FY 2008 

PERFORMANCE AND 

ACCOUNTABILITY REPORT 

FEDERAL ENERGY REGULATORY COMMISSION 

NOVEMBER 2008 

Joseph T. Kelliher 

Chairman 

Table of Contents 

Letter from the Chairman.............................................................................................................1 

Management’s Discussion and Analysis......................................................................................3 

Introduction......................................................................................................................................4 

Organizational Structure ..................................................................................................................4 

Strategic Plan Overview ..................................................................................................................6 

Strategies for Carrying Out the Commission’s Responsibilities .....................................................7 

Business Plan ...................................................................................................................................9 

Full Cost Recovery ..........................................................................................................................9 

Program Performance Overview......................................................................................................9 

Financial Performance Overview ..................................................................................................22 

Controls, Systems, and Legal Compliance ....................................................................................25 

Possible Future Effects of Existing Events and Conditions...........................................................28 

Limitations of the Financial Statements ........................................................................................28 

Improper Payments Information Act Reporting ............................................................................29 

Financial Section..........................................................................................................................31 

Message from the Chief Financial Officer.....................................................................................32 

Independent Auditors’ Report........................................................................................................34 

Balance Sheets ...............................................................................................................................38 

Statements of Net Cost...................................................................................................................39 

Statements of Changes in Net Position..........................................................................................40 

Statements of Budgetary Resources...............................................................................................41 

Statements of Custodial Activity ...................................................................................................43 

Notes to Financial Statements........................................................................................................44 

Performance Report ....................................................................................................................61 

Introduction....................................................................................................................................62 

Performance Measurement Data for Energy Infrastructure: 

FY 2005 – FY 2008 .......................................................................................................................63 

Performance Measurement Data for Competitive Markets: 

FY 2005 – FY 2008 .......................................................................................................................78 

Performance Measurement Data for Enforcement: 

FY 2005 – FY 2008 .......................................................................................................................91 

Performance Measurement Data for Supporting Initiatives: 

FY 2005 – FY 2008 .......................................................................................................................98 

Appendix A: Organizational Chart..........................................................................................113 

Appendix B: Strategic Plan.......................................................................................................117 

Appendix C: Statutory Authority.............................................................................................121 

Appendix D: Acronym Glossary...............................................................................................125 
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Management’s 

Discussion and Analysis 

(Unaudited) 
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Introduction 

In accordance with the guidelines set forth in Office of Management and Budget (OMB) 

Circular A-136 and Section 230 of Circular A-11, this report presents the Federal Energy 

Regulatory Commission’s (the Commission’s, FERC’s) fiscal year (FY) 2008 audited 

annual financial statements and program performance report. The financial section 

includes the Commission’s audited balance sheets, statements of net cost, changes in net 

position, budgetary resources, custodial activity, and notes to the financial statements. 

The performance report section includes performance measurement data for fiscal years 

2005 through 2008. Additionally, this report includes an overview of the Commission, 

including its mission and organizational structure. 

This Performance and Accountability Report serves as a guide to the Commission’s key 

initiatives and activities during FY 2008. Approximately 1,281 full time equivalents 

(FTEs) carried out the Commission’s mission in FY 2008 using a budget of $260.4 

million. 

Organizational Structure 

The Federal Energy Regulatory Commission is an independent regulatory agency within 

the U.S. Department of Energy (DOE). The Commission’s statutory authority centers on 

major aspects of the Nation’s wholesale electric, natural gas, hydroelectric, and oil 

pipeline industries. 

The Commission was created through the Department of Energy Organization Act on 

October 1, 1977. At that time, the Federal Power Commission (FPC), the Commission’s 

predecessor that was established in 1920, was abolished and the Commission inherited 

most of the FPC’s regulatory mission. 

FERC is composed of up to five commissioners who are appointed by the President of 

the United States with the advice and consent of the Senate. Commissioners serve 

staggered five-year terms and have an equal vote on regulatory matters. To avoid any 

undue political influence or pressure, no more than three commissioners may belong to 

the same political party. One member of the Commission is designated by the President 

to serve as Chair and as FERC's administrative head. FERC’s decisions are not reviewed 

by the President or Congress, maintaining FERC's independence as a regulatory agency, 

and providing for fair and unbiased decisions. 

In addition to the Chairman and four Commissioners, FERC is organized into nine 

separate functional offices; each responsible for carrying out specific portions of the 

Commission’s responsibilities. The offices work in close coordination to effectively 

carry out the Commission’s statutory authority. 

The Commission modified its organizational structure in FY 2008. The Commission 

established a ninth office, the Office of Electric Reliability, on October 1, 2007. 

Formerly a division within the Office of Energy Markets and Reliability, this action 

reflected the growing importance of the reliability mission at the Commission. The 
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Office of Energy Markets and Reliability was renamed the Office of Energy Market 

Regulations. An organizational chart, as of September 30, 2008, is included in Appendix 

A. The following is a brief description of the nine offices and their operational roles. 

Office of Administrative Law Judges (ALJ) - Resolves contested cases as directed by the 

Commission either through impartial hearing and decision or through negotiated 

settlement, ensuring that the rights of all parties are preserved. 

Office of Administrative Litigation (OAL) - Litigates or otherwise resolves cases set for 

hearing. Represents the public interest and seeks to litigate or settle cases in an equitable 

manner while ensuring the outcomes are consistent with Commission policy. 

Office of Electric Reliability (OER) - Oversees the development and review of 

mandatory reliability and security standards. Ensures compliance with the approved 

mandatory standards by the users, owners, and operators of the bulk power system. 

Office of Energy Market Regulation (OEMR) - Provides technical and policy advice on 

matters involving markets, tariffs and rates relating to electric, natural gas, and oil 

pipeline facilities and services. 

Office of Energy Projects (OEP) - Fosters economic and environmental benefits for the 

Nation through the approval and oversight of hydroelectric, natural gas (including 

pipelines, storage, and liquefied natural gas facilities), and electric transmission projects 

that are in the public interest. 

Office of Enforcement (OE) - Protects customers through understanding markets and 

their regulation, timely identifying and remedying market problems, assuring compliance 

with rules and regulations, and detecting violations and crafting appropriate remedies, 

including civil penalties. 

Office of External Affairs (OEA) - Responsible for all external communications with the 

public and media for the Commission. 

Office of the Executive Director (OED) - Provides administrative support services to the 

Commission including human resources, procurement, information technology, 

organizational management, financial, and logistic functions. Included in this office is 

the Secretary of the Commission that serves as the focal point through which all filings 

are made for proceedings before the Commission. 

Office of the General Counsel (OGC) - Provides legal services to the Commission. 

Represents the Commission before the courts and Congress and is responsible for the 

legal aspects of the Commission’s activities. 
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Mission

Regulate and oversee energy industries in the 

economic, environmental, and safety interests of the 

American public. 

Vision

Abundant, reliable energy in a 

fair competitive market. 

Strategic Plan Overview 

The United States has the world’s most durable market economy, every sector of which 

depends vitally on energy. The Commission has an important role in the development of 

a reliable energy infrastructure and the protection of wholesale customers from unjust and 

unreasonable rates and undue discrimination and preference. The Commission draws its 

authority from various statutes and laws, which are listed in Appendix C. The 

Commission’s vision is to promote abundant, reliable energy in a fair, competitive market 

thereby supporting a strong, stable national economy. To accomplish this, the 

Commission has three main goals: 

1. Energy Infrastructure 

Goal: Promote the Development of a Strong Energy Infrastructure. 

This goal encourages investment in the infrastructure needed to sustain energy markets 

by expediting the decision-making process, maintaining regulatory and cost certainty, and 

protecting the energy infrastructure. This goal, which focuses on infrastructure, covers 

many of the Commission’s important responsibilities such as, pipeline certificates, 

hydropower licenses and preliminary permits, liquefied natural gas (LNG) siting and 

inspections, compliance activities, environmental and other licensing conditions, dam 

safety inspections and most rate determinations. This goal also captures the 

Commission’s responsibilities over the reliability of the interstate transmission grid. 

2. Competitive Markets 

Goal: Support Competitive Markets. 

This goal focuses on the competitive forces within the electric and gas markets, and the 

rules that govern those markets. This involves the Commission employing best practices 

in market rules, promoting transparency in electric and gas markets, and reforming 

market policies where necessary. Along with some traditional work in the area of rate 

determinations, this goal includes various initiatives to address market power. 
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3. Enforcement 

Goal: Prevent Market Manipulation. 

This goal ensures that competitive energy markets benefit the Nation over the long run by 

ensuring that the Commission will identify and remedy energy market problems. This 

entails recognizing problems quickly and addressing them before they become severe. 

Effective internal compliance programs within companies and self-policing will also help 

achieve this goal. The Commission will conduct traditional investigations and apply its 

expanded penalty authority where appropriate. 

The Commission’s Strategic Plan also includes several initiatives that support each of the 

strategic goals. These initiatives include functions such as enhancing the talents and skills 

of the staff through recruitment and training; building effective, customer-friendly 

information technology services; supporting the Commission with logistics and financial 

services; and strengthening strategic management processes. Additionally, the initiatives 

include the Commission’s litigation, alternative dispute resolution services, 

communication, outreach and other collaboration efforts. 

As the Commission works to achieve its mission, its focus remains on five guiding 

principles: organizational excellence, due process and transparency, regulatory certainty, 

stakeholder involvement, and timeliness. Whether the Commission is adjudicating a rate 

filing, ruling on a permit application, or developing a new policy, it strives to meet these 

criteria as a means of ensuring that each of its actions is consistent with the public 

interest. 

Strategies for Carrying Out the Commission’s Responsibilities 

The backbone of the Commission’s work is to ensure that energy infrastructure is 

developed in the public interest and that wholesale electric and natural gas rates are just 

and reasonable and not unduly discriminatory or preferential. As early as 1986, the 

Commission promoted effective competition in the wholesale markets it regulates by 

establishing rules for open access to transmission facilities. Over time, the natural gas 

and electric industries transformed from companies using their monopoly-owned 

transportation and transmission facilities to supply all the needs of their own wholesale 

customers, to companies providing competing suppliers and wholesale customers with 

open and non-discriminatory access to their facilities, under Commission-approved 

tariffs. This allows independent suppliers to compete for natural gas and electric energy 

sales and to offer market choices for customers at wholesale. The development and 

operation of regional transmission organizations (RTOs), independent transmission 

system operators (ISOs), and independent transmission companies in the electric industry 

and market hubs in the gas industry has increased competitive opportunities in the 

provision of services for buying and selling energy. The Commission monitors 

wholesale power and natural gas markets to ensure that its policies mitigate market 

power. 

Regulation and competition work in concert and the Commission relies on a combination 

of both to carry out its duties across industries. While the Commission encourages 

competitive wholesale markets, they continue to be subject to the Commission’s 
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regulatory oversight. The Commission’s energy market regulation will continue to refine 

market operations so competition encourages investment in infrastructure in a manner 

that is efficient and protects customers. 

In addition to the regulation and oversight of energy markets, the Commission must 

respond timely to requests for infrastructure development to meet the growing demand 

for energy. The Commission’s authority applies when companies propose to expand or 

construct additional hydropower, LNG, natural gas pipelines, storage, and related 

facilities, and electric transmission lines. In an effort to reduce the amount of time it 

takes to process an application, a perceived barrier to investment, the Commission has 

expedited the licensing and certification process of these facilities by having Commission 

staff actively participate in projects that undergo the pre-filing process. Pre-filing allows 

the environmental review process to start earlier in the project review and allows the 

public, government agencies, and other stakeholders to get involved at a time when 

fundamental decisions are being made, all of which helps to open the communication 

earlier in the project review process so problems can be averted later in the process. The 

Commission’s participation and initiative in these efforts have allowed for the filing of 

more complete applications which enables more efficient and expeditious licensing 

actions by the Commission. 

To protect and improve the reliability and security of the Nation’s bulk power system, the 

Commission will oversee the development and review of mandatory reliability and 

security standards. The Commission will achieve this through active involvement in the 

standards development process of the Electric Reliability Organization (ERO) and review 

of all reliability standards filed by the ERO. The Commission will provide extensive 

oversight of the ERO processes and compliance efforts to ensure firm, fair, and consistent 

implementation of, and compliance with, the approved mandatory reliability standards, 

including cyber and physical security. FERC will also join or lead incident and alleged 

violation analyses and/or investigations following bulk-power system incidents or 

complaints. The Commission will also track and review all alleged violations, mitigation 

plans, and proposed penalties and conduct ERO and regional entity performance reviews 

and audits. Finally, the Commission will review all notices of appeal of ERO compliance 

registry decisions. 

The Commission will rely on its Reliability Monitoring Center and its 24/7 emergency 

message system to monitor the integrity of the system continuously. In addition, FERC 

will monitor the reliability and adequacy planning of the bulk-power system by 

evaluating the ERO’s and Regional Entities’ short-term and long-term reliability 

assessments for compliance with reliability planning standards as well as the adequacy of 

the bulk-power system and evaluating siting applications within the DOE designated 

National Interest Electric Transmission Corridors. 

To ensure that jurisdictional infrastructure projects are safe, the Commission performs 

detailed safety and security analysis during its comprehensive review of a proposal for a 

new LNG or hydropower facility. The Commission also monitors and inspects these 

projects throughout the life cycle to ensure safety and security compliance. During 
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construction, Commission staff engineers frequently inspect a project and once 

construction is complete, the Commission follows inspection schedules depending on the 

type of facility. In addition, all LNG and hydropower facilities are required to coordinate 

with federal, state and local agencies and develop emergency response plans. 

For the ongoing success of market operations and infrastructure development, the 

Commission must ensure that all of its rules and regulations are followed by regulated 

entities, and those doing business with regulated entities. Among the most notable, 

FERC has codified Market Behavior Rules and the prohibition of energy market 

manipulation. In addition to actively monitoring compliance, the Commission also 

supports and strongly encourages regulated entities to maintain effective internal 

monitoring and compliance programs. If an entity is found to be in violation of any rules 

or regulation, the Commission has established factors it will consider when assessing 

civil penalties or developing remedies. This allows the Commission’s enforcement to be 

fair; a key component of the Commission’s approach to enforcement. The Commission 

has provided greater due process to industry by, for example, providing a no-action letter 

process and increasing the opportunities for companies to resolve disputed matters during 

the course of an audit. To facilitate fair and equitable compliance and enforcement 

efforts, the Commission conducts outreach efforts with the regulated community and 

adjusts enforcement polices where appropriate. 

Business Plan 

The Commission’s annual Business Plan details the activities and resources allocated to 

meet the Strategic Plan’s goals and objectives. This increases internal accountability by 

enabling management to link individual office responsibility, due dates, priorities, and 

budget resources to Commission activities. The Business Plan is an iterative process that 

helps to identify which activities are leading the Commission towards achieving 

particular goals and objectives. During FY 2008, the Commission reported actual FTE 

usage at a detailed activity level in its Business Plan, which improved offices’ ability to 

organize and allocate resources effectively. 

Full Cost Recovery 

The Commission recovers the full cost of its operations through annual charges and filing 

fees assessed on the industries it regulates as authorized by the Federal Power Act (FPA) 

and the Omnibus Budget Reconciliation Act of 1986. The Commission deposits this 

revenue into the Treasury as a direct offset to its appropriation, resulting in no net 

appropriations. 

Program Performance Overview 

The performance measurement data and other achievements included below constitute a 

few of the Commission’s key achievements during FY 2008. The performance measures 

and targets were selected from the Commission’s FY 2009 Performance Budget Request. 

A complete list of the Commission’s performance measurement data for fiscal years 2005 

through 2008 is included in the Performance Report section of this report. 
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Performance Measurement Data for Energy Infrastructure

Goal: Promote the Development of a Strong Energy Infrastructure 

Reliability Accomplishments 

In October 2007, the new OER was established to help protect and improve the reliability 

and security of the nation’s bulk power system through effective regulatory oversight. 

OER’s responsibilities include overseeing the development and review of mandatory 

reliability and security standards; ensuring compliance with the approved mandatory 

standards by the users, owners, and operators of the bulk power system; monitoring and 

addressing issues concerning the nation’s bulk power system including assessments of 

resource adequacy and reliability; and directing long-term strategic research programs to 

identify emerging reliability and security issues and their implications for bulk power 

system planning, operations and Commission regulation. Over the course of FY 2008, 

OER has been successful in hiring 29 new employees to help accomplish the mission of 

the new office. 

Performance Measurement Performance Target Result 

Timely approval of ERO/RE 

budgets and business plans Complete by November 1, 2007 Target Met. Order was issued on October 18, 2007. 

In FY 2008, the Commission reviewed and approved business plans and budgets for the 

North American Electric Reliability Corporation and for the eight Regional Entities (RE), 

as well as the budget for the Western Interconnection Regional Advisory Body. The 

Commission also directed that it be supplied additional information and that additional 

metrics be developed for the next budget filing to help with assessing accomplishments 

achieved under the business plans. 

Additional Accomplishments in Logistics & Security

The Commission issued Order No. 706, which became effective in April 2008, approving 

the first eight mandatory critical infrastructure protection (CIP) standards containing over 

160 security-related requirements which addressed such issues as critical cyber asset 

identification, security management controls, physical security of critical cyber assets, 

and recovery plans for critical cyber assets. That order also directed the ERO to make 

many improvements to these CIP standards to address shortcomings identified by the 

Commission. 

Performance Measurement Performance Target Result 

Timeliness of processing proposed 

reliability standards 

75% of filed proposed reliability 

standards are remanded or approved 

within 18 months, unless found 

incomplete 

Target Met. 100% of Reliability 

Standards were remanded or 

approved within 18 months of filing. 

100% of Cyber Security Standards 

were approved within 18 months of 

being filed. 
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This fiscal year, the Commission reviewed and analyzed four proposed reliability 

standards filed by the ERO for Commission approval. Commission staff participated in 

the formulation and drafting of determinations and directives for modification, as 

necessary, resulting in Commission approval of Facility Design and Maintenance 

Standards in Order No. 705. The Commission issued a notice of proposed rulemaking 

proposing further improvements to the Interconnection Reliability Operations and 

Coordination Standard. In each instance, staff proposed determinations whether the 

proposed reliability standard met the criteria or directives previously set forth by the 

Commission and whether the assigned Violation Risk Factors were consistent with the 

Commission’s guidelines. Staff also participated in notices of proposed rulemakings 

relevant to the three approved standards. 

Additional Accomplishments in Reliability Standards

In FY 2008, the Commission has participated, or is currently participating in, the ERO 

development of 36 different standards related to various topics. 

 

Reliability Standard Topic Number of 

Standards 

Resource Demand Balancing 9 

Facilities Design, Connections, and 

Maintenance 7 

Interconnection Reliability Operations and 

Coordination 1 

Modeling, Data, and Analysis 6 

Nuclear 1 

System Personnel Training 2 

Protection and Control 4 

Transmission Planning 6 

In addition to participating in the development process of ERO standards, the 

Commission also participated in the ERO’s development of Violation Risk Factors for 

the requirements of reliability standards approved in Order No. 693. Similar to the 

participation in the standards development process, staff participated in drafting team 

meetings to ensure the Commission’s expectations and directives are implemented prior 

to an ERO filing. On a regional basis, the Commission has, or is currently participating 

in, the development of 32 proposed regional standards for 8 regions. 
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In addition to this participation, the Technical Review Panel (TRP) was formed. The 

TRP is comprised of senior leaders from OER and contracted subject matter experts to 

provide technical guidance on identified issues relevant to ERO proposed or existing 

standards. This panel will ensure consensus and technical relevancy of information is 

communicated from the Commission to the ERO and its standards drafting teams. 

Performance Measurement Performance Target Result 

Percentage of ERO penalty action 

rulings reviewed or tolled to prevent 

inappropriate rulings from going 

into effect by default 

100% 

Target Met. 100% (37 out of 37) 

penalty action rulings were reviewed 

to prevent inappropriate rulings from 

going into effect. They were 

accepted by operation of law, 

Guidance on Filing Notices of 

Penalty, 124 FERC ¶ 61,015 (July 3, 

2008) 

The Commission reviewed the first 37 Notices of Penalty (NOP) addressing over 100 

violations filed by the ERO and issued two guidance orders on processing NOP and 

developing a complete record in support of proposed penalties. Acceptance of the first 

NOP marked the completion of the first complete cycle under the mandatory and 

enforceable reliability standards under the Commission’s reliability authority. 

Additional Accomplishments in Compliance

The Commission, over the first year of mandatory and enforceable reliability standards, 

developed and implemented a strategy to ensure compliance by users, owners, and 

operators of the bulk power system. This strategy focused on close oversight and support 

to ensure the development and success of a strong ERO. This oversight has included 

review of thousands of ERO submittals, both public and non-public, and through working 

closely with the ERO and RE. OER and OE also participated in a variety of meetings with 

ERO/RE staff and acted as “observers” on eight compliance audits of registered entities 

and approximately ten event analyses/compliance violation investigations, plus numerous 

other incidents and disturbances, led by the ERO or RE. 

The Commission performed extensive review of the first filings addressing violations of 

the mandatory and enforceable reliability standards. This included over 1,800 mitigation 

plans addressing more than 3,000 violations of reliability standards that began prior to the 

date the standards became mandatory and enforceable, i.e., before June 18, 2007. 

Because these violations began and were addressed by an ERO-approved mitigation plan 

before the effective date of the standards, the ERO proposed no penalties for these 

violations. This also included technical review of thousands of ERO Notices of Alleged 

Violation and review of the ERO’s penalty tool for calculating penalties related to 

reliability standards violations. It also encompassed oversight of the ERO’s registration 

of over 1,800 entities as users, owners, or operators of the bulk power system, including 

ruling on ten appeals of the ERO’s compliance registry decisions. 
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Performance Measurement Performance Target Result 

Percentage of ERO / industry 

reliability readiness evaluations of 

Reliability Coordinators in which 

FERC participates 

75% 

Target Met. Participated in 100% of 

ERO/industry reliability readiness 

evaluations of Reliability 

Coordinators (i.e., CaliforniaMexico, Rocky Mountain-Desert 

Southwest, SPP, and ERCOT 

Reliability Coordinators). 

Percentage of load served, included 

in ERO / industry reliability 

readiness evaluations, in which 

FERC participates 

35% 

Target Met. Participated in 11 

readiness evaluations which 

represented 78% of load served. 

The Commission participated in all the ERO/industry reliability readiness evaluations of 

Reliability Coordinators which included California-Mexico, Rocky Mountain-Desert 

Southwest, Southwest Power Pool (SPP) and Electric Reliability Council of Texas 

(ERCOT) Reliability Coordinators. These readiness evaluations were performed to better 

identify areas of excellence in operations and areas in need of improvement for existing 

or new standards. The ERO Readiness Evaluation and Improvement Program 

independently reviewed the operations of all balancing authorities, transmission 

operators, reliability coordinators, and other entities that support the reliable operation of 

the bulk power system in North America, and determined their readiness to maintain safe 

and reliable operations. The results of these evaluations were used to champion the 

changes required to improve the reliability performance of these entities. 

Additional Accomplishments of Bulk Power System Analysis

The Commission established the Reliability Monitoring Center with additional wide-area 

monitoring of Tennessee Valley Authority, Midwest Independent Transmission System 

Operator (MISO), and Florida Reliability Coordination Council systems which helped to 

develop the daily regional forecast at peak system condition reports and provided regular, 

timely and accurate bulletins when significant events or threats to the bulk power system 

occurred such as the California wildfires, hurricanes, system islanding and outages. 

In addition, the Commission developed and presented a report on the 2008 Summer 

Reliability and Market Assessment at the Commission’s May open meeting. This report 

reviewed and analyzed the ERO's 2007 Long Term Reliability Assessments. The 

Commission also participated with various governmental agencies on the establishment 

of a U.S. Smart Grid taskforce. Staff participated, reviewed and provided comments on 

the Smart Grid white paper and the DOE's Wind report. Staff also prepared and 

presented the Commission's Generator Interconnection Procedures at the Joint Nuclear 

Regulatory Commission and FERC meeting. 

Other Significant Accomplishments in Reliability

The Commission reviewed approximately 100 filings in docketed rate proceedings to 

evaluate their engineering aspects and potential reliability implications to the bulk power 

system. The engineering issues examined include but were not limited to: (1) 

contingency reserve requirements; (2) reliability issues; (3) reactive power needs; (4) 
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generator interconnections and wind interconnection issues; (5) regional reserve 

requirements; (6) various characteristics and performance criteria of generators such as 

ramping, derating and outages; (7) dynamic scheduling, eTag and Open Access Sametime Information System (OASIS) matters; and (8) Reliability Must Run agreements. 

The Commission also completed review of approximately 80 compliance filings to 

determine whether they met Order No. 890’s requirements with respect to the available 

transmission capacity calculation, and directed additional compliance filings because the 

filing failed to satisfy one of the requirements. 

Hydropower Safety Accomplishments 

Performance Measurement Performance Target Results 

Percentage of high- and significanthazard-potential dams inspected 

annually 

100% 

Target Met. 100% of high- and 

significant-hazard-potential dams 

were inspected. 

The Commission is responsible for conducting operation inspections of almost 1,000 high 

and significant hazard potential dams each year. These inspections are conducted by 

engineers located in the Commission’s Division of Dam Safety and Inspections five 

regional offices: New York, Atlanta, Chicago, Portland (OR), and San Francisco. 

Each operation inspection serves to verify that the hydropower project is operating safely, 

has an effective dam safety surveillance monitoring program, and an appropriate security 

program. Any safety problems or concerns identified during the inspection may lead to 

engineering investigations, evaluations, or corrective actions such as remedial 

modifications, enhanced monitoring of the performance of the structures, or improved 

security measures being required by the Commission. Inspections also ensure that 

projects receive the necessary maintenance to provide the long-term structural integrity of 

the project and help ensure that project owners comply with their license terms and 

conditions. Furthermore, these inspections ensure the continued operation of hydropower 

projects, which enables them to continue to produce a wide variety of multi-purpose 

benefits. 

Commission engineers provided effective leadership in the resolution of specific project 

safety issues at the Taum Sauk and Silver Lake rebuilds, and Swinging Bridge, Black 

River Falls, Victoria, Sturgis, Conklinville, Lowell, Upper/Middle, Fire Mountain, 

Lowell, Caples Lake, and Hebgen Projects. 

LNG Safety Accomplishments 

Performance Measurement Performance Target Results 

Percentage of qualifying LNG plants 

inspected during ongoing 

construction activity 

90% of plants inspected every 8 

weeks 

Target Met. 100% of qualifying 

LNG plants were inspected at least 

once every 8 weeks during ongoing 

construction. 
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LNG plant construction activity during FY 2008 occurred at eight major facilities, 

including five new LNG import terminals and expansions of three existing LNG 

terminals. The five new import terminals are in Texas and Louisiana: Freeport LNG, 

Cheniere Sabine Pass Phases I and II, Sempra Cameron LNG, ExxonMobil Golden Pass, 

and Gulf LNG. Two of the new import terminals, Freeport LNG and Sabine Pass Phase 

I, completed construction during the fourth quarter and commenced operations. 

Construction continued on major expansion projects at two existing import terminals: the 

Dominion Cove Point Expansion Project and the Trunkline Infrastructure Enhancement 

Project. New construction began during FY 2008 on a major expansion at the Southern 

LNG Elba Island terminal. A team of two Commission LNG engineers were assigned to 

each project to ensure that all of the qualifying projects were inspected at least once every 

eight weeks and to verify that facilities under construction complied with engineering and 

safety conditions set forth in the Commission order. Each team also inspected 

environmental mitigation measures at each site and reviewed the final design of process 

and safety equipment to verify compliance with the authorized design.

Performance Measurement Performance Target Results 

Percentage of LNG import terminals 

inspected annually 90% Target Met. 100% of the LNG import terminals were inspected. 

Percentage of LNG peak-shaving 

facilities inspected biennially 90% 

Target Met. 100% of peak shaving 

plants were inspected according to 

the biennial schedule. 

Percentage of LNG facilities that 

meet all current safety standards or 

are subject of a compliance letter 

100% 

Target Met. 100% of the LNG 

facilities either met all current safety 

standards or received a compliance 

letter. 

