Chairman Jon Wellinghoff 

FEDERAL ENERGY 

REGULATORY COMMISSION

PERFORMANCE & ACCOUNTABILITY REPORT

FISCAL YEAR 2012
FEDERAL ENERGY REGULATORY COMMISSION 

WASHINGTON, DC 20426 

OFFICE OF THE CHAIRMAN 

Letter from Chairman Wellinghoff 

I am pleased to present the Federal Energy Regulatory Commission (Commission) 

Performance and Accountability Report for fiscal year 2012. This report was 

prepared in accordance with the guidelines set forth in Office of Management and 

Budget Circular A-136 and Part 6 of Circular A-11. 

This report details the progress the Commission has made in assisting consumers 

obtain reliable, efficient and sustainable energy services at a reasonable cost 

through appropriate regulatory and market means. The strategic goals and 

objectives that support the Commission's mission are included on page i of this 

document. 

The Commission has completed evaluations of its management controls and 

financial management systems and, based on these evaluations, I am providing a 

statement of assurance that the Commission meets the objectives required by the 

Federal Managers' Financial Integrity Act and that our financial systems conform 

with government-wide standards. In addition, I can provide assurance that the 

performance information contained in this report is complete and reliable and 

describes the results achieved towards our goals. 

"Sincerely, 

Jon linghoff 

Chairm n 

Federal Energy Regulatory Commission 
FY 2012 Performance & Accountability Report

TABLE OF CONTENTS 

STRATEGIC PLAN OVERVIEW i 

MANAGEMENT’S DISCUSSION AND ANALYSIS 1 

Introduction 2 

Organizational Structure 2 

Strategic Plan Overview 4 

Strategies for Carrying Out the Commission’s Responsibilities 5 

Business Plan 7 

Full Cost Recovery 7 

Program Performance Overview 7 

Financial Performance Overview 23 

Controls, Systems, and Legal Compliance 26 

Possible Future Effects of Existing Events and Conditions 28 

Limitations of the Financial Statements 28 

FINANCIAL SECTION 29 

Message from the Chief Financial Officer 30 

Independent Auditors’ Report 32 

Balance Sheets 36 

Statements of Net Cost 37 

Statements of Changes in Net Position 38 

Statements of Budgetary Resources 39 

Statements of Custodial Activity 41 

Notes to Financial Statements 42 

PERFORMANCE REPORT 56 

Introduction 57 

Historic Performance Data: 

Energy Infrastructure: FYs 2007 - 2009 58 

Competitive Markets: FYs 2007 - 2009 68 

Enforcement: FYs 2007 - 2009 73 

Supporting Initiatives: FYs 2007 – 2009 78 

Current Performance Data: 

Just and Reasonable Rates, Terms and Conditions: FYs 2010 - 2012 87 

Infrastructure: FYs 2010 - 2012 95 

APPENDIX A: STATUTORY AUTHORITY 99 

APPENDIX B: ACRONYM LISTING 101 
Page i

THE FEDERAL ENERGY REGULATORY COMMISSION’S MISSION

RELIABLE, EFFICIENT, AND SUSTAINABLE ENERGY FOR CONSUMERS

Assist consumers in obtaining reliable, efficient, and sustainable energy services 

at a reasonable cost through appropriate regulatory and market means. 

GOAL 1: JUST AND REASONABLE RATES, TERMS AND CONDITIONS. 

Ensure that rates, terms and conditions are just, reasonable and 

not unduly discriminatory or preferential. 

Objective 1.1: Regulatory and Market Means. 

Ensure implementation of appropriate regulatory and 

market means for establishing rates. 

Objective 1.2: Oversight and Enforcement. 

Increase compliance with the Commission’s rules and 

deter market manipulation. 

GOAL 2: INFRASTRUCTURE. 

Promote the development of safe, reliable and efficient infrastructure 

that serves the public interest. 

Objective 2.1: Infrastructure Development and Siting. 

Increase efficient infrastructure consistent with demand. 

Objective 2.2: Safety. 

Minimize risk to the public. 

Objective 2.3: Reliability. 

Provide for the reliable operation of the bulk power system through oversight 

of the development and implementation of mandatory and enforceable 

standards. 
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Management’s 

Discussion and Analysis 

(Unaudited) 
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INTRODUCTION 

In accordance with the guidelines set forth in 

the Office of Management and Budget 

(OMB) Circular No. A-136 and Section 230 

of Circular No. A-11, this report presents the 

Federal Energy Regulatory Commission’s 

(the Commission, FERC) fiscal years (FY) 

2012 and 2011 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 2007 through 2012. 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 2012. 

Approximately 1,468 full time equivalents 

(FTEs) carried out the Commission’s mission 

in FY 2012 using a budget of $304.6 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 

eleven 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. 

An organizational chart, including a brief 

description of each office, is included below. 
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Office of Administrative Law Judges 

(OALJ) 

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. The 

Dispute Resolution Service (DRS) is located 

within OAL and provides neutral, third-party 

assistance using alternative dispute resolution 

(ADR) methods to parties in regulatory and 

environmental conflict; trains staff and energy 

stakeholders in collaborative problem-solving 

tools to develop and ensure a reliable 

infrastructure. 

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) 

Focuses on ensuring that market, tariffs and 

rates relating to electric, natural gas and oil 

pipeline facilities and services are just, 

reasonable and not unduly discriminatory or 

preferential.

Office of Energy Policy and Innovation 

(OEPI) 

Issues, coordinates, and develops proposed 

policy reforms to address emerging issues 

affecting wholesale and interstate energy 

markets, including such areas as climate 

change, the integration of renewable 

resources, and the deployment of demand 

response. 

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 (LNG) 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. 
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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. 

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. 

Office of the Secretary (OSEC) 

Serves as the official focal point through which 

all filings are made for proceedings before the 

Commission.

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 in 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 A. 

On September 30, 2009, the Commission 

submitted to Congress its updated Strategic 

Plan which will serve as a guide through 

fiscal year 2014. The Commission issued a 

revised plan in February 2012 as allowed by 

the GPRA Modernization Act of 2010. The 

Commission found during its review that the 

Strategic Plan continues to reflect 

appropriately the direction of the 

Commission. As such, only three minor 

changes were made. These changes are 

footnoted in this report and the full Strategic 

Plan can be found at www.ferc.gov. 

The Commission’s mission is to assist 

consumers in obtaining reliable, efficient and 

sustainable energy services at a reasonable 

cost through appropriate regulatory and 

market means. To accomplish this, the 

Commission focuses on two goals: 

Goal 1. Just and Reasonable Rates, 

Terms and Conditions: Ensure that rates, 

terms and conditions are just, reasonable 

and not unduly discriminatory or preferential. 

One of the Commission’s fundamental 

statutory responsibilities is to ensure that 

rates, terms and conditions for wholesale 

sales and transmission of electric energy 

and natural gas are just and reasonable and 

not unduly discriminatory or preferential. The 

Commission uses a combination of 

regulatory and market means to achieve this 

goal, including reviewing tariffs and making 

rate determinations. Oversight of the energy 

markets and enforcement of the associated 

laws, rules and regulations are essential 

complements to the regulatory and market 

means. The Commission uses a balanced 

approach in its oversight and enforcement 

efforts, including: educating affected entities 

about market rules and other regulations; 

promoting internal compliance programs; 

employing robust audit and investigation 

programs; and, where appropriate, 

exercising the Commission’s civil penalty 

authority as a deterrent to violations. 

