of information that it
collects and provides because restructuring has significantly expanded the
role of wholesale markets in providing electricity. For example, EIA now
posts electricity prices for several of the largest markets on its Web
site and reports more detailed information about the aggregate activities
of these markets in its publications. The third effect of restructuring on
EIA is to significantly alter the way that EIA examines energy sectors and
electricity in particular. In order to meet one of its missions of
examining and forecasting energy consumption and use, EIA has had to
revise its energy models to accommodate restructuring because of changes
in the way that electricity is supplied and distributed. For example, in
March 2003, EIA reported that it reviewed and revised how it collects,
estimates, and reports fuel use for facilities producing electricity.
According to EIA, the review addressed inconsistent reporting of fuels for
electric power by combined heat and power plants and changes in the
electric power marketplace that have been inconsistently represented in
various EIA survey forms and publications. EIA regards these efforts as
complex and substantial and expects them to continue as the electricity
sector evolves. 16 EIA*s two reports were (1) *Effects of Electric Power
Industry Restructuring on EIA

Data Collection,* March 1997 and (2) *Electric Power Restructuring* A
Focus Group Summary: Implications for Data Collection, Analysis, and
Reporting on the Electric Power Industry by the Energy Information
Administration.* No date was given for the second report, which was based
on a series of eight focus groups between July and October 1997.
Restructuring Has

Affected Other Agencies to a Lesser Extent

Page 28 GAO- 03- 586 Electricity Restructuring EIA also encountered
problems such as maintaining the quality of information. The Director of
EIA*s Electric Power Division said that the

Department of Energy*s Secretary has made the quality of information one
of the department*s top priorities. However, maintaining this quality at
EIA is a challenge because there has been a substantial increase in the
number of sources of information (especially the nonutilities) resulting
from restructuring while EIA has also experienced substantial budget cuts.
The Director estimated that there has been a 50 percent increase in the
overall volume of data. In addition, the Director said that, while
omission of information by companies responding to EIA*s data collection
efforts is

not a common problem, in the past, some companies failed to answer a
question about the delivered fuel price on EIA*s Form 423. The Director
added that the companies* decision not to disclose information about fuel
prices could have been attributed to the sensitive nature of this
particular item.

Restructuring has had little direct effect on SEC*s overall information
collection activities. As such, according to SEC officials, the SEC
continues to carry out its oversight of securities laws and its
administration of PUHCA. However, the Congress is considering repealing or
modifying PUHCA because the emergence of nonutilities reflects the fact
that utilities are no longer the sole source of electricity energy. FERC
and SEC officials acknowledge that since nonutilities are

not covered by PUHCA, registered holding companies may engage in
nonutility activities that are not regulated by the act. SEC has stated
that it supports the repeal of PUHCA as long as repeal is accomplished in
a way that gives FERC and state regulators sufficient authority to protect
utility consumers. 17 FERC has stated that PUHCA, as it currently exists,
may actually impede competitive markets and appropriate competitive market
structures.

17 Issac C. Hunt, Jr., Former Commissioner, SEC, Testimony Concerning: S.
1766 and Repeal of the Public Utility Holding Company Act of 1935, before
the Senate Committee on Energy and Natural Resources, 107th Congress,
February 6, 2002.

Page 29 GAO- 03- 586 Electricity Restructuring Recent events such as the
collapse of Enron Corporation have accelerated reforms affecting SEC that
aim at improving the quality and reliability of financial information. SEC
plays a vital role in ensuring that meaningful

and intelligible information is disclosed to investors. Such disclosures
are particularly important as corporate structures of new and old
electricity market participants continue to change. The Sarbanes- Oxley
Act of 2002

has established the legal framework to address some of the concerns
related to corporate disclosure, accountability, and transparency.

Restructuring has not had significant effects on the collection of
electricity information by the other agencies included in our review. Some
agencies, such as the Federal Trade Commission and the Commodities Futures
Trading Commission, may become more involved in collecting electricity
information as competitive markets develop. For example, the number of
electricity entity mergers has slowed down, but should these mergers
increase, Justice may need to increase its information collections for
merger investigations accordingly. In addition, a Commodities Futures
Trading Commission official initially told us that electricity futures
trading had been discontinued because the market participants found that
electricity futures failed to provide an adequate hedge against
intermittent price volatility. However, since our initial discussion, the
New York Mercantile Exchange has introduced several new electricity
contracts, and the Commodities Futures Trading Commission has reinstated
its practice of collecting information on these trades.

Despite the more limited impacts of electricity restructuring on many of
these agencies to date, some jurisdictional issues have been raised about
their respective roles in helping to oversee electricity markets more
generally. Events such as the collapse of Enron Corporation bring to light
the importance of clarifying jurisdiction across the federal government as
restructuring progresses. As noted in a recent Senate Governmental Affairs
report and memorandum, 18 and other congressional hearings, both FERC and
SEC have been questioned about their lack of diligence in following
through on Enron*s activities* even though they had indications of
improper conduct. The report commented that effective coordination between
agencies prevents companies from exploiting

18 Report of the Staff to the Senate Committee on Governmental Affairs,
Financial Oversight of Enron: The SEC and Private- Sector Watchdogs,
October 8, 2002, and a Majority Staff Memorandum to the Committee on
Governmental Affairs, Subject: Committee Staff Investigation of the
Federal Regulatory Commission*s Oversight of

Enron Corp., November 12, 2002.

Page 30 GAO- 03- 586 Electricity Restructuring the lack of oversight in
areas where neither agency may have taken full responsibility* as Enron
did with FERC and SEC in the case of

its investments in wind farms. Officials at both FERC and SEC told us that
they had performed their jobs and had no reason to check with the other
agency about Enron*s actions. However, Enron took advantage of
jurisdictional gaps between the two agencies that enabled it to earn tens
of millions of dollars above what it would have otherwise earned from its
wind farms. FERC and the Commodity Futures Trading Commission provide a

second example of problems resulting from jurisdictional uncertainties.
The Senate memorandum (noted previously) on FERC pointed out that FERC did
not initially determine whether it had jurisdiction over on- line trading
platforms such as Enron Online, although it was FERC*s expectation that
these electronic trading platforms would become a dominant way to trade
both electricity and gas. Furthermore, this memorandum concluded that both
FERC and the Commodity Futures Trading Commission had some regulatory
responsibility for on- line trading. Until Enron*s collapse, however, the
two agencies did not participate in meaningful discussions to identify and
coordinate their respective roles. Effective coordination would have
helped to clarify the jurisdictional boundaries between FERC and the
Commodity Futures Trading Commission regarding energy trading activities
and products, including on- line trading, and to define the two agencies*
respective monitoring responsibilities in these developing markets. Both
agencies have recently taken steps to improve their coordination. Because
these jurisdictional issues remain unresolved, however, it is unclear
whether these problems are limited to a few examples or are potentially
more widespread.