During FY 2008, Commission LNG engineers conducted annual operational inspections 

at all five of the LNG import terminals: Dominion Cove Point LNG in Cove Point, MD, 

Southern LNG at Elba Island, GA; EcoEléctrica L.P. in Penuelas, Puerto Rico, Trunkline 

LNG at Lake Charles, LA, and Distrigas in Everett, MA; and arranged and conducted a 

baseline inspection of the Kenai LNG export terminal in Kenai, AK. Biennial 

operational inspections were conducted at six of the twelve jurisdictional LNG peakshaving facilities. A team of Commission LNG engineers conducted field inspections on 

the condition of plant process equipment, storage tanks and safety systems at each 

facility. In addition, the operational and maintenance history of the facility since the 

previous inspection was reviewed with plant management. Of the eleven total 

inspections, four resulted in post-inspection letters with recommendations. Example 

recommendations include increasing gas detection, evaluating relief valve discharge 

orientation, and repairing equipment deterioration or corrosion. 
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Market Regulation Accomplishments 

Performance Measurement Performance Target Results 

Timeliness of processing complete 

applications for incentive rates 

3⁄4 100% of statutory cases processed 

within statutory deadlines or by 

applicant’s requested date, 

whichever is later 

3⁄4 80% of declaratory orders filed 

for Commission action within 180 

days of filing date or by applicant’s 

requested date, whichever is later. 

3⁄4 Target Met. 100% (16 out of 16) 

statutory incentive rate cases were 

processed within the statutory 

timeframes. 

3⁄4 Target Met. 100% filed within 

180 days. 

In FY 2008, the Commission advanced its goal of stimulating investment in new 

transmission infrastructure by issuing orders approving applications for incentive rates 

for transmission projects worth more than $4 billion and representing thousands of miles 

of high-voltage transmission facilities. 

These applications included major “backbone” projects widely recognized as providing 

significant benefits. For example, one case involved Southern California Edison 

Company’s “Tehachapi Project,” to provide transmission for up to 4,500 megawatts of 

primarily wind generation into the Los Angeles area. Other cases included transmission 

facilities to allow substantially more imports of economic power from the Midwest into 

New Jersey, eastern Pennsylvania, and nearby areas. Few transmission projects of this 

size have been developed for many years. Additional cases included a proposal by 

Pacific Gas & Electric Company to build a thousand-mile transmission line to import up 

to 3,000 megawatts of new renewable power from Canada, and a billion-dollar proposal 

by Northern States Power to expand its transmission system to access between 300 and 

700 megawatts of wind power. 

Additional Accomplishments in Interconnection Queue Reform

Since the Commission issued Order No. 2003 to standardize the agreements and 

procedures related to the interconnection of large generating facilities, queue problems 

have arisen because of the surge of new entry by generators, especially wind and other 

renewable energy projects. In FY 2008, the Commission held a technical conference to 

seek information on these interconnection queue issues stemming from the large number 

of new generation entrants seeking to interconnect to the grid. The conference also 

explored existing practices that have proven effective in addressing interconnection 

queue problems experienced by both traditional and renewable generation. Subsequently, 

the Commission provided guidance to RTOs/ISOs on how to reform interconnection 

queue practices and acted on a number of RTO/ISO filings on interconnection queue 

reforms for their respective regions. 

Other Significant Accomplishments in Market Regulation

In FY 2008, the Commission adopted a new policy that allows Master Limited 

Partnerships to be included in rate of return proxy groups for determining rates for 

services provided by interstate natural gas and oil pipelines. This change was necessary 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

17

to reflect structural changes that have occurred in both the natural gas and oil pipeline 

industries in recent years. 

Financial Regulation Accomplishments 

Performance Measurement Performance Target Results 

Percentage of Accounting Inserts 

completed for inclusion in merit 

orders on cost recovery proposals 

for new gas pipeline infrastructure 

95% 

Target Met. 100% of gas certificate 

accounting inserts were completed 

on time.

Percentage of financial accounting 

filings completed timely 75% within 60 days of filing date 

Target Met. 100% of financial 

accounting filings were completed 

within 60 days of filing date.

During FY 2008, the Office of Enforcement timely completed numerous accounting 

inserts and financial accounting filings involving complex accounting and regulatory 

matters. For example, in a proceeding involving PacifiCorp, OE successfully advised the 

Commission that the proposed accounting for the acquisition of the Chehalis facility was 

inconsistent with Commission rate making principles. In addition, in a proceeding 

involving Novinium, OE approved an accounting request to allow their products to be 

capitalized. This is significant because once the costs of these products are capitalized, 

companies may seek to recover a return on the investment. Another example of financial 

accounting filings OE completed in a timely manner involved the California System 

Operator Corporation’s (CAISO) request for authority to use Statement of Governmental 

Accounting Standards No. 45 to account for post-employment benefits. In this case, OE 

denied the CAISO’s as inconsistent with Commission policy. 

Other Significant Accomplishments in Financial Regulation

OE also drafted several major orders and undertook initiatives to ensure that the 

Commission and the public had access to information needed for oversight activities. 

OE’s activities improved the quality of information reported to the Commission and 

provided regulatory certainty to companies filing data with the Commission. 

These major initiatives included: 

• Rulemakings on Adequacy of Financial Forms. In March 2008, the Commission 

issued Order No. 710, revising the reporting requirements for natural gas 

pipelines to reflect current market and cost information relevant to interstate 

natural gas pipelines and their customers. In September 2008, the Commission 

issued Order No. 715, revising the reporting requirements for major electric 

utilities and licensees to provide additional information on implementing formula 

rates and affiliate transactions, among other things. 

• Issuance of Electric Quarterly Reports (EQR) Data Dictionary. The EQR Data 

Dictionary was developed to improve the quality of the information reported in 

the EQR by establishing a common, documented basis for the definition of EQR 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

18 

terms and values. The EQR Data Dictionary provides regulatory certainty to the 

public by documenting the Commission’s requirements with regard to filing 

contract and transaction information in the EQR. 

Performance Measurement Data for Competitive Markets

Goal: Support Competitive Markets 

Performance Measurement Performance Target Results 

Timeliness of review of proposed 

RTO/ISO market rules 

100% by the statutory due date or 

the applicant’s requested date, 

whichever is later 

Target Met. 100% (410 out of 410) 

filings from PJM, ISO-NE, NYISO, 

NEPOOL, SPP, Midwest ISO, and 

California ISO were acted on by 

statutory due dates 

In FY 2008, the Commission reaffirmed its rule on open access transmission, Order No. 

890. This rule will ensure that transmission service is provided on a non-discriminatory, 

just and reasonable basis and will strengthen the transmission grid to support competitive 

wholesale power markets and assure reliability. 

Order No. 890’s regional planning requirements will improve coordination of planning 

among utilities. Ownership of the interstate transmission grid is highly disaggregated, 

with more than 500 owners. Before Order No. 890, many transmission expansions were 

planned by individual transmission owners; however, the transmission grid is not merely 

a collection of local systems that can be planned on a stand-alone basis. The need for, 

and effect of, transmission expansions must be considered on a local, sub-regional, and 

regional basis. To that end, Order No. 890 required transmission providers to expand 

their planning processes to provide for coordination among transmission providers in the 

same region, and establish planning processes to consider (1) upgrades necessary to 

maintain reliability and (2) additional expansions that could enhance the economic 

operation of the grid. 

Among the proposed RTO/ISO market rules the Commission reviewed were Order No. 

890 transmission planning compliance filings from several RTOs/ISOs. The Commission 

conditionally accepted these transmission planning compliance filings. The detailed 

information in these filings brings more specificity as to how customers and other 

stakeholders should be treated in the transmission planning processes of the transmission 

providers. 

Performance Measurement Performance Target Results 

Timeliness of processing cases that 

encourage demand response in 

organized markets 

100% of statutory cases processed 

within statutory deadlines, or by the 

applicant’s requested date, 

whichever is later 

Target Met. 100% (10 out of 10) 

filings were acted on by statutory 

due dates. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

19

A well-functioning competitive wholesale electric market should reflect current supply 

and demand conditions. The Commission’s policy is to facilitate the participation of 

demand response in organized markets because demand response helps to hold down 

wholesale power prices, reduces price volatility, increases awareness of energy usage, 

provides for more efficient operation of markets, mitigates market power, and enhances 

reliability. 

In FY 2008, in addition to processing cases that encourage demand response, the 

Commission proposed new rules to improve operations and encourage demand response 

in organized electric markets. Specifically, with respect to demand response the 

Commission proposed to: (1) accept bids from demand response resources in their 

markets for certain ancillary services comparable to other resources; (2) during a system 

emergency, eliminate a charge to a buyer for taking less energy in the real-time market 

than it purchased in the day-ahead market; and (3) permit an aggregator of retail 

customers to bid demand response on behalf of retail customers and modify market rules 

to allow market-clearing prices, during a period of operating reserve shortage, to reach a 

level that rebalances supply and demand so as to maintain reliability while providing 

sufficient provisions for mitigating market power. 

Other Significant Accomplishments in Competitive Markets

In FY 2008, the Commission issued a final rule designed to enhance competition in 

secondary natural gas capacity release markets. This rule removes price caps on shortterm releases of capacity and increases the flexibility afforded asset management 

agreements under the Commission’s capacity release rules. The rule is designed to 

enhance competition in the secondary capacity release market and increase shippers’ 

options for obtaining gas supplies. 

Performance Measurement Data for Enforcement

Goal: Prevent Market Manipulation 

Audit Accomplishments

Performance Measurement Perform nce Targe a t Results

Percentage of operational audit 

recommendations issued and 

implemented 

90% within 6 months Target Met. 99% (94 out of 95) 

In FY 2008, the Commission completed 60 operational and financial audits of energy 

companies, including one audit that was referred to the Office of Enforcement, Division 

of Investigations for further consideration. The audited companies included public 

utilities and natural gas pipeline and storage companies. The Commission auditors were 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

20 

successful in overseeing jurisdictional companies’ implementation of 99 percent of its 

recommendations to correct the areas of noncompliance discovered during the 

operational audit engagements within 6 months. Ultimately, all operational audit 

recommendations were implemented. 

The operational and financial audits focused on compliance with:

• Public Utility Holding Company 

Act 2005, 

• open access transmission tariffs, 

• interconnection rules, 

• affiliate abuse, 

• gas tariffs, 

• wholesale fuel adjustment clause 

tariffs, 

• cash management programs, 

• electronic quarterly reporting, 

• OASIS and gas website posting, 

• the Uniform System of Accounts, 

• market-based rate authority, and 

• other blanket authorizations, 

filings, and conditions of the 

Commission. 

The 60 audits above resulted in 156 recommendations (95 recommendations associated with 

operational audits; 61 recommendations associated with financial audits) for corrective action 

and included over $5.7 million in accounting and billing adjustments that resulted in refunds to 

wholesale customers. Several audits also required the implementation of stringent compliance 

plans to ensure adherence to policies and procedures of the Commission including requirements 

to conduct training and periodic audits. 

Market Oversight Accomplishments 

Performance Measure Performance Target Result 

Regular monitoring of natural gas 

and electric markets with significant 

issues of market structure and 

operations identified 

Weekly reporting of significant 

issues of market structure and 

operations 

Target Met. 45 Weekly Market 

Reviews (WMR) were produced. In 

2 other instances, market conditions 

were summarized at the 

Commission’s monthly meeting. In 

addition to the 45 WMRs published, 

13 special reports providing in-depth 

analysis of emerging market issues 

were also published. 

During FY 2008, OE conducted extensive outreach to communicate the results of the 

Commission’s on-going oversight of energy markets. OE staff made public presentations to the 

Commission on five occasions. On four occasions, OE staff addressed several issues at the 

Commission meeting, including the winter and summer market assessments, a review of the state 

of the energy markets, and concerns about rising costs of electricity. In addition, OE presented 

at the Commission conference on wholesale electric markets. OE staff also conducted monthly 

phone calls with representatives from state governments. As many as 28 states participated in 

these calls during any one month. OE staff also maintains a portion of the FERC public website, 

where OE posts current information and analysis about energy and related markets. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

21

Performance Measure Performance Target Result 

Develop and provide further 

guidance to the industry on FERC’s 

expanded penalty authority 

By September 30, 2008 

Target met. The revised Policy 

Statement on Enforcement was 

issued on May 15, 2008. 

In FY 2008 OE’s Division of Investigation assessed its enforcement program which was 

implemented two years ago. A main focus was related to its additional subject matter authority 

and the expanded civil penalty authority in Part II of the FPA and the Natural Gas Act. To that 

end, OE organized the Commission’s Conference on Enforcement Policy held on November 16, 

2007. At the conference, panels of industry experts and counsel addressed, among other things, 

policy issues regarding how the Commission should balance a firm approach to enforcement 

with fair treatment of those subject to remedies and sanctions for misconduct. In advance of the 

conference and to provide context for the conference staff released a Report on Enforcement, 

dated November 14, 2007, in which it described its processes for investigation, self-reports, and 

audits. 

On May 15, 2008, the Commission issued a Revised Policy Statement on Enforcement which 

reflected the experience gained from administering the enhanced enforcement tools as well as 

responded to many of the points and recommendations made during the November conference. 

In particular, the Revised Policy Statement provides a detailed picture of how the investigative 

process works, including considerations taken when opening an investigation, the opportunities 

the subject has to communicate with staff and the Commission during the investigation, and how 

investigations may proceed to settlements or enforcement proceedings, and how penalties are 

determined. 

In July 2008, the Commission held a workshop on regulatory compliance which provided a 

forum for interested participants to share perspectives and information on federal energy 

regulatory compliance. More specifically, two panels of industry participants discussed the 

elements of a sound compliance program, including: identifying and prioritizing risks; 

integrating FERC compliance with other regulatory requirements, developing appropriate 

organizational structures and management and employee incentives to achieving certain 

compliance targets; and training, monitoring, and periodic assessment of training and compliance 

programs. 

Performance Measurement Data for Supporting Initiatives

Other Significant Accomplishments: Electronic Filing of Tariffs

In FY 2008, the Commission issued a final rule requiring that all tariffs and tariff revisions and 

rate change applications for the public utilities, natural gas pipelines, and oil pipelines be made 

electronically according to a set of standards developed in conjunction with the North American 

Energy Standards Board. This will make tariff information accessible to the public, the industry, 

and the Commission staff from the Commission’s web site. Implementation of the electronic 

tariff filing requirements will begin in FY 2010 to permit sufficient time for software 

development. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

22 

Financial Performance Overview 

As of September 30, 2008, the financial condition of the Commission was sound with sufficient 

funds to meet program needs and adequate controls were in place to ensure Commission 

obligations did not exceed budget authority. The Commission prepared its financial statements 

in accordance with the accounting standards codified in the Statements of Federal Financial 

Accounting Standards and with OMB Circular No.A-136, Financial Reporting Requirements. 

Sources of Funds. The Commission receives an appropriation from Congress that is available 

until expended. The Commission’s FY 2008 new budget authority was $260.4 million. This 

represents an increase in new budget authority of approximately $38.5 million over FY 2007. 

Additional funds available to obligate in FY 2008 were $3.4 million from prior-year unobligated 

appropriations and $0.7 million of prior-year obligations that were subsequently de-obligated in 

the current year and submitted for re-allotment. The sum of all funds available to obligate in FY 

2008 was $264.5 million. Additionally, the Commission receives an appropriation from 

Congress to pay states the fees it collected for the occupancy and use of public lands. The 

payments to states appropriation in FY 2008 was $3.1 million. 

Consistent with the requirements of the Omnibus Budget Reconciliation Act of 1986, as 

amended, the Commission collected fees to offset 100% of its budget authority in FY 2008. 

Costs by Function. The Commission incurred costs of $254.2 million in FY 2008, which was 

an increase of $14.1 million over FY 2007. Approximately 71 percent of costs were used for 

salaries and benefits. The remaining 29 percent was used to obtain technical assistance for the 

Commission's principal regulatory programs, to cover operating expenses, staff travel, and 

reimbursable work. Salaries and benefits increased by $6.6 million over 2007 while the net 

affect on the other cost categories was an increase of $7.5 million. 

Costs by Function (millions) 

Costs FY 2008 FY 2007 

Salaries and Benefits $180.6 $174.0 

Travel/Transportation 3.6 2.8 

Rent/Comm/ Utilities 22.3 22.1 

Contract Support 37.2 30.8 

Printing/Supplies/Other 10.5 10.4 

Total Costs $254.2 $240.1 

Audit Results. The Commission received an unqualified audit opinion on its FY 2008 financial 

statements. This was the fifteenth consecutive year the Commission has received an unqualified 

opinion. For FY 2008, no material weaknesses were identified by the audit. 

Financial Statement Highlights. The Commission's financial statements summarize the 

financial activity and financial position of the agency. The financial statements and footnotes 

appear in the financial section of this report. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

23

Analysis of the Balance Sheet 

The Commission's assets were approximately $101.9 million as of September 30, 2008. This is 

an increase of $40.9 million from September 30, 2007. The assets reported in the Commission's 

Balance Sheet are summarized in the Asset Summary table. 

Assets Summary (millions) 

Assets FY 2008 FY 2007 

Fund Balance with Treasury $72.7 $48.4 

Accounts Receivable, net 22.9 4.6 

Property and Equipment, net 6.3 8.0 

Total Assets $101.9 $61.0 

The Fund Balance with Treasury represents the Commission's largest asset of $72.7 million as of 

September 30, 2008, an increase of $24.3 million from the FY 2007 balance. This balance 

represents appropriated funds, collected penalties and other funds maintained at the Treasury 

until final disposition is determined. The increase from FY 2007 to FY 2008 is due to the 

Commission receiving a higher appropriation this year to fund increased staffing needs in the 

Commission’s reliability and enforcement program areas. 

The Accounts Receivable, net has a balance of $22.9 million as of September 30, 2008. This 

balance represents the outstanding amounts due from either annual charges, civil penalties or 

other penalties issued by the Commission to entities under its regulation. The $18.3 million 

increase from FY 2007 to FY 2008 is primarily the result of penalties issued by the Commission 

to entities under its regulation that are outstanding. 

The Property and Equipment, net was $6.3 million as of September 30, 2008, a decrease of $1.7 

million from FY 2007. The balance is comprised of the net value of the Commission’s 

equipment, furniture, leasehold improvements, and computer hardware and software. The $1.7 

million net decrease is primarily due to the decrease in Property and Equipment for depreciation 

of assets throughout the year. 

The Commission's liabilities were $87.4 million as of September 30, 2008. The Liabilities 

Summary table shows an increase in total liabilities of $33.3 million from FY 2007. The $87.4 

million balance is largely the result of penalties issued by the Commission to entities under its 

regulation found guilty of market manipulation that are subsequently due to other entities. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

24 

Liabilities Summary (millions) 

Liabilities FY 

2008 

FY 

2007 

Accounts Payable $16.4 13.1 

Federal Employee Benefits 7.7 6.4 

Other Liabilities 63.3 34.7 

Total Liabilities $87.4 $54.1 

The difference between total assets and total liabilities is net position. The Commission’s net 

position was approximately $14.5 million as of September 30, 2008. The increase in net position 

in FY 2008 compared to FY 2007 is the result of the Commission’s larger FY 2008 

appropriation, which was not fully expended by year-end, and the amount the Commission 

overbilled the entities under its regulation. 

Net Position Summary (millions) 

Position FY 2008 FY 2007 

Unexpended Appropriations $24.6 $4.5 

Cumulative Results of Operations ($10.1) $2.4 

Total Net Position $14.5 $6.9 

Analysis of the Statement of Net Cost 

The Statement of Net Cost presents the net cost of the Commission's three strategic goals as 

identified in the Commission’s Strategic Plan. The purpose of the statement is to show, 

separately, the components of the net cost of operations that can be linked to the costs of 

program performance under the Government Performance and Results Act of 1993 (GPRA). Net 

costs by strategic goal are shown in the Net Cost of Operations table. 

Net Cost of Operations

Operation FY 2008 FY 2007 

Energy Infrastructure $0 $0 

Competitive Markets 0 0 

Market Oversight 0 0 

Net Cost of Ops $0 $0 

The Commission's net cost of operations for FY 2008 was $0 which is in line with $0 for FY 

2007. The Commission is a full cost recovery agency and recovers all of its cost through the 

allocated annual charges to the entities that it regulates. In FY 2008, for financial reporting 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

25

purposes, the Commission accrued its reimbursable revenue to match total reimbursable costs to 

report cost of $0 on its financial statements. 

Analysis of Statement of Changes in Net Position 

The Statement of Changes in Net Position reports the change in net position during the reporting 

period. Net position is affected by changes in its two components: Cumulative Results of 

Operations and Unexpended Appropriations. The overall increase in Net Position of $7.6 

million is the result of increased billings and expended appropriations for FY 2008 compared to 

FY 2007. 

Analysis of the Statement of Budgetary Resources 

The Statement of Budgetary Resources shows the sources of budgetary resources available and 

the status at the end of the period. It represents the relationship between budget authority and 

budget outlays, and reconciles obligations to total outlays. For FY 2008, the Commission had 

budgetary resources available of $267.6 million, the majority of which was derived from new 

spending authority. This represents an increase of $36.1 million over FY 2007 budgetary 

resources available of $231.5 million. The unobligated budget authority available at September 

30, 2008 was $16.8 million, which is an increase of $13.5 million from the FY 2007 amount of 

$3.4 million. 

The status of budgetary resources includes obligations incurred of $250.9 million, or 94 percent 

of funds available. Similarly, FY 2007 obligations incurred were $228.0 million or 98.5 percent 

of funds available. Total net outlays for FY 2008 were $66.8 million, which represents a $10.5 

million decrease from FY 2007 net outlays of $77.3 million. The decrease from last year is a 

result of fewer collections in FY 2008 of Commission distributed offsetting receipts, which 

include penalties and collections of costs over our appropriation. 

Analysis of the Statement of Custodial Activity 

The Statement of Custodial Activity displays the total Custodial Revenue and the Disposition of 

Collections related to that revenue activity. This statement ensures that revenue billed and 

collected by the Commission on behalf of another federal agency will not be reported twice as 

revenue on the consolidated government’s Statement of Net Cost. In FY 2008, the Commission 

reported $55.6 million in custodial revenue as of September 30, 2008 compared to $69.9 million 

in FY 2007. The majority of the decrease over FY 2007 is due to fewer civil penalties billed in 

FY 2008 to entities under the Commission’s regulation. 

Controls, Systems, and Legal Compliance 

This section provides information on the Commission's compliance with the: 

• Federal Managers' Financial Integrity Act of 1982; 

• Federal Financial Management Improvement Act of 1996; 

• Prompt Payment Act; 

• Debt Collection Improvement Act of 1996; and 

• Revised OMB A-123. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

26 

Integrity Act Statement 

 During Fiscal Year 2008, the Commission responded to the challenge of a changing energy industry as 

it becomes more competitive. Our strategic plan contains three primary Commission goals which reflect 

the Commission's vision of "abundant, reliable energy in a fair competitive market". We are progressing 

on each goal and are tracking our achievements so that the real benefits of competition to consumers and 

the industry are not delayed. Our goals are: (1) promote the development of a strong energy 

infrastructure; (2) support competitive markets; and (3) prevent market manipulation. 

 To accomplish our goals, we must manage our resources efficiently and integrate our budget, 

performance measures, and management controls to improve performance and accountability. Our OMB 

A-123 internal control program is helping us accomplish this by monitoring our financial, human capital 

and information resources to safeguard our assets, improve the integrity of our reporting, and use our 

resources more effectively in reaching our goals. Problems that impede our progress continue to be 

brought to the attention of management and resolved within the Commission at the appropriate level. The 

auditors' FY 2007 report on the Commission's internal control structure disclosed no material weaknesses 

and no instances of noncompliance with laws and regulations. We will continue to maintain a strong 

management control system. 

 The Commission's management is responsible for establishing and maintaining effective internal 

control and financial management systems that meet the objectives of the Federal Managers' Financial 

Integrity Act (FMFIA). In accordance with OMB Circular A-123, Management's Responsibility for 

Internal Controls; we evaluated the effectiveness and efficiency of our internal controls over operations 

and our compliance with applicable laws and regulations as of September 30, 2008. Based on the results 

of this evaluation, the Commission can provide reasonable assurance that its internal controls are 

operating effectively and that no material weaknesses were found in the design or operation of our 

internal controls. 

 In addition, the Commission assessed the effectiveness of internal controls over financial reporting, 

which includes the safeguarding of assets and our compliance with applicable laws and regulations in 

accordance with the requirements of OMB Circular A-123, Appendix A. The results of this assessment 

found no material weaknesses in the design or operation of our controls over financial reporting. The 

Commission can provide reasonable assurance that its internal controls over financial reporting as of 

September 30, 2008, are operating effectively. 

 

Joseph T. Kelliher 

Chairman 

Federal Energy Regulatory Commission 

September 2008 

Federal Managers' Financial Integrity Act 

The Federal Managers' Financial Integrity Act of 1982 (Integrity Act) mandates that agencies 

establish controls that reasonably ensure that: (i) obligations and costs comply with applicable 

law; (ii) assets are safeguarded against waste, loss, unauthorized use, or misappropriation; and 

(iii) revenues and expenditures are properly recorded and accounted for. This act encompasses 

program, operational, and administrative areas as well as accounting and financial management. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

27

The Integrity Act requires the Chairman to provide an assurance statement on the adequacy of 

management controls and conformance of financial systems with Government wide standards. 

Management Control Review Program 

Managers throughout the Commission are responsible for ensuring that effective controls are 

implemented in their areas of responsibilities. Each office director and regional administrator 

prepared an annual assurance statement that identified any control weaknesses that required the 

attention of the Chairman. These statements were based on various sources and included: 

• Management knowledge gained from the daily operation of agency programs and 

reviews; 

• Management reviews; 

• Annual performance plans; and, 

• Inspector General and Government Accountability Office reports. 

The Commission's ongoing management control program requires, among other things, that 

management control deficiencies be integrated into office action plans. The action plan process 

has provisions for periodic updates and attention from senior managers. The management 

control information in these plans, combined with the individual assurance statements discussed 

previously, provides the framework for monitoring and improving the agency's management 

controls on an ongoing basis. 

FY 2008 Integrity Act Results 

The Commission evaluated its management control systems for the fiscal year ending September 

30, 2008. This evaluation provided reasonable assurance that the Commission’s management 

controls achieved their intended objectives. As a result, management concluded that the 

Commission did not have any material weaknesses in its programmatic or administrative 

activities. 

FY 2008 OMB A-123 Results 

The Commission evaluated its internal controls over financial reporting for the fiscal year ending 

September 30, 2008. Based on the results of this evaluation, the Commission can provide 

reasonable assurance that its internal controls are operating effectively and that no material 

weaknesses were found in the design or operation of our internal controls. 

Federal Financial Management Improvement Act 

The Federal Financial Management Improvement Act of 1996 (Improvement Act) requires each 

agency to implement and maintain systems that comply substantially with: (i) Federal financial 

management system requirements, (ii) applicable Federal accounting standards, and (iii) the U.S. 

Government standard general ledger at the transaction level. The Improvement Act requires the 

Chairman to determine whether the agency's financial management systems comply with the 

Improvement Act and to develop remediation plans for systems that do not comply. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

28 

FY 2008 Improvement Act Results 

As of September 30, 2008, the Commission evaluated its financial management system to 

determine if it complied with applicable federal requirements and accounting standards required 

by the Improvement Act. We found that the Commission’s financial management system was in 

substantial compliance with the Federal financial management system requirements, applicable 

Federal accounting standards and the U.S. standard general ledger at the transaction level. In 

making this determination, we undertook financial reporting tests of the system and reviewed 

entries at the transaction level, and determined compliance with Federal requirements and 

accounting standards required by the Improvement Act. 

Prompt Payment. The Prompt Payment Act requires Federal agencies to make timely payments 

to vendors for supplies and services, to pay interest penalties when payments are made after the 

due date, and to take cash discounts when they are economically justified. As of September 30, 

2008, the Commission made 98% of its payments, that were subject to the Prompt Payment Act, 

on-time. The Commission incurred $304 in interest penalties in FY 2008, which was a decrease 

compared to the FY 2007 amount of $506. The agency made 98% of its vendor payments 

electronically in FY 2008. 

Debt Collection. The Debt Collection Improvement Act of 1996 was enacted to enhance the 

ability of the Federal Government to service and collect debts. The agency goal is to maintain 

the delinquent debt owed to the Commission at year-end at less than two percent of its current 

annual billings. As of September 30, 2008, delinquent debt was $6.0 million, which was 

approximately two percent of its current annual billings. Included in this amount is a single 

delinquent debt of approximately $5.8 million. The Commission continues to aggressively 

pursue the collection of delinquent debt and continues to meet the requirement that all eligible 

delinquent debt over 180 days is referred to the U.S. Treasury for collection. 

