# Presentation: 923157

## Federal Energy Regulatory Commission

**Federal Energy Regulatory Commission**
**Update**

**Presented at **
**Edison Electric Institute**
**Accounting Standards Committee ****Annual Meeting**
**by**
**Janice Garrison Nicholas**
**Chief Accountant**
**Federal Energy Regulatory Commission**

## 
   The views and comments presented are mine alone and do not represent, nor are they to be interpreted to represent the views, comments, or positions of the Federal Energy Regulatory Commission.

-    The views and comments presented are mine alone and do not represent, nor are they to be interpreted to represent the views, comments, or positions of the Federal Energy Regulatory Commission.

- FERC

- November 14, 2005

## Table of Contents

- Organizational Changes
- Chairman’s Priorities
- Energy Policy Act of 2005
- Repeal of PUHCA1935 & Enactment of PUHCA 2005
- Anti-manipulation Proposed Rule
- Enforcement Policy Statement
- ISO/RTO Accounting & Reporting – Proposed Rule
- FERC Quarterly Financial Reporting - Update
- Contested Audit Matters – Proposed Rule
- Interlocking Directorates Final Rule
- Overview of Financial and Operational Audits

- FERC

- November 14, 2005

## Organizational Update 

- New FERC Chairman -  Joseph Kelliher
- Staff Changes:
- Chief of Staff – Daniel Larcamp
- Director, OMTR – Shelton Cannon
- Director, OMOI – Susan Court
- Chief Accountant – Janice Garrison Nicholas

- FERC

- November 14, 2005

**Notes:**
Chairman’s initial agenda:

Reforming the Commission’s transmission access rules (to address complaints of continuing undue discrimination)
California refunds – been 5 yrs -  lets put it to bed and move on
Gas Storage pricing – market based and cost based – reforms may be needed to both with goal being expanded storage capacity and efficient use of existing capac
RTO costs – costs are rising and additional action by commission is needed to ensure the costs are just and reasonable.       
PUHCA Intiatives

## Reform the Commission’s transmission open access rules
Resolve California refund cases
Reform gas storage pricing to facilitate additional storage capacity
Review of RTO costs
Implement provisions of Energy Policy Act of 2005

- Reform the Commission’s transmission open access rules
- Resolve California refund cases
- Reform gas storage pricing to facilitate additional storage capacity
- Review of RTO costs
- Implement provisions of Energy Policy Act of 2005

- FERC

- November 14, 2005

## Energy Policy Act of 2005 (EPAct 2005)

- Signed into law August 8, 2005
- Requires number of rulemakings
- Repeals PUHCA of 1935
- Establishes PUHCA of 2005
- Gives FERC some accounting and recordkeeping authority over holding companies and associate companies
- Gives FERC additional civil penalty authority

- FERC

- November 14, 2005

**Notes:**
The Energy Policy Act of 2005 is an expansive piece of energy legilation.
Portions of it affect almost every one of the Commission’s primary program areas – Gas, Electric,and Hydropower.
Since passage, the Commission has issued NOPRs or Final Rules that address aspects of this legislation related to: electric reliability standards(RM05-3), qualifying facilities RM05-6), merger reform (RM05-34), Order 888 reform (RM05-25), Anti manipulation/antifraud behavior and practices (RM06-3) and  PUHCA reform (RM05-32).

The PUHCA reform rulemaking proposal probably has the most direct accounting and financial reporting implications for you.  So lets spend a little time on that one. 

## Docket No. RM05-32

- Proposed rules implementing the repeal of the PUHCA of 1935 and the enactment of the PUHCA of 2005.
- NOPR issued September 16, 2005
- Comment period expired
- Broad range of comments received
- Action required by December 8, 2005

- FERC

- November 14, 2005

**Notes:**
Voted out at the September 15 Commission meeting.
Comments due 21 days after publication in the federal register with reply comments 7 days thereafter.
This action covers the rulemakings required to implement Subtitle F Of the EPAct of 2005.
Requires holding companies, their associated companies, affiliates and subsidiaries to maintain accounts books and records as the Commission determines relate to costs incurred by associated public utilities and are necessary for the protection of utility customers. 
Proposes to adopt with certain modifications existing SEC rules for:
Preservation of records for holding companies and mutual service companies (Part 256).
Uniform System of Accounts for service companies.  (Part 257)
Reporting requirements for holding companies (U5S) and service companies (U1360).
Registration by holding companies
Requests comments on whether the Commission should not adopt the SEC rules it proposes to adopt or should adopt any SEC rules that has not proposed to adopt in order to carry out its responsibilities under PUHCA of 2005.