Restructuring has made the issue of confidentiality concerning electricity
information more prominent. On the one hand, the need to access key
information now is greater in evaluating the benefits and risks of
restructuring. On the other hand, the sensitivity of this information,
according to the companies asked to provide it, is also greater because of
fears that other companies could use it to seek competitive advantages.
This dilemma has led to controversy about the electricity information that
is to be made publicly available and shared with other federal agencies.
Both EIA and FERC have procedures regarding restrictions on access to
information and have modified these procedures, as appropriate. For
example, EIA faced considerable protest for its proposal to restrict
access to the information that it collects but updated its procedures to
resolve some of the concerns raised. By contrast, public disclosure laws
and Changes in Industry

Caused by Restructuring and National Security Concerns Have Affected How
Information Is Shared

Page 31 GAO- 03- 586 Electricity Restructuring confidentiality pledges to
protect information also affect information sharing and collection of
other key information at both federal and

nonfederal levels. For example, NERC*s information collected from the
electricity industry remains unavailable to FERC and other federal
agencies because of its sensitivity. In addition, the quality of the
information being submitted to NERC has declined as companies have become
increasingly concerned about providing it. In addition to the
confidentiality issues, the events of September 11, 2001, have heightened
national security concerns about protecting the nation*s energy.

In 2001, EIA faced a major controversy over confidentiality of electricity
information, which it was able to resolve. The controversy pitted certain
companies that feared potential competitive harm from the release of
sensitive information, against agency and public interest in maintaining
access to electricity data. Federal agencies and a private sector group
provided extensive comments on EIA*s proposal to broaden the information
it considered confidential. EPA, for example, objected to EIA*s proposed
confidential treatment of fuel consumption, fuel quality, fuel type,
thermal output, and retail sales. EPA officials noted that EPA makes
extensive use of these data elements in monitoring emissions. In general,
it maintained that EIA*s proposal went far beyond what was reasonably
necessary to protect competitors from the release of sensitive data. The
American Public Power Association, which represents the nation*s 2,000
nonprofit, publicly owned electric utilities, described itself as *deeply
troubled* by EIA*s proposal. It stated that EIA had provided no evidence
that the public availability of specific data items would harm the filing
companies and no evidence on how EIA balanced the public*s need for
information against any potential harm to these companies. By contrast,
the Edison Electric Institute, which represents shareholder- owned
electric companies, cited potential harm to companies, for example,
information in the hands of a competitor that could allow the competitor
unfairly to undercut another company*s bid strategy.

In response to these disagreements over confidentiality, EIA issued a
policy statement that made two general changes to its procedures. First,
it reported that some data elements that were not considered confidential
in the past would now be treated as confidential. Second, it reported that

some data collected from unregulated companies that were formerly treated
as confidential would now be made publicly available. Discussing the
eventual resolution of the controversy, the Director of EIA*s Electric
Power Division told us that EIA adopted two strategies to achieve this
balance. These strategies involve (1) requiring essentially the same
information from all companies, including utilities and nonutilities, EIA
Has Taken Steps to

Resolve Confidentiality Issues

Page 32 GAO- 03- 586 Electricity Restructuring and (2) identifying
appropriate time frames for retaining and releasing sensitive data. The
details of the data remaining confidential are presented in appendix III.

FERC recognizes the need of utilities to compete in the electric market
and understands their desire to keep confidential some of the information
it collects through its forms. However, FERC*s policy requires respondents
who request confidentiality to show that potential harm outweighs the need
for public access to the information. According to FERC, the courts have,
through a considerable body of case law, clearly stated that the company
bears the obligation, in this case the electric utility, to prove release
of information would cause harm. FERC officials told us that Freedom of
Information Act requirements raise concerns among utilities about FERC*s
ability to protect commercially sensitive information. The act requires
FERC to disclose information to the public unless specific exemption
categories are met, which FERC officials told us, is often difficult to
do. According to FERC officials, while FERC may be willing to share
exempted information with state regulatory bodies, states have similar
public disclosure laws that do not always guarantee their ability to
protect this information. FERC officials added that RTOs will also face
similar challenges in sharing commercially sensitive information. While
RTOs could benefit by sharing information about entrants from other
markets who are interested in entering their own markets, protecting the
confidentiality of this information will be an issue. In commenting on a
draft of this report, FERC stated that proposed legislative language
provides a clear confidentiality standard, exempting *from disclosure
information FERC determines would, if disclosed, be detrimental to the
operation of an effective market or jeopardize system security.* Finally,
FERC also faces challenges creating ways to obtain and share information
from Canada and Mexico, since they also affect U. S. electricity markets.

NERC is hesitant to share information with FERC that its members feel
would cause them competitive harm if released in the public domain.
According to a NERC official, companies are increasingly reluctant to
provide commercially sensitive information, causing a decline in
information quality. Therefore, NERC has pledged not to divulge
information on a company- specific basis and will release it only in
aggregate form in hopes of getting the information it needs. NERC collects
current electric market information such as flows on key transmission
lines, transmission between two parties, and system frequency (an
indicator of how well the system is balanced) that FERC is interested in
obtaining from NERC, but, according to both FERC and Other Nonfederal

Sources of Information Face Challenges that Affect Both Information
Collection and Sharing

Page 33 GAO- 03- 586 Electricity Restructuring FERC and NERC officials,
confidentiality pledges inhibit this sharing this information.

Since September 11, 2001, the federal government has taken steps to
protect the nation*s critical infrastructures, including the energy
infrastructure. FERC has taken steps to remove information it considers to
be critical to protecting the nation*s power grid from the public domain.
Specifically, it has removed information such as oversized maps that
detail the specifications of existing and proposed energy facilities that
were

once publicly available from its Internet site, public reference rooms,
and databases. For example, FERC removed the information its collects from
the Form 715, Annual Transmission Planning and Evaluation Report, from the
public domain. Additionally, EIA removed power plant latitude and
longitude information from the public domain. While steps have been taken
to better protect information, federal officials at both FERC and EPA
raised concerns about the increasing difficulty of accessing information
on power plant locations and related data.

