og96012.txt

Office of the General Counsel
B-271810.3
May 24, 1996
The Honorable Frank H. Murkowski Chairman The Honorable J.
Bennett Johnston Ranking Minority Member Committee on Energy and
Natural Resources United States Senate
The Honorable Thomas J. Bliley, Jr. Chairman The Honorable John
D. Dingell Ranking Minority Member Committee on Commerce House of
Representatives
Subject: Open Access Same-Time Information System and Standards
of Conduct
Pursuant to section 801(a)(2)(A) of title 5, United States Code,
this is our report on a major rule promulgated by the Federal
Energy Regulatory Commission (Commission), Department of Energy,
entitled "Open Access Same-Time Information System and Standards of
Conduct" (Docket No. RM95-9-000; Order No. 889). The Commission
issued the final rule on April 24, 1996, and we received it on
April 25, 1996. The final rule was published in the Federal
Register on May 10, 1996. 61 Fed. Reg. 21737.
A companion rule entitled "Promoting Wholesale Competition
Through Open Access Non-Discriminatory Transmission Services by
Public Utilities; Recovery of Stranded Costs by Public Utilities
and Transmitting Utilities" (Docket Nos. RM95-8-000 and RM94-7-001;
Order No. 888) was also published in the Federal Register on May
10, 1996. 61 Fed. Reg. 21540. Today, we are issuing a separate
report, captioned B-271810.4, GAO/OGC-96-13 on the companion rule.
On May 1, 1996, Representative Bob Franks introduced a joint
resolution to disapprove both final rules pursuant to section
802(a) of title 5. 142 Cong. Rec. H4397.
This rule would require each public utility that owns, controls,
or operates transmission facilities used for transmitting electric
energy in interstate commerce to create or participate in an open
access same-time information system (OASIS).
GAO/OGC-96-12 The OASIS would provide potential customers with
information needed to obtain the open access non-discriminatory
service required by the Commission's companion rule. This rule
would also require public utilities to implement standards of
conduct to functionally separate transmission and wholesale power
merchant functions.
Enclosed is our assessment of the Commission's compliance with
the procedural requirements referred to in sections 801(a)(1)(B)(i)
through (iv) of title 5 with respect to the rule. Our review
indicates that the Commission complied with the applicable
requirements.
If you have any questions about this report, please contact
Helen T. Desaulniers, Senior Attorney, at [phone]. The
official responsible for GAO's work related to the Commission is
Victor S. Rezendes, Director for Energy, Resources, and Science
Issues. Mr. Rezendes can be reached at [phone].
Robert P. Murphy General Counsel
Enclosure
cc: The Honorable Elizabeth A. Moler Chair Federal Energy
Regulatory Commission
Page 4 GAO/OGC-96-12
ENCLOSURE
ANALYSIS UNDER 5 U.S.C. §§ 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
ISSUED BY THE FEDERAL ENERGY REGULATORY COMMISSION ENTITLED "OPEN
ACCESS SAME-TIME INFORMATION SYSTEM (OASIS) AND STANDARDS OF
CONDUCT" (DOCKET NO. RM95-9-000; ORDER NO. 889)