Possible Future Effects of Existing Events and Conditions 

As of September 30, 2008, the Commission has a pending Bid protest case where the probability 

of success is reasonably possible. The amount of monetary relief, if awarded, would not exceed 

$100,000. 

Limitations of the Financial Statements 

The financial statements have been prepared to report the financial position and results of 

operations of the FERC, pursuant to the requirements of 31 U.S.C. 3515(b). While the 

statements have been prepared from the books and records of the Commission in accordance 

with accounting principles generally accepted in the United States of America for Federal 

entities and the formats prescribed by OMB, the statements are in addition to the financial 

reports used to monitor and control budgetary resources which are prepared from the same books 

and records. The statements should be read with the realization that they are for a component of 

the U.S. Government, a sovereign entity. One implication of this is that liabilities cannot be 

liquidated without legislation that provides resources to do so. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

29

Improper Payments Information Act (IPIA) Reporting 

The Commission has performed a review of its payments through September 30, 2008 and it has 

processed 99% of its payments without error. The Commission found only 63 erroneous 

payments out of 6,261 total payments. The value of those erroneous payments totaled $0.1 

million out of total payments of $49.3 million for fiscal year 2008. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

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Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

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Financial Section 
FEDERAL ENERGY REGULATORY COMMISSION
 

WASHINGTON, DC 20426
 

Office of the 

Executive Director 

Message from the Chief Financial Officer 

I am pleased to present the Federal Energy Regulatory Commission's 

comparative financial results for fiscal years 2008 and 2007. The accompanying 

financial statements and related notes fairly present the Commission's financial 

position and were prepared in conformity with accounting principles generally 

accepted in the United States of America, and the Office of Management and 

Budget (OMB) Circular A-136, Financial Reporting Requirements. 

The Commission takes seriously its charge to regulate energy industries in 

the economic, environmental and safety interest of the American public. The 

Commission understands that these objectives must be achieved in a fiscally 

responsible manner. As a result, senior leadership has instilled a culture of 

accountability throughout the agency. Specifically, I am proud of the efforts made 

by my organization as vigilant stewards of public resources. Following are a few 

achievements in financial management that I consider noteworthy: 

•	 The Commission obtained an unqualified opinion on its principal financial 

statements for the 15th consecutive year. In addition, it strengthened its internal 

control program by continuing on-going self-assessment efforts as required by 

OMB Circular A-123, Management's Responsibility for Internal Control. The 

Commission for the 3rd consecutive year asserted reasonable assurance that its 

internal controls over financial reporting were operating effectively. 

•	 The Commission continued its efforts to enhance integration of performance 

and budgetary data. Specifically, it took measures which provided for greater 

transparency in its budget request. In the FY 2009 Congressional Budget 

Justification (CBJ), the Commission presented funding and full-time 

equivalents at the strategic objective level outlined in its Strategic Plan. The 

FY 2009 CBJ marks the first year the Commission has provided this level of 

detailed alignment in its budget presentation. Presentation of funding and 

resource data in this manner has provided federal appropriators, industry, and 

the American public greater insight into the Commission's specific resource 

needs. The Commission is planning to make additional changes to its FY 2010 

CBJ that will provider greater visibility into its resource requirements and the 

effectiveness and efficiency of its programs. 
•	 The Commission collected over $280 million in annual charge receipts during 

the fiscal year. Financial management staff worked together to compile the 

required financial data to issue these charges and implemented new processes 

utilizing internal applications to deliver the billing statements electronically. 

As a result of these efforts, the Commission exceeded statutory collection 

requirements to offset its annual appropriation by more than $20 million. 

•	 The Commission maintained effective and efficient financial management 

operations. It paid over 99% of its vendor invoices electronically while 

remitting 98% of these payments within statutorily mandated due dates at an 

error rate of less than 1%. Moreover, it collected 98% of established accounts 

receivable by their respective due dates. 

•	 The Commission awarded over 31 % of its total contract dollars to small, 

women-owned and minority businesses. It exceeded its performance target by 

6 %. The Commission values the pivotal role small businesses play in 

supporting the accomplishment of its mission. 

Our accomplishments clearly demonstrate the considerable importance placed 

on financial management, accountability and public disclosure. This report 

demonstrates our commitment to fulfill our fiduciary responsibilities to 

Commission stakeholders and the American public. 

~:iU-?~ NL,OQ Thomas R. Herlihy "'J 

Chief Financial Officer 

Federal Energy Regulatory Commission 

November 6,2008 




2008 2007

Assets (note 3):

Intragovernmental:

Fund balance with Treasury (note 4) $ 72,693,742 $ 48,361,676 

Accounts receivable (note 5) 13,399 22,640

Total intragovernmental assets 72,707,141 48,384,316

Accounts receivable, net (note 5) 22,896,225 4,647,677

Property and equipment, net (note 6) 6,307,483 7,987,011

Total assets $ 101,910,849 $ 61,019,004 

Liabilities:

Intragovernmental:

Accounts payable $ 3,037,177 $ 3,434,843 

Other (note 7):

Accrued payroll benefits 1,291,035 996,000

Resources transferable to Treasury and other

Federal entities 478,500 4,618,517

Miscellaneous receipts transferable to Treasury 5,254 5,098

Workers' compensation payable (note 9) 850,484 758,944

Total intragovernmental liabilities 5,662,450 9,813,402

Accounts payable 13,346,630 9,664,254

Other (note 7):

Accrued payroll and benefits 6,397,959 5,363,070

Commitments and contingencies (note 11) 100,000 -

Revenue collected under protest - 97,776

Refunds and other amounts due 10,534,131 1,730,332

Accrued leave (note 9) 12,425,724 10,973,250

Resources transferable to other entities from 

disgorged funds 38,905,088 16,472,603

Total liabilities 87,371,982 54,114,687

Net Position:

Unexpended appropriations 24,646,344 4,493,446

Cumulative results of operations (10,107,477) 2,410,871

Total net position 14,538,867 6,904,317

Total liabilities and net position $ 101,910,849 $ 61,019,004 

The accompanying notes are an integral part of these statements.

FEDERAL ENERGY REGULATORY COMMISSION

Balance Sheets

As of September 30, 2008 and 2007

(in dollars)
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

39

Program costs: 2008 2007

 Regulation:

 Energy Infrastructure (note 14):

 Gross costs $ 194,110,589 $ 183,580,477 

 Less: earned revenue 194,110,589 183,580,477

 Net program costs $ $ - -

 Competitive Markets (note 14):

 Gross costs $ 30,313,293 $ 28,451,474 

 Less: earned revenue 30,313,293 28,451,474

 Net program costs $ $ - -

 Enforcement (note 14):

 Gross costs $ 29,818,284 $ 28,018,671 

 Less: earned revenue 29,818,284 28,018,671

 Net program costs $ $ - -

 Total (note 14):

 Gross costs $ 254,242,166 $ 240,050,622 

 Less: earned revenue 254,242,166 240,050,622

 Net Cost of Operations $ $ - -

The accompanying notes are an integral part of these statements.

FEDERAL ENERGY REGULATORY COMMISSION

Statements of Net Cost

For the Years Ended September 30, 2008 and 2007

(in dollars)
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

40 

 FEDERAL ENERGY REGULATORY COMMISSION

Statements of Changes in Net Position

For the Years Ended September 30, 2008 and 2007

(in dollars)

2008 2007

Cumulative Results of Operations:

Beginning balances $ 2,410,871 $ 3,999,016

Budgetary Financing Sources:

Appropriations used 240,272,102 226,871,540

Other Financing Sources (Non-Exchange):

Transfers – out to Treasury without reimbursement (263,440,238) (239,839,793)

Imputed financing from costs absorbed by others (note 10) 10,649,788 11,380,108

Total Financing Sources (12,518,348) (1,588,145)

Net Cost of Operations - -

Net Change (12,518,348) (1,588,145)

Cumulative Results of Operations $ (10,107,477) $ 2,410,871

Unexpended Appropriations:

Beginning balances $ 4,493,446 $ 9,463,468

Budgetary Financing Sources:

Appropriations received 260,425,000 221,901,518

Appropriations used (240,272,102) (226,871,540)

 Total Budgetary Financing Sources 20,152,898 (4,970,022)

Total Unexpended Appropriations $ 24,646,344 $ 4,493,446

Net Position $ 14,538,867 $ 6,904,317

The accompanying notes are an integral part of these statements.
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

41

 FEDERAL ENERGY REGULATORY COMMISSION

Statements of Budgetary Resources

For the Years Ended September 30, 2008 and 2007

(in dollars)

2008 2007

Budgetary Resources:

Unobligated balance, beginning of period $ $ 5,748,933 3,429,690 

Recoveries of prior year unpaid obligations 651,567 676,291

Budgetary authority

Appropriation 3,127,077 3,094,042

Collected 260,474,032 221,917,880

Change in unfilled customer orders

Without advance from Federal Sources (43,057) 40,979

Subtotal 263,558,052 225,052,902

Total Budgetary Resources $ 267,639,310 $ 231,478,125 

Status of Budgetary Resources:

Obligations incurred: (note 15)

Direct $ 250,815,633 $ 228,015,257 

Reimbursable 39,790 33,178

Subtotal 250,855,423 228,048,435

Unobligated balances available and apportioned

Apportioned 16,783,887 3,429,690

Total status of budgetary resources $ 267,639,310 $ 231,478,125 

Change in Obligated Balance:

Obligated balance, net

Unpaid obligations, brought forward, October 1 $ 20, 628,189 $ 23,174,182 

Less: Uncollected customer payments from

 Federal sources, brought forward, October 1 (87,283) (46,303)

Total unpaid obligated balance, net 20,540,906 23,127,879

Obligations incurred, net 250,855,423 228,048,435

Less: Gross outlays (238,844,144) (229,918,138)

Less: Recoveries of prior year unpaid

 obligations, actual (651,567) (676,291)

Change in uncollected customer payments

 from Federal sources (43,057) (40,979)

Obligations balance, net, end of period

Unpaid obligations 31,987,901 20,628,189

Less: Uncollected customer payments from

 from Federal sources (44,226) (87,283)

Total, unpaid obligated balance, net,

 end of period $ 31,943,675 $ 20,540,906 

(Continued)
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

42 

Net Outlays:

Gross outlays $ 238,844,144 $ 229,918,138 

Less: Offsetting collections (260,474,032) (221,917,880)

Less: Distributed offsetting collections (45,163,340) (85,255,615)

Net outlays $ (66,793,228) $ (77,255,357) 

The accompanying notes are an integral part of these statements.
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

43

 FEDERAL ENERGY REGULATORY COMMISSION

Statements of Custodial Activity

For the Years Ended September 30, 2008 and 2007

(in dollars)

2008 2007

Sources of collections:

Cash collections – annual charges $ 56,548,067 $ 82,035,815 

Accrual adjustment (940,339) (12,179,467)

Total custodial revenue (note 12) 55,607,728 69,856,348

Disposition of collections:

Transferred to others:

United States Army – Corps of Engineers (7,743,045) (13,153,812)

Department of Interior (6,726,135) (8,774,079)

United States Treasury (38,948,424) (59,477,033)

Various states (3,127,077) (3,094,042)

Decrease (increase) in Amounts Yet to be transferred 936,953 14,642,618

Net Custodial Activities $ $ - -

The accompanying notes are an integral part of these statements.
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

44 

FEDERAL ENERGY REGULATORY COMMISSION

Notes to Financial Statements 

September 30, 2008 and 2007 

(1) Description of Reporting Entity 

The Federal Energy Regulatory Commission (the Commission) is an independent Federal 

agency that oversees key operating functions of the United States’ natural gas and oil 

pipeline transportation, electric utility and hydroelectric power industries. 

The Commission was created through the Department of Energy’s (DOE) Organization Act 

on October 1, 1977. The Commission’s predecessor, the Federal Power Commission (FPC), 

established in 1920, was abolished, and the Commission inherited a significant portion of 

FPC’s energy agenda. 

The Commission administers laws and regulations involving key energy issues. These 

include the transportation and sale of natural gas and oil in interstate commerce; regulation 

of electric utility wholesale rates and transactions; licensing and inspection of private, 

municipal, and state hydroelectric projects; and oversight of related environmental matters. 

The Commission’s main legal authority is derived from the Federal Power Act of 1935 

(FPA), the Natural Gas Act of 1938, the Natural Gas Policy Act of 1978, and the Public 

Utility Regulatory Policies Act of 1978. 

The Commission’s activities are separated into the following three segments: 

Energy Infrastructure 

The Commission’s overall objective is to encourage investment in the infrastructure 

needed to sustain energy markets by removing roadblocks, providing cost recovery 

clarity and welcoming innovative thinking about rates and the use of new technology. 

By focusing on infrastructure, this segment covers many of the Commission’s 

important traditional activities, for example, pipeline certificates, hydropower 

licenses and preliminary permits, compliance activities, environmental and other 

licensing conditions, dam safety inspections and most rate determinations. 

Competitive Markets 

Another Commission objective is to complete the transition to competitive energy 

markets as comprehensively as possible. This requires the growth of certain new 

institutions, particularly clearly defined and independent regional transmission 

organizations (RTOs), to make electric markets work. The Commission also needs to 

establish balanced, self-enforcing market rules in wholesale electric markets, and 

encourage continued efforts by industry groups to standardize reliability and business 

practice standards, promote the use of demand-side participation in energy markets, 

and establish regional transmission planning. Along with some traditional work in the 

area of rate determinations, this segment includes work on initiatives begun in the 

last couple of years such as RTOs and new policies for natural gas. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

45

Enforcement 

The Commission also needs to ensure that competitive energy markets benefit the 

Nation over the long run. The Commission must offer the public and market 

participants credible assurance that the Commission will identify and remedy energy 

market problems to maintain just and reasonable rates. At the systemic level, the 

Commission needs to recognize problems before or when they develop and craft 

solutions quickly. Effective internal compliance programs within companies and selfpolicing will also help achieve this goal. The Commission will conduct traditional 

investigations and apply its expanded penalty authority when appropriate. 

Cost Recovery 

As described below, the Commission recovers 100% of its annual appropriation from the 

U.S. Treasury (the Treasury) through annual charges and filing fees authorized by the 

Omnibus Budget Reconciliation Act of 1986 and other laws. 

Annual Charges 

The Commission recovers most of its administrative program costs through allocated 

annual charges to the entities it regulates, regardless of the number or type of services 

rendered to any particular entity during the year. The annual charge assessed in a fiscal year 

is based on an estimate of costs to be incurred during that year. Final program costs are 

determined from year-end accounting reports and time distribution reports by office and 

program. The difference in assessments that results from estimated versus final program 

costs is an adjustment to the following fiscal year’s assessments. The authority and related 

implementation methods for the annual changes are summarized as follows: 

Hydropower 

Authority – Section 10(e) of FPA makes the general provision that licensees under 

Part I of FPA shall pay reasonable annual charges to compensate the federal 

government for the costs of administering Part I. 

Implementation – The methods for assessing annual charges to hydropower licensees 

are codified at 18 Code of Federal Regulations (C.F.R.) Part 11. Costs are prorated 

based on capacity (municipal projects), on capacity and generation (non-municipal 

projects), or on a flat rate per horsepower under 1,000 (minor projects). 

Gas, Electric, and Oil 

Authority – Section 3401 of the Omnibus Budget Reconciliation Act of 1986 

provides that the Commission shall “assess and collect fees and annual charges in any 

fiscal year in amounts equal to all of the costs incurred by the Commission in that 

fiscal year.” It further provides that “fees or annual charges assessed shall be 

computed on the basis of methods that the Commission determines, by rule, to be fair 

and equitable.” 

Implementation – The methods for assessing annual charges to gas and oil pipelines 

and to electric utilities and power marketing administrations are codified at 18 C.F.R. 

Parts 382.201-203. Costs are prorated to gas pipelines based on volume transported 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

46 

and sold, to electric utilities and power marketing administrations based on energy 

sold, and to oil pipelines based on operating revenues. 

Filing Fees 

Filing fees are calculated annually. Regulated entities pay the current fee when filing with 

the Commission for a specific service. The fees are based on the average time spent to 

perform the particular type of service and the average cost per employee, including salary, 

benefits, and indirect costs. Fee structure and procedures are codified in 18 C.F.R. Part 381. 

The Independent Offices Appropriations Act of 1952 (IOAA) authorizes agencies to 

prescribe regulations establishing charges for services, benefits, or items of value provided 

by an agency. In establishing a fee under the IOAA, the Commission must: 

3⁄4 Identify the service for which the fee is to be assessed; 

3⁄4 Explain why that particular service benefits an identifiable recipient more than it 

benefits the general public; 

3⁄4 Base the fee on as small a category of service as possible; and 

3⁄4 Demonstrate what direct and indirect costs are incurred by the Commission in 

rendering the service. 

Section 3401 of the Omnibus Budget Reconciliation Act of 1986 also provides for fees and 

annual charges “computed on the basis of methods that the Commission determines, by 

rule, to be fair and equitable.” 

(2) Summary of Significant Accounting Policies 

(a) Basis of Presentation 

The accompanying financial statements have been prepared to report the financial 

position of the Commission and its net costs, changes in net position, budgetary 

resources, and custodial activity in accordance with accounting principles generally 

accepted in the United States of America applicable to federal government entities. 

These financial statements have also been prepared in accordance with the form and 

content for financial statements specified by Office of Management and Budget 

(OMB) Circular Number (No.) A-136, Financial Reporting Requirements.

The financial statements include all activity related to the Commission’s portion of 

appropriation (89X0212), including the budget authority allotted by DOE to other 

DOE agencies. In addition, the Commission receives small allotments from DOE 

appropriation (89X5105). Both of the Commission’s appropriations relate to budget 

functional classification code 276, Energy Information Policy and Regulation. 

Entity assets disclosed in notes 3 and 5 include those assets that the Commission has 

the authority to use in its operations. 

Non-entity assets disclosed in notes 3 and 5 include those assets that result from the 

Commission’s custodial billing activities for other federal agencies, including the 

U.S. Army Corps of Engineers, the Treasury and the U.S. Department of Interior. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

47

(b) Budgets and Budgetary Accounting 

Congress annually adopts a budget appropriation that provides the Commission with 

authority to use funds from the Treasury to meet its operating and capital expenditure 

requirements. The appropriated funds are not restricted to use in a specific fiscal year. 

All revenue from annual charges and filing fees is remitted to the Treasury when 

received. 

(c) Basis of Accounting 

The Commission’s financial statements are prepared using the accrual method of 

accounting. The accrual method of accounting requires recognition of the financial 

effects of transactions, events, and circumstances in the period(s) when those 

transactions, events, and circumstances occur, regardless of when cash is received or 

paid. The Commission also uses budgetary accounting to facilitate compliance with 

legal constraints and to monitor its budget authority at the various stages of 

execution, including allotment, obligation, and eventual outlay. 

(d) Revenue and Financing Sources 

As described above, the Commission receives funds for its operating and capital 

expenditures through an appropriation allotment from DOE. For financial statement 

purposes, the appropriation allotment is recognized as a financing source when 

operating expenses (primarily salaries and benefits), other than depreciation, are 

incurred and when capital assets are purchased. 

The Commission recognizes revenue for hydropower, gas, oil, and electric annual 

charges when earned. Annual charges are based on estimated current year program 

costs and adjustments from the prior year. At year-end, the Commission records a 

financial statement adjustment to accurately reflect the amount to be billed or 

credited to regulated entities based on the difference between the charges and the 

actual program costs for the year. The Commission adjusts the subsequent year’s 

charge for such amount. Revenue is recognized for filing fees when received. 

The Commission recognizes an imputed financing source for the estimated annual 

pension, life and health insurance costs in excess of contributions made by the 

Commission during the year. These costs will ultimately be funded by the Office of 

Personnel Management. 

Reimbursable work agreement revenue is recognized when the related services are 

rendered. 

Transfers-out represent receipts collected and remitted to the Treasury during the 

year and net accounts receivable that, once collected, will be returned to the 

Treasury, less any amounts due to regulated entities for the excess of estimated and 

billed costs over actual costs incurred. 

(e) Fund balance with Treasury 

The Commission does not maintain cash in commercial bank accounts. Cash receipts 

and disbursements are processed by the Treasury. The balance of funds with the 

Treasury represents appropriated funds that are available to pay current liabilities and 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

48 

finance authorized purchase commitments relative to goods or services that have not 

been received and monies held in suspense until final disposition is determined. 

(f) Allowance for Doubtful Accounts 

The Commission calculates its allowance for doubtful accounts using historical 

collection data and specific account analysis. 

(g) Property and Equipment 

Property and equipment are stated at cost less accumulated depreciation. The 

Commission capitalizes property (other than furniture) and equipment purchases with 

a cost greater than $25,000 and a total useful life exceeding two years. The 

Commission capitalizes furniture purchases with a cost greater than $50,000, and 

commercially purchased or internally developed software with a cost greater than 

$100,000. Depreciation is calculated based on an estimated useful life of 20 years for 

leasehold improvements, 10 years for furniture, 2 to 5 years for commercially 

purchased or internally developed software, and 5 years for all remaining assets. 

Expenditures for repairs and maintenance are charged to program costs as incurred. 

(h) Liabilities 

Liabilities represent amounts owed by the Commission as the result of transactions or 

events that have occurred as of year-end. Liabilities for which Congress has not 

appropriated funds are disclosed in note 9 as liabilities not covered by budgetary 

resources. 

(i) Revenue Collected Under Protest 

Revenue collected under protest is deferred and recorded as a liability until the 

protest is resolved. 

(j) Collections Due to States 

The Commission disburses 50% of the fees it collects from licensees for the 

occupancy and use of public lands to affected states in the year following collection. 

These collections are initially deposited into the Treasury’s miscellaneous receipts 

fund. 

(k) Accrued Leave 

Annual leave is accrued as a liability as it is earned. The accrual is reduced as leave is 

taken. Each year, the balance in the accrued annual leave account is adjusted to 

reflect current year pay rates. To the extent that the current or prior year 

appropriations are not available to fund annual leave earned but not taken, funding 

will be obtained from future appropriations. Sick leave and other types of nonvested 

leave are charged to expense as the leave is used. 

(l) Workers’ Compensation Payable 

The Federal Employees Compensation Act (FECA) provides income and medical 

cost protection to cover federal civilian employees injured on the job, employees who 

have incurred a work-related occupational disease and beneficiaries of employees 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

49

whose death is attributable to a job-related injury or occupational disease. Claims 

incurred for benefits for the Commission’s employees under FECA are administered 

by the United States Department of Labor (DOL) and are ultimately paid by the 

Commission. The workers’ compensation payable represents billings from DOL that 

are unpaid at year-end. An actuarial estimate of unbilled claims is recorded by DOE 

at the departmental level and was not separately calculated for the Commission. 

(m) Disgorged Funds 

The Commission seeks to detect abuses of market power or statutory or rule 

violations by investigating observed market anomalies, complaints, and referrals 

from regional transmission organizations and/or independent system operators, and 

by conducting both targeted and random audits. Once the Commission identifies 

violations, it applies remedies to mitigate the effects of market power, requires 

disgorgement of unjust profits where appropriate, and imposes civil penalties or other 

sanctions when available under existing laws. The Commission records disgorged 

funds as a liability until they are disbursed to appropriate entities. 

(n) Net Position Accounts 

Net position account balances consist of the following components: 

Unexpended appropriations – Represents amounts of spending authority that are 

unobligated and available to the Commission, or obligated but not expended. 

Cumulative results of operations – Represents the Commission’s net results of 

operations since inception, including (1) the amount in the Special Receipts fund 

balance with Treasury, (2) the cost of property and equipment acquired that has 

been financed by appropriations, less accumulated depreciation, and (3) the 

amount of appropriated funding that will be needed in future periods to liquidate 

liabilities incurred through the current fiscal year. Funding for these items is 

generally received in the year that amounts become due and payable. 

(o) Tax Status 

The Commission, as a Federal agency, is not subject to Federal, state, or local income 

taxes, and accordingly, no provision for income tax is recorded. 

(p) Use of Estimates 

The preparation of financial statements in conformity with accounting principles 

generally accepted in the United States of America requires management to make 

estimates and assumptions that affect the reported amounts of assets and liabilities 

and disclosure of contingent assets and liabilities at the date of the financial 

statements. Also affected are the reported amounts of revenues and expenses during 

the reporting period. Actual results could differ from these estimates. 

 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

50 

(3) Non-Entity Assets 

Non-entity assets at September 30, 2008 and 2007 consisted of: 

2008 2007

Intragovernmental:

 Fund balance with Treasury:

 Revenue collected under protest $ $ 97,776 -

 Disgorged funds 16,523,256 16,455,511

 Miscellaneous receipts held in suspense 214,752 609,775 

 Special receipts fund 7,222,919 7,222,919

 Other 5,254 5,098 

Total intragovernmental $ 23,966,181 $ 24,391,079 

Accounts receivable, net 22,673,141 639,612

 Total non-entity assets $ 46,639,321 $ 25,030,691 

Total entity assets 55,271,527 35,988,313

 Total assets $ 101,910,849 $ 61,019,004 

(4) Fund balance with Treasury 

Fund balance with Treasury at September 30, 2008 and 2007 consisted of: 

2008 2007

Fund balances:

 Appropriated funds $ 48,727,561 $ 23,970,59 7

 Revenue collected under protest 97,776 - 

 Disgorged funds 16,523,256 16,455,511

 Miscellaneous receipts held in suspense 214,752 609,775

 Special receipts fund 7,222,919 7,222,919

 Other 5,254 5,098

 Total $ 72,693,74 2 $ 48,361,67 6

Status of Fund balance with Treasury

 Unobligated balance:

 Available $ 16,068,828 $ 3,429,690 

 Unavailable 24,637,014 24,303,797

Obligated balance not yet disbursed 31,987,901 20,628,189

 Total $ 72,693,742 $ 48,361,676 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

51

(5) Accounts Receivable, net 

Entity and nonentity accounts receivable at September 30, 2008 and 2007 consisted of: 

2008

Annual Charges Other Total

Entity

Uncollected billings $ 4,262,767 $ 75,960 $ 4,338,727 

Uncollected intragovernmental billings - 13,399 13,399

Allowance for doubtful accounts (4,115,170) (473) (4,115,643)

 Total entity accounts receivable, net 147,597 88,886 236,483

Non-entity

Uncollected billings 2,041,448 54,910,598 56,952,046

Allowance for doubtful accounts (1,750,139) (32,528,766) (34,278,905)

Total non-entity accounts receivable, net 291,309 22,381,832 22,673,141

 Total accounts receivable, net $ 438,906 $ 22,470,718 $ 22,909,624 

2007

Annual Charges Other Total

Entity

Uncollected billings $ 8,131,010 $ 58,343 $ 8,189,353 

Uncollected intragovernmental billings - 22,640 22,640

Allowance for doubtful accounts (4,174,607) (6,681) (4,181,288)

 Total entity accounts receivable, net 3,956,403 74,302 4,030,705

Non-entity

Uncollected billings 6,892,979 32,545,858 39,438,837

Allowance for doubtful accounts (6,270,459) (32,528,766) (38,799,225)

Total non-entity accounts receivable, net 622,520 17,092 639,612

 Total accounts receivable, net $ 4,578,923 $ 91,394 $ 4,670,317 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

52 

(6) Property and Equipment, net 

Property and equipment and related accumulated depreciation at September 30, 2008 and 

2007 consisted of: 

2008

Acquisition Accumulated

Amount Depreciation Net

Equipment $ 2,631,985 $ 2,468,514 $ 163,471 

Furniture 9,070,773 9,070,773 -

Leasehold improvements 9,491,415 6,130,111 3,361,304

ADP software 17,034,785 14,917,698 2,117,087

Internal software developed - WIP 655,955 655,955 - 

Capital assets 29,000 19,334 9,666

 Total Property and Equipment, net $ 38,913,913 $ 32,606,430 $ 6,307,483 

2007

Acquisition Accumulated

Amount Depreciation Net

Equipment $ 4,826,522 $ 4,554,602 $ 271,920 

Furniture 9,070,773 9,070,773 -

Leasehold improvements 9,491,415 5,655,540 3,835,875 

ADP software 18,422,855 14,562,972 3,859,883 

Capital assets 29,000 9,667 19,333

 Total Property and Equipment, net $ 41,840,565 $ 33,853,554 $ 7,987,011 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

53

(7) Other Liabilities 

Other liabilities at September 30, 2008 and 2007 consisted of: 

2008

Current Non-Current Total

Intragovernmental

 Accrued payroll and benefits $ 1,291,035 $ $ 1,291,035 - 

 Resources transferable to Treasury and other Federal

 entities 478,501 - 478,501

 Miscellaneous receipts transferable to Treasury 5,254 - 5,254

 Workers' compensation payable 605,264 245,220 850,484

 Total intragovernmental liabilities 2,380,053 245,220 2,625,273

Accrued payroll and benefits 6,397,959 - 6,397,959

Commitments and contingencies 100,000 - 100,000

Refunds and other amounts due 10,534,131 - 10,534,131

Accrued leave 12,425,724 - 12,425,724

Resources transferable to other entities from disgorged funds - 38,905,088 38,905,088

 Total other liablities $ 31,837,868 $ 39,150,308 $ 70,988,176 

2007

Current Non-Current Total

Intragovernmental

 Accrued payroll and benefits $ 996,000 $ $ 996,000 - 

 Resources transferable to Treasury and other Federal

 entities 4,618,517 - 4,618,517

 Miscellaneous receipts transferable to Treasury 5,098 - 5,098

 Workers' compensation payable 164,054 594,890 758,944

 Total intragovernmental liabilities 5,783,669 594,890 6,378,559

Accrued payroll and benefits 5,363,070 - 5,363,070

Revenue collected under protest 97,776 - 97,776

Resources transferable to other entities from disgorged funds - 16,472,603 16,472,603

Refunds and other amounts due 1,730,332 - 1,730,332

Accrued leave 10,973,250 - 10,973,250

 Total other liablities $ 23,948,097 $ 17,067,493 $ 41,015,590 

Resources transferable to Treasury represents future collections on accounts receivable that 

will be forwarded to Treasury upon receipt. 