Given FERC*s predominant role in overseeing evolving electricity markets,
FERC needs information on a regular basis regarding reliability, supply
and demand, transmission, purchase and sale of electricity commodities,
and market participants* much of the needed information has not previously
been collected. Consequently, FERC is currently missing some of these key
pieces of information or is relying on third parties such as energy news
services for related information to assist in meeting its market
monitoring and oversight responsibilities. Without access to this key
information, FERC will not be able to fully understand the performance of
specific electricity markets across the country. In addition, FERC will be
less prepared to identify potential market manipulation that may affect
competitive markets. FERC*s existing authority is not adequate to collect
all the information it needs, resulting in these gaps of key information.
Moreover, legislation does not allow FERC to levy meaningful criminal
fines and civil penalties against market participants to ensure that
companies report accurate and reliable information, further diminishing

its ability to identify potential market manipulation. For these reasons,
the Congress may need to make decisions regarding the scope of information
collection at FERC and other agencies. National Security Concerns

Affect Information Sharing Conclusions

Page 34 GAO- 03- 586 Electricity Restructuring Given that effective
oversight of evolving electricity markets requires the acquisition of and
access to timely, reliable, and complete information,

we recommend that the Chairman, FERC (1) demonstrate what information FERC
needs, (2) describe the limitations resulting from not having this
information, and (3) ask the Congress for sufficient authority to meet its
information collection needs and responsibilities. Additionally, we
recommend that FERC consider the cost and potential reporting burden
associated with additional information collection, since market
participants will incur additional costs and burden hours, and where
possible, explore creative ways to obtain information.

We provided a draft of this report to FERC and DOE for their review and
comment. In its written comments, FERC generally agreed with the report*s
conclusions, specifically that its authority to collect information has
not kept pace with the changing electricity market and that its ability to
penalize noncompliance is severely limited. Regarding our recommendation
that FERC take action to resolve its information gaps, FERC commented that
it is in the process of conducting an internal information assessment and
the results will be provided at the end of 2003. This assessment should
provide a first step toward implementing our recommendations. However, in
a related point, FERC also noted that whatever information gaps exist with
electricity supply, much greater deficiencies exist on the demand side of
the market, which is largely beyond its jurisdiction but also important to
understanding the entire market.

FERC also noted that it must be mindful of the potential burden imposed by
additional information collections, and it has been inventive in
developing ways to monitor markets, particularly those operating under its
restructuring rules. FERC also provided several small corrections to the
draft report language and added other clarifications that we incorporated
into the draft where appropriate. The complete text of FERC*s comments

is included in appendix IV. In its written comments, DOE agreed that the
report generally characterizes the current state of electricity data
collection and dissemination at EIA accurately and that it provides a
balanced set of recommendations on improving the timeliness of data
dissemination in the electricity industry*s restructured environment. DOE
also commented about our characterization of EIA*s mission and how EIA*s
information is used, as well as provided further clarification on the
coverage of EIA and RUS information collections and EIA*s resolution of
data quality issues on Recommendations for

Executive Action Agency Comments

Page 35 GAO- 03- 586 Electricity Restructuring its Form 423. We
incorporated EIA*s suggested information in these areas along with
previously provided technical corrections into the draft where

appropriate. The complete text of DOE*s written comments is included in
appendix V. To determine what electricity information is collected, used,
and shared by key federal agencies in meeting their primary
responsibilities, we first identified federal agencies using specific
forms and form- like surveys for collecting electricity information. These
agencies included FERC, EIA and Fossil Energy within DOE, RUS, SEC, and
EPA. We obtained these forms and form- like surveys and analyzed their
contents, as summarized in appendix I. We also identified third- party
sources of information used by federal agencies. These included the 13
companies identified in appendix II. We analyzed this third- party
information through a review of Web- based materials and interviewed
officials at Genscape, Edison Electric Institute, and NERC. We also
identified federal agencies that collect, or have collected, electricity
information for investigations and interviewed officials at these agencies
that included the Department of Justice, the Federal Trade Commission, and
the Commodity Futures Trading Commission. For all federal agencies
included in our review, we obtained information on their missions by
examining mission statements on their Web sites. To understand how federal
agencies use and share electricity information, we interviewed federal
officials at the federal agencies mentioned above.

To determine the effect of restructuring on federal agencies* collection,
use, and sharing of this information, we focused primarily on FERC because
it bears the main responsibility for monitoring electricity markets, is
undergoing major organizational changes caused by restructuring, and has
shown serious deficiencies in responding to restructuring. Within FERC, we
met with officials from OMOI and from its Office of Markets, Tariffs, and
Rates. To understand the gaps in FERC*s electricity information resulting
from restructuring, we interviewed officials at FERC and NERC, reviewed
information from third- party sources, and identified federal authority
contributing to these gaps. Although restructuring has affected other
federal agencies to a lesser extent, we identified the relevant effects,
if any, in these other agencies by interviewing officials and reviewing
pertinent documents. Among these other agencies, EIA has been the most
affected by restructuring. We examined specific impacts at EIA that
included increases in the number of entities from which EIA collects data
and the volume of information collected. We also examined jurisdictional
issues posed about FERC and SEC, and FERC and the Objectives, Scope,

and Methodology

Page 36 GAO- 03- 586 Electricity Restructuring Commodity Futures Trading
Commission. To understand how restructuring has affected the way in which
federal agencies share this

information, we examined concerns about confidentiality, particularly as
they related to EIA*s development of its current confidentiality policy
and FERC*s lack of access to NERC information because of NERC*s concerns
about the potential sensitivity of the information. In addressing the
second objective, we also relied on a broad range of our previously issued
reports

on electricity restructuring and FERC*s oversight of electricity rates. We
conducted our work from June 2002 to May 2003 in accordance with generally
accepted government auditing standards.

As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 14 days
after the date of this letter. At that time, we will send copies to
appropriate congressional committees, the Chairman of the Federal Energy
Regulatory Commission, the Secretary of the Department of Energy, the
Administrator of the Environmental Protection Agency, the Secretary of the
Department of Agriculture, the Chairman of the Securities and Exchange
Commission, the Attorney General of the United States, the Chairman of the
Federal Trade Commission, the Chairman of the Commodity Futures Trading
Commission, the Director of the Office of Management and Budget, and other
interested parties. We will make copies available to others on request. We
will also make copies available to others upon request. In addition, the
report will be available at no charge on the GAO Web site at http:// www.
gao. gov.