Goal 2. Infrastructure: Promote the 

development of safe, reliable and efficient 

energy infrastructure that serves the public 

interest. 

The Commission plays an important role in 

the development of a strong energy 

infrastructure that operates efficiently, safely 

and reliably. The Commission has siting 

authority that includes licensing non-federal 

hydropower projects, certificating interstate 

natural gas pipelines and storage projects, 

authorizing LNG facilities, and, in certain 

circumstances, permitting electric 

transmission lines. The Commission relies 

primarily on physical inspections of facilities 
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to ensure the safety of LNG and non-federal 

hydropower facilities throughout the entire 

life cycle of a project: design review, 

construction and operation. Further, the 

Commission promotes efficient operation of 

energy infrastructure by encouraging, for 

example, the use of new technologies, and 

other procedures that may enhance 

economic efficiency. 

Lastly, the Commission has an important 

role in providing for the reliable operation of 

the bulk power system. Under section 215 of 

the Federal Power Act, the Commission 

certified, and now oversees, the Electric 

Reliability Organization (ERO). The ERO 

develops and enforces mandatory reliability 

standards, subject to the review and 

approval by the Commission. Section 215 

defines a "reliability standard" as including 

"requirements for the operation of existing 

bulk-power system facilities, including 

cybersecurity protection, and the design of 

planned additions or modifications...." 

These standards, if approved by the 

Commission, apply to utilities that own or 

operate the bulk-power system. The 

Commission also monitors system 

disturbances to identify near- and long-term 

issues affecting generation and 

transmission. 

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 Commission’s two core functions are to 

ensure that wholesale electric and natural 

gas rates are just and reasonable and not 

unduly discriminatory or preferential and that 

energy infrastructure is developed in the 

public interest. To achieve these goals, the 

Commission will employ several strategies 

which are summarized below. 

The organized wholesale electric markets 

represent one area in which the Commission 

relies on regulatory and market means to 

ensure that rates are just and reasonable 

and not unduly discriminatory or preferential. 

The Commission will establish rules that 

enhance competition by allowing nondiscriminatory market access to all supplyside and demand-side energy resources. 

Improving the competitiveness of these 

markets is important because it encourages 

new entry among supply-side and demandside resources, spurs innovation and 

deployment of new technologies, improves 

operating performance, and exerts 

downward pressure on cost. Notable 

benefits also stem from more broadly 

diversifying the fuels used to generate 

electricity. In executing its authority, the 

Commission will take steps to ensure a level 

playing field in jurisdictional markets for all 

types of resources. 

In an effort to increase compliance with rules 

and to deter market manipulation, the 

Commission will promote internal 

compliance programs and self-reporting of 

violations by regulated entities. The 

Commission has provided guidance on 

elements of an effective compliance program 

and will review compliance programs as part 

of routine compliance audits. In addition, the 

Commission will further this strategy by 

giving companies credit against settlements 

if a robust compliance program was in effect 

when the violation occurred. In cases where 

a company is given a reduced civil penalty, 

the settlement agreement should be made 

known to the industry in order to encourage 

others to adopt and implement robust and 

thorough compliance programs. 

In addition to the regulation and oversight of 

energy markets, the Commission aims to 
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increase efficient infrastructure consistent 

with demand. The Commission is employing 

the use of incentive rates, the adoption of 

smart grid standards and other transmissionrelated activities to try to increase the 

number of electric transmission projects that 

incorporate advanced technologies. The 

Commission also supports an open and 

transparent electric transmission planning 

process in order to increase infrastructure 

efficiency. 

A significant portion of the Commission’s role 

in energy infrastructure development stems 

from siting authority that includes licensing 

non-federal hydropower projects, certificating 

interstate natural gas pipelines and storage 

projects, authorizing LNG facilities, and, in 

certain circumstances, permitting electric 

transmission lines. Throughout all of these 

processes, the Commission’s goal is to 

expedite application processing without 

compromising environmental responsibilities 

or public participation. Reconciling these 

interests, however, remains a significant 

challenge. The Commission believes that 

issues are best addressed openly and early 

in the application process. The Commission 

encourages, and sometimes requires, 

project proponents to engage in early 

involvement of state and Federal agencies, 

Indian tribes, affected landowners and the 

public. 

To ensure that jurisdictional infrastructure 

projects are safe, the Commission performs 

a detailed safety 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 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. The Commission is working 

to develop and incorporate risk-informed 

decision making into the dam safety 

program. 

This transition could have several positive 

impacts on the Commission’s dam safety 

program including, among others, a better 

understanding of potential failure modes, a 

better understanding of the consequences of 

potential failure modes on life, health and 

property, and an improved ability to evaluate 

risk reduction alternatives. 

To protect and improve the reliability and 

security of the Nation’s bulk power system, 

the Commission oversees the development 

and review of mandatory reliability and 

security standards. The Commission 

achieves this through active involvement in 

the standards development process of the 

ERO and review of all reliability standards 

filed by the ERO. The Commission provides 

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 standards. The 

Commission also joins or leads incident and 

alleged violation analyses and/or 

investigations following bulk-power system 

incidents or complaints. The Commission 

also tracks and reviews all alleged violations, 

mitigation plans, and proposed penalties and 

conducts ERO and regional entity 

performance reviews and audits. 
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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 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 2012, 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 several of 

the Commission’s key achievements during FY 2012. The performance measures and targets were 

taken from the Commission’s FYs 2009 – 2014 Strategic Plan. A complete list of the Commission’s 

performance measurement data for fiscal years 2007 through 2012 is included in the Performance 

Report section of this report. 

GOAL 1: JUST AND REASONABLE RATES, TERMS AND CONDITIONS 

OBJECTIVE 1.1: REGULATORY AND MARKET MEANS 

Ensure implementation of appropriate regulatory and market means for establishing rates 

STRATEGY 1 

Establish rules that enhance competition by allowing non-discriminatory market access to all supply 

side and demand-side energy resources 

Performance Measure 1 

Further barriers to participation by demand resources in organized wholesale electric markets 

will be identified and eliminated. 

Year Target Result 

FY 2012 

As appropriate, issue Final Rule on 

further steps to eliminate barriers to 

demand resources 

Target Met. On December 15, 2011, the 

Commission issued Order 745-A, Demand 

Response Compensation in Organized 

Wholesale Energy Markets order on 

rehearing. 
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Performance Measure 2 

Best practices for demand response products and procedures will be explored and, as 

appropriate, implemented in organized wholesale electric markets. 

Year Target Result 

FY 2012 Implement Final Rule as appropriate 

Target Met. The Commission has reviewed 

the filings made by six RTOs and ISOs to 

comply with Order No. 745, Demand 

Response Compensation in Organized 

Wholesale Energy Markets. The Commission 

determined that implementation of the Final 

Rule as proposed by five of the six RTOs and 

ISOs is appropriate, subject to additional 

compliance requirements in some instances, 

and issued orders on these five compliance 

filings. The Commission is determining 

whether implementation of the Final Rule as 

proposed in the sixth compliance filing is 

appropriate. 