Revenue collected under protest represent monies that may be forwarded to the 

Commission or protesting entities once the protest is resolved. 

Refunds and other amounts due represent monies that ultimately will be returned to entities 

due to overpayments of prior billings. 

Resources transferable to other entities from disgorged funds represents monies that will be 

disbursed to specific entities in the future. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

54 

(8) Building Lease 

The General Services Administration (GSA) enters into lease agreements for government 

buildings and maintains those lease agreements. The Commission pays GSA a standard 

level users charge for the annual rental of building space, of which Commission 

Headquarters is in Washington, DC and several other regional offices are located in various 

parts of the country. The standard level users charge approximates the commercial rental 

rates for similar properties. The Commission generally does not execute an agreement with 

GSA; the Commission, however, is normally required to give 30-120 days notice to vacate. 

Expenses incurred for building leases amounted to $21.5 million and $19.9 million for 

periods ended September 30, 2008 and 2007, respectively. 

Real Property Operating Leases

Fiscal Year GSA Non-GSA Total

FY 2009 11,006,950 97,709 11,104,659

FY 2010 11,006,950 73,280 11,080,230

FY 2011 11,006,950 23,074 11,030,024

FY 2012 11,006,950 12,573 11,019,523

FY 2013 11,006,950 - 11,006,950

Beyond FY 2013 22,013,900 - 22,013,900

 Total future minimum lease payments $ 77,048,650 $ 206,636 $ 77,255,286 

(9) Liabilities Not Covered by Budgetary Resources 

Liabilities not covered by budgetary resources at September 30, 2008 and 2007 consisted 

of: 

2008 2007

Intragovernmental

 Workers' compensation payable $ 850,484 $ 758,944 

Total intragovernmental 850,484 758,944

Accrued leave 12,425,724 10,973,250

 Total liabilities not covered by budgetary resources $ 13,276,208 $ 11,732,194 

(10) Pension Expense

Commission employees participate in either the Civil Service Retirement System (CSRS) 

or the Federal Employees’ Retirement System (FERS). Employees participating in CSRS 

contribute 7% of their basic pay to the plan, and the Commission makes a matching 

contribution. For employees participating in the FERS program, the Commission makes a 

contribution of 10.7% of basic pay. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

55

On January 1, 1987, FERS went into effect pursuant to Public Law 99-335. Most 

employees hired after December 31, 1983, are automatically covered by FERS and Social 

Security. Employees hired prior to January 1, 1984, could elect either to join FERS and 

Social Security or remain in CSRS. FERS offers a savings plan in which the Commission 

automatically contributes 1% of employees’ basic pay and matches any employee 

contribution up to an additional 4% of basic pay. For most employees hired since 

December 31, 1983, the Commission also contributes the employer’s matching share for 

Social Security. 

The actuarial present value of accumulated benefits, assets available for benefits, and 

unfunded pension liability of CSRS and FERS is not allocated to individual departments 

and agencies and is, therefore, not disclosed by the Commission. Total pension expense 

paid by the Commission for both plans for fiscal years 2008 and 2007 was approximately 

$12.8 million and $12.7 million, respectively as of September 30th. During fiscal years 

2008 and 2007 as of September 30th, an additional $10.6 million and $11.4 million, 

respectively, of pension and life and health insurance expense was recognized by the 

Commission for amounts that will ultimately be funded through the Office of Personnel 

Management. This amount is also recorded as an imputed financing source. 

(11) Contingencies 

The Commission has a pending bid protest case where the probability of success is 

reasonably possible. The amount of monetary relief, if awarded, would not exceed 

$100,000. 

(12) Custodial Activity 

The Commission currently bills regulated companies annual charges as a custodian for 

certain Federal agencies. These agencies include the United States Army Corps of 

Engineers, the Department of Interior’s Bureau of Reclamation, and the Treasury. Accrual 

accounting is used to account for the Commission’s custodial activities. The receivables 

are maintained by the Commission, and the collections are processed to each Federal 

agency on a monthly basis. In addition to the annual charges, penalty and administrative 

costs are assessed on past-due bills and remitted to the Treasury when received. For fiscal 

years 2008 and 2007, these custodial collections totaled approximately $56.5 million and 

$82.0 million, respectively as of September 30th. For fiscal years 2008 and 2007, custodial 

revenue totaled approximately $55.6 million and $69.9 million, respectively as of 

September 30th. 

(13) Earmarked Funds 

In accordance with the Federal Accounting Standards Advisory Board’s Statement on 

Federal Financial Accounting Standards (SFFAS) No. 27, the Commission is required to 

report separately on the Balance Sheets and Statements of Changes in Net Position, the nonexchange revenue, other financing sources, net cost of operations and net position 

attributable to earmarked funds. In addition, the Commission must disclose the earmarked 

fund for which it has program management responsibility. The Commission’s Collections 

Due to States fund meets the criteria for earmarked funds. The balances as of September 

30, 2008 and 2007 were $0 and $0 respectively. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

56 

Fund 89X5105 and 895105 pertains to the Use of Government lands. "Reasonable annual 

charges for recompensing the United States for the use, occupancy, and enjoyment of its 

lands or its other property will be fixed by the Commission." 18 CFR CH 1, part 11.2(a) 

 

The Commission disposes of the charges arising from licenses in accordance with USC, 

Title 16, CH 12, Part I, Sec 810 “All other charges arising from licenses hereunder, except 

charges fixed by the Commission for the purpose of reimbursing the United States for the 

costs of administration of this subchapter, shall be paid into the Treasury of the United 

States and credited to Miscellaneous Receipts...37.5 per centum of the charges arising from 

licenses hereunder for the occupancy and use of national forests and public lands from 

development within the boundaries of any State shall be paid by the Secretary of the 

Treasury to such state” 

 

The Commission bills out of the receipt account 895105, requests a warrant for the amount 

of the collections, which is used to transfer the collections into the expenditure account, 

89X5105. The actual payments to the states are made from account 89X5105. 

Since the earmarked funds managed by the Commission are custodial in nature, there are no 

equity balances to report on the financial statements as of September 30, 2008 and 2007. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

57

(14) Intragovernmental Costs and Exchange Revenue 

Costs classified as “Intragovernmental” represent the cost of goods or services obtained 

from Federal entities. Costs classified as “Public” represent the cost of goods or services 

obtained from non-Federal entities. Revenues classified as “Intragovernmental earned” are 

generated when the buyer and seller of services are Federal entities. Revenues classified as 

“Public earned” are generated when the buyer of services is a non-Federal entity. 

Intragovernmental costs and exchange revenue at September 30, 2008 and 2007 consisted of:

2008 2007

Energy Infrastructure:

 Intragovernmental costs $ 39,344,434 $ 39,345,874 

 Public costs 154,766,154 144,234,603

Total Energy Infrastructure costs 194,110,589 183,580,477

 

 Intragovernmental earned revenue 47,870 48,289

 Public earned revenue 194,062,719 183,532,188

Total Energy Infrastructure earned revenue 194,110,589 183,580,477

Competitive Markets

 Intragovernmental costs 6,144,226 6,097,860

 Public costs 24,169,067 22,353,614

Total Competitive Markets costs 30,313,293 28,451,474

 

 Intragovernmental earned revenue 7,476 7,484

 Public earned revenue 30,305,818 28,443,990

Total Competitive Markets earned revenue 30,313,293 28,451,474

Enforcement

 Intragovernmental costs 6,043,892 6,005,100

 Public costs 23,774,392 22,013,571

Total Market Oversight costs 29,818,284 28,018,671

 

 Intragovernmental earned revenue 7,353 7,370

 Public earned revenue 29,810,930 28,011,301

Total Market Oversight earned revenue $ 29,818,284 $ 28,018,671 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

58 

(15) Apportionment Categories of Obligations Incurred 

Apportionment categories of obligations incurred as of September 30, 2008 and 2007 

consisted of: 

2008 2007

Category A:

 Direct $ 250,815,633 $ 228,015,257 

 Reimbursable 39,790 33,178

Total obligations incurred $ 250,855,423 $ 228,048,435 

Category A apportionments distribute budgetary resources by fiscal quarters. 

(16) Explanation of Differences Between the Statement of Budgetary Resources and the 

Budget of the United States Government 

The Commission had no differences between the Statement of Budgetary Resources and 

the Budget of the United States as of September 30, 2007. The statement can be reconciled 

to the President’s budget by combining both of the budgets for Federal Energy Regulatory 

Commission (89-0212-0-1-176) and Payments to States under Federal Power Act (89-

5105-0-2-806). The reconciliation as of September 30, 2008 is not presented, because the 

submission of the FY 2010 budget occurs after publication of these financial statements. 

The Commission’s Budget Appendix can be found under the Department of Energy on the 

OMB website (http://www.whitehouse.gov/omb/budget) and will be available in early 

February 2009. 

(17) Undelivered Orders at the End of the Period 

Undelivered orders are obligations made by the Commission for services and purchases that 

have not been received and accepted as of the balance sheet date. The amount of 

Commission budgetary resources reported as undelivered orders as of September 30th for 

fiscal years 2008 and 2007 were $7.9 million and $1.1 million respectively. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

59

(18) Reconciliation of Net Cost of Operations to Budget 

 The objective of this information is to provide an explanation of the differences between budgetary and

 financial (proprietary) accounting. This is accomplished by means of a reconciliation of budgetary 

 obligations and non-budgetary resources available to the reporting entity with its net cost of operations. 

2008 2007

Resources used to finance activities:

Budgetary resources obligated:

 Obligations incurred $ 250,855,423 $ 228,048,435

 Less: spending authority from offsetting collections (261,082,542) (222,635,150)

 Obligations, net of offsetting collections (10,227,119) 5,413,285

 Less: offsetting receipts (45,163,340) (85,255,615)

 Net obligations (55,390,459) (79,842,330)

Other resources:

 Transfers-out, net of appropriations received 6,183,584 (17,938,275)

 Imputed financing from costs absorbed by others (note 10) 10,649,788 11,380,108

 Net other resources used to finance activities 16,833,372 (6,558,167)

Total resources used to finance activities (38,557,087) (86,400,497)

Resources used to finance items not part of the net cost of operations:

 Change in budgetary resources obligated for

 goods/services/benefits ordered but not yet provided (+/-) (6,778,893) 2,624,898

 Resources that fund expenses recognized in prior periods - (38,082)

 Budgetary offsetting receipts that do not affect the net

 cost of operations 45,163,340 85,255,615

 Resources that finance the acquisition of assets (977,244) (997,518)

 Payments to States (note 12) (3,127,077) (3,094,042)

 Total resources used to finance items not part of the net cost of operations 34,280,126 83,750,871

 Total resources used to finance the net cost of operations (4,276,961) (2,649,626)

Components of the net cost of operations that will not require or generate

 resources in the current period:

Components requiring or generating resources in the future periods:

Increase in unfunded liabilities 1,644,014 265,753

Total components of net cost of operations that will require or 1,644,014 265,753

 generate resources
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

60 

Components not requiring or generating resources:

Depreciation and amortization 2,656,772 2,595,296

Other (23,825) (211,423)

Total components of net cost of operations that will not require or

 generate resources 2,632,946 2,383,873

Total net cost of operations that do not require or generate resources in

 the current period 4,276,961 2,649,626

Net Cost of Operations $ $ - -
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

61

Performance Report 

(Unaudited) 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

62 

Introduction 

In accordance with Government Performance and Results Act of 1993, the Commission 

developed its Strategic and Business Plans, as well as its performance measures, to 

ensure it is fulfilling its mission. When comparing the planned and actual performance 

according to the guidelines set forth in Section 230 of OMB Circular A-11, the 

Commission: 

• determined that its performance results are complete and reliable based on the fact 

that results are listed for every performance measure and target, that decision-makers use 

the information contained in the results “on an ongoing basis in the normal course of their 

duties,” and that the information contained in the results are derived via internal tracking 

mechanisms; and 

• identified no “significant or material” performance shortfalls based on the fact that 

none of the Commission’s unmet performance measures or targets had an adverse effect 

on overall program performance. 

In addition to the FY 2008 performance results that were highlighted in the 

Management’s Discussion and Analysis, the tables on the following pages include the 

Commission’s complete performance measurement data for fiscal years 2005 through 

2008. 

The Performance Measures for fiscal years 2005 through 2006 are aligned with the 

Commission’s former Strategic Plan. The Performance Measures for fiscal years 2007 

through 2008 are aligned with the Commission’s updated Strategic Plan which was 

submitted to Congress on September 29, 2006. The updated Strategic Plan can also be 

found in Appendix B.
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

63

Performance Measurement Data for Energy Infrastructure: FY 2005 – FY 2008

FY 2005 

Performance Measurement Performance Target Result 

Percentage of pipeline certificate cases 

completed in specified time frames 

85% of cases completed within the following 

time frames: 

3⁄4 unprotested cases that involve no 

precedential issues, 159 days 

3⁄4 protested cases that involve no precedential 

issues, 304 days 

3⁄4 cases of first impression or containing 

larger policy implications, 365 days 

3⁄4 cases requiring a major environmental 

assessment or environmental impact 

statement, 480 days 

Target Met. During FY 2005, the following 

percentages of cases were completed within 

the stated targets: 

3⁄4 93% 

3⁄4 100% 

3⁄4 100% 

3⁄4 89%. 

Inspect each major onshore pipeline project at 

least once every four weeks during ongoing 

construction activity 

100% of qualifying projects inspected per 

established schedule 

Target Met. During FY 2005, 100% of 

qualifying projects were inspected per the 

established schedule. 

Time to complete NEPA Prefiling Process 8 months after a complete application is filed 

Target Met. During FY 2005, 100% of 

applications completed the NEPA Prefiling 

Process within the stated target. 

Percentage of relicense filings based upon 

alternative licensing process (ALP) 25% of all relicense cases using ALP Target Met. During FY 2005, 39% of relicense cases used the ALP. 

Yearly increase in the percentage of 

hydropower projects using the ILP pre-filing 

process 

25% 

Target Met. Due in large part to staff 

outreach efforts, the percentage of 

hydropower projects using the ILP increased 

by 450% during FY 2005. 

Average processing times for hydropower 

relicensing Additional 5% reduction each year 

Target Met. During FY 2005, the average 

processing time for hydropower relicensing 

reduced by 5.5%. 

Percentage of final NEPA documents, 

required for hydropower license applications 

filed after FY 2002, completed within 

specified time frames 

75% of final NEPA documents prepared for 

licenses approved within the following time 

frames: 

3⁄4 ALP case, less than 16 months 

3⁄4 Traditional case, less than 24 months 

Target Met. 100% of final NEPA documents 

were prepared within the stated targets for 

both the ALP and TLP cases during FY 2005. 

Percent of final NEPA documents based upon 

comprehensive settlement agreements 

completed within specified time frames 

75% of final NEPA documents prepared for 

final comprehensive license settlement 

agreements are completed within 12 months 

Target Met. 92% of final NEPA documents 

were completed within 12 months during FY 

2005. 

Reduction in the number of barriers to entry 

for new generators and reduction in the 

potential for undue discrimination against 

new generators, by streamlining and 

standardizing interconnection terms and 

conditions in non-independent transmission 

provider tariffs 

75% of all open access transmission tariffs 

will have standard generator interconnection 

procedures in compliance with Order No. 

2003 (and small generator final rule) by the 

end of FY 2005 

Target Met. During FY 2005, the 

Commission completed 96.9% (31 of 32) of 

the open access transmission tariff 

compliance filings received, which also have 

standard generator interconnection 

procedures that comply with Order No. 2003. 

Note: Filings required under Order No. 2006 

(small generator final rule) were not reflected 

in these results since they are contingent upon 

the issuance of the final rule on electronic 

tariff filing, which was not completed by the 

end of FY 2005. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

64 

FY 2005 

Performance Measurement Performance Target Result 

Effectiveness of regional planning processes 

in each region of the country 

Establish benchmarks assessing how well 

each region is meeting the necessary criteria 

for regional planning, which includes: 

3⁄4 an open and inclusive process for 

stakeholder involvement 

3⁄4 objective cost allocation criteria 

3⁄4 equal opportunity for a variety of 

technologies 

3⁄4 a process to reduce congestion 

Target Met. In March 2005, benchmarks that 

meet the stated targets were developed and 

presented to the RTO and ISO Boards of 

Directors during a meeting at the 

Commission. 

Timeliness of processing requests for cost 

recovery, new services, or changes to existing 

services 

100% of all cases processed by statutory 

action date 

Target Not Met. Almost 99.9% of the more 

than 3,000 statutory cases were completed by 

the statutory action date. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. This difference had no 

effect on overall program performance. 

Timeliness of Commission Opinions, to 

provide ratepayers with regulatory certainty 

with respect to rates set for hearing 

85% of all Commission Opinions issued 

within 12 months of Briefs Opposing 

Exceptions to Initial Decisions on rates set for 

hearing 

Target Met. During FY 2005, 100% of 

Commission Opinions were issued within 12 

months of the Briefs Opposing Exceptions to 

Initial Decisions on rates set for hearing. 

Timeliness of resolving cost recovery 

proposals for new infrastructure, to provide 

investors with regulatory certainty 

85% of all merits orders accepting, 

modifying, or rejecting timely filed proposals, 

including time for hearing, ADR, or 

settlement judge participation, issued by date 

requested by applicant to meet its 

construction/financing schedule 

Target Met. During FY 2005, The 

Commission issued 95% of the 224 merits 

orders to resolve cost recovery proposals for 

new infrastructure by requested date or, in the 

case of gas pipeline certificate applications, 

contributed rate inserts to allow timely 

completion. 

Implementation of rate flexibility or 

incentives to encourage needed additions to 

energy infrastructure 

Increase in the number of innovative or 

flexible rate designs in effect, by approving 

rate proposals or issuing policy statements 

providing rate flexibility or incentives needed 

for infrastructure additions 

Target Met. During FY 2005, the 

Commission approved several rate proposals 

and issued a policy statement on independent 

transmission companies, which collectively 

accomplished the stated targets. 

Participation with NERC in reliability 

readiness reviews over next 3 years to ensure 

grid reliability 

One-third of the Nation’s control areas 

reviewed with NERC annually 

Target Met. During FY 2005, the 

Commission participated in 35 of the 44 

NERC scheduled control area audits, which 

exceeds one-third of the Nation’s 

approximately 100 control areas. 

This result is based on an estimate since 

NERC continues to re-define what constitutes 

a “control area.” In future years, the 

Commission is no longer basing its 

performance on the number of “control 

areas,” but rather on “load capacity.” 

Timeliness of processing proposals to recover 

prudently incurred costs to improve the 

reliability of the transmission grid 

100% of all filings, including innovative 

proposals, seeking recovery of reliability 

costs in transmission rates processed by the 

statutory action date 

Target Not Met. The Commission processed 

99.7% (313 out of 314) of these filings by the 

statutory action date during FY 2005.

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. This difference had no 

effect on overall program performance. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

65

FY 2005 

Performance Measurement Performance Target Result 

Assess each region’s reliability rules and 

penalties to determine whether they specify 

reliability violations and include enforceable 

and effective penalties 

Target Met. After assessing the reliability 

rules of the six existing RTOs/ISOs in various 

regions of the country, the Commission 

determined that the rules specify reliability 

violations and include enforceable and 

effective penalties. Clarity and enforceability of reliability rules, 

with effective penalties for non-compliance 

Require each new RTO or ISO to address 

reliability considerations prior to becoming 

operational 

Target Met. Prior to becoming operational, 

each of the six existing RTOs/ISOs addressed 

reliability considerations.

Enhance reliability oversight by creating a 

new reliability division Division operational by end of fiscal year Target Met. The Commission’s Reliability Division was operational in October 2004. 

Timeliness of processing proposals to recover 

prudently incurred costs to safeguard the 

security and safety of energy transportation 

and supply infrastructure 

100% of all filings, including innovative 

proposals, seeking recovery of security and 

safety costs in jurisdictional rates processed 

by statutory action date 

Target Met. The Commission processed 

100% of the fourteen oil pipeline and three 

gas pipeline filings by the statutory action 

date. 

Evaluate the effectiveness of Commission 

required resources protection measures, and 

disseminate information on the results. 

Conduct a workshop and disseminate one 

report on the results of the evaluation. 

Target Met. During FY 2005, the 

Commission conducted a workshop on 

shoreline management and issued a report on 

its evaluation of recreation mitigation 

effectiveness. 

Maintain environmental quality at 

hydropower projects. 

Resource protection measures constructed 

and implemented according to license 

requirements. 

Target Met. Environmental inspections 

during FY 2005 indicated that all resource 

protection measures at inspected projects 

were constructed and implemented according 

to license articles. 

100% of high- and significant-hazardpotential dams inspected annually 

Percentage of high- and significant-hazardpotential dams meeting all current structural 

safety standards remains uniformly high 

Enhance dam safety 

100% of qualifying dams in compliance with 

EAP requirements 

Target Met. During FY 2005, the following 

percentage of dams met the stated targets: 

3⁄4 100% 

3⁄4 95% 

3⁄4 100% 

Timely handling of CEII without disrupting 

requesters’ participation rights in other 

proceedings 

No requester’s failure to obtain CEII in a 

timely manner will affect requester’s ability 

to participate effectively in a proceeding 

Target Met. The Commission received no 

complaints from requesters regarding their 

ability to participate effectively in a 

proceeding during FY 2005. 

Prevent unauthorized access to securityrelated documents No instances of unauthorized access to 

security-related documents 

Target Met. During FY 2005, the 

Commission did not have an instance of 

unauthorized access to security-related 

documents reported. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

66 

FY 2005 

Performance Measurement Performance Target Result 

Number of instances of improved regulation 

to facilitate security and emergency response 

Number of specific measures (e.g., number of 

security surcharge requests approved and gas 

allocation principles set) 

Target Met. During FY 2005, the 

Commission improved regulation to facilitate 

security and emergency responses by: 

3⁄4 approving all security surcharge requests 

received from oil pipelines; 

3⁄4 approving recovery of software costs to 

meet security requirements for an electric 

public utility; 

3⁄4 approving surcharges to recover capital 

costs (including costs to enhance security) for 

two natural gas pipelines; and 

3⁄4 issuing notices in response to Hurricanes 

Katrina and Rita, waiving certain reporting 

requirements and non-statutory deadlines for 

specified periods. 

FY 2006 

Performance Measurement Performance Target Result 

Develop strategic plan and timeline for 

transmission line siting group By August 31, 2006 

Target Met. The strategic plan and timeline 

were in place by August 31, 2006. Steps 

have been taken to establish a transmission 

line siting group including: the issuance of a 

Notice of Proposed Rulemaking to establish 

the necessary rules and regulations to process 

applications filed with the Commission and 

posting openings to fill these essential 

positions. 

Issue final rules on mandatory pre-filing 

process for LNG terminal proposals Within 60 days of enactment of EPAct 2005 

Target Met. The Commission issued 

regulations on the mandatory pre-filing 

process for LNG terminal proposals within 60 

days of the enactment of EPAct 2005. The 

Pre-Filing Rule was issued on October 7, 

2005 in Docket No. RM 05-31-000, Order 

665; the effective date of the rule was 

November 17, 2005. 

Complete MOU with Secretary of Defense on 

coordination of LNG facilities affecting 

active military installations 

By March 31, 2006 

Target Not Met. Both DoD contacts retired 

or were transferred during negotiations. A 

new DoD contact was assigned in July 2006 

and negotiations are underway again. This 

did not impact operations. 

Issue reports to Congress on Alaska Natural 

Gas Pipeline 

Reports issued in February 2006 and August 

2006 

Target Met. Reports issued February 1 and 

July 10, 2006. 

Establish rules for transmission infrastructure 

incentives Issue rules by August 8, 2006 

Target Met. Docket No. RM06-4-000; Final 

Rule, Order No. 679, “Promoting 

Transmission Investment through Pricing 

Reform,” issued July 20, 2006. 

Identify requirements for establishing a 

communications system with transmission 

owners and RTOs on status of transmission 

lines 

Issue report to Congress by February 4, 2006 

Target Met. Report entitled “Steps to 

Establish a Transmission Monitoring System 

for Transmission Owners and Operators 

within the Eastern and Western 

Interconnections,” submitted to Congress on 

February 2, 2006. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

67

FY 2006 

Performance Measurement Performance Target Result 

Establish process to review ERO proposed 

initial reliability standards By March 31, 2006 

Target Met. Developed a rulemaking process 

and timeline for addressing the initial 

reliability standards; the process and timeline 

were approved by the Commission in March 

2006. 

Issue report to Congress on operator training By December 31, 2005 

Target Not Met. Although a comprehensive 

study of the current state of control room 

operator training across the bulk power 

system of the United States was completed in 

early December, the report has not yet been 

sent to Congress. The Commission is 

currently involved in a comprehensive 

rulemaking related to ERO reliability 

standards which will include standards related 

to operator training. This did not negatively 

impact operations. 

Percentage of qualifying, major, onshorepipeline projects inspected during ongoing 

construction activity 

100% of projects inspected at least once 

every four weeks 100% 

Percentage of pipeline certificate cases with 

no precedential issues completed 

3⁄4 90% of unprotested cases within 159 days 

of filing 

3⁄4 90% of protested cases within 304 days of 

filing 

3⁄4 94% 

3⁄4 100% 

Percentage of pipeline certificate cases of 

first impression or containing larger policy 

implications completed 

90% within one year of filing 100% 

Percentage of pipeline certificate cases 

requiring a major environmental assessment 

or environmental impact statement completed 

90% within 18 months of filing 100% 

Percentage of qualifying LNG plants 

inspected during ongoing construction 

activity 

100% of plants inspected at least once every 

eight weeks 100% 

Percentage of LNG import terminals 

inspected 100% inspected annually 100% 

Percentage of LNG peak-shaving terminals 

inspected 50% inspected annually 50% 

Percentage of ILP pre-filing notices for 

NOI/PAD and initial scoping document 

issued 

85% within 60 days of NOI/PAD filing 100% 

Percentage of ILP pre-filing scoping meetings 

and site visits completed 85% within 90 days of NOI/PAD filing 100% 

Percentage of ILP pre-filing study plan 

determinations completed 85% within 315 days of NOI/PAD filing 100% 

Percentage of final NEPA documents issued 

for ALP/TLP cases with settlement 

agreements 

85% within 12 months 94% 

Percentage of final NEPA documents issued 

for ALP/TLP cases without settlement 

agreements 

85% within 24 months 94% 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

68 

FY 2006 

Performance Measurement Performance Target Result 

Percentage of non-independent transmission 

provider open access transmission tariffs that 

have standard generator interconnection 

procedures in compliance with Order No. 