Page 37 GAO- 03- 586 Electricity Restructuring If you or your staff have
any questions about this report, please contact me at (202) 512- 3841. Key
contributors to this report are listed in appendix VI. Jim Wells

Director, Natural Resources and Environment

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 38 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Federal Energy Regulatory Commission a Form 1* Annual Report of Major
Electric Utilities, Licenses, and Others

Federal Power Act (FPA) sections 304 and 309. These sections authorized
the Federal Energy Regulatory Commission (FERC):

 to collect and record data to the extent it deems necessary and  to
prescribe rules and

regulations concerning accounts, records, and memoranda. FERC may
prescribe a system of accounts for jurisdictional companies and after
notice and opportunity for hearing, may determine the accounts in which
particular outlays and receipts will be entered, changed, or credited.

Used to monitor markets to ensure that rates are just and reasonable, and
services are offered in a nondiscriminatory manner.

Generation, transmission, distribution, and sales of electric energy from
major electric utilities and licensees subject to FERC jurisdiction.

Form 1- F* Annual Report for Non- major Public Utilities, Licensees, and
Other Public Utilities, Licensees, and Others

Same as above Same as above Same as above

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 39 GAO- 03- 586 Electricity
Restructuring Sources of

data Voluntary, mandatory, or as needed Treatment of

data How often captured/ collected How often

reported Products issued (if applicable)/ how used

Major public utilities. Mandatory Publicly available. On or before April
30

of each year for the previous calendar year.

Annually  Department of Energy*s (DOE) Energy Information Administration
publishes Form 1 data in aggregate form.

 The Office of Chief Accountant uses the data in its audit program and
for

continuous review of the financial conditions of regulated companies.

 The Office of Markets, Tariffs, and Rates uses the data in rate
proceedings and supply programs.

 The Office of Economic Policy and General Counsel use the data in their
programs.

 Data from schedules are used to compute annual charges assessed against
public utilities.

 State regulatory commissions use the data to help satisfy their
reporting requirements for public utilities and licensees subject to state
jurisdiction. Nonmajor public utilities. Same as above. Same as above.
Same as above. Same as

above. Same as above.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 40 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Federal Energy Regulatory Commission a Form 423* Monthly Report of Cost
and Quality of Fuels for Electric Plants FPA sections 205 and 206, as

amended by section 208 of the Public Utility Regulatory Policies Act
(PURPA) (Public Law 95- 617). FERC is authorized to collect basic cost and
quality of fuel data at

electric generating plants. Collects information on the cost

and quality of fossil fuels delivered to electric generating plants.

Cost, price, and quality of fuels for generating plants.

Form 556* Application for Certification of Qualifying Facility (QF) or
CoGen Status FPA section 3 and sections 201

and 210 of PURPA. These statutes authorize FERC to encourage cogeneration
and small power production and to

prescribe such rules as necessary in order to carry out these statutory
directives.

Filed by owners or operators of small power production or cogeneration
facilities seeking status as qualifying facility eligible for benefits
under PURPA, including exemption from certain corporate, accounting,
reporting and rate regulation requirements; certain state laws; and where
applicable regulation under FPA.

Information related to the facility*s ownership and technical
specifications.

Form 561* Interlocking Directorates Title II, section 211 of PURPA, which
amended part III, section

305, of FPA. Section 305 defines monitoring and regulatory operations

concerning interlocking directorate positions held by public utility
personnel and possible conflicts of interest.

Collects information from individual public utility directors and officers
who hold interlocking directorates.

Information on public utilities* interlocking directorates for possible
conflicts of interest.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 41 GAO- 03- 586 Electricity
Restructuring Sources of

data Voluntary, mandatory, or as needed Treatment of

data How often captured/ collected How often

reported Products issued (if applicable)/ how used

Public utilities who have electric generating plants (see EIA- 423 for

unregulated plants).

Mandatory Publicly available. No later than 45 days after the end of the
report month.

Monthly FERC uses the data to conduct authorized fuel reviews, rate
investigations,

and monitor changes and trends in the electric wholesale market. Other
government agencies use the data to track the supply, disposition, and
fuel prices on a regional and national basis and conduct environmental
assessments. Others use the data to assess market competitiveness.

Owners or operators of small power production or cogeneration facilities.

As needed. Publicly available. Once during a 1- year time period. As
needed. FERC uses the information to

determine whether a facility meets the necessary requirements and is
entitled to various PURPA benefits.

Approximately 1,600 directors and officers of

public utilities or public utility holding companies

engaged in the generation, transmission, and sale of electric power.
Mandatory Publicly available. On or before April 30th

for each preceding year.

Annually FERC collects this information to monitor public utilities*
interlocking directorates for possible conflicts of interest.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 42 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Federal Energy Regulatory Commission a Form 566* Top 20 Purchasers List
FPA section 305, as amended, by section 211 of PURPA. Filed by
jurisdictional public utilities

or public utility holding companies engaged in the generation,
transmission, and sale of electric power to report 20 of the largest
purchases of electric energy. Lists customers and their business addresses
if they were 1 of the top 20 largest purchasers of electric energy,
measured in kilowatt hours sold, for purposes other than resale, during
any of 3 preceding calendar years. Information on the 20

largest purchasers of electric energy. Form 580* Interrogatory on

Fuel and Energy Purchase Practices

FPA section 205 (f), as amended, by section 208 of PURPA. This section
authorizes the interrogatory established in Form 580 to take place not
less frequently than every 2 years. Collects information from

jurisdictional public utilities that own or operate power plants
generating 50 megawatts or greater capacity.

Information on fuel cost and cost recovery practices under fuel adjustment
clauses in cost- based rates.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 43 GAO- 03- 586 Electricity
Restructuring Sources of

data Voluntary, mandatory, or as needed Treatment of

data How often captured/ collected How often

reported Products issued (if applicable)/ how used

Approximately 175 public utilities and public utility holding companies.

Mandatory Publicly available. On March 1 of the year following the
reporting.

Annually Used to identify large purchasers of electric energy and possible
conflicts of interest.

Approximately 120 public utilities.

Mandatory Publicly available. Filed biennially on June 1st for preceding
calendar period.

Biennially Used to review public utility*s fuel purchase and cost recovery
practices under fuel adjustment clauses in cost- based.