Provides for review and Commission approval of service company allocation when it is requested by a holding company or a state PUC.
Invites comments on whether the Commission should apply the lower of cost or market standard for the allocation of costs for non-power goods and services or if it should instead adopt the SEC at cost standard. 

The Commission received over 100 comments on this NOPR and staff is presently working on a final rule.  The comments varied.  In general, a lot of commenters felt that the Commission’s proposed rules went further than needed or necessary to carry out its responsibilities under PUHCA of 2005.  That reaction was not unexpected in that under the tight time constraints imposed by the legislation, the NOPR erred on the side of caution in eliminating oversight rules – which is why the NOPR specifically asked for comments on what SEC rules we proposed keeping that should be eliminated.  

## Issued Anti-manipulation Proposed Rule (RM06-3-000, Issued 10/20/05):
Implements new anti-manipulation provisions of EPAct 2005 which prohibits any manipulative or deceptive practice.
Patterned after SEC’s Rule 10b-5

Policy Statement on Enforcement (PL06-1-000, Issued 10/20/05):
EPAct 2005 increased maximum penalty to $1 million/day per violation.
Provides guidance and more certainty about the enforcement process
Discusses the factors the Commission will consider in deciding on appropriate remedies, including the level of civil penalties to be assessed.

- Issued Anti-manipulation Proposed Rule (RM06-3-000, Issued 10/20/05):
- Implements new anti-manipulation provisions of EPAct 2005 which prohibits any manipulative or deceptive practice.
- Patterned after SEC’s Rule 10b-5
- Policy Statement on Enforcement (PL06-1-000, Issued 10/20/05):
- EPAct 2005 increased maximum penalty to $1 million/day per violation.
- Provides guidance and more certainty about the enforcement process
- Discusses the factors the Commission will consider in deciding on appropriate remedies, including the level of civil penalties to be assessed.

- FERC

- November 14, 2005

## 
Notice of Inquiry Issued September 16, 2004

RM04-12-000, Financial Reporting and Cost Accounting, Oversight and Recovery Practices for Regional Transmission Organizations and Independent System Operators

Received over 50 comments

- Notice of Inquiry Issued September 16, 2004
- RM04-12-000, Financial Reporting and Cost Accounting, Oversight and Recovery Practices for Regional Transmission Organizations and Independent System Operators
- Received over 50 comments

- FERC

- November 14, 2005

**Notes:**
This initiative began as two pronged  Notice of Inquiry.  One prong addressed financial accounting and reporting requirments for these relatively new types of entities.  The second prong addressed cost oversight and accountability for these entities.   In general the Commission requested comments on whether existing rules and practices in these two general areas were adequate and if not what changes should the Commission consider making.  We received a variety of comments from over 50 interested parties.  The comments were quite diverse in both the accounting and cost oversight areas.    I’m going to focus on the accounting aspects of this intiative. 

## RTO Accounting and Reporting

- Uniform System of Accounts
- Developed for vertically integrated business model
- Used by all forms of business organizations
- Revising:  to better identify assets, costs incurred, and revenues earned for RTOs and other public utilities

- FERC

- November 14, 2005

**Notes:**
The Commission’s accounting and financial reporting requirements are designed to provide information about a reporting entity’s financial condition and results of operation.  This information is important in developing and examining rates and in making policy decisions.  

As the electric industry has transitioned from a vertically integrated to an unbundled business model, and as the respective functions of business entities have continued to evolve, the Commission relied on the existing accounting and reporting requirements for traditional public utilities (i.e., principally investor-owned utilities) to get financial information about  RTOs.  That is RTOs followed our existing uniform system of accounts and reporting requirements.  And during this initial restructuring period,  it was difficult to prescribe new accounting rules that could be uniformly applied.  But, the comments we received indicate that sufficient experience has been gained to make some general observations about RTOs and the adequacy of our existing accounting and reporting requirements for these entities.