2003 and small generator final rule 

75% by September 30, 2006 

Target Met. 100% compliance with Order 

No. 2006, “Standardization of Small 

Generator Interconnection Agreements and 

Procedures,” issued May 12, 2005, was 

established through language contained in 

paragraph 544 of the Final Rule, as follows: 

“On the effective date of this Final Rule...the 

OATTs [open access transmission tariffs] of 

all non-independent Transmission Providers 

are deemed revised to include the Final Rule 

SGIP [Standard Generator Interconnection 

Procedures] and SGIA [Standard Generator 

Interconnection Agreement].” In accordance 

with other language in the same paragraph, 

no further amendment to include the SGIP 

and SGIA in a Transmission Provider’s 

OATT is required until compliance is due in 

the Commission’s pending rulemaking on 

Electronic Tariff Filings. 

Compliance with Order No. 2003 (large 

generator rule) was completed and reported 

on during FY 2005 (see previous results). 

Percentage of cases for cost recovery, new 

services, or changes to existing services 

processed 

3⁄4 100% of NGA section 4 cases in 30 days 

3⁄4 100% of FPA section 205 cases in 60 days 

Target Met. 100% of the more than 3,350 

statutory cases were completed by the 

statutory action date. 

Percentage of rate cases set for hearing 

completed according to the established 

schedule 

3⁄4 75% of Track I cases in 29.5 weeks 

3⁄4 75% of Track II cases in 47 weeks 

3⁄4 75% of Track III cases in 63 weeks 

3⁄4 There were no Track I cases 

3⁄4 90% of Track II cases in 47 weeks 

3⁄4 94% of Track III cases in 63 weeks 

Percentage of rate cases set for hearing that 

achieve partial or complete consensual 

agreement 

75% 78% 

Percentage of Commission Opinions issued 

once Briefs Opposing Exceptions to Initial 

Decisions are filed 

90% within 12 months 

Target met. 100% (10 of 10) Initial 

Decisions processed within 12 months of 

Briefs Opposing Exceptions. 

Percentage of merit orders accepting, 

modifying, or rejecting timely filed cost 

recovery proposals for new infrastructure 

submitted (including time for hearing, ADR, 

or settlement judge participation) 

95% by applicant request date 

Target Met. 96% of the 120 merit orders to 

resolve cost recovery proposals for new 

infrastructure were issued by statutory or 

requested date as applicable. In the case of 

gas pipeline certificate applications, 

contributed rate inserts to allow timely 

completion. 

Timeliness of issuing environmental licensing 

requirements 

Licensing responsibility letters sent within 45 

business days of license issuance date 

Target Met. All licensing responsibility 

letters were issued within 45 days of license 

issuances. 

Percentage of NEPA documents completed 

for projects utilizing the pre-filing processes 

85% within 8 months of determining a 

pipeline or LNG facility application complete 100% 

Participation in NERC / industry reliability 

readiness reviews 

3⁄4 100% of the Reliability Coordinators 

3⁄4 Large entities which represent 80% of the 

load served by all entities reviewed by NERC 

Target Met. FERC participated in 100% of 

NERC’s Reliability Coordinator reviews (5 of 

5), and participated in 22 readiness reviews of 

large entities which represent 94.5% (125,503 

MW) of the load served by all entities 

reviewed by NERC (132,796 MW). 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

69

FY 2006 

Performance Measurement Performance Target Result 

Issue final rule on Electric Reliability 

Organization (ERO) certification and 

mandatory reliability standards enforcement 

Rule issued by February 4, 2006 

Target Met. Docket No. RM05-30-000; Final 

Rule, Order No. 672, “Rules Concerning 

Certification of the Electric Reliability 

Organization; and Procedures for the 

Establishment, Approval, and Enforcement of 

Electric Reliability Standards,” issued 

February 3, 2006. 

Percentage of new RTOs or ISOs performing 

reliability functions included in Orders No. 

2000 or No. 888, respectively 

100% No new RTOs or ISOs were established 

during the performance period. 

Percentage of merit orders accepting, 

modifying, or rejecting timely filed proposals 

to recover prudently incurred reliability costs 

submitted (including time for hearing, ADR, 

or settlement judge participation) 

95% by applicant request date 

Target Met. 100% of the 394 merit orders to 

resolve cost recovery proposals for reliability 

were issued by statutory or requested date, as 

applicable. 

Percentage of merit orders accepting, 

modifying, or rejecting timely filed proposals 

to recover prudently incurred safety and 

security costs submitted (including time for 

hearing, ADR, or settlement judge 

participation) 

95% by applicant request date 

Target Met. 100% of the 20 relevant filings 

(i.e., oil pipelines) were completed by the 

statutory action date. 

Percentage of high- and significant-hazardpotential dams inspected annually 100% 100% 

Percentage of high- and significant-hazardpotential dams that either meet all current 

structural safety standards or are undergoing 

investigation or remediation 

100% 100% 

Percentage of qualifying dams that either 

comply with EAP requirements or are 

conducting follow-up action(s) on 

outstanding item(s) 

100% 100% 

Number of instances of unauthorized access 

to Critical Energy Infrastructure Information 

(CEII) 

No instances Target met. No instances. 

Number of complaints from CEII requesters 

on inability to participate in a proceeding due 

to failure to obtain CEII in a timely manner 

None Target met. None. 

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

Resolve Regulatory and Other Challenges to Needed Development 

Issue Alaska Gas Pipeline Reports to Congress Issue Reports in February and August 2007 Target Met. Reports were issued on January 

31 and August 15, 2007. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

70 

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

Percentage of pipeline certificate cases with no 

precedential issues completed 

3⁄4 90% of unprotested cases within 159 days 

of filing 

3⁄4 90% of protested cases within 304 days of 

filing 

Targets Met. 

3⁄4 98% of unprotested cases were completed 

within 159 days of filing. 

3⁄4 100% of protested cases were completed 

within 304 days of filing. 

Percentage of pipeline certificate cases of first 

impression or containing larger policy 

implications completed 

90% within 365 days of filing 

Target Met. 100% of cases of first 

impression or larger policy implications were 

completed within 365 days of filing. 

Percentage of pipeline certificate cases 

requiring a major environmental assessment or 

environmental impact statement completed 

90% within 480 days of filing 

Target Met. 94% of cases requiring a major 

environmental assessment or environmental 

impact statement were completed within 480 

days of filing. 

Percentage of qualifying LNG plants inspected 

during ongoing construction activity 100% of plants inspected every 8 weeks 

Target Met. 100% of qualifying LNG plants 

(6 of 6) where construction was occurring 

were inspected at least every 8 weeks. 

Percentage of ILP pre-filing study plan 

determinations completed 

85% within 150 days of applicant’s filing of 

the proposed study plan 

Target Met. 90% (9 out 10) ILP pre-filing 

study plan determinations were completed 

within 150 days of applicant’s filing of the 

proposed study plan. 

Percentage of infrastructure studies completed 

3⁄4 100% for regional and issue-based 

infrastructure conferences 

3⁄4 100% for Commission- and Congressionaldirected studies 

Targets Met. 

3⁄4 100% of infrastructure studies completed 

for regional and issue-based conference. 

3⁄4 100% of infrastructure studies completed 

for Commission- and Congressional-directed 

studies. 

Percentage of NEPA documents completed for 

projects utilizing the pre-filing processes 

85% within 8 months of determining a 

pipeline or LNG facility application complete 

Target Met. Of the 18 projects that utilized 

the pre-filing process, 100% had final NEPA 

documents within 8 months of filing a 

complete application. 

Timeliness of filings processed containing 

amendments to non-independent electric 

transmission provider OATTs 

Within 60 days of filing date or applicants’ 

requested date, whichever is later 

Target Met. All 126 amendments to nonRTO/ISO OATTs completed within 60-day 

statutory timeframe. 

Encourage Investment and Effect Timely Cost Recovery 

Timeliness of applications processed for 

incentive rates under section 205 of the FPA 

Processed by the statutory deadline for rate 

filings or the applicants’ requested date, 

whichever is later 

Target Met. 100% of the 11 statutory 

incentive rates cases were processed within 

statutory timeframes. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

71

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

Process cost recovery cases within reasonable 

timeframes (including prudently-incurred 

expenses to safeguard and enhance the 

reliability, security and safety of the energy 

infrastructure) 

3⁄4 100% of statutory cases addressed by 

Commission order within statutory deadlines 

3⁄4 95% of certificate cases within 12 months 

or applicants’ requested date, whichever is 

later 

3⁄4 90% of cases set for hearing within 12 

months of briefs opposing exceptions 

Targets Met. 

3⁄4 100% of all 3,164 statutory items, 

including cost recovery cases, were 

completed within statutory due dates. 

3⁄4 In certificate work, 97%, or 60 of 62 cases 

requiring rate inserts, were completed timely. 

Even in the cases that were unavoidably 

delayed—one due to Coast Guard 

involvement in approving LNG facility, and 

the other subject to environmental issues 

because the company did not use the NEPA 

pre-filing process—the rate analyses were 

provided to the lead Office within the 

required time period. 

 

3⁄4 100% issued within 12 months. 

Establish price volatility baseline By September 30, 2007 

Not Applicable. The Commission proposed 

to establish a price volatility baseline. The 

first step in this process was to determine 

what information was available and 

reasonable to collect. In FY 2007, staff 

reviewed available price data and concluded 

that a price volatility baseline was not 

feasible. Because of the lack of available 

data, this performance measure has been 

discontinued. 

Program performance was not negatively 

impacted as a result of not establishing a 

price volatility baseline. 

Establish out-of-merit dispatch baseline By September 30, 2007 

Not Applicable. The Commission proposed 

to establish an out-of-merit dispatch baseline. 

The first step in this process was to determine 

what information was available and 

reasonable to collect. In FY 2007, staff 

contacted transmission operators and found 

that their data is inconsistent across 

transmission systems and does not allow for 

meaningful analyses to establish this baseline. 

Because of the lack of consistent data, this 

performance measure has been discontinued. 

Program performance was not negatively 

impacted as a result of not establishing an 

out-of-merit dispatch baseline. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

72 

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

Assure Reliability of Interstate Transmission Grid 

Percentage of proposed reliability standards 

reviewed 100% 

Target Met. Docket No. RM06-16-000; Final 

Rule, Order No. 693, "Mandatory Reliability 

Standards for the Bulk-Power System," 

issued March 16, 2007, in which the 

Commission approved 83 of 107 proposed 

Reliability Standards, and directed significant 

improvements to 56 of those standards. The 

Commission also required submission of 

further information in order to evaluate the 

adequacy of the remaining 24 standards. 

The initial 83 standards became mandatory 

and enforceable on June 18, 2007. 

In addition, the Commission approved 8 

regional standards in Docket No. RM07-11-

000; "Order Approving Regional Reliability 

Standards for the Western Interconnection 

and Directing Modifications," issued June 8, 

2007. 

Develop procedures to review the performance 

of the ERO Complete by March 31, 2007 

Target Met. Procedures were outlined in 

Docket No. RM05-30-000; Final Rule, Order 

No. 672, "Rules Concerning Certification of 

the Electric Reliability Organization; and 

Procedures for the Establishment, Approval, 

and Enforcement of Electric Reliability 

Standards," issued February 3, 2006. 

Percentage of NERC / industry reliability 

readiness reviews of Reliability Coordinators 

in which FERC participates 

100% Target Met. FERC participated in all 4 of 

NERC's Reliability Coordinator reviews. 

Percentage of load served, included in NERC / 

industry reliability readiness reviews, in which 

FERC participates 

50% 

Target Met. FERC participated in 22 

readiness reviews of large entities which 

represent just over 80% (332,244 MW) of the 

load served by all entities reviewed by NERC 

(414,101 MW). 

Percentage of ERO penalty action rulings 

reviewed to prevent inappropriate rulings from 

going into effect by default 

100% 

No activity, as the standards only became 

mandatory on June 18, 2007, and no ERO 

proposed penalties were filed in FY 2007. 

Protect Safety at LNG and Hydropower Facilities 

Percentage of high- and significant-hazardpotential dams inspected annually 100% 

Target Met. 100% of all high and significant 

hazard-potential dams were inspected 

annually. 

Percentage of high- and significant-hazardpotential dams that either meet all current 

structural safety standards or are undergoing 

investigation or remediation 

100% 

Target Met. 100% of all high- and 

significant-hazard potential dams meet 

current structural standards or are undergoing 

investigation or remediation. 

Percentage inspected annually: 

3⁄4 LNG import terminals 

3⁄4 LNG peak-shaving facilities 

3⁄4 100% 

3⁄4 50% 

Targets Met. 

3⁄4 All 5 of the operating LNG import 

terminals were inspected. 

3⁄46 of the 12 peak-shaving facilities were 

inspected. 

Percentage of LNG facilities that meet all 

current safety standards or are subject of a 

compliance letter 

100% 

Target Met. 100% of LNG facilities met all 

current safety standards or were subject to a 

compliance letter. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

73

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

Percentage of EIS documents that contain 

sections addressing safety for Hydropower 

Projects, LNG Facilities, Gas Pipeline Projects 

and Storage Facilities 

100% 

Target Met. 100% of EIS documents contain 

sections relating to safety for Hydropower 

Projects, LNG Facilities, Gas Pipeline 

Projects and Storage Facilities. 

Control access to Critical Energy 

Infrastructure Information 

No instances of improper access or improper 

denial affecting national security or 

Commission proceedings 

Target met. No instances. 

Percentage of qualifying dams that either 

comply with EAP requirements or are 

conducting follow-up action(s) on outstanding 

item(s) 

100% 

Target Met. 100% of qualifying dams 

comply with EAP requirements or are 

conducting follow-up action(s) on 

outstanding item(s). 

Percentage of LNG facility authorizations that 

incorporate consultation with all appropriate 

agencies on security related matters 

100% 

Target Met. 100% of LNG facility 

authorizations incorporate consultation with 

all appropriate agencies on security related 

matters. 

Incorporate Environmental Considerations into Commission Decisions 

Percentage of final NEPA documents issued 

for ALP/TLP cases: 

3⁄4 with settlement agreements 

3⁄4 without settlement agreements 

3⁄4 85% within 12 months 

3⁄4 85% within 24 months 

Targets Met. 

 100% of final NEPA documents (5 of 5) 

were issued within 12 months for ALP/TLP 

cases with settlement agreements. 

 100% of final NEPA documents (16 of 16) 

were issued within 24 months for ALP/TLP 

cases without settlement agreements. 

Timeliness of issuing environmental licensing 

requirements 

Licensing responsibility letters sent within 45 

business days of license issuance date 

Target Met. All licensing responsibility 

letters were sent out within 45 business days 

of license issuance date. 

Percentage of qualifying, major, onshorepipeline projects inspected during ongoing 

construction activity 

100% of projects inspected at least once 

every four weeks 

Target Met. Of the 30 pipeline projects under 

active construction in FY 2007, 100% were 

inspected at least once every four weeks. 

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Resolve Regulatory and Other Challenges to Needed Development 

Timeliness of processing complete filings 

containing amendments to non-independent 

electric transmission provider OATTs 

100% processed by statutory due date or 

applicant’s requested date, whichever is later 

Target Met. 100% (125 out of 125) 

amendments to non-RTO/ISO OATTs were 

completed within the 60-day statutory 

timeframe. 

Issue Alaska Gas Pipeline Reports to Congress Issue Reports in February and August 2008 Target Met. Reports were issued February 

19 and August 29, 2008. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

74 

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Percentage of pipeline certificate cases with 

no precedential issues completed 

3⁄4 90% of unprotested cases within 159 days 

of filing 

3⁄4 90% of protested cases within 304 days of 

filing 

3⁄4Target Met. 94% of unprotested pipeline 

certificate cases with no precedential issues 

were completed within 159 days of filing. 

3⁄4Target Met. 100% of protested pipeline 

certificate cases with no precedential issues 

were completed within 304 days of filing. 

Percentage of pipeline certificate cases of first 

impression or containing larger policy 

implications completed 

90% within 365 days of filing 

Target Met. 97% of pipeline certificate 

cases of first impression or containing larger 

policy implications were completed within 

365 days of filing 

Percentage of pipeline certificate cases 

requiring a major environmental assessment or 

environmental impact statement completed 

90% within 480 days of filing 

Target Not Met. 75% (6 of 8) of pipeline 

certificate cases requiring a major 

environmental assessment or environmental 

impact state were completed within 480 

days of filing. Bradwood Landing Project 

(CP08-365-000, et al, issued September 18, 

2008) required additional time due to an 

unusually large number of environmental 

issues which resulted in processing delays 

beyond FERC’s control. This project was 

the first new LNG import terminal and 

related sendout pipeline to serve the Pacific 

Northwest. Broadwater Energy Project 

(CP06-54 issued March 20, 2008) also 

required additional time due to novel 

environmental issues which resulted in 

processing delays beyond FERC’s control. 

This project was the first floating terminal 

for the storage and delivery of liquefied 

natural gas in the United States. There were 

no adverse impacts as a result of these two 

delays. 

Percentage of NEPA documents completed for 

projects utilizing the pre-filing processes 

85% within 8 months of determining a 

pipeline or LNG facility application complete 

Target Met. 87% of NEPA documents were 

completed within 8 months of determining a 

pipeline or LNG facility application was 

complete for projects utilizing the pre-filing 

process. 

Percentage of qualifying LNG plants inspected 

during ongoing construction activity 90% of plants inspected every 8 weeks 

Target Met. 100% of qualifying LNG plants 

were inspected at least once every 8 weeks 

during ongoing construction. 

Percentage of ILP pre-filing study plan 

determinations completed 

75% within 30 days of applicant filing revised 

study plan for Commission approval 

Target Met. 100% of ILP pre-filing study 

plans determinations were completed within 

30 days of the applicant filing a revised 

study plan. 

Percentage of infrastructure studies completed 

3⁄4 95% for regional and issue-based 

infrastructure conferences 

3⁄4 95% for Commission- and Congressionaldirected studies 

3⁄4 Target Met. 100% of regional and issuebased infrastructure studies were completed 

for regional and issue-based infrastructure 

conferences. 

3⁄4 Target Met. 100% of infrastructure 

conferences were completed for 

Commission- and Congressional-directed 

studies. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

75

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Encourage Investment and Effect Timely Cost Recovery 

Timeliness of processing complete 

applications for incentive rates 

3⁄4 100% of statutory cases processed within 

statutory deadlines or by applicant’s requested 

date, whichever is later 

3⁄4 80% of declaratory orders filed for 

Commission action within 180 days of filing 

date or by applicant’s requested date, 

whichever is later. 

3⁄4 Target Met. 100% (16 out of 16) 

statutory incentive rate cases were processed 

within the statutory timeframes. 

3⁄4 Target Met. 100% filed within 180 days. 

Timeliness of processing cost recovery cases 

(including prudently-incurred expenses to 

safeguard and enhance the reliability, security 

and safety of the energy infrastructure) 

3⁄4 100% of statutory cases processed within 

statutory deadlines or by applicant’s requested 

date, whichever is later 

3⁄4 90% of rate inserts for certificate cases 

processed within 30 days prior to lead office’s 

target date for completion of pipeline 

certificate case 

3⁄4 85% of cases that were set for hearing filed 

for Commission action within 12 months of 

briefs opposing exceptions 

3⁄4 Target Met. 100% (3,498 out of 3,499) 

statutory items, including cost recovery 

cases, were processed within statutory 

deadlines; only one filing missed its 

deadline by three business days 

3⁄4 Target Met. 96% (55 out of 57) of rate 

inserts were processed within the 

appropriate timeframe. 

3⁄4 Target Met. 100% filed within 12 months 

of briefs opposing exceptions. 

Timeliness of verification of EQR submissions Within 10 business days of filing due date Target Met. All EQR submissions were 

verified within 10 business days.

Percentage of Accounting Inserts completed 

for inclusion in merit orders on cost recovery 

proposals for new gas pipeline infrastructure 

95% Target Met. 100% of gas certificate 

accounting inserts were completed on time.

Percentage of financial accounting filings 

completed timely 75% within 60 days of filing date 

Target Met. 100% of financial accounting 

filings were completed within 60 days of 

filing date.

Percentage of reporting requirement filings 

completed timely 75% within 60 days of filing date Target Met. 99% of reporting requirement filings were completed within 60 days.

Assure Reliability of Interstate Transmission Grid 

Timely approval of ERO/RE budgets and 

business plans Complete by November 1, 2007 Target Met. Order was issued on October 18, 2007. 

Timeliness of processing proposed reliability 

standards 

75% of filed proposed reliability standards are 

remanded or approved within 18 months, 

unless found incomplete 

Target Met. 100% of Reliability Standards 

were remanded or approved within 18 

months of filing. 100% of Cyber Security 

Standards were approved within 18 months 

of being filed. 

Review the performance of the ERO 

Complete within 12 months of the submission 

by the ERO of an assessment of its 

performance 

N/A. The ERO’s submission is not due until 

July 2009. The Commission will review the 

performance of the ERO within 12 months 

of their submission. 

Percentage of ERO / industry reliability 

readiness evaluations of Reliability 

Coordinators in which FERC participates 

75% 

Target Met. Participated in 100% of 

ERO/industry reliability readiness 

evaluations of Reliability Coordinators (i.e., 

California-Mexico, Rocky Mountain-Desert 

Southwest, SPP, and ERCOT Reliability 

Coordinators). 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

76 

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Percentage of load served, included in ERO / 

industry reliability readiness evaluations, in 

which FERC participates 

35% 

Target Met. Participated in 11 readiness 

evaluations which represented 78% of load 

served. 

Percentage of ERO penalty action rulings 

reviewed or tolled to prevent inappropriate 

rulings from going into effect by default 

100% 

Target Met. 100% (37 out of 37) penalty 

action rulings were reviewed to prevent 

inappropriate rulings from going into effect. 

They were accepted by operation of law, 

Guidance on Filing Notices of Penalty, 124 

FERC ¶ 61,015 (July 3, 2008) 

Protect Safety at LNG and Hydropower Facilities 

Percentage of high- and significant-hazardpotential dams inspected annually 100% Target Met. 100% of high- and significanthazard-potential dams were inspected. 

Percentage of high- and significant-hazardpotential dams that either meet all current 

structural safety standards or are undergoing 

investigation or remediation 

100% 

Target Met. 100% of high- and significanthazard-potential dams met all current 

structural safety standards or are undergoing 

investigation or remediation. 

Percentage of LNG import terminals inspected 

annually 90% Target Met. 100% of the LNG import terminals were inspected. 

Percentage of LNG peak-shaving facilities 

inspected biennially 90% 

Target Met. 100% of peak shaving plants 

were inspected according to the biennial 

schedule. 

Percentage of LNG facilities that meet all 

current safety standards or are subject of a 

compliance letter 

100% 

Target Met. 100% of the LNG facilities 

either met all current safety standards or 

received a compliance letter. 

Percentage of qualifying dams that either 

comply with EAP requirements or are 

conducting follow-up action(s) on outstanding 

item(s) 

100% 

Target Met. 100% of qualifying dams 

comply with EAP requirements or are 

conducting follow-up action(s) on 

outstanding item(s). 

Control access to Critical Energy 

Infrastructure Information 

No instances of improper access or improper 

denial affecting national security or 

Commission proceedings 

Target Met. No instances. 

Incorporate Environmental Considerations into Commission Decisions 

Timeliness of issuing environmental licensing 

requirements 

Licensing responsibility letters sent within 60 

business days of license issuance date 

Target Met. All licensing responsibility 

letters were issued within 60 days of license 

issue date. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

77

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Percentage of final NEPA documents issued 

for ALP/TLP cases: 

3⁄4 with settlement agreements 

3⁄4 without settlement agreements 

3⁄4 75% within 12 months of settlement filing 

date 

3⁄4 75% within 24 months of REA date 

3⁄4 Target Met. 100% of final NEPA 

documents were issued for ALP/TLP cases 

with settlement agreements within 12 

months of the settlement filing date 

3⁄4 Target Met. 100% of final NEPA of final 

NEPA documents were issued for ALP/TLP 

cases without settlement agreements within 

24 months of the REA date 

Percentage of qualifying, major, onshorepipeline projects inspected during ongoing 

construction activity 

90% of projects inspected at least once every 

four weeks 

Target Met. 98% of qualifying, major, 

onshore-pipeline projects were inspected at 

least once every four weeks during ongoing 

construction activity. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

78 

Performance Measurement Data for Competitive Markets: FY 2005 – FY 2008

FY 2005 

Performance Measurement Performance Target Result 

Timeliness of processing filings to establish 

RTOs, ISOs, or Independent Transmission 

Companies (ITCs)

75% of all filings processed within 6 months 

of filing, or before applicant’s proposed 

effective date (whichever is later) 

Target Met. The initial applications for both 

Southwest Power Pool (SPP) and ISO-New 

England (ISO-NE) were processed within six 

months of filing. These were the only 

applications processed in FY 2005. 

Establishment of cost-effective elements of 

market design 

Within 3 years of commencement of 

operation, approved RTO or ISO will 

implement, if cost effective: 

3⁄4 regional independent grid operation 

3⁄4 regional transmission planning process 

3⁄4 fair cost allocation for existing and new 

transmission 

3⁄4 market monitoring and market power 

mitigation 

3⁄4 spot markets to meet customers’ real-time 

energy needs 

3⁄4 transparency and efficiency in congestion 

management 

3⁄4 firm transmission rights 

3⁄4 resource adequacy approaches 

Target Not Met. Although Midwest ISO 

planned to start its energy markets on 

December 1, 2004 (within three years of 

receiving RTO status), the Commission 

approved a four-month delay to permit 

additional time for software testing and 

market participant training. The updated 

April 1, 2005 date was met. 

Elimination of multiple, or “pancaked,” 

transmission rates through the 

implementation of new rate designs to 

promote efficient trade across RTO and 

utility boundaries 

The elimination of multiple charges for 

transmission service between PJM and 

Midwest ISO 

Target Met. Effective December 1, 2004, the 

Commission established hearing procedures 

and accepted filings to eliminate through and 

out rates from the combined Midwest ISO 

and PJM regions for service commencing on 

or after April 1, 2004. In addition, the 

Commission established a December 1, 2004 

through April 1, 2006 transition period for the 

collection of lost revenues resulting from the 

elimination of the regional through and out 

rates based on the Seams Elimination Charge 

Adjustment (SECA) methodology. At the 

end of the transition period, the through and 

out rates will be eliminated for all 

transactions under the open access 

transmission tariffs. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

79

FY 2005 

Performance Measurement Performance Target Result 

Transition existing regulatory constructs into 

competitive markets 

Approval of an energy market that minimizes 

cost shifts while preserving existing 

contractual rights and creating efficiency 

gains 

Target Met. As mentioned in the previous 

performance result, Midwest ISO commenced 

operation of its regional energy markets on 

April 1, 2005, in accordance with the terms of 

its recently approved Transmission and 

Energy Markets Tariff. The markets are 

designed to provide for an optimal dispatch of 

all generation resources within the region 

based on a security constrained economic 

dispatch which will enable Midwest ISO to 

ensure that all load requirements in its region 

are met reliably and efficiently. 

In addition, the Commission approved a 

California ISO proposal to resolve existing 

transmission contract rights. The proposal 

removed a major impediment to completion 

and implementation of California ISO’s 

market redesign by specifying scheduling 

rights under the contracts and holding the 

contract holders financially harmless from 

congestion costs. 

Movement toward competitive markets in 

each region, including greater interregional 

coordination of broader, more efficient, and 

non-discriminatory energy markets 

Increase in: 

3⁄4 coordination of joint operating agreements 

between RTOs or an RTO and neighboring 

non-member utilities 

3⁄4 new, independent regional transmission 

providers 

3⁄4 new product markets within RTOs or ISOs 

3⁄4 RTO membership through the integration 

of the transmission facilities of additional 

transmission owners 

Target Met. During FY 2005, Midwest ISO 

and PJM entered into a Joint Operating 

Agreement (JOA) to coordinate the marketto-market operations between the entities 

pending implementation of the joint and 

common market which is under development. 

In addition to the JOA, the Commission 

conditionally accepted a utility-to-utility 

interconnection agreement between Indiana 

Michigan Power Company, a PJM 

transmission owner, and Northern Indiana 

Public Service Company, a Midwest ISO 

transmission owner. Lastly, Midwest ISO 

also entered into joint operating and/or 

coordination agreements with Southwest 

Power Pool (SPP), Mid-Continent Area 

Power Pool (MAPP), Tennessee Valley 

Authority (TVA), and Manitoba-Hydro to 

coordinate market-to-nonmarket seams 

resulting from the start of its energy markets. 

In New England, the Commission accepted a 

transmission operating agreement between 

ISO-NE and Maine Electric Power Company 

(MEPCO) in which MEPCO granted ISO-NE 

authority to operate its 345 kV intertie 

between Central Maine Power Company and 

Bangor Hydro Electric Company, thus 

integrating MEPCO into the New England 

Control Area. 