Further, the Commission addressed other 

best practices by issuing a notice of proposed 

rulemaking on Standards for Business 

Practice and Communication Protocols for 

Public Utilities - Wholesale Electric Quadrant 

Demand Response Standards on April 19, 

2012. 
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Performance Measure 3 

All resources that are technically capable of providing needed ancillary services have the 

opportunity to provide those services. 

Year Target Result 

FY 2012 Implement Final Rule as appropriate 

Target Met. The Commission issued Order 

Nos. 755 and 755-A, Frequency Regulation 

Compensation in Organized Wholesale Power 

Markets on October 20, 2011 and February 

16, 2012, respectively. The Commission has 

reviewed the filings made by five RTOs and 

ISOs to comply with the Final Rule. The 

Commission determined that implementation 

of the Final Rule as proposed by three of the 

RTOs and ISOs is appropriate, subject to 

additional compliance requirements in some 

instances, and issued orders on these three 

compliance filings. The Commission is 

determining whether implementation of the 

Final Rule as proposed in the two remaining 

compliance filing is appropriate. 

Further supporting this measure, the 

Commission issued a notice of proposed 

rulemaking on Third-Party Provision of 

Ancillary Services; Accounting and Financial 

Reporting for New Electric Storage 

Technologies on June 21, 2012. 

Performance Measure 4 

Market reforms which will allow renewable resources to compete fairly will be explored and, 

as appropriate, implemented in Commission-jurisdictional markets. 

Year Target Result 

FY 2012 Issue Final Rule on market reforms, if 

appropriate 

Target Met. On June 21, 2012, the 

Commission issued Order No. 764, 

Integration of Variable Energy Resources. 

The Commission also issued a notice of 

inquiry on Open Access and Priority Rights on 

Interconnection Facilities on April 19, 2012. 

 
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STRATEGY 2 

Promote operational efficiency in wholesale markets through the exploration and encouragement of 

the use of software and hardware that will optimize market operations 

Performance Measure 5 

By FY 2014, efficiency in market operations will be enhanced through deployment of new 

software and optimization of hardware. 

Year Target Result 

FY 2012 

Follow-up workshops on best practices 

implementation; issue Final Rule, if 

relevant 

Target Met. On March 20, 2012, a workshop 

on best practices in software planning 

modeling was held. 

A Final Rule is not relevant for this 

performance measure. In FY 2011, it was 

determined that a technical conference would 

be more effective in furthering implementation 

of best practices than initiating a rulemaking 

proceeding. Without a rulemaking proceeding 

in FY 2011, pursuance of a Final Rule in FY 

2012 was no longer relevant. Rather, staff 

held a follow-up workshop to identify best 

practices in the specific area of software 

planning modeling. 

(Remainder of page intentionally left blank.) 
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STRATEGY 3 

Develop and implement a common set of performance metrics for markets within and outside of 

Independent System Operators (ISOs)/ Regional Transmission Organizations (RTOs) 

Performance Measure 6 1

By FY 2014, the performance of markets within and outside of ISOs/RTOs will be measured 

using a common set of metrics. 

Year Target Result 

FY 2012 

Explore and develop appropriate 

operational and financial metrics for nonISOs/RTO regions 

Target Not Met. Beginning in FY 2011, 

Commission staff has been engaged in a 

voluntary and collaborative process with a 

diverse group of non-RTO utilities to develop 

proposed operational and financial 

performance metrics. It has taken longer than 

anticipated for this group to organize and 

reach consensus on a list of proposed 

metrics. In February 2012, the draft metrics 

were issued for public comment with an 

extended comment period of 75 days, 45 days 

longer than the typical 30 day comment 

period. Commission staff expects to issue in 

FY 2013 a report that will recommend a final 

list of performance metrics. This will not have 

a negative impact on program performance. 

STRATEGY 4 

Promote broad participation, including the use of alternative dispute resolution services, in the 

Commission’s processes and procedures 

Performance Measure 7 2

By FY 2014, appropriate filings and issues will employ alternative dispute resolution and 

collaborative processes first. 

Year Target Result 

FY 2012 

Implement rules setting forth 

guidelines/tariff provisions and initiate 

pilot programs 

Target Not Met. No additional measures for 

consensual resolution were identified as 

feasible; therefore, this measure is no longer 

applicable. This will not have a negative 

impact on program performance. 

 

 

1

 The FY 2012 Performance Target reflects an adjustment made to the Commission’s Strategic Plan as allowed 

by the GPRA Modernization Act of 2010. 

2

 The FY 2012 Performance Target reflects an adjustment made to the Commission’s Strategic Plan as allowed 

by the GPRA Modernization Act of 2010. 
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OTHER NOTEWORTHY ACCOMPLISHMENTS IN OBJECTIVE 1.1: 

REGULATORY AND MARKET MEANS 

 In September 2012, to facilitate the review 

of oil pipeline rates, the Commission 

proposed to modify the reporting 

requirements of the FERC Form No. 6, 

Annual Report of Oil Pipeline Companies. 

The proposed modification will require 

additional information regarding rate base, 

rate of return, and income taxes and will 

facilitate the calculation of a pipeline’s 

actual rate of return on equity. 

 In April 2012, the Commission 

conditionally accepted proposals to reform 

ISO New England’s (ISO-NE) markets by 

adding real-time external transaction 

bidding and scheduling rules for use at 

specifically designated proxy generator 

buses between New York Independent 

System Operator (NYISO) and ISO-NE. 

 The Commission continued to engage in a 

stakeholder process to reform ISO-NE’s 

Forward Capacity Market and address 

issues such as buyer-side mitigation and 

modeling capacity zones. In March 2012, 

the Commission accepted incremental 

revisions to extend the price floor to a 

lower level. 

 The Commission conditionally approved 

Midwest Independent Transmission 

System Operator’s (MISO) proposed 

revisions to its resource adequacy 

requirements and to establish local 

resource zones and zonal resource 

requirements. The local resource zones 

and associated locational capacity prices 

are intended to send economic signals 

indicating that capacity may have 

additional value if it is located in one 

location rather than another and reflects 

the limitations of MISO’s transmission 

system. 

 In September 2012, the Commission 

conditionally accepted a revised joint 

operating agreement between NYISO and 

PJM Interconnection (PJM) that addresses 

the cause of the Lake Erie loop flows that 

occurred in 2008 and certain interregional 

transactions in and around the Lake Erie 

region. 

 In September 2012, the Commission 

granted, in part, and denied, in part, 

Astoria Generating Company’s complaint 

that NYISO improperly implemented its 

buyer-side mitigation rules in the New York 

City Industrial and Commercial Abatement 

Program market with respect to new 

facilities. 

 In May 2012, the Commission provided 

guidance on NYISO and PJM’s recovery of 

costs associated with Phase Angle 

Regulator transmission facilities assessed 

to NYISO and PJM by MISO. NYISO’s 

cost recovery proposal was accepted in 

August 2012, and PJM’s cost recovery 

proposal was conditionally accepted in 

July 2012. 

 In December 2011, the Commission 

accepted revisions to PJM’s Open Access 

Transmission Tariff to support the 

development of price responsive demand, 

a state-level initiative under which end-use 

customers can vary load in response to 

wholesale electricity prices. This program 

will enhance the efficiency of the energy 

market and increase reliability. 