Used to evaluate fuel costs in individual rate filings, to supplement
periodic utility audits, and to monitor changes and trends in the electric
wholesale market. Used by DOE*s EIA to study various aspects of coal, oil,
and gas transportation rates. Used by electric market participants and the
public to assess the electric marketplace during the transition to a
competitive marketplace.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 44 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Federal Energy Regulatory Commission a Form 714* Annual Electric Control
and Planning Area FPA sections 202, 207, 210,

211, 212, and 213, as amended, and sections 4, 304, 309, and 311 of the
same act.

Collects information from any public utility or group of public utilities
operating as a control area

that has a peak load greater than 200 megawatts based on energy for load.
The information collected allows FERC to analyze power system operations
in the course of its regulatory functions. The purpose of these analyses
is to estimate the effect of changes in power system operations that
result from the installation of a

new generating unit or plant, transmission facilities, and energy
transfers between systems and/ or new points of interconnections. The
analyses also serve to correlate rates and changes; assess reliability and
other operating attributes in regulatory proceedings; monitor market
trends and behaviors; and

determine the competitive impacts of proposed mergers, acquisitions, and
dispositions.

Generating plants included in the reporting control area; control area
monthly peak demand; control area net energy for load and peak demand
sources by month; adjacent control area interconnections; control

area scheduled and actual interchange; planning area demand and forecast
summer and winter peak demand and annual net energy for load; and control
area hourly system lambda data.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 45 GAO- 03- 586 Electricity
Restructuring Sources of

data Voluntary, mandatory, or as needed Treatment of

data How often captured/ collected How often

reported Products issued (if applicable)/ how used

A public utility operating as a control area or a group of electric
utilities that operates as a control area.

Mandatory Publicly available. On or before June 1 of each year for the
preceding calendar year.

Annually Used to monitor control area planning hourly demand, forecast
summer and winter peak demand, and annual net energy for load.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 46 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Federal Energy Regulatory Commission a Form 715* Annual Transmission
Planning and Evaluation Report

FPA section 213 (b), as amended, by the Energy Policy Act (Public Law 102-
486). Section 213 (b) requires FERC to collect annually from

transmitting utilities sufficient information about their transmission
systems to inform potential transmission customers, state regulatory
authorities, and the public of available transmission capacity and
constraints. Provides information to potential

transmission customers, FERC, state regulatory authorities, and the public
of potential transmission capacity and known constraints.

Potential transmission capacity and known constraints.

Electric Quarterly Report FPA section 205( c). Provides contract and power
sales data per Order 2001 issued on April 25, 2002. Public utilities are

required to electronically file Electric Quarterly Reports summarizing the
contractual terms and conditions in their agreements for all
jurisdictional services (including market- based power sales, cost- based
power sales, and

transmission service) and transaction information for shortterm and long-
term market- based power sales and cost- based power sales during the most
recent calendar quarter.

Lists all contracts in effect and all power sales made during the previous
quarter.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 47 GAO- 03- 586 Electricity
Restructuring Sources of data

Voluntary, mandatory, or as needed Treatment of

data How often captured/ collected How often

reported Products issued (if applicable)/ how used

Approximately 117 respondents consisting of transmitting utilities or a
designated agent, such as a

regional transmission group, North American Electric Reliability Council
(NERC) regional reliability council, formal power pool, or other group
operating integrated (nonradial) transmission facilities at or above 100
kilovolts.

Mandatory Data are now restricted and designated as critical energy
infrastructure information.

On or before April 1 of each year for the preceding calendar year.

Annually FERC uses the information to facilitate and resolve transmission
disputes brought before it. State and federal

regulatory agencies use the information as a part of their oversight
functions. Potential transmission customers use the information to
determine transmission availability to or from wholesale electric power
purchasers and sellers.

All public utilities. Mandatory Publicly available. For the period from

January 1 through March 31, file by April 30; for the period from April 1
through June 30, file by July 31; for the period July 1 through September
30, file by October 31; and for the period October 1 through December 31,
file by January 31.

Quarterly Information is available to the public in a variety of formats.
It is used as an electronic repository of all jurisdictional contracts, to
fulfill the FPA requirements to have all rates on file, and to provide
price

data for market oversight purposes.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 48 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Energy Information Administration b EIA- 411* Coordinated Bulk Power
Supply Program Report Federal Energy Administration Act (Public Law 93-
275) and

the DOE Organization Act (Public Law 95- 91). These two laws require EIA
to carry out a centralized, comprehensive, and unified energy information
program. EIA is mandated to collect, evaluate, assemble, analyze, and
disseminate information on energy resource reserves,

production, demand, technology, and related economic and statistical
information.

Collects information on regional electricity supply and demand projections
for a 5- year advance

period and provides information on the transmission system and supporting
facilities. This information is used to assess the adequacy of energy
resources to meet near and longer- term domestic demands.

The information reported includes (1) peak demand and energy for the
preceding year and 5 future years, (2) existing and planned generating
capacity and the same for demand, (3) scheduled capacity purchases and
sales, (4) bulk electric transmission system maps, and (5) existing and
proposed transmission lines.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 49 GAO- 03- 586 Electricity
Restructuring Sources of

data Voluntary, mandatory, or as needed Treatment of

data How often captured/ collected How often

reported Products issued (if applicable)/ how used

NERCregulated electric power entities and other electricity suppliers.

Voluntary, except for Schedule C, which is identical to the Form EIA- 860.

Publicly available, except for information on plant location (longitude
and

latitude) and tested heat rate.

Each NERC Regional Council should file by April 1 and after review, NERC
should file the Form EIA- 411 by June 30.

Annually Used to monitor the current status and trends of the electric
power industry and to evaluate the future of the industry. Primary
publication* Electric Power Annual EIA is required to provide

company- specific data to the Department of Justice, or to any other
federal agency when requested for official use, which may include
enforcement of federal law. The information may also be made available,
upon request, to another component of DOE,

to any committee of Congress, the General Accounting Office, or to
congressional agencies authorized by law to receive such information. A
court of competent jurisdiction may obtain this information in response to
an order.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 50 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Energy Information Administration b EIA- 412* Annual Electric Industry
Financial Report Same as above. Collects information on accounting,

plant statistics, and transmission data.