Existence of RTO/ISO rules that encourage 

qualified demand response participation on an 

equal basis with supply options 

All RTOs and ISOs have rules that do not 

inhibit demand response participation in 

RTO/ISO-controlled markets within 1 year of 

commencing day-ahead markets 

Not applicable. During FY 2005, no 

RTO/ISO-controlled market was within oneyear of its day-ahead markets commencing 

date. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

80 

FY 2005 

Performance Measurement Performance Target Result 

Demonstrable improvements in regional 

competitive market structures 

In any region of the country at least one of 

the following will occur: 

3⁄4 addition of a new or expansion of an 

existing RTO 

3⁄4 adoption by an RTO of additional marketoriented features, programs or rules 

3⁄4 in regions primarily without RTOs, an 

increase in the degree of transmission 

independence (ownership or control) from 

generation 

3⁄4 increase in the amount of competitive 

solicitation for supply 

3⁄4 improvement of open access tariff to 

reduce entry barriers of foster competition 

Target Met. During FY 2005, the 

Commission accomplished several of the 

stated targets, including: 

3⁄4 the expansion of PJM; 

3⁄4 adding SPP and ISO-NE as RTOs; 

3⁄4 accepting new ISO-NE operating 

agreements; and 

3⁄4 the adoption of multiple rule and/or tariff 

revisions within several RTOs/ISOs. 

Timeliness of processing market-based rate 

filings to advance well-functioning markets 

that deliver the benefits of competition 

100% of all market-based ratemaking filings 

processed within statutory deadline 

Target Met. During FY 2005, 100% of the 

434 market-based ratemaking filings were 

completed by the statutory deadline. 

Percentage of market-based rates triennial 

review cases resolved 

Resolve 80% of triennial review cases using 

the new generation market power screens 

within 1 year of the order on rehearing on the 

new screens 

Target Met. During FY 2005, over 98% (342 

out of 346) of market-based rates triennial 

review cases were completed. 

Timeliness of corporate application orders 

100% of all section 203 applications 

processed within 90 days of the date 

comments are filed 

Target Not Met. During FY 2005, over 99% 

(124 out of 125) of the section 203 corporate 

applications were processed by the target 

completion date. The remaining application 

was completed in 93 days with the delay due 

to the applicant’s failure to file the required 

concurrent petition for declaratory order. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. This difference had no 

effect on overall program performance. 

Timeliness of processing proposed 

rulemakings adopting industry-wide business 

practice standards (North American Energy 

Standards Board (NAESB)) and proposed 

rulemakings related to reliability 

Non-controversial rulemakings completed 

within 9 months of receipt of NAESB 

proposal, and controversial rulemakings 

completed within 12 months 

Target Met. During FY 2005, the 

Commission completed three important 

actions that met the stated targets, including: 

3⁄4 issuing a final rule adopting the Wholesale 

Gas Quadrant’s Version 1.7 business practice 

standards (within 41⁄2 months of being 

proposed); 

3⁄4 issuing a NOPR which proposes criteria 

for the establishment of an Electric 

Reliability Organization (ERO) to enforce 

reliability standards under the regulatory 

review and oversight of the Commission; and 

issuing a policy statement on creditworthiness 

standards that reiterates policies articulated in 

recent cases decided by the Commission. 

Removal of barriers to entry into wholesale 

power markets for renewable energy 

resources 

Approval of tariff provisions, both for 

transmission and generator interconnection, 

that grant all energy sources an opportunity to 

compete in the wholesale market 

Target Met. During FY 2005, both the Small 

Generator Interconnection and the Wind 

Generation final rules were issued. In 

addition, the wind tariff services NOPR 

(Imbalance Provisions for Intermittent 

Resources) was issued. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

81

FY 2005 

Performance Measurement Performance Target Result 

Frequency of meetings with multi-state 

regional organizations (Regional State 

Committees) to resolve regional policy and 

planning issues 

Participate in at least one meeting annually 

with multi-state organizations established for 

each approved RTO/ISO 

Target Met. The Commission hosted and/or 

participated in numerous meetings with state 

representatives from each region. 

Frequency of meetings to support 

development of robust customer demand-side 

participation in energy markets 

In areas where there is no opportunity for 

robust customer demand-side participation in 

energy markets, meet with appropriate state 

commission officials at least annually to 

discuss demand response issues 

Target Met. In June 2005, the Commission 

co-sponsored a National Town Meeting on 

Demand Response, which included state 

participation and live web casts to state 

commissions throughout the U.S. In addition, 

the Commission conducted a September 2005 

technical conference with California state 

officials. 

Provide timely resolution of third-party 

complaints 

Issue initial order on 80% of all third-party 

complaints within 60 days of filing and 90% 

of all requests meeting fast-track 

requirements within prescribed time frame 

Target Not Met. During FY 2005, 50% (30 

of 60) of initial orders were issued within 60 

days. The reasons for the difference include: 

3⁄4 extension requests by the parties; 

3⁄4 complainants withdrawal of complaints; 

3⁄4 deferral requests by the parties to pursue 

settlement; and 

3⁄4 the 60th day falling on a weekend or 

holiday. 

This performance target was set at an 

approximate level, and the deviation from 

that level, while not slight, had no effect on 

overall program performance. 

FY 2006 

Performance Measurement Performance Target Data Source 

Review and propose revisions to OASIS 

standards By June 30, 2006 

Target Met. Docket No. RM05-5-000; 

Final Rule, Order No. 676, “Standards for 

Business Practices and Communication 

Protocols for Public Utilities,” issued 

April 25, 2006. 

Assess demand response Issue annual report by August 8, 2006 

Target Met. Staff report, “Assessment of 

Demand Response & Advanced 

Metering” (Docket No. AD-06-2-000) was 

delivered to Congress on August 4, 2006. 

Issue final rule to implement PUHCA provisions 

of EPAct 2005 By January 31, 2006 Target Met. Final rule was issued on December 8, 2005. 

Issue rules governing market manipulation in 

electricity and gas markets By September 30, 2006 

Target Met. The final rule (Order 670) 

was issued January 19, 2006 and an order 

denying rehearing was issued March 22, 

2006 in Docket Nos. RM06-3, et al., Final 

Rule Prohibiting Energy Market 

Manipulation. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

82 

FY 2006 

Performance Measurement Performance Target Data Source 

Movement toward competitive markets in each 

region, including greater interregional 

coordination of broader, more efficient, and nondiscriminatory energy markets 

Increase in: 

3⁄4 new, independent regional transmission 

providers 

3⁄4 coordination between RTOs or between 

RTOs and neighboring non-member utilities 

Target Met. Some examples: 

3⁄4 In order to create a more seamless 

administration between the tariffs of the 

Midwest ISO’s energy markets and the 

non-market operations of Mid-Continent 

Area Power Pool’s (MAPP) members that 

do not belong to the Midwest ISO, the 

Commission approved MAPP’s proposal 

to conform its Available Transfer 

Capability (ATC) calculation 

methodologies to provisions of the Seams 

Operating Agreement between MAPP and 

the Midwest ISO. 

3⁄4 The Commission approved proposed 

revisions to the SPP/Midwest ISO Joint 

Operating Agreement (JOA) and to the 

Congestion Management Process (CMP) 

which is incorporated in the JOA to align 

them more closely with the JOA and CMP 

of the Midwest ISO/PJM. 

3⁄4 Action was taken on Midwest ISO and 

PJM and their respective transmission 

owners’ proposed revisions to the JOA for 

allocating to customers in each RTO the 

cost of new transmission facilities that are 

built in one RTO but provide benefits to 

customers in the other RTO (the so-called 

cross-border facilities). 

Increased presence at RTOs, to improve 

relationships with and knowledge of existing 

RTOs 

Creation and staffing of an office at any new 

RTO within 6 months of commencement of 

operations (including establishment of virtual 

office processes) 

No new RTOs were established during the 

performance period. All existing RTOs 

have either staff on location or a virtual 

office process in effect. 

Percentage of filings to establish RTOs, ISOs, or 

Independent Transmission Companies (ITCs) 

processed 

100% completed within 6 months of filing or 

before applicants’ proposed effective date 

(whichever is later) 

No filings were received to establish new 

RTOs, ISOs, or ITCs during the 

performance period.

RTO / ISO establishment of cost-effective market 

design elements per Order No. 2000 

Within three years of commencement of 

operation, each approved RTO or ISO will 

implement (if cost effective): 

3⁄4 firm transmission rights 

3⁄4 resource adequacy approaches 

3⁄4 regional independent grid operation 

3⁄4 regional transmission planning process 

3⁄4 appropriate market monitoring and market 

power mitigation 

3⁄4 transparency and efficiency in congestion 

management 

3⁄4 spot markets to meet customers’ real-time 

energy needs 

3⁄4 fair cost allocation for existing and new 

transmission 

Target Met. With the exception of 

Southwest Power Pool (SPP), all 

RTOs/ISOs (PJM, ISO-NE, NY-ISO, 

Midwest ISO, and CAISO) have been 

operational over 3 years and all have 

implemented cost-effective market design 

elements. 

SPP has been operating as an RTO since 

November 1, 2004, and has received 

authorization during FY 2006 to 

commence a real-time energy imbalance 

market, as well as having received 

approvals for its market monitoring and 

mitigation plans. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

83

FY 2006 

Performance Measurement Performance Target Data Source 

Demonstrable improvements in regional 

competitive market transparency and 

independence 

In each region of the country, there will be: 

3⁄4 RTO adoption of additional marketoriented features, programs or rules 

3⁄4 improvement of open access tariff to 

reduce entry barriers or eliminate undue 

discrimination 

3⁄4 increase in the degree of transmission 

independence (ownership or control) from 

generation in regions primarily without RTOs 

Target Met. During FY 2006, the 

Commission acted on a number of 

proceedings related to improving 

competitive market transparency and 

independence. 

Some actions by the Commission will 

have nationwide impact. In May 2006, 

the Commission issued a notice of 

proposed rulemaking (NOPR) proposing 

amendments to its regulations and the pro 

forma OATT to ensure that transmission 

services are provided on a basis that is 

just, reasonable and not unduly 

discriminatory or preferential. The NOPR 

aims to strengthen the OATT and address 

deficiencies that have become apparent 

since its adoption 10 years ago, 

particularly in the areas of available 

transfer capability calculation and 

transmission planning. 

In addition, the Commission approved 

four proposals by vertically integrated 

utilities (Duke, MidAmerican, Entergy, 

and Louisville Gas & Electric) to contract 

with an independent entity to serve as the 

independent coordinator of transmission 

(ICT). The ICT performs oversight over 

these utilities’ transmission systems, 

including authority to administer utilities’ 

OATT. 

Other actions taken on proceedings related 

to establishing new or revised market 

rules, rule changes in RTOs, and increased 

transmission independence were regionspecific. For example: 

East

In the New England area, the Commission 

issued an order accepting a proposal filed 

by ISO-NE and NEPOOL which included, 

most significantly, the addition of a 

locational component to the existing 

Forward Reserve Market and the 

coordination and optimization of pricing 

of energy and reserves in real time to be 

effective October 1, 2006, or later date. 

In addition, the Commission approved a 

contested settlement that provided an 

alternative to the Locational Installed 

Capacity mechanism called the Forward 

Capacity Market (FCM). The 

Commission found that the FCM, in 

conjunction with an interim mechanism, 

will provide the revenues needed by 

generators to preserve reliability in New 

England. The Commission also found that 

the forward looking nature of the FCM 

will provide appropriate price signals to 

investors when new infrastructure 

resources are necessary with sufficient 

lead time to allow that infrastructure to be 

put in place before reliability is sacrificed. 

(Continue on next page) 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

84 

FY 2006 

Performance Measurement Performance Target Data Source 

(continued from previous page) 

Demonstrable improvements in regional 

competitive market transparency and 

independence 

(continued from previous page) 

In each region of the country, there will be: 

3⁄4 RTO adoption of additional marketoriented features, programs or rules 

3⁄4 improvement of open access tariff to 

reduce entry barriers or eliminate undue 

discrimination 

3⁄4 increase in the degree of transmission 

independence (ownership or control) from 

generation in regions primarily without RTOs 

(Continued from previous page) 

With respect to the PJM area, the 

Commission issued an initial order on 

PJM’s proposed reliability pricing model 

(RPM) designed to replace its existing 

capacity obligation rules. The 

Commission found the existing capacity 

rules to be unjust and unreasonable to 

ensure energy resources to meet reliability 

responsibilities, and established further 

procedures to resolve the remaining 

issues. At the same time, the Commission 

encouraged the parties to continue to seek 

a negotiated resolution, and offered the 

Commission’s settlement judge 

procedures to facilitate these discussions. 

Central

For the Midwest ISO region, the 

Commission approved the continuation of 

mitigation in Broad Constrained Areas; 

action on proposed revisions to real-time 

revenues sufficiency guarantee (RSG) 

payments; approval of revised rules 

defining less-than-seasonal financial 

transmission right (FTR) entitlements for 

network resources; approval of contractual 

arrangements related to the market 

monitor and balancing authorities; as well 

as offering guidance on Midwest ISO’s 

future plans to implement ancillary service 

markets and an energy-only market. 

For the SPP region, the Commission 

provided guidance and approvals related 

to SPP’s proposal to establish a real-time 

energy imbalance market. 

Regarding revisions to the OATT, the 

Commission approved various revisions to 

the Midwest ISO’s creditworthiness 

provisions, reactive power requirements, 

as well as changes to the Midwest ISO pro 

forma interconnection agreement which 

reflect improvements or regional 

variations needed based upon its 

operational experience, including new 

pricing provisions. 

West

In September 2006, the Commission 

conditionally approved the CAISO Market 

Redesign and Technology Upgrade 

(MRTU) market reforms and 

enhancements, such as a financially 

binding day-ahead market and more 

effective congestion management system. 

Elements of MRTU are intended to fix 

market design flaws, enhance reliability, 

better protect wholesale customers from 

price volatility and gaming, incorporate 

price-responsive demand in the markets, 

and encourage construction of new 

resources. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

85

FY 2006 

Performance Measurement Performance Target Data Source 

Percentage of section 203 applications processed 98% completed within 90 days of the 

comments filing date 

Target Met. 100% of the 145 section 203 

corporate filings were processed by target 

completion dates in FY 2006. 

Issue final rule on RTO and ISO accounting to 

improve oversight of RTO and ISO costs By January 31, 2006 

Target met. A final order on RTO 

accounting and financial reporting was 

issued on December 16, 2005 in Docket 

RM04-12-000, Order No. 668. 

Percentage of market-based rate filings processed 100% of new filings within 60 days of filing 

date 

Target Met. 100% of the 534 marketbased rate filings were completed by the 

targeted deadline in FY 2006. 

Percentage of competitive energy markets and 

market institution cases set for hearing completed 

according to the established schedule 

3⁄4 75% of Track I cases in 29.5 weeks 

3⁄4 75% of Track II cases in 47 weeks 

3⁄4 75% of Track III cases in 63 weeks 

3⁄4 There were no Track I cases 

3⁄4 87% of Track II cases in 47 weeks 

3⁄4 There were no Track III cases 

Percentage of competitive energy markets and 

market institution cases set for hearing that 

achieve partial or complete consensual agreement 

75% 100% 

Percentage of applications filed by RTOs and 

ISOs to revise market rules to not inhibit demand 

response processed 

100% within statutory deadlines

Target Met. The Commission processed 

all 5 filings involving demand response 

enhancements within the statutory 

deadlines: 

3⁄4 PJM submitted agreements to enhance 

demand response in the PJM region in a 

number of ways, including allowing 

demand resources to participate in PJM’s 

ancillary services market by bidding into 

the PJM reserve markets. 

3⁄4 ISO-NE’s Ancillary Services Market 

(ASM) Phase II will include measures 

allowing the owners of demand resources 

to bid their resources directly into the 

energy and reserve markets on an equal 

footing with generating resources. This 

change will establish the supporting 

market infrastructure that is needed to 

develop fully the potential for demand 

participation in the wholesale markets. 

3⁄4 NYISO’s filing eliminated the sunset 

dates for NYISO’s Day-Ahead Demand 

Response Program and its Emergency 

Demand Response Program. 

3⁄4 ISO-NE’s proposal to establish a 

demand response reserve pilot program to 

test whether certain resources can reliably 

provide 30-minute and 10-minute 

Operating Reserve services. 

3⁄4 CAISO’s MRTU tariff provides loads 

with demand response capability the 

opportunity to participate in the CAISO 

day-ahead, real-time, and ancillary 

services markets under comparable terms 

as supply. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

86 

FY 2006 

Performance Measurement Performance Target Data Source 

Support development of robust customer 

demand-side participation in energy markets in 

areas where it does not exist 

Meet at least annually to discuss demand 

response issues with appropriate state 

commission officials 

Target Met. Held technical conference on 

demand response in January 2006, where 

state representatives, including several 

state commissioners from all regions of 

the U.S., participated on panels. Met with 

NARUC officials in January 2006 to 

discuss Commission demand response 

report and seek their assistance in the 

FERC demand response and advanced 

metering survey. Met in April 2006 with 

Midwestern state officials, primarily 

Illinois Commissioners, on the 

development of a regional demand 

response initiative. Discussed demand 

response report with state officials and 

Commissioners at various events 

including the NARUC Winter Meeting in 

February 2006 and an EPRI Summer 

Seminar on Energy Efficiency and EndUse Technologies in August 2006. 

Percentage of proposed NAESB business practice 

standards rulemakings completed 

3⁄4 100% of non-controversial rulemakings 

within 9 months 

3⁄4 100% of controversial rulemakings within 

12 months 

Target Met. During FY 2006, the 

Commission issued a final rule adopting 

the Wholesale Electric Quadrant’s 

controversial first set of business practice 

and communication standards within 12 

months of receiving NAESB’s complete 

proposal. Docket No. RM05-5-000; Final 

Rule, Order No. 676, “Standards for 

Business Practices and Communication 

Protocols for Public Utilities,” was issued 

April 25, 2006. 

Percentage of initial orders completed on thirdparty complaints 3⁄4 80% within 60 days 

3⁄4 95% within 180 days 

3⁄4 60-day target not met. 49% (28 of 57 

{1 projected}) issued within 60 days. 

This was an internal deadline, not 

statutorily based, and did not have a 

negative impact on operations. 

3⁄4 180-day target met. 95% (49 {1 

projected} of 51 {1 projected}) issued 

within 180 days. 

Percentage of initial orders completed on fast 

track third-party complaints 90% within prescribed time frame Target Met. One filing was received and completed on time. 

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

Employ Best Practices In Market Rules 

Timeliness of review of proposed market 

rules 

By the statutory due date or the applicants’ 

requested date, whichever is later 

Target Met. All 358 filings from PJM, ISONE, NYISO, NEPOOL, SPP, Midwest ISO, 

and California ISO were acted on by statutory 

due dates. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

87

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

Percentage of proposed NAESB business 

practice standards rulemakings completed 

3⁄4 100% of unopposed rulemakings within 9 

months 

3⁄4 100% of all rulemakings within 12 months 

Targets Met. The Commission issued two 

NAESB business practice standards 

rulemakings during the fiscal year, both 

completed within 9 months of issuance of the 

notice of proposed rulemaking, as follows: 

Docket No. RM05-5-003; NOPR issued 

February 20, 2007; Final Rule, Order No. 

676-B, "Standards for Business Practices and 

Communication Protocols for Public 

Utilities," issued April 19, 2007; and 

Docket Nos. RM96-1-027 and RM05-5-001; 

NOPR issued October 25, 2006; Final Rule, 

Order 698, "Standards for Business Practices 

for Interstate Natural Gas Pipelines; 

Standards for Business Practices for Public 

Utilities," issued June 25, 2007. 

Timeliness of applications processed on 

requests to encourage demand response in 

organized markets 

Within 60 days of filing date or applicants’ 

requested date, whichever is later 

Target Met. All 15 filings were acted on 

within 60-day statutory due dates. 

Reduce Barriers to Trade Between Markets and Among Regions 

Timeliness of review of filings to reduce or 

eliminate seams between organized markets 

By the statutory due date or the applicants’ 

requested date, whichever is later 

Target Met. All 10 filings dealing with seams 

issues were completed by statutory due dates. 

In addition, two major orders were issued 

related to the California ISO's Market 

Redesign Technology Update (MRTU) 

addressing seams issues between CAISO and 

neighboring systems in the Western 

Interconnect. A technical conference was 

held on December 15, 2006, in Phoenix, 

Arizona, to address these western seams 

issues; and on March 29, 2007, a second 

conference was held in Washington, DC, to 

address eastern seams issues. 

Assure Proposed Mergers and Acquisition Are in the Public Interest 

Percentage of merger authorizations upheld 

by the courts 90% Target met. 100% of merger authorizations have been upheld by the courts. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

88 

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

Percentage of merged applicants reporting on 

compliance with merger conditions imposed 

by the Commission 

100% 

Target Met. 100% of the 9 merger applicants 

reported on compliance, if or as applicable, 

with the four types of conditions—summary, 

notice of consummation, proposed accounting 

entries, and additional conditions—imposed 

by the Commission. 

It should be noted that most of the 

“additional” conditions only require 

compliance in the event that the merger 

applicants subsequently take some specific 

action. For example, in 5 of the 9 mergers, 

the Commission imposed a “hold-harmless” 

condition, requiring that if the applicants seek 

to recover merger-related costs through 

jurisdictional rates, they must show offsetting 

merger-related cost savings. As of yet, none 

of the applicants have sought to recover any 

merger-related costs, so they haven’t needed 

to make a compliance filing. 

Timeliness of processing applications for the 

disposition, consolidation, or acquisition 

under section 203 of the FPA, of 

jurisdictional facilities (including transactions 

involving certain transfers of generation 

facilities and public utility holding company 

transactions, and issues of cross subsidization 

or encumbrances of utility assets) 

3⁄4 Within 180 days for non-major mergers 

3⁄4 Within 360 days for major mergers 

Targets Met. 

3⁄4 100% of the 100 non-major dispositions 

were completed within 180 days. 

3⁄4 100% of the 9 major merger cases were 

completed within 360 days. 

Address Market Power in Jurisdictional Wholesale Markets 

Revise open access transmission tariff Issue final rule by June 30, 2007 

Target Met. Docket Nos. RM05-17-000 and 

RM05-25-000; Final Rule, Order 890, 

"Preventing Undue Discrimination and 

Preference in Transmission Service," issued 

February 16, 2007. 

Timeliness of processing initial market-based 

rate filings 

Within 60 days of filing date or by 

applicant’s requested date, whichever is later 

Target Met. 100% of the 167 initial marketbased rate applications were completed by the 

established target date. 

Develop generation market power screens for 

electric market based rates Issue final rule by June 30, 2007 

Target Met. Docket No. RM04-7-000; Final 

Rule, Order 697, "Market-Based Rates for 

Wholesale Sales Of Electric Energy, Capacity 

And Ancillary Services By Public Utilities," 

issued June 21, 2007. 

Act timely on complaints 80% within 60 days or, for fast-track cases 

only, within the designated timeframe 

Target not met; 78%. The performance goal 

was set at an approximate target level, and the 

deviation from that level is slight. There was 

no effect on overall program or activity 

performance. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

89

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Employ Best Practices in Rules 

Percentage of initial orders completed on thirdparty complaints 

3⁄4 75% filed with the Commission within 60 

days of the date of the answer or by 

complainant’s requested date, whichever is 

later 

3⁄4 90% filed with the Commission within 180 

days of the date of the answer, or by 

complainant’s requested date, whichever is 

later 

3⁄4 Target Met. 83% (40 of 48) filed 

within 60 days of the date of the 

answer. 

3⁄4 Target met. 98% (47 of 48) filed 

within 180 days of the date of the 

answer.

Timeliness of review of proposed RTO/ISO market 

rules 

100% by the statutory due date or the 

applicant’s requested date, whichever is later 

Target Met. 100% (410 out of 410) 

filings from PJM, ISO-NE, NYISO, 

NEPOOL, SPP, Midwest ISO, and 

California ISO were acted on by 

statutory due dates 

Percentage of proposed NAESB business practice 

standards rulemakings completed 

100% of all proposed rulemakings within 12 

months of receipt of comments 

Target Met. The Commission issued 

one NAESB business practice standards 

rulemaking. 

Docket No. RM05-5-005, NOPR issued 

April 21, 2008; Final Rule, Order No. 

676-C, “Standards for Business 

Practices and Communication Protocols 

for Public Utilities,” issued July 21, 

2008 (three months later) 

Timeliness of processing cases that encourage 

demand response in organized markets 

100% of statutory cases processed within 

statutory deadlines, or by the applicant’s 

requested date, whichever is later 

Target Met. 100% (10 out of 10) 

filings were acted on by statutory due 

dates. 

Industry and state outreach to increase Commission 

awareness and understanding on emerging energy 

issues 

Participate in and/or facilitate 10 sessions per 

quarter 

Target Met. Participated in and/or 

facilitated 34 sessions in first quarter, 

36 sessions in second quarter, 33 

sessions in third quarter, and 28 

sessions in fourth quarter. 

Reduce Barriers to Trade Between Markets and Among Regions 

Timeliness of processing complete filings to reduce 

or eliminate border utility issues between markets 

100% processed by the statutory due date or 

applicant’s requested date, whichever is later 

Target Met. 100% (6 out of 6) filings 

dealing with border utility issues 

between markets were completed by 

statutory due dates. 

Assure Proposed Mergers and Acquisitions are in the Public Interest 

Timeliness of processing complete filings for the 

disposition, consolidation, or acquisition, under 

section 203 of the FPA, of jurisdictional facilities 

(including transactions involving certain transfers of 

generation facilities and public utility holding 

company transactions, and issues of cross 

subsidization or encumbrances of utility assets) 

3⁄4 100% processed within 180 days for 

non-major dispositions 

3⁄4 100% processed within 360 days for 

major dispositions 

3⁄4 Target Met. 100% (142 out of 

142) of non-major dispositions 

were completed by the statutory 

deadlines 

3⁄4 Target Met. 100% (7 out of 7) of 

major merger cases were 

completed by the statutory 

deadline. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

90 

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Address Market Power in Jurisdictional Wholesale Markets 

Timeliness of processing initial electric marketbased rate filings 

100% processed within 60 days of the filing 

date of a complete application or by 

applicant’s requested date, whichever is later 

Target Met. 100% (156 out of 156) of 

initial market-based rate applications 

were completed by the established 

target date. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

91

Performance Measurement Data for Enforcement: FY 2005 – FY 2008

FY 2005 

Performance Measurement Performance Target Result 

The Electronic Quarterly Report of electric 

transactions will be fully functional. 

Enhance institutional capability for 

overseeing energy markets 

The Commission will identify further key 

data requirements needed to analyze energy 

markets. 

Target Met. In addition to the fully 

functional Electric Quarterly Report (EQR) 

for electric transactions, the Commission also 

identified several key data requirements to 

analyze energy markets via its Market 

Monitoring Center (e.g. Dow Jones’ real time 

data, Genscape’s alert system data, U.S. 

Waterborne LNG Report, NE Power Data, 

CERA’s energy advisory service, CoalDat, 

and AirDaily). 

MMUs will produce standardized market 

metrics. 

Development of market expertise The Commission will use standard metrics 

developed by the MMUs to develop a 

balanced scorecard to determine how well 

energy markets are working 

Target Met. During FY 2005, the 

Commission completed the development of 

13 standardized market metrics and used 

those metrics to analyze and report on how 

well the energy markets are working in the 

State of the Markets report and the MMU 

Metrics paper. 

Issue Market Surveillance Reports to the 

Commission in conjunction with the 

Commission’s public meeting schedule. 

Enhance the Commission’s and public’s 

understanding of energy markets 

Publish Market Assessments, State of the 

Market Reports, and other reports as 

conditions warrant. 

Target Met. In conjunction with the 

Commission’s public meeting schedule, 

fifteen Market Surveillance Reports were 

completed in FY 2005. In addition, the 

Commission published a Winter and Summer 

Seasonal Assessment Report (November 

2004 and May 2005, respectively) along with 

its June 2005 State of the Markets report. 

Identify and remedy market problems Provide analysis and recommendations on 

major market problems. 

Target Met. During FY 2005, analysis and 

recommendations on major market problems 

were provided at Closed Commission 

meetings via Market Surveillance Reports. 