 In May 2012, the Commission issued an 

order addressing transmission cost 

allocation in the PJM market. The order 

requires the use of the postage-stamp 

methodology in allocating costs of new 500 

kV and above transmission projects. The 

Commission found that PJM’s existing 

methodology for cost allocation of 

transmission enhancements for highvoltage facilities was unjust and 

unreasonable. 

 The Commission conditionally approved 

MISO’s proposal for the allocation of the 

costs of network transmission upgrades 

and transmission planning in order to 

establish a transition for the potential 

integration of Entergy Corporation and its 

operating companies into MISO as 

transmission-owning members. 

 In December 2011, the Commission 

accepted a transition agreement that sets 

forth the terms and conditions under which 
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Valley Electric will make the transition from 

the Nevada Power Company balancing 

authority area to the California 

Independent System Operator (CAISO) 

balancing authority area. This is 

noteworthy because it involves the 

expansion of CAISO’s footprint into 

Nevada, thus making CAISO a multi-state 

ISO. 

 In FY 2012, staff achieved settlements in 

various electric utility, natural gas and oil 

pipeline cases resulting in annual savings 

of approximately $352 million and one time 

savings of approximately $108 million for 

American energy consumers. 

OBJECTIVE 1.2: OVERSIGHT AND ENFORCEMENT 

Increase compliance with the Commission’s rules and deter market manipulation. 

STRATEGY 1 

Promote internal compliance programs and self-reporting of violations 

Performance Measure 8 

By FY 2014, 70 percent of company compliance programs reviewed on Commission audits for 

the audit focus areas are found to be adequate to demonstrate a culture of compliance. 

Year Target Result 

FY 2012 40% 

Target Met. The Commission found that 67% 

(8 of 12) compliance programs were adequate 

to demonstrate a culture of compliance. 

In FY 2012, the Commission completed the review of 12 jurisdictional companies’ (companies) 

compliance programs as they related to the focus of the audits. In reviewing these compliance 

programs, the Commission found that 67 percent (8 out of 12) were found to be adequate to 

demonstrate a culture of compliance. The Commission is encouraged that jurisdictional companies 

have proactively taken steps to enhance their existing compliance programs based on the 

Commission’s publicly issued audit reports and outreach efforts encouraging stronger compliance. 

Staff has also noticed an increased awareness of compliance related issues and an appreciation of 

suggested improvements to compliance programs. 

Performance Measure 9 

By FY 2014, 70 percent of compliance programs reviewed through investigations that involve 

a penalty are found to be sufficiently robust to merit credit to reduce the penalty. 

Year Target Result 

FY 2012 40% 

Target Met. In 43% of the relevant cases, the 

Commission found compliance programs in 

place at the time of the violation to be 

sufficiently robust as to merit credit to reduce 

or eliminate penalties. 

During FY 2012 the Commission completed 100 matters involving violations subject to penalties, 

including review of company compliance programs as they relate to the violations examined. In 43 

percent of these cases (43 out of 100) the Commission found compliance programs in place at the 

time of the violation to be sufficiently robust as to merit credit to reduce or eliminate penalties. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 14   

STRATEGY 2 

Use a risk-based approach to plan and prioritize audits of jurisdictional companies 

Performance Measure 10 

By FY 2014, 80 percent of the Commission’s audit program will be planned using a risk-based 

approach. 

Year Target Result 

FY 2012 80% 

Target Met. 88% (43 of 49) of the audits were 

planned by the Commission staff using a riskbased approach. 

Of the 49 planned audits included in the Commission’s annual audit plan, the Commission used a riskbased methodology to plan 88 percent of the audits (43 out of 49). In FY 2012, the Commission 

completed 44 audits which resulted in the issuance of 399 recommendations for corrective actions to 

public utilities and natural gas pipeline companies. Specifically, these audits resulted in $7 million in 

refunds and savings to utility ratepayers. A risk-based audit approach is key to using the 

Commission’s resources efficiently and selecting audit candidates that pose the greatest risk of not 

complying with the Commission’s statutes, orders, policies, rules and regulations. 

OTHER NOTEWORTHY ACCOMPLISHMENTS IN OBJECTIVE 1.2: 

OVERSIGHT AND ENFORCEMENT 

 In FY 2012, the Commission finalized nine 

settlements of investigations on a range of 

violations within the Commission’s 

jurisdiction. 

 In November 2011, the Commission held a 

Penalty Guidelines Technical Conference 

to discuss the effect of the Penalty 

Guidelines on certain compliance and 

enforcement matters. 

 In September 2012, the Commission 

issued an order to show cause in the 

Deutsche Bank matter, involving alleged 

violations of the FPA and the 

Commission’s anti-manipulation rule and 

accuracy requirements. 

 In July 2012, the Commission issued four 

orders to show cause in the Day-Ahead 

Load Response Program matter, involving 

alleged violations of the FPA and the 

Commission’s anti-manipulation rule. 

 In September 2012, the Commission 

issued an order to show cause why JP 

Morgan Ventures Energy should not be 

found to have violated section 35.41(b) of 

the Commission’s regulations and why it 

should not have its market-based rate 

authority suspended due to 

misrepresentations to the Commission in a 

docketed proceeding. 

 In July 2012, staff filed a subpoena 

enforcement action in Federal court to 

challenge the assertion of attorney-client 

privilege on documents that did not include 

communications to or from an attorney. 

The assertion of privilege was made in 

connection with an investigation of JP 

Morgan Ventures Energy. 

 In FY 2012, the Commission received 91 

self-reports of violations. Staff reviewed 

every self-report and determined whether it 

warrants opening an investigation. 

 In FY 2012, the Commission’s 

Enforcement Hotline received 172 calls, 

each of which received prompt attention, 

and most of which resulted in informal 

resolution. Two hotline calls in FY 2012 

resulted in the Commission opening 

investigations. 

 Commission enforcement staff opened 16 

new investigations (resulting from a variety 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 15   

of leads and sources, including Hotline 

calls) and continues to conduct 

investigations in numerous cases involving 

possible market manipulation and tariff 

violations. 

 In FY 2012, the Commission issued two 

key orders, which will ultimately provide 

trading and market data critical to the 

surveillance of jurisdictional markets as 

well as the identification, investigation, and 

prosecution of market manipulation. 

 In September 2011, FERC conditionally 

authorized the proposed merger of 

Progress Energy and Duke Energy, and 

required the companies to propose 

measures to address market share screen 

failures and to mitigate their market power. 

The companies filed a proposal in October 

2011, but the Commission determined that 

the proposed measures would not 

sufficiently remedy the harmful effects of 

the merger. After the companies filed a 

proposal that includes a significant 

investment in new transmission lines and 

infrastructure to increase competition, the 

Commission conditionally approved the 

merger in June 2012. 

 In March 2012, the Commission approved 

the merger of Exelon Corporation and 

Constellation Energy Group, Inc. under the 

condition that the post-merger entity divest 

certain generation assets in order reduce 

their ability to exercise market power in the 

PJM markets. 