RTOs are largely not-for-profit companies with no shareholder investment.  They use different classes or types of assets and deploy these resources in a manner that does not readily lend itself to traditional, functional utility plant classifications (e.g., generation, transmission or distribution plant).  RTO assets are largely computer hardware, computer software, and communication equipment.  They allow the RTO to ensure reliability, to operate and monitor competitive markets, to control and order dispatch of resources on the system, and to coordinate and plan short and long-term investment and construction.  
And I think it is fair to say that there was general agreement among the commenters that the existing accounting and reporting rules didn’t do a very good job of identifying and providing financial measurements of  the services provided by RTOs to their members, the assets used, the costs incurred, and the revenues billed.
While most commentors to the NOI did not recommend a completely new USofA to for RTOs, most suggested that more accounting detail is needed to better identify these items in a more relevent and comparable way.

## RM04-12-000, Accounting and Reporting for Public Utilities Including RTOs
NOPR issued June 2, 2005
Comments filed August 26, 2005
Accounting only first step

- RM04-12-000, Accounting and Reporting for Public Utilities Including RTOs
- NOPR issued June 2, 2005
- Comments filed August 26, 2005
- Accounting only first step

- FERC

- November 14, 2005

**Notes:**
After studying the comments received, the Commission decided to move forward with a proposed rulemaking in this docket that puts forth a proposal for changes to the Commissions’s existing Uniform System of Accounts for Public Utilities and Licensees and related reporting requirements  rather than creating an entirely new system of accounts exclusively for RTOs.  I believe that moving forward with the accounting issues raised in the NOI now will get comparable, transparent financial information about grid operations and other RTO services in the public domain and that will aid and inform the Commission and others in making decisions about these issues.
The proposal reflects many of the accounting and financial reporting ideas offered by commentors.  The Commission is of the view that there would be little, if any, impact on existing RTO rate designs from the proposed changes, but seeks comment on this and other related matters raised in this NOPR. The Commission also expects that the proposed changes will lead to improvements in cost recovery practices by providing details concerning the cost of RTO functions and increased assurance that the costs are a legitimate and reasonable cost of providing service and assigned to the correct period for recovery in rates. 
And as I mentioned earlier our Chairman believes the accounting is only the first step in providing oversight.

## RTOs
Expanded reporting 
New functional classification 
Compare costs between RTOs

Traditional Public Utilities
Transparency in costs billed from RTOs and expanded reporting

- RTOs
- Expanded reporting
- New functional classification
- Compare costs between RTOs
- Traditional Public Utilities
- Transparency in costs billed from RTOs and expanded reporting

- FERC

- November 14, 2005

## RTOs
New Asset Function
Computer hardware
Computer software
Structures and improvements

- RTOs
- New Asset Function
- Computer hardware
- Computer software
- Structures and improvements

- FERC

- November 14, 2005

**Notes:**
The benefit of establishing a new asset function within the existing accounting and reporting framework is that the cost of property, plant and equipment used by RTOs will now be uniformly reported by these entities.  This new functional classification will help provide comparability among RTOs that perform regional control and market operations.  The creation of a new RTO asset function will also minimize inconsistent reporting of RTOs’ major technology assets, which include computer hardware, computer software and communication equipment. 

## RTOs
New Expense Function
Dispatching, System Control, Scheduling
Long Term Reliability Planning, Standards Development
Market Accounts
Day-Ahead and Real Time
Transmission Rights
Capacity 
Monitoring and Facilitation
Maintenance Expense Accounts

- RTOs
- New Expense Function
- Dispatching, System Control, Scheduling
- Long Term Reliability Planning, Standards Development
- Market Accounts
- Day-Ahead and Real Time
- Transmission Rights
- Capacity
- Monitoring and Facilitation
- Maintenance Expense Accounts

- FERC

- November 14, 2005

**Notes:**
Similarly, the benefit of the new expense function is that expenses will now be uniformly reported by these entities.