The problems included EIA’s storage 

reporting process, major weather disturbances 

(e.g., Hurricanes Katrina and Rita), and presummer markets issues in California and the 

West. 

Timeliness of industry wide financial audits Complete 90% of audits within 120 days 

Target Not Met. During FY 2005, none of 

the financial audits were completed within 

the 120 day targeted timeframe. This was 

due to the increasing complexities and 

management oversight of the audits, and due 

to a stricter interpretation of the audit 

timeframe (e.g., total days under audit as 

opposed to audit field-work days). 

In future years, this target has been narrowed 

to require a report to the Commission within 

120 days of the audit Commencement Letter. 

Timeliness of Hotline call resolutions Close 60% within 2 weeks of initial contact 

Target Met. During FY 2005, 74% of 

Hotline calls were closed within 2 weeks of 

initial contact. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

92 

FY 2005 

Performance Measurement Performance Target Result 

Timely resolution of allegations of market 

misconduct 

Resolution within established timeframes for 

FERC investigations and litigation, as posted 

on the Commission internet site 

Target Met. Of the 5 cases under this 

performance measure in FY 2005, three cases 

were settled; one case is pending Commission 

consideration of the global Enron proceeding; 

and one case terminated by initial decision 

within the established timeframe, which 

varies from case-to-case based on the outlook 

of the Chief Judge and the Commission. 

Number of major rule violations for a 

particular set of business practices None or Few 

Target Not Met. During FY 2005, the 

Commission conducted 29 investigations, 

eight of which were settled. 

Although this result did not meet the “None 

or few” target, the performance measure and 

target do not reflect the true goal of the 

Commission’s enforcement function, which is 

to investigate and remedy violations of the 

Commission’s statutes, orders, and 

regulations. While the Commission 

acknowledges that “deterrence” is an 

important part of enforcement, we do not 

believe it is reasonable to assume that no 

violations will occur. 

In future years, this measure has been 

removed and replaced with better 

performance measures and targets to evaluate 

the enforcement function. 

Number of requests and referrals for ADR 

services 

Maintain at or increase levels achieved in FY 

2004 

Target Met. The 65 requests or active cases 

in FY 2005 represented a 20.4% increase 

over the 54 logged in FY 2004. 

Percentage of processes that achieve 

consensual agreements 

Maintain at or increase levels achieved in FY 

2004 

Target Met. The Administrative Law area 

maintained their FY 2004 success rate as 

90.2% of cases achieved settlement in FY 

2005. DRS increased their FY 2004 success 

rate as 95.8% of cases achieved settlement in 

FY 2005. 

Timeliness of formal complaint resolutions 

Complete 80% within target time frames for 

various paths for resolution of complaints as 

specified by the Commission 

Target Met. During FY 2005, all three of the 

Commission’s initial decisions on complaints 

were completed within the specified 

deadlines, which vary from case-to-case 

based on the outlook of the Chief Judge and 

the Commission. 

Of the six additional complaints the 

Commission handled during FY 2005, three 

were settled, two were withdrawn, and one 

was returned to the Commission for further 

action. 

FY 2006 

Performance Measurement Performance Target Data Source 

Reduce duplicative information requests 

through coordination with CFTC 50% reduction by September 30, 2006 

Target met. Investigations coordinated with 

CFTC on all known cases of joint interest and 

there were no known duplicative information 

requests. 

Timeliness of verification of EQR 

submissions Within 10 business days of submission Target met. Verified within 10 business days. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

93

FY 2006 

Performance Measurement Performance Target Data Source 

Review EQR submissions for completeness 

and contact companies that make up at least 

80% of reported revenue for incomplete 

submissions 

Within 10 business days of submission 

Target met. Contacted 100% of companies in 

the EQR database that had filed incomplete 

submissions within 10 business days of filing 

deadline. 

Conduct follow up reviews of companies that 

make up at least 80% of reported revenue on 

exercise of market power or market 

manipulation 

Within 60 days of final submission 

Target Met. Conducted follow-up reviews of 

EQR filers that make up at least 80% of 

reported revenue for the third quarter of 2005 

for market manipulation or exercise of market 

power within 60 days of final submission. 

Timeliness of reporting to Commission on 

important market events Analysis complete within 60 days of event 

Target Met. Provided the Commission with 

seven presentations at open Commission 

meetings, 26 Weekly Market Reviews 

beginning in April 2006 reviewing weekly 

market developments and performance, and 

seven end-of-day summaries on market 

conditions during heat waves in the summer 

of 2006. 

Percentage of Hotline calls resolved 60% within 2 weeks of initial contact 

Target Met. Since October 1, 2005, 80% of 

hotline calls were resolved within two weeks 

of initial contact. 

Percentage of non-environmental, non-tribal 

ADR processes (agreed to by parties) 

concluded 

75% within 120 days (convening and 

process) 

Target Met. The DRS completed 25 cases in 

FY 2006 that were non-environmental and 

non-tribal, and in which the parties agreed to 

pursue an ADR process. Of these, 22 were 

completed within 120 days after being 

referred the DRS (88%) 

Number of ADR requests and referrals to the 

Dispute Resolution Service 

Minimum number of requests and referrals 

equal to FY 2004 

Target Met. The DRS addressed 70 new 

requests or ongoing cases from a previous 

year, involving gas, electric, hydroelectric, 

oil, and pipeline matters. This represents a 

29.6% increase over FY 2004 

Favorable Dispute Resolution Service 

customer satisfaction 80% customer satisfaction rate 

Target Met. For training given by DRS, 

customer satisfaction rate was 89%. For 

casework concluded in FY 2006, all 

participants who completed evaluations gave 

the DRS staff favorable comments, for a 

satisfaction rate of 100%. 

Percentage of market manipulation cases set 

for hearing completed according to the 

established schedule 

3⁄4 75% of Track I cases in 29.5 weeks 

3⁄4 75% of Track II cases in 47 weeks 

3⁄4 75% of Track III cases in 63 weeks 

There were no Track I, II, or III cases 

Percentage of market manipulation cases set 

for hearing that achieve partial or complete 

consensual agreement 

75% 100% 

Timeliness of reporting to the Commission 

on operational audits 

85% reported to the Commission within 120 

days of Commencement Letter 

Target Met. Since the beginning of the rating 

year, 100% of operational audits were 

reported to the Commission within 120 days 

of Commencement Letters. 

Percentage of operational audit 

recommendations issued and implemented 85%

Target Met. 100% of operational audit 

recommendations have been issued and 

implemented. 

Timeliness of reporting to the Commission on 

financial audits 

85% reported to the Commission within 120 

days of Commencement Letter 

Target Met. Since the beginning of the rating 

year, 100% of financial audits were reported 

to the Commission within 120 days of 

Commencement Letters. 

Percentage of financial audit 

recommendations issued and implemented 85%

Target Met. 100% of financial audit 

recommendations have been issued and 

implemented. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

94 

FY 2006 

Performance Measurement Performance Target Data Source 

Timeliness of reporting to the Commission on 

Standards of Conduct compliance audits 

85% reported to the Commission within 120 

days of Commencement Letter 

No Standards of Conduct compliance audits 

were initiated during FY 2006. 

Percentage of Enforcement investigations 

completed 75% within one year 

Target Met. From October 1, 2005 to the 

present, 88% of cases were closed within one 

year (84% within 9 months and 60% within 6 

months). 

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

Identify and Remedy Problems with Structure and Operations In Energy Markets 

Timeliness of verification of EQR 

submissions Within 10 business days of submission Target met. 100% verification within 10 business days.

Evaluate and improve the usefulness of EQR 

data 

3⁄4 Issue a data dictionary for all undefined 

fields with restricted entries 

3⁄4 Review the current EQR data structure and 

develop written recommendations for 

improvements 

Targets met. Issued Final Order in Docket 

No. RM01-8-006 on September 24, 2007 

which defined all EQR fields and improved 

EQR data structure.

Number of RTO and ISO MMU performance 

metrics Increase over FY 2006 

Target met. One new RTO and ISO MMU 

performance metric was developed in 

FY2007 (increasing the number of 

performance metrics from 11 in FY 2006 to 

12 in FY 2007). 

Timeliness of initiating or deciding action on 

MMU referrals 80% acted on within 30 days Target met. 100% acted on within 30 days. 

Percentage of organized markets reviewed 

and market structure and operations problems 

or deficiencies identified 

100% reviewed and reports completed 

identifying market problems or deficiencies, 

if any, and recommended solutions 

Target met. 100% of organized markets 

reviewed in daily oversight meetings, 

including all RTO/ISO markets, NYMEX, 

ICE and other relevant markets. Results of 

continuing review communicated to 

Commissioners via Weekly Reports and to 

the public via the Market Oversight website 

and the State of the Markets Report. Seven 

major structure and operations problems were 

identified. 

Timeliness of actions on problems or 

discrepancies identified in reviews of 

organized markets 

With 6 months of completed report

Target met. Addressed all seven identified 

issues within six months of identification. 

Issues included: prices over $400 in West, 

lack of transparency for intrastate pipelines, 

lack of transparency for natural gas sales and 

purchases, need to clarify role of MMUs in 

RTOs, PJM/MISO transmission issues, 

CenterPoint data reporting, and Rockies Gas 

Prices. 

Publish annual assessment of infrastructure 

and market conditions for each region Complete by June 30, 2007 

Target met. The State of the Markets Report 

was completed in February 2007 and detailed 

market and infrastructure issues for the 

country as a whole. In addition the Seasonal 

Assessment was published for electric power 

on May 17, 2007, specifically addressing 

summer 2007 and the new Market Oversight 

website provides updates and detailed 

information for each region on a monthly 

basis. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

95

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

Establish Clear and Fair Processes 

Improve Forensic Audits and Investigations 

information technology tools 

Implement capability to search e-mails and 

voice recordings by June 30, 2007 

Target met. The capability to search voice 

recordings was implemented beginning in 

September 2006 and the capability to search 

e-mails was implemented beginning in 

August 2006. 

Improve Forensic Audits and Investigations 

capabilities 

90% of enforcement and compliance staff 

participate in forensics training and 

interviewing skills by June 30, 2007 

Target met. 95% of enforcement and 

compliance staff received training on forensic 

interviewing and auditing. Classes were held 

in August 2005 and May 2006.

Timeliness of reporting to the Commission on 

operational audits 

100% reported to the Commission within 120 

days of Commencement Letter 

Target met. 100% of operational audits (24 

out of 24 from 10/1/06 – 9/30/07) were 

reported to the Commission within 120 days 

of the Commencement Letter.

Percentage of operational audit 

recommendations issued and implemented 90% 

Target met. 100% of operational audit 

recommendations issued were implemented 

within 6 months.

Timeliness of reporting to the Commission on 

financial audits 

100% reported to the Commission within 120 

days of Commencement Letter 

Target met. 100% of financial audits (43 out 

of 43 from 10/1/06 – 9/30/07) were reported 

to the Commission within 120 days of the 

Commencement Letter.

Percentage of financial audit 

recommendations issued and implemented 90% 

Target met. 100% of financial audit 

recommendations issued were implemented 

within 6 months.

Conduct Investigations Promptly and Impose Penalties Where Appropriate 

Percentage of enforcement investigations 

completed 75% within one year of initiation Target met. 94.8% of investigations were closed within a year of being initiated. 

Percentage of Hotline calls resolved 70% within 2 weeks of initial contact Target met. 75% of Hotline calls were 

resolved within 2 weeks of initial contact.

Encourage Self-Policing and –Reporting of Violations 

Percentage of regulated entities audited to 

ensure internal compliance programs and 

processes are in place 

85% of regulated entities included in annual 

audit plan 

Target met. 95% of regulated entities 

included in the annual audit plan were audited 

(74 out of 78). 

Timeliness of responses to regulated entities 

seeking guidance and clarification on 

compliance issues 

Within 60 days 

Target met. Responded to 100% of regulated 

entities seeking guidance and clarification on 

compliance issues within 60 days. 

Timeliness of completing recommendations 

on compliance issues raised by regulated 

entities 

Within 180 days, where Commission action is 

required 

Target met. 100% of recommendations to the 

Commission (where Commission action was 

required) were completed within 180 days of 

completing an investigation originated by a 

self report. 

Timeliness of reporting on compliance issues 

raised by regulated entities Reports completed monthly 

Target met. The Pending Case Report is 

issued at the end of each month and reports 

on compliance issues (i.e., self reports) raised 

by regulated entities. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

96 

FY 2008 

Strategy 

Performance Measure Target Results 

Identify and remedy problems with structure and operations in energy markets 

Regular monitoring of natural gas and electric 

markets with significant issues of market 

structure and operations identified 

Weekly reporting of significant issues of 

market structure and operations 

Target Met. 45 Weekly Market Reviews 

(WMR) were produced. In 2 other instances, 

market conditions were summarized at the 

Commission’s monthly meeting. In addition 

to the 45 WMRs published, 13 special reports 

providing in-depth analysis of emerging 

market issues were also published. 

Timeliness of actions on significant issues 

identified by regular monitoring of natural 

gas and electric markets 

Within 6 months of completed report Target Met. Actions on all significant issues 

were completed within 6 months. 

Complete transition of consolidated reporting 

to a web strategy Complete by June 30, 2008 

Target Met. The transition of this web 

strategy was completed in March 2008 when 

the State of the Markets report was published 

to the Oversight page 

(http://www.ferc.gov/marketoversight/market-oversight.asp) on the 

external FERC website. 

Establish clear and fair processes 

Apply current clear and fair processes to 

investigations during the fiscal year 

Provide recommendations to the Commission 

for each proposed remedy and penalty with 

clear and consistent criteria 

Target met. The Commission was provided 

with a written memo and recommendations 

for each of the six settlements approved in FY 

2008. 

Develop and provide further guidance to the 

industry on FERC’s expanded penalty 

authority 

By September 30, 2008 Target met. The revised Policy Statement on 

Enforcement was issued on May 15, 2008. 

Timeliness of reporting to the Commission on 

operational audits 

Within 120 days of the Commencement 

Letter Target Met. 100% (30 out of 30) 

Percentage of operational audit 

recommendations issued and implemented 90% within 6 months Target Met. 99% (94 out of 95) 

Timeliness of reporting to the Commission on 

financial audits 

Within 120 days of the Commencement 

Letter Target Met. 100% (37 out of 37) 

Percentage of financial audit 

recommendations issued and implemented 90% within 6 months Target Met. 100% (23 out of 23) 

Conduct investigations promptly and impose penalties where appropriate 

Timeliness of initiating or deciding action on 

MMU referrals 80% acted on within 30 days Target Met. 100% acted on within 30 days. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

97

FY 2008 

Strategy 

Performance Measure Target Results 

Percentage of enforcement investigations not 

including market manipulation issues 

completed 

75% within one year of initiation Target Met. 89% completed within one year 

of initiation. 

Percentage of market manipulation 

enforcement investigations completed 75% within two years of initiation Target Met. 100% completed within two years of initiation. 

Percentage of Hotline calls resolved 70% within 2 weeks of initial contact Target Met. 78% resolved within 2 weeks of 

initial contact. 

Encourage self-policing and -reporting of violations 

Percentage of regulated entities audited to 

ensure internal compliance programs and 

processes are in place 

85% of regulated entities included in annual 

audit plan Target Met. 97% (77 out of 79). 

Process complete requests for “No Action” Within 60 days of receipt of final request 

Target Met. All five requested no-action 

letters were all completed in less than 60 

days. 

Timeliness of reporting on compliance issues 

raised by regulated entities Reports completed monthly 

Target Met. Monthly pending case reports 

were issued for self-reports of compliance 

issues. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

98 

Performance Measurement Data for Supporting Initiatives: FY 2005 – FY 2008

FY 2005 

Performance Measurement Performance Target Result 

Number of new hires from recruitment 

program 

Attract new talent in mainstream occupations 

through targeted recruitment, with 50% at 

entry levels 

Target Met. 57% of new employees (42 of 

74) were hired into mainstream occupations 

at the entry-level. 

New staff from summer intern program Hire 30% of participants into permanent 

positions 

Target Not Met. 20% (6 0f 29) of interns 

eligible for conversion were hired into 

permanent positions. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. In light of the increase in 

the number of entry-level new hires during 

FY 2005, this difference had no effect on 

overall program performance. 

Increase diversity of staff in high grades Continue increasing diversity in GS-14, GS15 and SES positions 

Target Met. Overall diversity in grades GS14 and -15, SES, and equivalent level 

positions increased from 93 to 95 during FY 

2005. This figure includes both women and 

minorities. 

Improved executive/managerial development 

Expand training in leadership and 

management skills by implementing an 

experienced supervisors leadership program 

Target Met. Beginning in June 2005, the 

Commission launched a Business Acumen 

Course that was designed for supervisors. 

The curriculum, which was developed 

through a series of focus group meetings with 

SES managers, addresses the linkage between 

strategic plans, budgets, human capital plans, 

and operational plans in order to manage 

performance at both the organizational and 

individual levels. 

In August 2005, the first of four Business 

Acumen Courses were taught. Out of a target 

audience of 133 non-SES supervisors, 81 or 

61% have completed or are enrolled to 

complete this course. 

Improved technical development Implement second phase of “markets 

curriculum” for experienced staff 

Target Met. From March 2005 to June 2005, 

a second markets curriculum titled “FERC’s 

Role in the Energy Markets and 

Infrastructure” was implemented through a 

series of four separate modules. 

Mentoring program Implement FERC-wide mentoring programs 

Target Not Met. Although a draft mentoring 

program was prepared in late January 2005, a 

decision was made to merge the mentoring 

program with a larger training/developmental 

program that is being developed in FY 2006. 

This difference had no effect on overall 

program performance. 

Improved human capital processes 

Implement selected human resources 

flexibilities provided by new SES Pay-forPerformance legislation 

Target Met. On April 7, 2005, the 

Commission received provisional 

certification to implement SES Pay-forPerformance for calendar year 2005 by 

demonstrating that our SES performance 

appraisal system made meaningful 

distinctions in pay and performance, 

demonstrated clear alignment to strategic 

goals, and included good measures of 

performance for each executive. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

99

FY 2005 

Performance Measurement Performance Target Result 

Improved employee morale 

Conduct baseline FERC-wide employee 

survey; identify issues and conduct follow-up 

survey; set improvement targets for follow-up 

survey in FY 2006 

Target Met. Based on the analysis of a 

baseline Commission-wide employee survey 

conducted in early FY 2005, specific survey 

issues were identified and addressed (through 

action plans) by the Commission and each 

office. In accordance with a FY 2006 NDAA 

requirement, a follow-up survey is planned 

that will address and include those issues 

identified in the FY 2005 baseline survey 

(including improvement targets). 

Improved services to employees Successful implementation of payroll services 

and integration with HR services 

Target Met. In March 2005, the Commission 

successfully migrated its processing of 

payroll distributions to the National Finance 

Center. Also in March 2005, the 

Commission’s Employee Maintenance 

Helpdesk was established to provide a central 

point of contact for all human resources and 

payroll related inquiries. 

Average IT costs per FTE Below industry average for federal agencies 

Target Met. The Commission’s FY 2005 

average IT cost per FTE of $12,154 is below 

the FY 2005 industry average for federal 

agencies of $14,590. 

Percentage of transactions accepted 

electronically 95% of transactions accepted electronically 

Target Not Met. The Commission received 

80.2% of qualified documents (27,934 out of 

34,817) electronically. Qualified documents 

represented about 56% of the total documents 

submitted to the Commission in FY 2005. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. This difference had no 

effect on overall program performance since 

parties have the option to submit transactions 

via digital media (i.e. CD) rather than hardcopy form. In addition, the percentage 

represents an increase over the FY 2004 

result of 75.7%. 

Improved Internet Website 99% availability 

Target Met. The Commission did not 

experience a major Internet outage in FY 

2005, with average uptime reported at 100% 

(per contractor FY 2005 self-evaluation 

reports). 

Timeliness of getting public documents 

online 99% within 24 hours of receipt or issuance 

Target Not Met. During FY 2005, 96.6% of 

all documents presented to the Commission’s 

eLibrary operations staff were published 

within 24 hours. Of the documents the 

Commission receives or issues electronically, 

99.88% were published within 24 hours. As 

the volume of electronic filings increases, the 

current 96.6% will rise. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. This difference had no 

effect on overall program performance. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

100 

FY 2005 

Performance Measurement Performance Target Result 

Improved reliability and availability of 

FERRIS 

Increase customer satisfaction 25% over FY 

2003 

Target Met. During FY 2005, customer 

feedback from the eLibrary Helpdesk showed 

that 100% of customers felt they received a 

high quality of service. 

Network availability 99% 

Target Met. The Commission did not 

experience a major network outage in FY 

2005, with average uptime reported at 100% 

(per contractor FY 2005 self-evaluation 

reports). 

Desktop reliability Increase reliability by 5% per year 

Target Met. Compared to FY 2004 , the 

number of PC breakdowns (or re-images) 

during FY 2005 reduced by 9.2% from 54 reimages to 49 re-images. 

With no means to capture positive reliability 

data (e.g. reliability increases from FY 2004 

to FY 2005), the current performance 

measure and target do not appear in future 

performance plans. 

Standard office automation platform and PC 

rate of refresh 33% Target Met. The Commission’s FY 2005 upgrade percentage was 37%. 

Timeliness of virus file updates on servers 

and workstations 

Updates within 24 hours from release by 

vendors Target Met 

Implementation of Federal Information 

Security Management Act (FISMA) for small 

agencies 

95% 

Target Met. According to the Putnam 

scorecard, the measurement used to grade 

implementation of FISMA, the Commission 

earned a 100% (or A) rating for FY 2005. 

Development of initial enterprise architecture Complete by October 30, 2004 

Target Met. The Commission’s IT Enterprise 

Architecture was completed and in place by 

October 31, 2004. 

Develop Communications Plan 

Increase number of proactive interactions 

with the Press, Elected Officials, and Industry 

by 25% 

Target Met. In FY 2005, the total number of 

proactive interactions increased by 27.6%. 

Redesign Internet Website Make internet site more useful and userfriendly 

Target Met. In addition to several new userfriendly features, the Commission added 

eleven new project- / initiative-targeted web 

pages during FY 2005. 

Engage Stakeholders Provide 50 presentations to government or 

other groups of stakeholders 

Target Met. The Commission provided over 

70 presentations to government and/or other 

stakeholder groups during FY2005. 

Discussions with State regulatory bodies on 

Commission policies and actions

Formal, effective interactions between FERC 

and state officials on policy issues

Target Met. The Commission participated in 

61 different meetings with state officials 

during FY 2005. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

101

FY 2005 

Performance Measurement Performance Target Result 

Foster communication with States and 

Governors on infrastructure

Hold infrastructure conferences in each 

region

Target Not Met. The Commission held a 

total of seven infrastructure related 

conferences during FY 2005 in the Northeast, 

Western, Appalachian, and Rocky Mountain 

regions. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. The Commission’s 

inability to hold a conference in each region 

did not have an effect on overall program 

performance. 

Maintain liaison with market monitors in 

RTOs and ISOs 

Meet at least twice annually with RTO and 

ISO market monitors 

Target Met. The Commission met with RTO 

and ISO market monitors twice during FY 

2005, both at Commission-hosted 

conferences (December 2004 and July 2005). 

Outreach to stakeholder groups to encourage 

use of conflict resolution mechanisms 

Increase number of outreach opportunities 

with stakeholders by 25% 

Target Met. The 83 active projects in FY 

2005 represent a 29.7% increase over the 64 

projects in FY 2004. 

Support further discussions with Canada and 

Mexico

Formal interaction with Canadian and 

Mexican regulators on policy issues

Target Met. The Commission held or 

participated in 20 different meetings with 

Canadian and/or Mexican officials on issues 

related to infrastructure, reliability, and other 

policy initiatives during FY 2005. 

Monitoring of manage-to-budget process 

Bi-weekly tracking of office salary levels and 

quarterly review of salary levels between 

CFO and Office Directors 

Target Not Met. Due to the National Finance 

Center processing of payroll distributions 

migration in March 2005, bi-weekly tracking 

information was briefly delayed. In addition, 

ongoing reviews and discussions between the 

Budget Division, individual office contacts, 

and the Chief Financial Officer did not 

necessitate the need for quarterly reviews 

with Office Directors. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. This difference had no 

effect on overall program performance. 

Monitoring of business plan 

3⁄4 Clarity of fit between projects, activities, 

and objectives 

3⁄4 Periodic monitoring of completions and 

adjustments to plan and related resources 

Target Met. Both of the business plan 

updates that took place during FY 2005 

accomplished the stated targets. A final FY 

2005 update will be completed during the 

first week in November. 

Timeliness of annual charges collections Collect 98% of outstanding receivables 

within 45 days of billing 

Target Not Met. The Commission received 

92.7% of its annual charge collections within 

45 days of billing. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. Since the collections 

during the 45-day period off-set the 

Commission’s FY 2005 appropriation and the 

Commission received 97.3% of its annual 

charge collections prior to the end of FY 

2005, this difference had no effect on overall 

program performance, 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

102 

FY 2005 

Performance Measurement Performance Target Result 

Invoices paid by electronic funds transfer 98% 

Target Met. The Commission paid 99% of its 

invoices via electronic funds transfer during 

FY 2005. 

Percentage of payments accomplished 

without error 98% 

Target Not Met. The Commission made 97% 

of its payments without error during FY 

2005. 

This performance target was set at an 

approximate level, and the deviation from 

that level is slight. Since all incorrect 

payments were recovered via internal or 

Department of Treasury collection actions, 

this difference had no effect on overall 

program performance. 

Accuracy and completeness of annual 

financial statements Unqualified opinion 

Target Met. The Commission received an 

unqualified opinion on its FY 2004 financial 

statement audit. 

Percentage of contracts performance-based 85% 

Target Met. Of the 118 procurement actions 

that required a performance-based statement 

of work, 100% were awarded as 

performance-based. 

Percentage of contracts advertised online 85% 

Target Met. Of the 3 procurement actions 

eligible for advertising, 100% were 

advertised online. 

FY 2006 

Performance Measurement Performance Target Data Source 

Percentage of summer interns hired into 

permanent positions 30% 

Target Not Met. 14.3% of summer interns 

eligible to be rehired accepted offers of 

permanent employment. 

Conversions of summer interns have steadily 

declined since its high in 2003 with 33%. As 

EPAct of 2005 requirements have evolved, 

the need for skill sets not represented in the 

summer intern population has dictated hiring 

from other sources. This measure is omitted 

in 2007 and reduced in 2008 to 20%. 

Implement entry-level Professional 

Development Program Complete by September 30, 2006 

Target Met. FERC Entry-Level Retention 

Program distributed to Program Offices in 

September 2006. 

Percentage of minorities among senior-level 

positions (GS-14, GS-15, SL, and SES 

positions) 

Increase over FY 2005 

Target Met. Percentage of minorities among 

senior-level positions increased by 1% over 

FY 2005. 

Implement Commission-wide Business 

Requirements guidelines Complete by September 30, 2006 

Target Met. Commission-wide Business 

Requirements Guidelines distributed to the 

Training Council in September 2006 

Reliability of IT infrastructure 99% network availability rate Target Met. 

FISMA compliance according to the Putnam 

scorecard Grade of “A” 

Target Met. FERC received a grade of an 

"A" based on the Putnam scorecard for its 

most recent FISMA report which ended 

September 30, 2006.
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

103

FY 2006 

Performance Measurement Performance Target Data Source 

Integrate the Business Plan, CPIC process, 

and IT architecture into the Commission’s 

Enterprise Architecture 

Complete by September 30, 2006 

Target Met. DCIO's current CPIC process 

requires all requests to map to the FERC 

Business Plan. Pursuant to the CPIC process 

Information Technology (IT) projects are 

approved or denied based on a number of 

criteria one being whether or not it supports 

the Commission's mission. Approved IT 

projects generate a Control Board action 

producing document. The data from the 

approved CCN is used to update the IT 

architecture which is entered into the 

Commission's Enterprise Architecture 

through the use of the Metis tool. 

Percentage of approved IT initiatives with 

supporting documentation per the 

Commission's CPIC process 

100% 

Target Met. The CPIC Investment Review 

Board approved 21 projects of which all 21 

went through the CPIC review process. 

Therefore, 100% of the approved IT projects 

went through the CPIC approval process. 

Establish earned value management schedule 

and cost performance indices for all major 

projects 

Complete by September 30, 2006 

Target Met. As implemented in FERC 

Capability Maturity Model Integration level 2 

(CMMI-2) policies and procedures, EVM is 

used to measure progress on major projects 

and major phases of multi-phased projects. 