(i)
Cost-Benefit Analysis

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


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


Section 603: Initial Regulatory Flexibility Analysis
The preamble to the proposed rule stated that the entities that
would be required to comply with the rule are public utilities and
transmitting utilities that do not fall within the Regulatory
Flexibility Act's definition of small entity.1 60 Fed. Reg.
66197-8. Accordingly, the Commission certified, pursuant to 5
U.S.C. § 605(b), that the rule would not have a significant
economic impact on a substantial number of small entities and did
not prepare an initial regulatory flexibility analysis. 60 Fed.
Reg. at 66198. Section 605(b) states that the certification and
explanatory statement shall be provided to the Chief Counsel for
Advocacy of the Small Business Administration (SBA). In response to
our inquiry, Commission officials explained that the Commission did
not provide a separate certification and statement to SBA because
it considers publication of the certification in the Federal
Register to be notice to SBA. An SBA official has confirmed that
some agencies follow this practice, and SBA has not objected to
it.
Section 604: Final Regulatory Flexibility Analysis
1Section 601(3) of title 5, United States Code, provides that
the term "small business" generally has "the same meaning as the
term 'small business concern' under section 3 of the Small Business
Act." Section 3 of the Small Business Act defines a "small business
concern" as a business which is independently owned and operated
and which is not dominant in its field of operation. 15 U.S.C. §
632(a).
GAO/OGC-96-12 In the preamble to the final rule, the Commission
reiterated that the rule would only apply to public and
transmitting utilities and again certified that the rule would not
have a significant economic impact on a substantial number of small
entities within the meaning of the Regulatory Flexibility Act. See
61 Fed. Reg. 21762. Therefore, the Commission did not conduct a
final regulatory flexibility analysis under 5 U.S.C. § 604(a). One
commenter expressed concern that the Commission would extend the
requirement for an open access same-time information system (OASIS)
to nonpublic, not-for-profit cooperative utilities and stated that
the Commission would then be required to analyze the requirement's
effect on those utilities. In response, the Commission emphasized
that the rule would only apply to public utilities that own,
operate, or control transmission facilities subject to the
Commission's jurisdiction. See 61 Fed. Reg. at 21763. By letter of
May 9, 1996, the Commission informed SBA of its certification.
In light of the Commission's determination that the rule would
not have a significant economic impact on a substantial number of
small entities, sections 605(a) and (c), 607, and 609 are
inapplicable.
(iii) Agency Actions Relevant to Sections 202-205 of the
Unfunded Mandates Reform Act of 1995, 2 U.S.C. §§ 1532-1535
As an independent regulatory agency, the Commission is not
subject to title II of the Unfunded Mandates Reform Act of
1995.
(iv) Other Relevant Information Under Acts and Executive
Orders
Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
The Commission promulgated the OASIS rule under the notice and
comment procedures of 5 U.S.C. § 553. A notice of proposed
rulemaking was published on December 21, 1995. 60 Fed. Reg. at
66182. The Commission received comments on the proposed rule from
104 commenters. In the preamble to the final rule, the Commission
responded to issues raised during the comment period.
Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520
The rule requires public utilities to create or participate in
an OASIS designed to provide potential customers with information
by electronic means about available transmission capacity and
prices. According to the preambles to the proposed and final rules,
the Commission reviewed its proposed information collection and,
among other things, assessed the need for the information, how the
information would be used, and the associated burden. 60 Fed. Reg.
at 66184, 66198; 61 Fed. Reg. at 21739, 21763.
Page 4 GAO/OGC-96-12 In addition, the Commission solicited and
evaluated comments on the proposed information collection. The
Commission specifically solicited public comments on the need for
and utility of the information; the accuracy of the burden estimate
contained in the preamble to the proposed rule; ways to enhance the
quality, utility, and clarity of the information to be collected;
and suggested methods for minimizing the burden. See 60 Fed. Reg.
at 66184. In the preamble to the final rule, the Commission
responded to comments on various aspects of the OASIS requirement.
The Commission also adjusted its burden estimate in response to
issues raised by commenters. See 61 Fed. Reg. at 21739, 21763.
Consistent with the requirements of the Paperwork Reduction Act,
the preambles to the proposed and final rules set forth significant
information about the proposed collection of information. Among
other things, the preambles included a title and reasons for the
information collection, the proposed use for the information, a
description of the respondents, and the frequency of responses. 60
Fed. Reg. at 66198; 61 Fed. Reg. at 21763. The preambles also cited
OMB's clearance requirements, though not specifically 44 U.S.C. §
3507. 2 60 Fed. Reg. at 66198; 61 Fed. Reg. at 21763.
At the same time as it requested public comments, the Commission
submitted its proposed collection of information and certification
under 44 U.S.C. § 3506(c)(3) to the Office of Management and Budget
(OMB). See 60 Fed. Reg. at 66184. In response to our inquiry,
Commission staff advised that OMB approved the information
collection requirement. OMB also asked that the Commission examine
the burden associated with "third party reporting" and ensure that
this burden was reflected in the Commission's final rule. The
Commission also submitted the final rule to OMB. See 61 Fed. Reg.
at 21763. On May 3, 1996, the Commission again certified to OMB
that the information collection complied with each of the
objectives identified in 44 U.S.C. § 3506(c)(3).
Statutory Authorization for the Rule
In the preambles to the proposed and final rules on the open
access nondiscriminatory tariff and "stranded costs," the
Commission explained that sections 205 and 206 of the Federal Power
Act, 16 U.S.C. §§ 824d and 824e, require it to ensure that, with
respect to any transmission in interstate commerce or any sale of
electric energy for resale in interstate commerce by a public
utility, no person is subject to any undue prejudice or
disadvantage. 60 Fed. Reg. at 17664; 61 Fed. Reg. at 21541. In the
preamble to the final OASIS rule, the Commission explained that
2Section 3506(c)(1)(B) requires each agency to establish a
process to ensure that each information collection indicates the
collection is in accordance with the clearance requirements of
section 3507.
Page 4 GAO/OGC-96-12
the information access requirement embodied in the OASIS rule is
necessary to meet the requirements of the open access rule. 61 Fed.
Reg. at 21739-40.
The Commission did not identify any other statute or executive
order imposing procedural requirements relevant to the OASIS
rule.
Page 4 GAO/OGC-96-12