## RTOs
Existing USofA can accommodate  
Customer service costs
Officer salaries and expenses
Administrative and general salaries
Pension and benefits
Interest expense, property insurance, taxes

- RTOs
- Existing USofA can accommodate
- Customer service costs
- Officer salaries and expenses
- Administrative and general salaries
- Pension and benefits
- Interest expense, property insurance, taxes

- FERC

- November 14, 2005

## Traditional Public Utilities 
New Expense Accounts for RTO Billings
Dispatching, System Control, and Scheduling
Long Term Reliability Planning, and Standards Development
Market Monitoring and Compliance
Settlement Amounts

- Traditional Public Utilities
- New Expense Accounts for RTO Billings
- Dispatching, System Control, and Scheduling
- Long Term Reliability Planning, and Standards Development
- Market Monitoring and Compliance
- Settlement Amounts

- FERC

- November 14, 2005

**Notes:**
Public utilities and licensees reimburse RTOs for the RTOs’ operational, administrative and general costs of providing service.   In order to provide greater transparency for the payments made by public utilities and licensees to RTOs, the Commission proposes to create three sub-accounts that utilities will use to record their share of costs billed to them by the RTO.   Additionally, the Commission proposes that each RTO include in its monthly settlement statements a breakdown of the allocation of that RTO’s operational costs into the required categories. This information will allow each RTO member to then record its share of the RTO’s total monthly operating costs in these new sub-accounts.  
The sub-accounts are:Account 561.4, for recording the costs of  scheduling, system control and dispatching services; Account 561.8, for recording the cost of of long-term system planning and standards development; and Account 575.7 for recording the cost of running the various markets and monitoring compliance activities. 
Settlement Amounts: The Commission proposes to include a new schedule in the quarterly and annual financial reports that will require utilities to report the type of transaction and the related amount of expense that it is being settled through the RTO.  This information will assist the Commission in determining the need for future accounting guidance on these matters.
Finally, the Commission proposes that utilities that conduct energy transactions through an RTO by bidding all of their generation into the market and buying  generation back to supply their native load, report these transactions on a net basis in Account 555, Purchase Power.  The Commission invites comment as to under what circumstances would it be appropriate for the public utility or licensee to reflect these types of transactions on a net basis, and under what circumstances would it be appropriate for the public utility or licensee to reflect these types of transactions as distinct purchases and sales. 

## RM04-12 NOPR Comments

- Received 25 comments
- Proposal important first step
- Support for the Commission’s goal: Sound and uniform accounting & reporting
- Different views on how best to attain it
- Scope too broad – Apply to only RTOs
- Scope too narrow – need more info

- FERC

- November 14, 2005

## RM04-12 NOPR Comments

**General:**
- Requests that the Commission provide clarity:
- which accounts are to be filled out by whom
- what amounts should be put in which accounts
- Requests to modify effective date (1/1/2006)
- Request the Commission accept ministerial changes to formula rates

- FERC

- November 14, 2005

## RM04-12 NOPR Comments

**Specific:**
- Traditional utilities question need for new plant accounts for computer hardware, software and communication equipment used for transmission
- Non-RTO public utilities disagreed with need for new expense accounts to capture separately the costs of load dispatching, scheduling, system planning and standards development rather using one account for all costs

- FERC

- November 14, 2005

## RM04-12 NOPR Comments

**Specific:**
- Should require segregation of cost incurred by utilities to participate in RTO with breakdown between transmission and market/generator
- Utilities supported netting power purchases and sales transacted through centralized RTO markets in Account 555/447.  Clarify how – hourly/daily /monthly?
- APPA  - no netting

- FERC

- November 14, 2005

## RM04-12 NOPR Comments

**Specific:**
- Require RTOs to record on their books the costs and revenues related to managed market services
- Clarify how RTOs should account for costs and revenues related to non-tariff services

- FERC

- November 14, 2005

## RM04-12 NOPR Comments

**Specific:**
- How do the proposed sub-accounts 561.6 and 561.7 impact a company’s ability to capitalize the costs?
- Are these accounts necessary since the amounts are likely to be small since most of the costs are reimbursable?