 In November 2011, the Commission 

launched investigations into the rates 

charged by three interstate natural gas 

pipeline companies to determine whether 

the companies’ revenues are substantially 

over-recovering costs, resulting in unjust 

and unreasonable rates charged to 

customers. The Commission's 

investigations stem from reviews of Annual 

Form 2 cost of service and revenue 

information submitted by interstate natural 

gas pipeline companies for 2009 and 

2010. Two of these investigations resulted 

in uncontested settlements resolving all 

issues and providing for reduced rates to 

the customers. The third investigation was 

terminated after Commission Trial Staff 

determined that the pipeline is not overrecovering its cost of service or earning an 

unreasonable return on equity, and likely 

will not in the future. 

GOAL 2: INFRASTRUCTURE 

OBJECTIVE 2.1: INFRASTRUCTURE DEVELOPMENT AND SITING 

Increase efficient infrastructure consistent with demand 

STRATEGY 1 

Encourage new electric transmission facilities that advance efficient transmission system operation 

Performance Measure 11 

By FY 2014, 50 percent of all new transmission projects will incorporate advanced 

technologies. 

Year Target Result 

FY 2012 20% 

Target met. Of the projects that met the 

criteria 68% (17 projects) incorporated 

advanced technologies. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 16   

STRATEGY 2 

Support electric transmission planning through the use of open and transparent processes that include 

analysis and consideration on a comparable basis of proposed solutions involving any of generation, 

transmission, and demand resources 

Performance Measure 12 

By FY 2014, all public utilities will implement open and transparent transmission planning 

processes that include analysis and consideration on a comparable basis of proposed 

solutions involving any of generation, transmission, and demand resources. 

Year Target Result 

FY 2012 Implement Final Rule as appropriate 

Target Met. The Commission in Order No. 

1000 (issued on July 21, 2011) encouraged 

public utility transmission providers to engage 

in frequent dialogue with Commission staff to 

explore issues that are specific to each 

transmission planning region in preparing their 

compliance filings (which were due in October 

2012). To facilitate that dialog, Commission 

staff identified regional meetings where public 

utilities intended to discuss compliance with 

Order No. 1000, and participated, by phone 

and in-person, at 173 of those meetings. 

Staff’s participation was both to monitor the 

progress of each region and to act as a 

resource for public utility transmission 

providers and stakeholders about issues 

related to Order No. 1000. In addition, staff 

was available to answer questions and meet 

with public utility transmission providers and 

stakeholders that had specific questions about 

Order No. 1000 compliance. 

In addition, Order 1000-A, Transmission 

Planning and Cost Allocation by Transmission 

Owning and Operating Public Utilities (Order 

on Rehearing & Clarification was issued on 

May 17, 2012. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 17   

STRATEGY 3 

Promote efficient design and operation of natural gas facilities 

Performance Measure 13 

By FY 2014, 100 percent of jurisdictional natural gas companies will be examined for 

feasibility of installing waste heat recovery systems. 

Year Target Result 

FY 2012 60% 

Target Met. In FY 2012, Commission staff 

examined a total of 62% of the Commission’s 

jurisdictional natural gas companies (98 of 

159) for feasibility of installing waste heat 

recovery systems. In FY 2012 specifically, 

Commission staff examined 33 companies. 

OTHER NOTEWORTHY ACCOMPLISHMENTS IN OBJECTIVE 2.1: 

INFRASTRUCTURE DEVELOPMENT AND SITING 

 The Commission completed 322 

environmental documents supporting the 

authorization of more than 4,200 million 

cubic feet per day (MMcf/d) of natural gas 

pipeline capacity and nearly 3,000 MMcf of 

new natural gas storage capacity. 

 The Commission successfully negotiated a 

Letter of Agreement with the Alaska State 

Pipeline Coordinator’s Office enabling that 

agency’s cooperation on the 

Environmental Impact Statement for the 

Alaska Pipeline Project. The Commission 

also conducted public scoping meetings in 

Alaska to support the development of an 

Environmental Impact Statement for the 

Alaska Pipeline Project, completed 

government-to-government consultation 

meetings with native Alaskan tribes and 

completed project-specific Native 

American consultation with 147 tribes. 

 The Commission issued 33 environmental 

documents, 23 of which were on projects 

that propose new hydroelectric capacity 

totaling 1,390 megawatts, and took final 

action on 31 licensing cases representing 

326 megawatts. 

 The Commission processed 11 

applications for increased hydroelectric 

capacity totaling 198 megawatts; 13 

conduit applications totaling 10 megawatts; 

and 15 requests for production tax credit, 

totaling over 193,465 megawatt hours of 

incremental generation due to efficiency 

improvements. 

 The Commission continued to implement 

the Small Hydropower Action Plan. 

Activities included: 1) six webinars and 

outreach sessions to explain contents of 

the website and clarify conduit and 5 

megawatt exemption requirements; 2) 

web-based guidance to assist staff in 

processing exemption applications; and 3) 

memorandum of understanding (MOU) 

with the Jamaican government to provide 

guidance to improve Jamaica’s 

hydropower licensing program. 

 The Commission fostered the orderly and 

environmentally sound development of 

marine and hydrokinetic technologies. 

Measures included: 1) the first pilot 

licenses for tidal projects; 2) a major 

revision to the Bureau of Ocean Energy 

Management/FERC staff guidelines for 

siting projects, which provides a 

streamlined process to accelerate marine 

and hydrokinetic technologies projects on 

the Outer Continental Shelf; and 3) an 

MOU with the Coast Guard, which clarifies 

roles and coordinates schedules. 

 The Commission conditionally approved 

MISO’s third round of generation 

interconnection queue reform. This 

proceeding extended the concept of “firstready, first-served” in the queuing process 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 18   

that had been accepted in MISO’s earlier 

queue reforms by increasing the financial 

commitments required of an 

interconnection customer to maintain its 

position in the queue. As part of this third 

round, MISO also proposed Net Zero 

Interconnection Service (Net Zero). Under 

Net Zero, an existing generator and a new 

generator negotiate a means of regulating 

the combined output of both units such 

that the units’ net output, as seen by the 

transmission system, is unchanged from 

the output which was previously approved 

for the existing unit alone. The 

Commission issued an order conditionally 

accepting MISO’s proposal to implement 

Net Zero in 2012, noting that the proposal 

will promote more efficient utilization of 

existing interconnection capacity. 

 In FY 2012, the Commission approved rate 

incentives for seven projects, totaling 

2,726 miles of new transmission and a 

$7.6 billion investment in infrastructure. 

 The Commission ruled on several 

abandonment and certificate applications 

that reorganized the corporate ownership 

of over 3,000 miles of natural gas pipelines 

located in the Gulf of Mexico. The 

Commission approved the abandonment 

by four natural gas pipelines of all or most 

of their offshore pipeline facilities. The 

Commission also conditionally approved 

the filings of the three pipelines acquiring 

the offshore assets. 

 On February 28, 2012, a workshop was 

held to obtain input on potential reforms to 

the Commission’s policies governing the 

allocation of capacity on new merchant 

transmission projects and new cost-based, 

participant-funded electric transmission 

projects, followed by issuance of a 

proposed policy statement on July 19, 

2012. 

 Five regional technical conferences on 

better coordination between natural gas 

and electricity markets were held to 

explore gas-electric interdependence as 

well as ways to improve coordination and 

communication between the two 

industries. 

 In FY 2012, alternative dispute resolution 

(ADR) was used to resolve natural gas 

pipeline facility infrastructure conflicts 

between private property owners and 

energy companies. The use of ADR to 

resolve infrastructure disputes has 

increased by 38 percent compared to the 

previous fiscal year. 