Develop and implement automated Business 

plan Complete by September 30, 2006 

Target Not Met. Though Software 

development for Phase 2 of the Activity and 

Tracking Management System (ATMS) has 

been completed, the target was not met 

because extensive testing of Phase 2 due to 

integration with other eGovernment systems 

will push deployment to February 2007. 

Though Phase 2 will support business plan 

reporting that is integrated with the HR time 

reporting system (MAPS), that reporting will 

depend on requisite information (e.g. proper 

use of time reporting codes, MAPS data, etc.) 

input by FERC's program and other offices. 

And since full automation will require 

Commission-wide deployment (Phases 3 and 

4) and additional reporting requirements 

definition and software development, the 

target will not be fully met until ATMS Phase 

4. Since manual processes for business 

planning will remain in place until they are 

replaced by an automated Business plan, 

there is no impact on operations or program 

performance. 

Percentage of qualified-procurements that are 

performance-based 100% 

Target Met. Of the 676 actions awarded 

during the period, a total of 78 actions were 

identified as performance-based. All 78 of 

these actions were awarded under 

performance-based contracts. 

Percentage of qualified-procurements that are 

advertised on-line 100% 

Target Met. Of the 676 actions awarded 

during the period, a total of 4 actions 

qualified for on-line advertisement, and all 4 

actions were advertised on-line with Federal 

Business Opportunities (fedbizops.) 

Percentage of total procurement dollars 

awarded to small, women-owned, and 

minority businesses 

5% increase over FY 2005 

Target Met. In FY 2005, the Commission 

awarded 22% of its total procurement dollars 

to small, women-owned and minority 

businesses. In FY 2006, the Commission 

awarded 34% of its total procurement dollars 

to these entities which constitutes a 12% 

increase over the FY 2005 performance level. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

104 

FY 2006 

Performance Measurement Performance Target Data Source 

Percentage of invoices paid via electronic 

funds transfer 99% 

Target Met. During FY 2006, the 

Commission paid 99% of its invoices via 

EFT. 

Percentage of payments in compliance with 

Prompt Payment Act deadlines 100% 

Target Not Met. During FY 2006, the 

Commission processed 94% of its payments 

in compliance with Prompt Payment Act 

deadlines. The primary cause was the 

Commission's acceptance of invoices during 

the FY 2006 Continuing Resolution (October 

- December) which could not be paid. Since 

January, the Commission has processed 98% 

of its payments in compliance with Prompt 

Payment Act deadlines. 

Percentage of payments made without error 100% 

Target Not Met. During FY 2006, the 

Commission made 99% of its payments 

without error. The failure to meet this target 

did not have an adverse affect on overall 

program performance. 

Timeliness of collecting accounts receivable 90% of invoices collected by due dates 

Target Met. During FY 2006, the 

Commission collected 94% of its invoice 

balances by the stated due date. 

Complete and accurate annual financial 

statements 

Unqualified opinion on audited financial 

statements Target Met 

Percentage of filings capable of being 

received electronically 95% 

Target Not Met. 42% of all document types 

are currently capable of being received 

electronically. Meeting the target has been 

delayed because of two primary factors: 

1) The Commission has been responsive to 

industry feedback regarding the most 

efficient way for tariff filings to be filed 

electronically and has extended the 

prototyping and discussion of proposed 

solutions; and 

2) The Commission has delayed to 

improve infrastructure (supporting 

database, storage, server, and disaster 

recovery infrastructure). 

To mitigate the effects of the delay the 

Commission encourages the filing of noneFiling-capable documents on digital media 

(CD, DVD); routinely accepts non-eFilingcapable documents electronically on an 

exception basis when requested by filers; and 

performs OCR and full-text indexing on 

documents submitted on paper. In addition, 

the Commission is actively planning and 

gathering requirements for an eFiling system 

release that will meet the target. Given the 

mitigation efforts, there have been no 

negative impacts on program performance or 

operations. 

Percentage of Commission orders approved 

during open meetings issued 99% within 5 business days 

Target Met. 321 agenda items were approved 

in open meeting during the rating period. All 

but 2 were issued within 5 business days. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

105

FY 2006 

Performance Measurement Performance Target Data Source 

Percentage of Commission orders approved 

by notational vote issued 99% within 1 business day of adoption date 

Target Not Met. 933 agenda items were 

approved through the notational process. 40 

items were issued after one day of adoption 

date; these were all issued on the following 

business day. Percentage is 96%. This is a 

remarkable accomplishment considering the 

significant increase in notational items during 

this appraisal period and the target did not 

change from last appraisal period. This did 

not have a negative impact on operations. 

Percentage of legally required notices issued 95% within 3 business days of being posted 

on eLibrary 

Target Not Met. This measure includes 

notices for electric rate filings prepared by the 

Secretary; notices for other industries are 

prepared by program offices. Number of 

electric rate notices during the appraisal 

period is 2,667. Of these, 632, or 76%, were 

issued three days after filing was posted on 

eLibrary. This target was not met due to staff 

shortages. However, no Commission 

proceeding or action was negatively affected. 

Percentage of press releases on important 

agency actions issued 95% within 1 hour of order being issued 

Target Met. In FY 2006, 90 out of 92 or 

97.8% of press releases were issued within 1 

hour of action being taken. 

Percentage of responses to public inquiries 3⁄4 60% within 3 business days 

3⁄4 100% within 5 business days 

Target Met. In FY 2006, OEA responded to 

approximately 2,800 public inquiries. Over 

90% of these inquiries were responded to 

within 1 business day of receipt. All public 

inquiries were responded to within 5 business 

days. 

Percentage of agency actions and timesensitive content posted on the FERC Internet 

Website 

95% within 1 hour of order being issued 

Target Met. In FY 2006, 3,159 of 3,201 or 

98.7% of important agency actions were 

posted on the Commission’s internet website 

within 1 hour of issuance. 

Timeliness of notices to NEB (Canada) and 

CRE (Mexico) of FERC activities pursuant to 

Memorandum of Understanding 

Within 1 business day 

Target Met. The NEB and CRE are routinely 

notified of significant Commission activities 

that impact their respective countries through 

emails with summaries and links to these 

orders within one business day of the order 

being issued.

Timeliness of regional hearings or 

conferences email notifications sent to State 

officials and Governors 

Within 1 business day No regional hearings/conferences took place 

during the review period. 

Submit FY 2005 Annual Report to Congress Complete by June 30, 2006 

Target Not Met. FY 2005 Annual Report has 

not been sent to Congress. The target was not 

met due to a significant change in the format 

of the Annual Report to improve the overall 

product by making it more targeted to the 

audience groups. The decision to re-format 

the Annual Report to track the agency’s 

Strategic Plan resulted in a significantly more 

time-consuming review process and an 

extended period for obtaining the content for 

the Annual Report. There were no negative 

impacts on operations. The process for the 

FY 2006 Annual Report has already been 

initiated and the expectation is that the target 

will be met. 

Submit FY 2005 international exchange and 

training activity data to U.S. Department of 

State 

Complete by April 1, 2006 

Target Met. FY 2005 international exchange 

and training activity data was sent to the U.S. 

Department of State in March 2006. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

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FY 2006 

Performance Measurement Performance Target Data Source 

Submit FY 2005 FOIA Annual Report to 

Department of Justice Complete by February 1, 2006 

Target Met. FY 2005 FOIA Annual Report 

to the Department of Justice was submitted 

on January 27, 2006. 

Submit FY 2005 Information Quality Agency 

Annual Report to OMB Complete by January 1, 2006 

Target Met. FY 2005 Information Quality 

Agency Annual Report was submitted to 

OMB prior to January 1, 2006. 

FY 2007 

Performance Measurement Performance Target Data Source 

Develop and implement a competency-based 

requirements framework Complete by January 31, 2007 

Target Met. Framework developed in 

January, 2007. Implementation 

ongoing with mainstream occupations. 

Percentage of women and/or minorities among all 

positions Increase over FY 2006 

Target Met. FY 2007 percentage for 

women was 52.9%. Increased 

percentage over FY06 by 8% (FY 2006 

- 44.5%). 

FY 2007 percentage for minority 

women was 20.6%. Increased 

percentage over FY06 by 1.1% (FY 

2006 – 19.5%). 

Improve retention ratio of entry-level new hires Increase FY 2006 ratio by 10% 

Target Met. Retention ration for FY 

2007 hires was 100% (FY 2006 

percentage was 95%). 

Implement workforce planning tools Complete by September 30, 2007 

Target Met. Implemented Hiring Gap 

Spreadsheet and Personnel Status 

Report. Continue to prepare and publish 

the Human Capital Plan. 

Timeliness of submitting Fair Act Inventory to 

OMB per Circular A-76 requirements Complete by June 30, 2007 Target Met. FY 2007 FAIR Act was submitted to OMB 6/30/07. 

Customers are satisfied with the use of 

eGovernment initiatives to interact with FERC 90% 

Target Met. The customer satisfaction 

level for FERC eGov Services exceeds 

96% based on data collected from the 

external users surveys. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

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FY 2007 

Performance Measurement Performance Target Data Source 

Federal FTE time is mapped through systems to 

workload and strategic goals and objectives Fully implemented by September 30, 2007 

Target Not met. With the deployment 

of ATMS Phase 2 in February FY07 the 

following offices are fully able to map 

workload to strategic goals and 

objectives using an enterprise-wide 

system: OAL, OED, OGC, and OEMR 

(now OEMR and OER). For the 

following offices, some divisions are 

able to map workload to strategic goals 

and objectives using an enterprise-wide 

system while other divisions can map 

workload to strategic goals and 

objectives but must continue to use 

legacy, departmental, and/or cuff 

systems: OEA, OALJ, OE, OEP. 

Mapping of workload in terms of FTE 

time requires both a revision of budget 

reporting codes and development of a 

report that correlates information in the 

enterprise-wide workload tracking 

system with information in the FERC 

HR system. The complete 

implementation of all ATMS phases 

will take longer than planned due to 

contract staffing reductions from 

funding shortages under a yearlong FY 

2007 continuing resolution and because 

the effort was underestimated. A 

detailed plan for ATMS Phase 3 is 

currently under review and the target 

may not be fully met in FY 2008. 

Align Commission costs to strategic objectives Complete by September 2007 

Target Met. The FY2009 Budget 

Request has been structured to map 

both FTEs and the Commissions costs 

to strategic objectives and was 

completed on September 10, 2007. 

Percentage of vendor payments made by 

established due dates 99% 

Target Not Met. During FY07, the 

Commission processed 97.1% (1897 

out of 1953) of payments in compliance 

with Prompt Payment Act deadlines. 

37 of the 56 late payments did not result 

in interest begin paid to the vendor. 

The failure to meet this target did not 

have an adverse affect on overall 

program performance. 

Percentage of payments made without error 100% 

Target Not Met. During FY 2007, the 

Commission made 99.7% of its 

payments without error. The failure to 

meet this target did not have an adverse 

affect on overall program performance. 

Timeliness of collecting accounts receivable that 

offset the Commission’s appropriation 95% collected by due dates 

Target met. During FY 2007, the 

Commission collected 99.5% of its 

offsetting accounts receivable by their 

stated due date. 

Financial statements that present fairly, in all 

material aspects, the Commission’s financial 

position 

Unqualified audit opinion on FY 2006 

financial statements 

Target Met. Unqualified opinion 

received 

November, 2006 

Percentage of transactional case assessments or 

convening sessions concluded 75% within 20 days 

Target Met. DRS completed 100% (41 

out of 41) transactional case 

assessments or convening sessions 

within 20 days after being referred to 

the DRS. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

108 

FY 2007 

Performance Measurement Performance Target Data Source 

Percentage of transactional ADR processes agreed 

to by parties concluded 

75% within 120 days total (convening and 

process) 

Target Met. Dispute Resolution Services 

completed 34 transactional processes or 

cases, both environmental and nonenvironmental in which parties agreed 

to pursue an ADR process. Of these, 31 

were completed within 120 days after 

being referred to the DRS (91%). 

Number of ADR requests and referrals to the 

Dispute Resolution Service Increase number over FY 2004 (base year) 

Target Met. DRS addressed a total of 

79 new requests or ongoing cases from a 

previous fiscal year involving gas, 

electric, hydropower, and pipelines. 

This represents a 46.3 % increase over 

FY2004, in which there were 54 new 

requests or ongoing cases. 

Favorable Dispute Resolution Service customer 

satisfaction for casework and outreach 80% customer satisfaction rate 

Target Met. The DRS requests 

customer feedback through evaluations 

of casework processes, and training 

sessions. For casework concluded in 

FY2007, all participants who completed 

evaluations gave the DRS staff 

favorable comments, for a satisfaction 

rate of 100%. 

In training sessions during FY2007, 

participant ranking for Course Content 

averaged 90%, Course Materials 

averaged 88%, and Instructor 

Effectiveness averaged 94%. 

Number of outreach events (e.g., trainings, 

workshops, and presentations) to promote the use 

of dispute resolution skills 

Increase number over FY 2004 (base year) 

Target Met. There were 65 active 

outreach projects in FY2007. This 

represents a 1.6 % increase over 2004 in 

which there were 64 projects. Note: 

The projects were both internal and 

external to FERC. 

Ensure timely and effective communication to all 

stakeholders 

3⁄4 Issue 95% of press releases for 

important agency actions on the same 

day as the underlining action 

3⁄4 Post 95% of important agency actions 

on the same day as the underlining 

action 

3⁄4 Provide an initial and complete response 

to 70% of inquiries at the time of the 

receipt of the request 

3⁄4 Develop webpages within the assigned 

timeframe to enhance and support the 

Commission’s initiatives and goals 

Targets Met. 

3⁄4 In FY 2007, 80 out of 80 or 100% 

of press releases were issued 

within 1 hour of action being 

taken. 

3⁄4 In FY 2007, 3816 of 3820 or 99% 

of important agency actions were 

posted on the Commission’s 

internet website within 1 hour of 

issuance 

3⁄4 In FY 2007, the office provided an 

initial and complete response to 

2272 of 2791 or 81% of public 

inquiries at the time of receipt. 

3⁄4 In FY 2007, the Commission 

developed the following webpages 

in the assigned timeframe: Market 

Oversight, Electric Competition, 

OATT Reform, Blanket 

Certificates, Transmission 

Investment, Pipeline, Hydrokinetic 

Energy, MOU, Policy Statement, 

Hydro licensing, Annual Charges, 

Career, Media form, and FOIA 

form. 

Enhance communication with National and 

International groups 

3⁄4 Respond to 50% of Official 

Congressional correspondence within 10 

business days 

3⁄4 Provide email notification of significant 

Commission actions to Congress within 

1 to 2 business days of the underlining 

Targets Met. 

3⁄4 130 out of 205 pieces of official 

Congressional correspondence, or 

63%, were responded to within 10 

business days. 

3⁄4 In FY 2007, email notifications to 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

109

FY 2007 

Performance Measurement Performance Target Data Source 

action along with briefing offers where 

appropriate 

3⁄4 Provide timely and effective briefings to 

members of Congress 

3⁄4 Provide email notification of significant 

Commission actions to effected State 

regulatory agencies within 1 to 2 

business days of the underlining action 

3⁄4 Accommodate visitation requests from 

delegations from various countries and 

organizations 

members of Congress were sent 

out on 340 significant Commission 

actions within 1 to 2 business days 

of the underlining action. Briefing 

offers were made on appropriate 

items. 

3⁄4 In FY 2007, the Commission 

provided 38 briefings to members 

of Congress. 

3⁄4 In FY 2007, 178 email 

notifications to State regulatory 

agencies were sent out on 

significant Commission actions 

within 1 to 2 business days of the 

underlining action. 

3⁄4 In FY 2007, OEA hosted 71 visits 

from 75 countries and 

organizations. 

Percentage of cases set for hearing that achieve 

partial or complete consensual agreement 75% 

Target Met. 88% of cases set for 

hearing achieved partial or complete 

consensual agreement. 

Percentage of cases set for hearing completed 

according to the established schedule 

3⁄4 75% of Track I cases in 29.5 weeks 

3⁄4 75% of Track II cases in 47 weeks 

3⁄4 75% of Track III cases in 63 weeks 

Targets Met. 

3⁄4 There were no Track I cases. 

3⁄4 80% of Track II cases in 47 weeks. 

3⁄4 88% of Track III cases in 63 weeks. 

Issue well-reasoned initial decisions, based on 

facts, law, and Commission policies which are 

upheld in whole or in part 

80% of initial decisions upheld in whole or in 

part 

Target Met. 91% of initial decisions 

were upheld in whole or in part. 

FY 2008 

Performance Measure Performance Target Results 

Number of ADR requests and referrals addressed 

by the Dispute Resolution Service Increase number over FY 2004 

Target Met. The DRS addressed 57 

new ADR requests and referrals; 3 

more than FY 2004. 

Percentage of mediated or facilitated case that 

achieve partial or complete consensual agreement 75% 

Target Met. The DRS had a 90% (18 

out of 20) success rate in assisting 

parties achieve consensual resolution of 

cases. 

Favorable Dispute Resolution Service customer 

satisfaction for casework and outreach 80% customer satisfaction rate 

Target Met. In trainings and workshops 

during the period, participant ranking 

for Course Content averaged 89% and 

Instructor Effectiveness 93%. For 

casework, all participants who 

completed evaluations gave the DRS 

staff favorable comments, for a 

satisfaction rate of 100%. 

Number of outreach events (e.g., trainings, 

workshops, and presentations) to promote the use 

of dispute resolution skills 

Increase number over FY 2004 

Target Not Met. The DRS delivered or 

assisted with 37 outreach events, equal 

to the number in FY 2004. The DRS 

met all of the outreach needs and there 

were no negative program impacts.

Of ADR processes concluded, percentage that 

resulted in savings of time and/or money over 

traditional processes 

75% 

Target Met. 100% of participants who 

completed a survey indicated that the 

use of ADR resulted in savings of time 

and/or money over traditional 

processes. 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

110 

FY 2008 

Performance Measure Performance Target Results 

Percentage of cases set for hearing that achieve 

partial or complete consensual agreement 75% Target Met. 91% 

Ensure timely and effective communication to all 

stakeholders 

3⁄4 Issue 95% of press releases for 

important agency actions within 1 hour 

of action being taken 

3⁄4 Post 95% of important and timesensitive agency actions on the 

Commission’s internet website within 1 

hour of issuance 

3⁄4 Provide an initial and complete response 

to 70% of inquiries at the time of the 

receipt of the request 

3⁄4 Develop webpages within the assigned 

timeframe to enhance and support the 

Commission’s initiatives and goals 

3⁄4 Target Met. 95% (71 out of 75) 

press releases were issued within 

1 hour of action being taken. 

3⁄4 Target Met. 100% (4,004 out of 

4,005) important and timesensitive actions were posted 

within 1 hour of action being 

taken by the Commission. 

3⁄4 Target Met. 74% (3,833 out of 

5,149) of inquiries were provided 

a complete response at the time of 

the receipt of the request. 

3⁄4 Target met. 19 new web pages 

and/or sections on FERC.gov 

were developed within the 

assigned timeframe. 

Enhance communication with National and 

International groups 

3⁄4 Provide responses to 95% of 

Congressional inquiries and briefing 

requests by the date requested or by 10 

business days from the date of the 

request 

3⁄4 Provide email notification of significant 

Commission actions to Congress within 

1 to 2 business days of the underlying 

action along with briefing offers where 

appropriate 

3⁄4 Provide timely and effective briefings to 

members of Congress and State 

Officials within the timeframe requested 

and initiate at least three briefings on 

top priority issues within timeframe 

appropriate to effect that issue 

3⁄4 Provide email notification of outreach 

efforts (i.e., panel discussions, 

workshops, conferences or other 

forums) to State Officials and 

Governors within 3 business days 

3⁄4 Respond to 80% of international 

delegation meeting requests within 3 

business days of rendering a decision 

3⁄4 Target Met. 100% (61 out of 61) 

briefings were held and (318 out 

of 318) congressional inquiries 

were responded to within 10 

business days of the request. 

3⁄4 Target Met. Email notifications 

concerning 292 significant 

Commission actions were sent 

within 1 to 2 business days of the 

underlying action. 

3⁄4 Target Met. 61 timely and 

effective briefings with members 

of Congress were held. Briefings 

on the top priority issues of cyber 

security; market manipulation; 

and transmission line siting were 

held within appropriate time 

frames. State officials were also 

briefed on these issues. 

3⁄4 Target Met. Staff provided 19 

notifications of outreach efforts 

within 3 business days, and within 

at least 30 days’ notice of public 

meetings for two additional 

outreach items. 

3⁄4 Target Met. 82% (40 out of 47) 

of requests were responded to 

within 3 business days. 

Maintain an effective recruiting program 

3⁄4 Recruit at least 3 students each from at 

least 4 target universities 

3⁄4 Increase new hires from recruiting 

program by 10 over FY 2007 

3⁄4 Hire 20% of interns into permanent 

positions 

3⁄4 Target Met. A total of 19 

students were recruited from 4 

target universities. 

3⁄4 Target Met. 58 new hires in FY 

2008; 41 more than FY 2007 

3⁄4 Target Met. 36% (4 out of 11) of 

summer interns from FY 2007 

hired in FY 2008. 

Implement employee development programs 

3⁄4 Launch leadership development 

program 

3⁄4 Develop competency based training for 

mainstream occupations 

3⁄4 Target Met. The LDP was 

launched in October 2007. 15 

candidates will graduate from 

program in February 2009. 

3⁄4 Target Met. A competency 

assessment tool for competency 

based training needs analysis was 

launched in September 2008 and 

will be included in the FY 2009 
Federal Energy Regulatory Commission 

FY 2008 Performance and Accountability Report 

111

FY 2008 

Performance Measure Performance Target Results 

Central Training Fund 

prioritization. 

Maintain an effective performance management 

system 

3⁄4 All employees receive training annually 

3⁄4 Provide feedback to managers to ensure 

ratings reflect meaningful distinctions 

between performance 

3⁄4 High achievers are rewarded 

appropriately 

3⁄4 Target Met. FERC NonSupervisory Employees received 

training in August and September 

2008. 

3⁄4 Target Met. All FERC managers 

received feedback on ratings and 

training on meaningful 

distinctions during the 

corresponding rating cycle of their 

program office. 

3⁄4 Target Met. Report analysis 

shows that higher monetary 

awards are commensurate with 

higher performance ratings. 

Ensure appropriate representation of women and 

minorities at all levels within the organization Increase over FY 2007 baseline 

 Target Not Met. 

3⁄4 Women. The representation of 

women was 45.5% in FY 2008, a 

7.4% decrease from FY 2007. 

3⁄4 Minorities. Overall, the 

representation of minorities was 

32.7% in FY 2008, a 0.5% 

decrease from FY 2007. 

Maintain reliable financial management systems 

which generate accurate and timely financial 

information to support operating, budget, and 

policy decisions 

3⁄4 Unqualified audit opinion on financial 

statements 

3⁄4 Unqualified assurance assertion on 

internal controls 

3⁄4 Target Met. Unqualified opinion 

received November 6, 2008. 

3⁄4 Target Met. Unqualified 

assurance asserted over internal 

controls September 12, 2008. 

Manage acquisitions in accordance with federal 

requirements and ensure process provides for the 

efficient use of Commission resources 

3⁄4 25% of total procurement dollars 

awarded to small, women-owned, and 

minority businesses 

3⁄4 100% of qualified procurements are 

performanced-based 

3⁄4 Target Met. 31% of total 

procurement dollars awarded to 

small, women-owned and 

minority businesses. 

3⁄4 Target met. 100% of all qualified 

procurements were performance 

based awards. 

Full implementation of FERC’s eGovernment 

initiatives Completed by September 30, 2008 

Target Met. eFiling 7.0 was completed 

by September 30, 2008. eFiling will 

increase the number of documents that 

can be submitted and provides a secure 

process for submitting Privileged and 

CEII materials. Also, ATMS 3.0 

successfully developed the 

infrastructure to capture the tracking of 

all docketed and non-docketed work. 

Customer satisfaction with eGov 

services was over 90%. 
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Appendix A 

Organizational Chart 
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Appendix B 

Strategic Plan 
Federal Energy Regulatory Commission

Strategic Plan FY 2006 – FY 2011

Mission

Regulate and oversee energy industries in the economic, environmental, 

and safety interests of the American public.

Vision

Abundant, reliable energy in a fair competitive market.

Guiding Principles that Strengthen the Commission’s 

Overall Performance

To fulfi ll its Mission, the Federal Energy Regulatory Commission commits to...

Organizational Excellence

Use resources effi ciently and effectively to achieve its strategic priorities.

Due Process & Transparency

Complete regulatory proceedings in an open and fair manner, consistent with 

established regulations.

Regulatory Certainty

Provide regulatory certainty through consistent Commission approaches and actions.

Stakeholder Involvement

Ensure that interested parties are informed and provided an appropriate 

opportunity to participate in Commission proceedings.

Timeliness

Act on regulatory matters in an expeditious manner.
Goal 1: Energy Infrastructure

Promote the Development of a Strong Energy Infrastructure

Objective A: Stimulate Appropriate Infrastructure Development

 • Resolve regulatory and other challenges to needed development

 • Encourage investment and effect timely cost recovery

Objective B: Maintain a Reliable and Safe Infrastructure

 • Assure reliability of interstate transmission grid

 • Protect safety at LNG and hydropower facilities

 • Incorporate environmental considerations into Commission decisions

Goal 2: Competitive Markets

Support Competitive Markets

Objective A: Develop Rules that Encourage Fair and Effi cient Competitive Markets

 • Employ best practices in market rules

 • Reduce barriers to trade between markets and among regions

Objective B: Prevent Accumulation and Exercise of Market Power

 • Assure proposed mergers and acquisitions are in the public interest

 • Address market power in jurisdictional wholesale markets

Goal 3: Enforcement

Prevent Market Manipulation

Objective A: Provide Vigilant Oversight

 • Identify and remedy problems with structure and operations in energy markets

Objective B: Provide Firm but Fair Enforcement

 • Establish clear and fair processes

 • Conduct investigations promptly and impose penalties where appropriate

 • Encourage self-policing and -reporting of violations
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Appendix C 

Statutory Authority
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Provided below is a listing of federal statutes applicable to the Commission. Links to 

these statutes are available on the Commission’s website at www.ferc.gov under Legal 

Resources. 

Electric, Hydropower, & General Statutes

Federal Power Act

Energy Policy Act of 2005

Energy Policy Act of 1992

Power Plant & Industrial Fuel Use Act

Department of Energy Organization Act

Electric Consumers Protection Act (ECPA)

Electronic Freedom of Information Act of 1996

Energy Independence and Security Act of 2007 (EISA) 

Public Utility Holding Company Act of 1935 and 2005

Public Utility Regulatory Policies Act of 1978 (PURPA)

Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)

Information Technology Management Reform Act of 1996 (ITMRA/Clinger-Cohen 

Act)

Natural Gas Statutes

Natural Gas Act 

Natural Gas Policy Act of 1978 

Alaska Natural Gas Pipeline Act of 2004 

Alaska Natural Gas Transportation Act of 1976 

Outer Continental Shelf Lands Act of 1978 (OCSLA) 

Natural Gas Wellhead Decontrol Act of 1989 (NGWDA) 

Oil Statutes

Interstate Commerce Act 

Oil Pipeline Regulatory Reform 

Environmental and Other Statutes

Clean Air Act 

Clean Water Act 

Rivers and Harbors Act 

Endangered Species Act 

Wild and Scenic Rivers Act 

Coastal Zone Management Act 

National Historic Preservation Act 

Fish and Wildlife Coordination Act 

National Environmental Policy Act (NEPA) 
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Appendix D 

Acronyms
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Acronym Full Description 

CAISO California System Operator Corporation 

CIP Critical Infrastructure Protection 

DOE Department of Energy 

EQR Electric Quarterly Reports 

ERCOT Electric Reliability Council of Texas 

ERO Electric Reliability Organization 

FERC Federal Energy Regulatory Commission 

FPA Federal Power Act 

FPC Federal Power Commission 

FTE Full Time Equivalent 

FY Fiscal Year 

ISO Independent Transmission System Operator 

LNG Liquefied Natural Gas 

MISO Midwest Independent Transmission System Operator 

NOP Notices of Penalty 

OASIS Open Access Same-time Information System 

OE Office of Enforcement 

OER Office of Electric Reliability 

OMB Office of Management and Budget 

RE Regional Entities 

RTO Regional Transmission Organization 

SPP Southwest Power Pool 

TRP Technical Review Panel 
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