The information reported includes (1) identification, (2) electric balance
sheet, (3) electric income statement, (4) electric plant, (5) taxes, tax
equivalents, contributions, and services during year, (6) sales of
electricity for resale, (7) electric operation and maintenance expenses,
(8) purchased power and power exchanges, (9) electric generating plant
statistics, (10) existing transmission lines, and (11) transmission lines
added within last year.

EIA- 417R* Electric Power Systems Emergency Report EIA- 417* Electric
Emergency Incident and Disturbance

Report Same as above. Collects information for DOE to

monitor electric utility system emergencies.

The information reported includes the type of emergency, cause of
incident, and actions taken.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 51 GAO- 03- 586 Electricity
Restructuring Sources of

data Voluntary, mandatory, or as needed Treatment of

data How often captured/ collected How often

reported Products issued (if applicable)/ how used

Completed by approximately 500 municipally owned,

federally owned, and state- owned regulated entities with approximately
1,000 additional unregulated entities filing a new schedule on *Electric
Generating Plant Statistics,* and 39 cooperative borrowers filing

transmission data.

Mandatory Publicly available, except for Schedule 9, lines 9 through 34,
for unregulated entities.

Accounting data (Schedules 1 through 8) of the Form EIA- 412 to EIA within
4 months following the end of the financial reporting year. All reports,

including Schedules 9 through 11, for the given calendar year must be
submitted by April 30.

Annually Used to compile statistics on the financial status of the
industry and to develop EIA forecasting models. Primary publications*
Electric Power Annual, DOE/ EIA- 0348;

State Energy Price and Expenditure Report,

DOE/ EIA- 0376; and

Annual Energy Outlook,

DOE/ EIA- 0383. EIA is required to provide company- specific data to the
Department of Justice, or to any other federal agency when requested for
official use,

which may include enforcement of federal law. The information may also be
made available, upon request, to another component of DOE,

to any committee of Congress, the General Accounting Office, or to
congressional agencies authorized by law to receive such information. A
court of competent jurisdiction may obtain this information in response to
an order.

Electric utilities. Mandatory Publicly available, except for the
information reported on Schedule 1, lines 4,5,6,7, and 8. As needed. As
needed. DOE uses the information as the basis for determining

appropriate federal action to relieve an electrical energy supply
emergency. Primary publication* Electric Power Monthly,

DOE/ EIA- 0226.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 52 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Energy Information Administration b EIA- 423* Monthly Cost and Quality of
Fuels for Electric Plants Report

Same as above. Collects information on cost and quality of fossil fuels
delivered to U. S. electric plants.

Delivered price of fuel by fossil fuel type and contract, contract type
and end date, quality of fuel (heat content, sulfur and ash content), and
volume delivered.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 53 GAO- 03- 586 Electricity
Restructuring Sources of

data Voluntary, mandatory, or as needed Treatment

of data How often captured/ collected How often

reported Products issued (if applicable)/ how used

Unregulated electricity generating facility (fossilfuel plants for
regulated entities report on FERC- 423). Mandatory Publicly

available, except for fuel cost.

Filing to be completed within 45 days of the close of the business month.

Monthly/ annually. With the exception of a handful

of state agency reports, the FERC- 423 and the EIA- 423 are the only
timely public sources of information of the price of fuel delivered to
electric generating

plants. Public agencies and private analysts seeking to understand the
current and historical fuel components of power prices and

generating plant operating costs use the data widely. Data from this form
and the FERC 423 appear in the EIA publications* Electric Power Monthly,
Electric Power Annual, Monthly Energy Review, and

Annual Energy Review.

EIA is required to provide company- specific data to the Department of
Justice, or to any other federal agency when requested for official use,
which

may include enforcement of federal law. The information may also be made
available, upon request, to another component of DOE, to any committee of
Congress, the General Accounting Office, or to congressional agencies
authorized by law to receive such information. A court of competent
jurisdiction may obtain this information in response to an order.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 54 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Energy Information Administration b EIA- 767* Steam- Electric Plant
Operation and Design Report Same as above. Collects information on the
design

and operations of organic- fueled or combustible, renewable, steamelectric
plants, regardless of ownership status, which have a total existing or
planned generator rating of 10 megawatts and above (excluding nuclear
power plants).

The information reported includes (1) identification, (2) plant
configuration, (3) plant information (a) annual byproduct disposition and
useful thermal output, (b) financial information, (4) boiler information
(a) fuel consumption and quality, (b) air emission standards, (c) design
parameters, (d) nitrogen oxide emission controls, (5) generator
information, (6) cooling system information (a) annual operations, (b)
design parameters, (7) flue gas particulate collector information, (8)
flue gas desulfurization unit information (a) annual operations, (b)
design parameters, and (9) stack and flue information* design parameters.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 55 GAO- 03- 586 Electricity
Restructuring Sources of

data Voluntary, mandatory, or as needed Treatment

of data How often captured/ collected How often

reported Products issued (if applicable)/ how used

Approximately 1,300 U. S. plants with a total existing or planned organic-
fueled or combustible renewable steam- electric plants that have a
generator nameplate rating of 10 megawatts or larger.

Mandatory Publicly available, except for information relating to plant
locations (longitude and latitude).

To be submitted no later than April 30 following the close of the
reporting year.

Annually Data from this form appear in the EIA publications* Electric
Power Annual, Annual Energy Review,

and Carbon Dioxide Emissions from the Generation of Electric Power in the
United States.

EIA is required to provide company- specific data to the Department of
Justice, or to any other federal agency when requested for official use,
which

may include enforcement of federal law. The information may also be made
available, upon request, to another component of DOE, to

any committee of Congress, the General Accounting Office, or to
congressional agencies authorized by law to receive such information. A
court of competent jurisdiction may obtain this information in response to
an order.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 56 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Energy Information Administration b EIA- 826* Monthly Electric Sales and
Revenue with State Distributions Report

Same as above. Collects information on the retail sales and revenue from
approximately 400 utilities and other energy service providers that

have sales to end- user customers. Retail sales of electricity by

end- user category, revenue, megawatt hours, and numbers of customers.

EIA- 860* Annual Electric Generator Report c Same as above. Collects
information on the status

of existing and planned power plants in the United States, including those
scheduled for initial commercial operation within 5 years of filing this
report. Also

tracks planned upgrades to existing power plants.