OBJECTIVE 2.2: SAFETY 

Minimize risk to the public. 

STRATEGY 1 

Incorporate risk-informed decision making (RIDM) into the dam safety program 

Performance Measure 14 

By FY 2014, risk-informed decision making will be incorporated into the FERC dam safety 

program. 

Year Target Result 

FY 2012 Determine RIDM is consistent with 

regulatory process 

Target Met. As a result of the Screening 

Level Portfolio Risk assessment of the 

Commission’s dams conducted in FY 2012, it 

was determined that RIDM could be 

incorporated into the Commission’s dam 

safety program. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 19   

OTHER NOTEWORTHY ACCOMPLISHMENTS IN OBJECTIVE 2.2: SAFETY 

 Licensees, under Commission direction, 

remediated 44 dams at a cost to the 

licensees of $123 million, and the 

Commission detected possible dam safety 

deficiencies at an additional 145 dams that 

are now currently under investigation or 

remediation. 

 The Commission collaborated with the 

Bureau of Reclamation, U.S. Army Corps 

of Engineers, and the Tennessee Valley 

Authority (Joint Federal Risk Management 

Task Group) to establish similar risk 

methodologies and procedures, and led a 

subcommittee of the task group developing 

a white paper on tolerability of risk. 

OBJECTIVE 2.3: RELIABILITY 

Provide for the reliable operation of the bulk power system through oversight of the development and 

implementation of mandatory and enforceable standards.3

STRATEGY 1 

Process reliability standards in a timely manner 

Performance Measure 15 

By FY 2014, proposed Reliability Standards will be processed in a timely manner at least 80 

percent of the time. 

Year Target Result 

FY 2012 75% 

Target Met. 100% of filed reliability standards 

(including regional and CIP standards) have 

been processed with orders issued within 18 

months. 

STRATEGY 2 

Monitor, audit, and enforce Reliability Standards 

Performance Measure 16 

By FY 2014, Reliability Standards will be enforced effectively, resulting in a reduction of the 

frequency of repeat violations by at least 10 percent. 

Year Target Result 

FY 2012 Track violations per entity 

Target Met. The annual report analyzing FY 

2011 data was completed on December 2, 

2011 and an additional mid-year report was 

completed on July 30, 2012. 

 

3

 The Objective statement reflects an adjustment made to the Commission’s Strategic Plan as allowed by the 

GPRA Modernization Act of 2010. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 20   

STRATEGY 3 

Identify reliability parameters that affect goals of reducing carbon and increasing the penetration of 

renewable energy resources on the electric transmission grid 

Performance Measure 17 

By FY 2014, reliability parameters that could affect goals of reducing carbon and increasing 

the penetration of renewable energy resources on the electric transmission grid will be 

finalized. 

Year Target Result 

FY 2012 

Track studies and identify or propose 

reliability parameters. Perform expanded 

analysis to assess if they are feasible for 

the bulk power system 

Target Met. Commission staff tracked three 

studies identifying several reliability 

parameters and performed two expanded 

analyses to assess their feasibility. 

Specifically, staff 1) performed detailed 

technical analysis related to the ArizonaSouthern California outages showing system 

operating limits, interconnection reliability 

operating limits, voltage collapse and special 

protection scheme reliability parameters were 

not appropriately considered; 2) tracked and 

conducted an expanded detailed analysis of 

the EPA regulations on the Bulk Power 

System and participated in the Commissionled technical conference; and 3) analyzed 

documentation and conducted a technical 

workshop on voltage coordination on high 

voltage grids to assess the feasibility of 

adjusting voltage reliability parameters. 

OTHER NOTEWORTHY ACCOMPLISHMENTS IN OBJECTIVE 2.3: 

RELIABILITY 

In FY 2012, the Commission participated, or is 

currently participating in, the development and 

interpretation of Reliability and Critical 

Infrastructure Protection (CIP) Standards. In 

FY 2012, the Commission issued the following: 

 Order on regional Reliability Standard 

PRC-002-NPCC-01 – the Commission 

approved PRC-002-NPCC-01, Disturbance 

Monitoring, which requires Transmission 

Owners, Generator Owners, and Reliability 

Coordinators to ensure that Disturbance 

Monitoring Equipment be available and 

adequate to monitor system response to 

disturbances. 

 Order on FAC-013-2 – the Commission 

approved Reliability Standard FAC-013-

2—Assessment of Transfer Capability for 

the Near-term Transmission Planning 

Horizon, which requires Planning 

Coordinators to have a transparent 

methodology for, and to annually perform, 

an assessment of transmission Transfer 

Capability over the near-term planning 

horizon. 

 Order on FAC-008-1 – the Commission 

approved Reliability Standard FAC-008-3 

(Facility Ratings), which requires 

Transmission Owners and Generator 

Owners to document underlying 

assumptions and methods used to 

determine normal and emergency facility 

ratings. The Order also approved the 

associated Violation Risk Factors and 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 21   

Violation Severity Levels, and retirement of 

Reliability Standards FAC-008-1 (Facility 

Ratings Methodology) and FAC-009-1 

(Establish and Communicate Facility 

Ratings). 

 Order on Reliability Standards PRC-006-1 

and EOP-003-2 – the Commission 

approved Reliability Standards PRC-006-1 

(Automatic Underfrequency Load 

Shedding) and EOP-003-2 (Load 

Shedding Plans), which establishes 

common performance characteristics that 

must be met by all Under Frequency Load 

Shedding programs. The Commission 

directed the North American Electric 

Reliability Corporation (NERC) to make the 

schedule for implementation of corrections 

needed in response to deficiencies 

identified in event assessment explicit in 

future versions of the Reliability Standard, 

and also to make modifications to one 

Violation Risk Factor and one Violation 

Severity Level. 

 Order on CIP-002-4 through CIP-009-2 – 

the Commission approved eight modified 

Critical Infrastructure Protection Reliability 

Standards (CIP-002-4 through CIP-009-4), 

the related Violation Risk Factors, Violation 

Severity Levels with modifications, 

implementation plan and effective dates. 

The final rule included providing NERC 

with guidance regarding achieving full 

compliance with the directives contained in 

Order No. 706, as well as imposing a 

deadline of March 31, 2013 by which time 

NERC must submit the next version of the 

CIP Reliability Standards. 

 In FY 2012, the ERO filed 53 notices of 

penalty addressing 1,450 violations of 

Reliability Standards. The notices of 

penalty included 35 filings identifying 736 

violations of Reliability Standards Critical 

Infrastructure Protection and cyber security 

for the bulk power grid. Each of the 

notices of penalty requires review and 

analysis by Commission staff. 

 Commission staff concluded technical 

analyses on two Part 1b investigations: (1) 

Grand River Dam Authority, Docket No. 

IN11-7-000, the result of which was a 

settlement with the Grand River Dam 

Authority including a $350,000 penalty plus 

mitigation measures and compliance 

improvements; and (2) Western Electricity 

Coordinating Council, Docket No. IN11-1-

000, which resulted in a settlement with 

the Western Electricity Coordinating 

Council including a $350,000 penalty plus 

mitigation and reliability enhancement 

measures. 