- FERC

- November 14, 2005

## RM04-12 NOPR Comments

**Specifics:**
**Transmission for Others Schedule**
- Is the schedule appropriate for capturing costs?
- Do the utilities capture information in a way that provides for reporting?
- Is this information duplicative to other reports the Commission receives?

- FERC

- November 14, 2005

## Quarterly Financial Reporting

- Established quarterly financial reports for jurisdictional utilities beginning with first quarter 2004
- Compliance:
- 207 of the 213 Major Utilities filed
- 104 of the 115 gas pipelines filed
- 129 of the 137 oil pipelines filed
- Pending waiver requests

- FERC

- November 14, 2005

**Notes:**
Result of Order No. 646    Issued February 11, 2004
In Order No. 646-A, the Commission indicated it would consider requests for waivers for electric cooperatives based upon the facts and circumstances of each respondent. Between June 21, 2004, and October 13, 2004, the commission received 21 requests for waivers of the quarterly financial reporting requirements in their entirety and each requested a filing extension until the Commission acts upon its waiver request. In general they all argue that waiver should be granted because of their small size and limited wholesale activity.  

5 Form 1 companies 
16 Form 1-F companies 

## Quarterly Financial Reporting

- Corporate Officer Certification Statement
- Internal accounting controls
- Significant weaknesses
- Significant changes to internal accounting controls

- FERC

- November 14, 2005

**Notes:**
The NOPR and Final rule implementing quarterly reporting also changed the management certification statements for the reports. The former certification statement focused only on the accuracy of the financial information presented in the Annual Reports.

The scope of the new corporate officer’s certification statement is expanded to include certifications that:  (1) the company has designed internal accounting controls to ensure that material information related to the company is made known to the certifying officer, (2) the certifying officer has disclosed to the company’s auditors any significant weaknesses in the design or operation of the company’s internal accounting controls, and (3) the certifying officer has identified any significant changes in the company’s internal accounting controls in its FERC Annual Report Form. 

## Quarterly Financial Reporting

- Certification Statement
- Requests from EEI, INGAA, and AOPL to delay implementation and modify statement
- Commission Order issued March 23, 2005 delayed implementing the Corporate Officer’s Certification for the FERC Annual Report Forms until further notice

- FERC

- November 14, 2005

**Notes:**
On March 3, 2005, Edison Electric Institute (EEI) filed a request for an extension of time for companies to adopt the revised corporate officer’s certification statement that Order No. 646 requires for FERC Form 1, and proposed modifications to the corporate officer’s certification for FERC Form 1 to conform with changes to a similar certification recently implemented by the Securities and Exchange Commission (SEC).  The Interstate Natural Gas Association (INGAA) filed a similar request on March 11, 2005 with respect to FERC Form 2. 

## Disposition of Contested Audit Matters 

- NOPR: Procedures for Disposition of Contested Audit Matters
- RM06-2-000 issued 10/20/2005
- 21 day comment period / 7 day reply
- Affects 18 CFR Parts 41, 158, 286 and 349

- FERC

- November 14, 2005

## Disposition of Contested Audit Matters 

- Why Was The Change Proposed?
- Existing regulations do not contain procedures for challenging audit findings and proposed remedies of audits conducted under the NGPA and the ICA.

- FERC

- November 14, 2005

## Disposition of Contested Audit Matters 

- What It Does:
- Proposes applying existing procedures for handling disagreed financial matters to  all other types of audits, including operational audits
- Invites comment on
- whether the Commission should provide informal procedures before proceeding with formal procedures contained in the rule.
- the relative merits of such processes and how they could function.

- FERC

- November 14, 2005

## Authorization to HoldInterlocking Positions

- Final Rule: Commission Authorization to Hold Interlocking Positions:
- Issued Sept 16, 2005
- 70 FR 55717 (September 23, 2005)
- Request for rehearing, motion for clarification, and request for stay of the final rule (Oct 17, 2005)

- FERC

- November 14, 2005

## Authorization to HoldInterlocking Positions

- What it Does:
- Clarifies
- that individuals seeking Commission authorization to hold interlocking positions must obtain authorization _prior_ to holding that position
-  the term “holding”
- Requires that an “informational report”
-  be filed _prior_ to holding the interlocking position
-  include a statement that the individual has not yet  assumed the duties or responsibilities for which the authorization is sought

- FERC

- November 14, 2005

**Notes:**
Holding applies throughout part 45 and not just 45.3.  It means acting as, serving as, voting as, or otherwise performing or assuming the duties and responsibilities of the interlocking positions requiring Commission authorization. 