Generating unit name, ownership, operator, location, cogeneration status,
and industry

category if a cogenerator, prime mover type, nameplate and summer net
generating capacity, initial

commercial operating and retirement date, current unit status, tested heat
rate, fuel sources, fuel delivery transportation mode, and FERC qualifying
facility information for cogenerators.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 57 GAO- 03- 586 Electricity
Restructuring Sources of data

Voluntary, mandatory, or as needed Treatment

of data How often

captured/ collected How often

reported Products issued (if applicable)/ how used

Regulated and unregulated companies that sell or deliver electric power to
end users, including electric utilities, energy services providers,

and distribution companies. Data collected on this form include retail
sales, revenue, and number of customers for all end- use sectors
(residential, commercial, industrial, and other, including public street
and highway

lighting). Mandatory Publicly

available, excluding energy service provider*s revenues, megawatt hours
sold, and number of customers.

Filing should be completed by the 10th working day, following the close of
the business month.

Monthly The EIA- 826 is the only timely source of information on the price
and volume of power sold to retail customers in the United States.

Data from this form appear in the EIA publications* Electric Power
Monthly, Electric Power Annual, Monthly Energy Review, and Annual Energy
Review. EIA is required to provide company- specific data to the
Department of Justice, or to any

other federal agency when requested for official use, which may include
enforcement of federal law. The information may also be made available,
upon request, to another component of DOE,

to any committee of Congress, the General Accounting Office, or to
congressional agencies authorized by law to receive such information. A
court of competent jurisdiction may obtain this information in response to

an order. Approximately 3,200 electric generating plants, which have or
will have a nameplate rating or 1 megawatt (1,000 kilowatts) or more, and
are operating or plan to be operating within 5 years of the year of this
form. Also maintains a record of plant retirements.

Mandatory Publicly available, except for latitude and longitude of plant
location and tested heat rate.

On or before February 15 of the

reporting calendar year.

Annually The EIA- 860 is the primary source of information on the
inventory of power plants in the United States. As such, it is widely used
by public and private analysts interested in such topics as adequacy of
power supplies and air pollution emissions. Data from this form appear in
the EIA publications* Electric Power Annual and

Annual Energy Review.

EIA is required to provide company- specific data to the Department of
Justice, or to any other federal agency when requested for official use,
which may include enforcement of federal law. The information may also be
made available, upon request, to another component of DOE,

to any committee of Congress, the General Accounting Office, or to
congressional agencies authorized by law to receive such information. A
court of competent jurisdiction may obtain this information in response to

an order.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 58 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Energy Information Administration b EIA- 861* Annual Electric Power
Industry Report Same as above. Collects annual data from the

universe of U. S. utilities and nonutility power producers on retail power
sales and energy distribution.

Collects information on system peak, net generation, energy balance,
demand- side management, and the sales and distribution of electricity in
the United States.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 59 GAO- 03- 586 Electricity
Restructuring Sources of data

Voluntary, mandatory, or as needed Treatment

of data How often

captured/ collected How often

reported Products issued (if applicable)/ how used

All electric utilities, including regulated and unregulated energy service
providers, in the United States, its territories, and Puerto Rico. These
include about 3, 300 regulated and 1,500 unregulated owner entities.

Mandatory Publicly available. By April 30,

following the calendar year.

Annually The EIA- 861 is the primary source of data for public and private
analysts seeking information on electric power sales, revenues, and
average prices. Data from this form appear in the EIA publications*
Electric Power Monthly, Monthly Energy Review, Electric Power

Annual, Annual Energy Outlook, Annual Energy Review, and Financial
Statistics for Major U. S. Publicly Owned Electric Utilities.

EIA is required to provide company- specific data to the Department of
Justice, or to any other federal agency when requested for official use,
which may include enforcement of federal law. The information may also be
made available, upon request, to another component of DOE,

to any committee of Congress, the General Accounting Office, or to
congressional agencies authorized by law to receive such information. A
court of competent jurisdiction may obtain this information in response to

an order.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 60 GAO- 03- 586 Electricity
Restructuring Form/ reporting requirement

by agency Legislation authorizing collections Purpose Types of data

Energy Information Administration b EIA- 906* Power Plant Report d Same as
above. Collects information on electric power generation, useful thermal
output, fuel consumption, the heat content of fuels, and stocks of fossil
fuels from electric power plants in the United States.

Data on electric power generation, fuel consumption, useful thermal

output, fuel heat contents, and stocks.

Appendix I: Description of Data Collection Forms and Legislation
Authorizing Collections for FERC and EIA Page 61 GAO- 03- 586 Electricity
Restructuring Sources of data

Voluntary, mandatory, or as needed Treatment

of data How often captured/ collected

How often reported Products issued (if applicable)/ how used

Electric power plants that meet the reporting requirements,

regardless of ownership type. A monthly sample of 1,200 entities with the
remainder reporting annually, out of a total universe of approximately
2,500 regulated and unregulated entities.

Mandatory Publicly available, excluding information on stocks at end of
reporting period.

For monthly respondents, submission is to be completed by the 10th working
day, following the close of the month. For annual respondents, submission
is to be completed by the last working day of January following the end of
year.

Monthly/ annually.

 The EIA- 906 is the primary source of information on power plant
generation, fuel consumption, and fuel stocks. Data are widely used by
industry, state government agencies, trade associations, and federal
agencies for energy analyses and policymaking decisions.

 Data from this form appear in the EIA publications* Electric Power
Monthly, Electric Power Annual, Monthly Energy

Review, Annual Energy, and Renewable Energy Annual.

 EIA is required to provide companyspecific data to the Department of
Justice, or to any other federal agency when requested for official use,
which may include enforcement of federal law.

 The information may also be made available, upon request, to another
component of DOE, to any committee of Congress, the General Accounting
Office, or to congressional agencies authorized by law to receive such
information. A court of competent jurisdiction may obtain this information
in response to an order. Source: GAO analysis of FERC*s and EIA*s survey
forms.

a If the information requested in FERC*s forms is not reported, the
criminal penalties are as follows: * 16 U. S. C. 825o( a) statutory
violations up to a $5,000 fine or imprisonment of not more than * 2 years
* 16 U. S. C. 825o( b) rules violations not to exceed $500 per day during
the time the offense occurs. b The timely submission of these forms by
those required to report is mandatory under section 13( b) of

the Federal Energy Administration Act (FEAA) (Public Law 93- 275), as
amended. Failure to respond may result in a penalty of not more than
$2,750 per day for each civil violation or a fine of not more than $5,000
per day for each criminal violation. The government may bring a civil
action to prohibit reporting violations, which may result in a temporary
restraining order or a preliminary or permanent injunction without bond.
In such civil action, the court may also issue mandatory injunctions
commanding any person to comply with these reporting requirements. c
According to EIA*s Electric Power Annual 2001 report, beginning with data
collected from the year 2000, the Forms EIA 860A and 860B are obsolete.
The infrastructure data collected on those forms

are now collected on the Form EIA- 860 and the monthly and annual versions
of the Form EIA- 906. d EIA 906 superseded Forms EIA- 900* Monthly
Nonutility Power Plant Report* and EIA- 759* Monthly Power Plant Report.