 On March 15, 2012, the Commission 

approved with conditions a proposal by the 

ERO to further streamline its violation 

processing by referring certain minor 

potential violations to a “find, fix and track” 

procedure. This approach foregoes all 

violations, penalties and related 

procedures, focusing instead on 

remediation and prospective compliance. 

The Commission conducted two inquiries into 

bulk power system events during FY 2012, and 

conducted follow-up work on a third inquiry 

which was initiated in FY 2011. 

 Arizona-Southern California. The 

Commission conducted a joint inquiry with 

the ERO into a September 8, 2011 power 

outage that left more than 2.7 million 

customers in Southern California, Arizona, 

and northern Baja California without 

electricity. The nearly eight-month inquiry 

was initiated to determine how the 

blackout occurred and to make 

recommendations to avoid similar 

situations in the future. ERO and 

Commission staff used on-site interviews, 

sophisticated computer modeling, event 

simulations and system analysis to make 

the determination that entities responsible 

for planning, operating and monitoring the 

bulk power system were not prepared to 

protect reliable operation or prevent 

cascading outages in the event of a single 

contingency: the loss of Arizona Public 

Service’s Hassayampa-North Gila 500 kV 

transmission line. A final report was 

issued on May 1, 2012 that included 27 

findings and associated recommendations. 

The report found that the blackout 

stemmed from operating in an unsecured 

state due to inadequate planning and a 

lack of awareness of system operating 

conditions on the day of the event. 

Overall, it recommended that transmission 

operators and balancing authorities 

improve how they plan for operations to 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 22   

account for the status of facilities outside 

their individual systems, the effect of 

external operation on their own systems 

and how operation of transmission facilities 

under 100 kV can affect the reliability of 

the Bulk Power System. 

 Northeast Snow Storm. The Commission 

also conducted a joint inquiry with the ERO 

into the October 29-30, 2011 

unprecedented fall snow storm-related 

power outages in the Northeast. A final 

report was issued on May 31, 2012. The 

report found that the outages were 

primarily caused by healthy, off-right-ofway trees falling onto distribution lines. In 

sum, 95 percent of the customer outages 

were related to facilities that were either 

distribution facilities not subject to the 

Commission’s jurisdiction or were 

transmission facilities operated at voltages 

less than 200 kV and not designated as 

critical to reliability by the Regional Entity. 

As such, the report found that while there 

is a Reliability Standard which addresses 

vegetation management, Reliability 

Standard FAC-003-1, this standard applies 

only to transmission facilities operated at 

voltages of 200 kV and above and, 

therefore, did not apply to the affected 

facilities. 

 Texas, New Mexico, and Arizona. In FY 

2011, the Commission completed an 

inquiry into the February 2011 generating 

facility outages and disruptions of both 

electric service and natural gas deliveries 

experienced in Texas, New Mexico, and 

Arizona as a result of unusually cold 

weather across the Southwest. On August 

16, 2011, the task force released its report, 

finding a majority of the electric outages 

and gas shortages were due to weatherrelated causes. Although generators and 

gas producers reported having 

winterization procedures and practices in 

place, responses were generally reactive 

in their approach to winterization and 

preparedness. The task force attributed 

most of the electric outages and natural 

gas shortages to prolonged freezing 

weather that resulted in dramatically 

reduced supply and unprecedented high 

demand. On November 9, 2011, the 

Commission issued a follow-up data 

request to the Texas Reliability Entity, the 

Western Electricity Coordinating Council, 

and SPP Regional Entity for an update on 

the implementation of the task force 

recommendations. The Commission also 

conducted follow-up technical conferences 

in Texas and New Mexico in September 

2012. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 23   

FINANCIAL PERFORMANCE OVERVIEW 

As of September 30, 2012, 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 to fund its 

operations that is available until expended. 

The Commission’s FY 2012 new budget 

authority was $304.6 million. Additional funds 

available to obligate in FY 2012 were $20.0 

million from prior-year unobligated 

appropriations and $1.2 million of prior-year 

obligations that were subsequently deobligated in the current year. The sum of all 

operating funds available to obligate in FY 

2012 was $325.8 million. Separately, 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 2012 

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 2012. 

Costs by Function. The Commission 

incurred costs of $310.4 million in FY 2012, 

which was a decrease of $5.5 million from FY 

2011. Approximately 73 percent of costs were 

used for salaries and benefits. The remaining 

27 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 decreased to $226.8 

million since 2011 while the net effect on the 

other cost categories was a decrease of $3.2 

million. 

Costs by Function (millions)

Costs FY 2012 FY 2011

Salaries and Benefits $226.8 $229.1

Travel/Transportation 3.8 3.8

Rent/Comm/Utilities 25.8 22.7

Contract Support 43.4 45.7

Printing/Supplies/Other 10.6 14.6

Total Costs $310.4 $315.9

Audit Results. The Commission received an 

unqualified audit opinion on its FY 2012 

financial statements. This was the nineteenth 

consecutive year the Commission has 

received an unqualified opinion. For FY 2012, 

no material weaknesses or significant 

deficiencies 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. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 24   

Analysis of the Balance Sheet 

The Commission's assets were approximately 

$184.3 million as of September 30, 2012. This 

is an increase of $113.4 million from 

September 30, 2011. The assets reported in 

the Commission's Balance Sheet are 

summarized in the Asset Summary table. 

Assets Summary (millions)

Assets FY 2012 FY 2011

Fund Balance with 

Treasury $163.6 $54.6

Accounts Receivable, 

net 11.3 9.0

Property and 

Equipment, net 9.4 7.3

Total Assets $184.3 $70.9

The Fund Balance with Treasury represents 

the Commission's largest asset of $163.6 

million as of September 30, 2012, an increase 

of $109.0 million from the FY 2011 balance. 

The increase is primarily collections of 

disgorged funds due to a large settlement of 

$104.0 million over market manipulation. 

Revenue collected under protest was also 

higher due to hydropower licensees protesting 

a portion of the Commission’s FY 2012 annual 

charges. This balance represents appropriated 

funds, collected penalties and other funds 

maintained at the Treasury until final 

disposition is determined. 

The Accounts Receivable, net has a balance 

of $11.3 million as of September 30, 2012. 

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 $2.3 million net increase in FY 2012 

compared to FY 2011 is primarily due to a 

higher outstanding balance for Dams and 

Hydropower administration receivables. 

The Property and Equipment, net was $9.4 

million as of September 30, 2012, an increase 

of $2.1 million from FY 2011. The balance is 

comprised of the net value of the 

Commission’s equipment, furniture, leasehold 

improvements, and computer hardware and 

software. The $2.1 million net increase is 

primarily due to the on-going development of 

the internal software and related capital items. 

The Commission's liabilities were $165.9 

million as of September 30, 2012. The 

Liabilities Summary table shows an increase in 

total liabilities of $115.4 million from FY 2011. 

The increase is primarily due to the settlement 

of $104.0 million in the disgorged funds yet to 

be disbursed, an increase in revenues 

collected under protest outlined above and a 

refund due to others from annual charges 

overbillings. The $165.9 million balance 

consists primarily of accrued expenditures for 

payroll, benefits, operating expenses, and 

collected disgorged funds. 