## Authorization to HoldInterlocking Positions

- What it Does:
- Automatic denial of all late-filed applications for authorization to hold interlocking positions
- Individuals that are already authorized to hold interlocking positions, those individuals do not need to re-file under the new regulations to continue to hold their previously authorized interlocking positions (unless and until, of course, they seek to assume additional interlocking positions)
- Absent Commission action within 60 days of a completed application to hold interlocking positions, an application will be deemed granted

- FERC

- November 14, 2005

## Authorization to HoldInterlocking Positions

- What it Does:
- No longer grants waivers of the full requirements of Part 45 in orders granting market-based rate authority
- Commission does not consider Part 45 to be a burdensome regulation
- Commission sees no reason to treat officers and directors of market based entities any differently
- Denied the request to permit individuals who are officers or directors of power marketers to file for automatic authorization under section 45.9 simply because such entities are power marketers
- Individuals who are currently authorized to hold interlocking positions do not need to re-file under Part 45 unless they assume additional interlocking positions

- FERC

- November 14, 2005

## Authorization to HoldInterlocking Positions

-    On October 17, 2005 Commission Received a Request for Rehearing, Motion for Clarification, and Request for Stay of Final Rule from:
- Morgan Stanley Capital Group Inc.
- Merrill Lynch Commodities, Inc.
- Merrill Lynch Capital Services, Inc.

- FERC

- November 14, 2005

## Authorization to HoldInterlocking Positions

- 	The motion contends the Commission did not address requests to clarify or revise automatic authorization rules:
- to apply in cases where the jurisdictional interlocking positions are between companies of the same ultimate parent company
- to reflect the entry of affiliates of financial institutions into the wholesale power business, for whom the Final Rule creates significant yet unnecessary compliance burdens
- so that section 45.9 applies to interlocks between power marketers or a power marketer and a merchant generator within the same corporate family.

- FERC

- November 14, 2005

## Authorization to HoldInterlocking Positions

- 	The motion contends the Commission:
- erred when it declined to adopt automatic authorization procedures for interlocking positions between power marketers in the absence of evidence demonstrating that such interlocks threaten the interests that Congress sought to protect when it enacted Section 305(b)
- failed to justify its elimination of its long standing-standing precedent of granting blanket approvals to market-based rate utilities, subject to reporting obligations and the Commission’s review

- FERC

- November 14, 2005

## Overview of Financial and Operational Audits 

- Office of Market Oversight and Investigations
- On August 12, 2002 OMOI became a formal, functioning office within the Commission
- Two units
- Market Oversight and Assessment
- Investigations and Enforcement
- Financial Audits (August 2004 )
- Operational Audits
- Enforcement

- FERC

- November 14, 2005

## Expanded Approach
Broader in scope and integrated
Tariffs, Standards of Conduct, OASIS
Capabilities from information technology
Utility & independent web sites to confirm data
Expanding email and voicemail search capability
Forensic auditing capability being developed

- Expanded Approach
- Broader in scope and integrated
- Tariffs, Standards of Conduct, OASIS
- Capabilities from information technology
- Utility & independent web sites to confirm data
- Expanding email and voicemail search capability
- Forensic auditing capability being developed

- FERC

- November 14, 2005

## Proactive approach
Conduct industry wide and targeted audits 
Establish a presence
Identify anti-competitive behaviors and rules violations (tariffs, accounting, financial reporting, OASIS
Respond to 
Complaints
Hotline calls
hotline@ferc.gov
1-888-889-8030

- Proactive approach
- Conduct industry wide and targeted audits
- Establish a presence
- Identify anti-competitive behaviors and rules violations (tariffs, accounting, financial reporting, OASIS
- Respond to
- Complaints
- Hotline calls
- _[hotline@ferc.gov](mailto:hotline@ferc.gov)_
- 1-888-889-8030

