1. Federal Energy Regulatory Commission The FERC Regulatory Process Dennis H. Melvin, Esq. Director – Legal Division (OAL) Federal Energy Regulatory Commission Washington, DC

2. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process2 Question How does FERC decide what a utility can charge and what goes into a tariff?

3. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process3 How Does FERC Regulate? Industry-wide Decisions –Notice of Inquiry (NOI) –Notice of Proposed Rulemaking (NOPR) –Final Rule or Policy Statement Company Specific Decisions –Applications (rate increase, change in a term or condition of a contract, etc.) or complaints filed by utilities, customers, interested parties or state commissions

4. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process4 Company Specific Decisions Application or complaint filed Filing is publicly noticed Staff analysis and recommendation to the Commission (tight deadlines)

5. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process5 Commission action –Decide merits of case without further procedures –Hold a technical conference or call for more written information –Hold trial-type hearing before an Administrative Law Judge Company Specific Decisions (con’t)

6. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process6 OAL Represents the public interest Only unbiased party The results we seek: –Lowest rates consistent with a well-run utility –Non-discriminatory treatment for all customers –Opportunity for utility to earn a fair return and compete

7. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process7 Settlements Are Important Prevents the legal system from being overloaded Settlement allows for faster resolution of disputes Parties are usually happier with a settlement

8. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process8 Adjudication Milestones 1. Judge assigned and Procedural Track set 2. Prehearing/Discovery 3. Prepared Testimony 4. Pre Trial Brief 5. Hearing 6. Initial and Reply Briefs 7. Initial Decision 8. Exceptions Briefs 9. Commission Order & Rehearing

9. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process9 Milestone One The Chief Judge will: –Assign an Administrative Law Judge to the case –May indicate a deadline for decision

10. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process10 Milestone Two Prehearing Conference –Conducted by Presiding Judge assigned –Scope and timetable to be determined –Settlement urged, Trial Staff available Discovery –Discovery concerns raised with ALJ –Procedures established –Wide range of options

11. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process11 Discovery Information regularly filed with the agency Written questions and answers Subpoenas available –Necessary if non-party data required –Nationwide reach Depositions, Inspections, Audits

12. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process12 Protective Orders Intent is to safeguard confidential information Order describes how confidential data is to be handled Issued by the Judge Everyone must sign and agree to its terms

13. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process13 Milestone Three Prepared Testimony –Prefiled before the hearing –May contain confidential information and need special handling –May be electronically filed –Several rounds

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16. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process16 Milestone Four Pre Trial Brief –Includes the theory of the case –Evidence to be presented –Summary of witnesses’ testimony –Description of exhibits –Legal foundation and precedent –Weaknesses in presentations of others

17. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process17 Milestone Five Hearing –Can last one day to many months –Witnesses sworn, direct testimony and exhibits admitted, then cross-examination –Confidential testimony requires special procedures –Written transcript made –Judge ultimately decides admissibility of evidence

18. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process18 A Hearing Room at the FERC

19. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process19 Another Hearing Room

20. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process20 Milestone Six Initial and Reply Briefs –Dates set by Presiding ALJ –Simultaneous unless ordered otherwise –Must not discuss evidence outside of the record

21. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process21 Milestone Seven Initial Decision –Usually summarizes evidence and arguments –Published in FERC Reports –Certified to Commission with the record –Always subject to Commission review

22. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process22 Milestone Eight Briefs On and Opposing Exceptions –30 days after ID, 20 days thereafter –Must be less than 100 pages

23. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process23 Milestone Nine Commission Order & Rehearing –No deadlines on Commission action on Judge’s ruling –Published in FERC Reports –Rehearing request must be filed within 30 days –Further appeals can be made to the court system

24. Federal Energy Regulatory Commission August 9, 2005FERC Regulatory Process24 Thank you for your attention ! Dennis H. Melvin, Esq. »Director, Legal Division »Office of Administrative Litigation »Federal Energy Regulatory Commission »888 First Street, NE »Washington, DC 20426 »(202) 502-8042 : Phone »(202) 208-0188 : FAX »dennis.melvin@ferc.gov