Appendix II: Third- Party Data Sources Page 62 GAO- 03- 586 Electricity
Restructuring Data Source Description

FriedWire FriedWire is an energy information provider, specializing in
Web- based data collection and integration. Its Traffic Report is a real-
time visual monitoring system covering electric power grid operations in
North America. Its Powersurge is a realtime monitoring system for
Northeastern and Canadian electric power markets. Its WestDesk provides
similar information for western electric power markets. Its Analyst Edge
is an on- line energy database created to support the needs of energy
market analysts. Its Data Feed Service and Energy Data Warehouse provide
updates of energy market information and historical information. Genscape
Genscape provides current information related to generation and
transmission of

some fossil and nuclear power plants in the United States. Genscape
guarantees accuracy of 90 percent or better based on its direct, physical
monitoring of power plant outputs. Electric Power Research Institute
Electric Power Research Institute has developed an on- line, Web- based
display of

power market transactions and includes information on schedules and
congestion. The data are useful for transmission planning. Bloomberg
Bloomberg*s PowerLines is a trade press publication providing electricity
news.

Bloomberg*s Professional Services provides current and historical data on
regional electricity and gas markets, including spot and future prices,
market commentary, plant outage information, and energy news. NERC NERC
provides real- time information on transmission constraints in the
northeast. Its

Flow Impacts Study Tool provides information about the real- time flow and
expected flow for the next 36 hours for specific transactions. Open Access
Technology International Open Access Technology International provides
information on electricity

transmission useful for scheduling and meeting electricity deliveries.
EarthSat EarthSat provides weather forecasts and historical weather data
for selected cities. Energy Argus Energy Argus provides news concerning
electricity and gas operations and prices. InterContinental Exchange
InterContinental Exchange provides information on over- the- counter
energy transactions.

PowerWorld Corporation PowerWorld Corporation*s Simulator is an
interactive package designed to simulate high voltage power system
operation. It gives an analyst a comprehensive look at issues surrounding
electrical power flows in a transmission grid. Resource Data International
Data Resources via Platt*s: (1) PowerDat (1) Historical data related to
electric industry.

(2) GasDat (2) Historical data related to gas industry. (3) NewGen (3)
Database consists of new proposed generation. (4) PowerMap (4) Tool to
generate maps, including transmission lines, gas pipelines, and

generation. Platt*s Through publications such as Megawatt Daily and Gas
Daily, Platt*s provides daily

energy news related to electric and gas issues. Cambridge Energy Research
Associates Cambridge Energy Research Associates provides various services
related to

regional electric, gas, and transmission issues. These include, for
example, its North American Electric Power Advisory Service, which focuses
on the future of the power sector and the forces affecting the market,
prices, and emerging trends and technology. Other services include its
North American Natural Gas Advisory Service, its Electric Transmission
Advisory Service, and its Western North America Energy Advisory Service.
Source: GAO analysis of information provided through third- party data
sources* Web sites and FERC. Appendix II: Third- Party Data Sources

Appendix III: EIA Confidentiality Elements Page 63 GAO- 03- 586
Electricity Restructuring Elements Forms affected Costs of fuel for
unregulated plants  EIA- 423* costs of coal, natural gas, and petroleum
at an unregulated power plant Tested heat rates  EIA- 411* tested heat
rate under full load

 EIA- 860* tested heat rate under full load Fuel inventory* stocks  EIA-
906* end- of- month coal and petroleum stocks Plant costs and expenses for
unregulated plants

 EIA- 412* generator plant cost and expenses for unregulated plants
Monthly electricity sales information reported for energy- only service

 EIA- 826* monthly electric sales, revenue, and number of customers
reported for energy- only service Latitude and longitude  EIA- 411*
latitude and longitude

 EIA- 767* latitude and longitude

 EIA- 860* latitude and longitude Source: EIA. Note: Other elements
collected in the electric power surveys are not treated as confidential.

Appendix III: EIA Confidentiality Elements

Appendix IV: Comments from the Federal Energy Regulatory Commission Page
64 GAO- 03- 586 Electricity Restructuring Appendix IV: Comments from the
Federal

Energy Regulatory Commission

Appendix IV: Comments from the Federal Energy Regulatory Commission Page
65 GAO- 03- 586 Electricity Restructuring

Appendix IV: Comments from the Federal Energy Regulatory Commission Page
66 GAO- 03- 586 Electricity Restructuring

Appendix IV: Comments from the Federal Energy Regulatory Commission Page
67 GAO- 03- 586 Electricity Restructuring

Appendix IV: Comments from the Federal Energy Regulatory Commission Page
68 GAO- 03- 586 Electricity Restructuring

Appendix IV: Comments from the Federal Energy Regulatory Commission Page
69 GAO- 03- 586 Electricity Restructuring

Appendix V: Comments from the Department of Energy

Page 70 GAO- 03- 586 Electricity Restructuring Appendix V: Comments from
the Department of Energy

Appendix V: Comments from the Department of Energy Page 71 GAO- 03- 586
Electricity Restructuring

Appendix VI: GAO Contact and Staff Acknowledgments

Page 72 GAO- 03- 586 Electricity Restructuring Dan Haas (202) 512- 9828 In
addition to the individual named above, Angelia Kelly, Dennis Carroll,
Jose Martinez- Fabre, Jon Ludwigson, Jonathan McMurray, Frank Rusco,

and Barbara Timmerman made key contributions to this report. Appendix VI:
GAO Contact and Staff

Acknowledgments GAO Contact Acknowledgments

(360242)

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512- 7470 Jeff Nelligan, Managing Director, NelliganJ@ gao. gov (202) 512-
4800

U. S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D.
C. 20548 GAO*s Mission Obtaining Copies of

GAO Reports and Testimony

Order by Mail or Phone To Report Fraud, Waste, and Abuse in Federal
Programs Public Affairs
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