- FERC

- November 14, 2005

## Overview of Financial and Operational Audits

- FERC

- November 14, 2005

## Overview of Financial and Operational Audits

- FERC

- November 14, 2005

## 	Order 2004 et al. [18 C.F.R. Part 358 - Standards of Conduct for Transmission Providers (TPs)]: 
Combined and amended the electric and gas Standards of Conduct and put into Part 358
Significant changes:

Broadened scope to cover relationships with Energy Affiliates.
Sought to ensure TPs can’t extend market power over transmission to other energy markets by giving their Energy Affiliates unduly preferential treatment.
Help to ensure TPs offer service to all customers, affiliated and non-affiliated, on a non-discriminatory basis.

Compliance Date – September 22, 2004
Phase I compliance reviews of posting requirements – completed 4th quarter of 2004.

- 	Order 2004 et al. [18 C.F.R. Part 358 - Standards of Conduct for Transmission Providers (TPs)]:
- Combined and amended the electric and gas Standards of Conduct and put into Part 358
- Significant changes:
- Broadened scope to cover relationships with Energy Affiliates.
- Sought to ensure TPs can’t extend market power over transmission to other energy markets by giving their Energy Affiliates unduly preferential treatment.
- Help to ensure TPs offer service to all customers, affiliated and non-affiliated, on a non-discriminatory basis.
- Compliance Date – September 22, 2004
- Phase I compliance reviews of posting requirements – completed 4th quarter of 2004.

- FERC

- November 14, 2005

## Completed
PA05-3-000  Aquila Inc.
PA05-8-000  Kern River Gas Transmission
PA05-12-000 Dayton Power & Light Co.

Ongoing
PA05-2-000  Allegheny Power
PA05-4-000  Baltimore Gas & Electric
PA05-6-000  El Paso Natural Gas Co.
PA05-7-000  Florida Power & Light Co.
PA05-9-000  Louisville Gas & Electric
PA05-10-000 Southern California Edison

- Completed
- PA05-3-000  Aquila Inc.
- PA05-8-000  Kern River Gas Transmission
- PA05-12-000 Dayton Power & Light Co.
- Ongoing
- PA05-2-000  Allegheny Power
- PA05-4-000  Baltimore Gas & Electric
- PA05-6-000  El Paso Natural Gas Co.
- PA05-7-000  Florida Power & Light Co.
- PA05-9-000  Louisville Gas & Electric
- PA05-10-000 Southern California Edison

- FERC

- November 14, 2005

## Ongoing Audits
FA05-1-000 DTE Energy Trading Inc.
FA05-2-000 Edison Mission Marketing and 			       Trading, Inc.
FA05-3-000 Sempra Energy Trading Corp.
FA05-4-000 UBS AG (broader scope)
FA05-5-000 Consolidated Edison Energy Inc.

- Ongoing Audits
- FA05-1-000 DTE Energy Trading Inc.
- FA05-2-000 Edison Mission Marketing and 			       Trading, Inc.
- FA05-3-000 Sempra Energy Trading Corp.
- FA05-4-000 UBS AG (broader scope)
- FA05-5-000 Consolidated Edison Energy Inc.

- FERC

- November 14, 2005

## ISO/RTO and Independence Audits

- Completed Financial Audits
- FA04-13-000 MISO
- FA04-14-000 California ISO
- FA04-15-000 New York ISO
- FA04-16-000 PJM
- FA04-17-000 ISO New England
- Ongoing Independence Audits
- RT01-2-013   PJM
- RT01-87-009 MISO

- FERC

- November 14, 2005

## FA04-37-000 Connecticut Yankee Atomic 			    Power Company
Unique 
Single asset company 
Owners are customers 
No longer operating but collecting costs pursuant to FERC tariff 
FERC reporting and accounting 

- FA04-37-000 Connecticut Yankee Atomic 			    Power Company
- Unique
- Single asset company
- Owners are customers
- No longer operating but collecting costs pursuant to FERC tariff
- FERC reporting and accounting

- FERC

- November 14, 2005

## Questions?

- Contact Information:
- _[janice.garrisonnicholas@ferc.gov](mailto:janice.garrisonnicholas@ferc.gov)_
- (202) 502-6602

- FERC

- November 14, 2005