Liabilities Summary (millions) 

Liabilities FY 2012 FY 2011

Accounts Payable $15.0 $18.7

Federal Employee 

Benefits 4.7 3.8

Resources 

Transferable to 

Treasury and Other 

Federal Entities 

3.3 1.2

Other Liabilities 142.9 26.8

Total Liabilities $165.9 $50.5

The difference between total assets and total 

liabilities is the net position. The 

Commission’s net position was approximately 

$18.4 million as of September 30, 2012. The 

decrease in net position in FY 2012 compared 

to FY 2011 is the net result of fewer resources 

expended by the Commission in FY 2012 

compared to FY 2011 and the adjustment for 

the annual charges overbillings. 

Net Position Summary (millions)

Position FY 2012 FY 2011

Unexpended 

Appropriations $37.6 $30.1

Cumulative Results of 

Operations (19.2) (9.7)

Total Net Position $18.4 $20.4

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 25   

Analysis of the Statement of Net Cost 

The Statement of Net Cost presents the net 

cost of the Commission's two 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 2012 FY 2011

Just and Reasonable 

Rates, Terms, and 

Conditions 

$0 $0

Infrastructure 0 0

Net Cost of Operations $0 $0

The Commission's net cost of operations for 

FY 2012 was $0. 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. 

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 decrease in net position 

in FY 2012 compared to FY 2011 is the result 

of fewer resources expended by the 

Commission in FY 2012 compared to FY 2011 

and the adjustment for the annual charges 

overbillings. 

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 2012, the 

Commission had budgetary resources 

available of $329.0 million, the majority of 

which was derived from new spending 

authority. This represents an increase of $10.9 

million over FY 2011 budgetary resources 

available of $318.1 million. The unobligated 

budget authority available at September 30, 

2012 was $20.9 million, which is an increase of 

$0.9 million from the FY 2011 amount of $20.0 

million. 

The status of budgetary resources includes 

obligations incurred of $308.1 million, or 93.7% 

percent of funds available. Similarly, FY 2011 

obligations incurred were $298.2 million or 

93.7% percent of funds available. Total net 

outlays for FY 2012 were $(179.1) million, 

which represents a $147.6 million increase 

from FY 2011 net outlays of $(31.5) million. 

The increase from last year is a result of 

approximately $2.0 million in lower gross 

outlays and a $139.0 million increase in 

distributed offsetting receipts in FY 2012 

compared to FY 2011. The increase in 

offsetting receipts was largely due to a $142.9 

million increase in civil penalty collections in 

FY 2012. 

 

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 other federal 

agencies will not be reported twice as revenue 

on the consolidated government’s Statement 

of Net Cost. In FY 2012, the Commission 

reported $179.2 million in custodial revenue as 

of September 30, 2012 compared to $27.9 

million in FY 2011. The majority of the 

increase over FY 2011 is due to the collection 

of civil penalties in the amount of $142.9 

million charged to entities under the 

Commission’s regulation for FY 2012 and 

subsequently transferred to the US Treasury.
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 26   

CONTROLS, SYSTEMS, AND LEGAL COMPLIANCE 

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

 Federal Managers' Financial Integrity Act of 1982; 

 Revised Circular No. OMB A-123; 

 Federal Financial Management Improvement Act of 1996; 

 Prompt Payment Act; 

 Debt Collection Improvement Act of 1996; and 

 Improper Payments Information Act (IPIA) 

Integrity Act Statement 

During Fiscal Year 2012, the Commission focused its efforts on assisting consumers in 

obtaining reliable, efficient, and sustainable energy services at a reasonable cost through appropriate 

regulatory and market means. In fulfilling this mission, the commission has pursued two primary goals. 

We have worked diligently to ensure that rates, terms and conditions for wholesale sales and 

transmission of electric energy and natural gas are just, reasonable and not unduly discriminatory or 

preferential. Moreover, we continue to promote the development of safe, reliable, and efficient energy 

infrastructure that serves the public interest. We are progressing in each of these areas while we 

continue to improve our capabilities to meet the challenges of the energy issues confronting our 

nation. 

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 Circular No. 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 2012 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 No. 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, 

2012. 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 No. 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, 2012, are operating effectively. 

 

Jon Wellinghoff 

Chairman 

Federal Energy Regulatory Commission 

September 2012
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 27   

Federal Managers’ Financial Integrity Act of 

1982 

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. 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 2012 Integrity Act Results. 

The Commission evaluated its management 

control systems for the fiscal year ending 

September 30, 2012. 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 2012 OMB Circular No. A-123 

The Commission evaluated its internal controls 

over financial reporting for the fiscal year 

ending September 30, 2012. 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 of 1996

The Federal Financial Management 

Improvement Act of 1996 (FFMIA) 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 FFMIA requires the 

Chairman to determine whether the agency's 

financial management systems comply with 

the FFMIA and to develop remediation plans 

for systems that do not comply. Our review of 

the Commission’s financial management 

system in FY 2012 demonstrated that we fully 

comply with this act. 

FY 2012 FFMIA Results. 

As of September 30, 2012, 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 FFMIA.
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 28   

Prompt Payment Act 

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, 2012, the Commission made 

100% of its payments, that were subject to the 

Prompt Payment Act, on-time. The 

Commission incurred $0.00 in interest 

penalties in FY 2012 and FY 2011. The 

agency made 100% of its vendor payments 

electronically in FY 2012. 

Debt Collection Improvement Act of 1996 

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, 2012, 

delinquent debt was approximately $386,000, 

which is approximately three one hundredths 

of a percent of its current annual billings. 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. 

Improper Payments Information Act (IPIA) 

Reporting 

 

The Commission has performed a review of its 

payments through September 30, 2012 and it 

has processed 99% of its payments without 

error. The Commission found only 75 

erroneous payments out of 7,064 total 

payments. The value of those erroneous 

payments totaled $274,951 out of total 

payments of $63,513,895 for FY 2012.

POSSIBLE FUTURE EFFECTS OF EXISTING EVENTS AND CONDITIONS 

Certain hydroelectric licensees have filed 

appeals claiming the Commission erroneously 

accepted certain “other agency costs” (costs 

incurred by Other Federal agencies in 

administering Part I of the FPA component of 

the licensees’ annual charges) in its calculation 

of FY annual charges. The combined liability of 

these appeals total $2.2 million as of 

September 30, 2012 and is included herein as 

revenue collected under protest. This liability is 

fully funded and therefore poses no adverse or 

material future effect on the Commission’s 

financial position. 

In addition, the Commission has an Equal 

Employment Opportunity case pending where 

the probability of success for the claimant is 

reasonably possible. The amount of monetary 

relief, if awarded, could be $100,000 to 

$125,000 as of September 30, 2012. 

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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 29   

Financial Section 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 30

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 (Commission) 

comparative financial results for fiscal years 2012 and 2011. 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 requirements set 

forth in Office of Management and Budget (OMB) Circular No. A-136, Financial Reporting 

Requirements. 

During FY 2012, the Commission continued to focus on its statutory responsibilities. Through 

strict adherence to its primary mission, the Commission assisted consumers in obtaining reliable, 

efficient, and sustainable energy services at a reasonable cost through appropriate regulatory and 

market means. In fulfilling this mission, the Commission continued to establish policies and processes 

designed to ensure that rates, terms and conditions for wholesale sales and transmission of electric 

energy and natural gas are just, reasonable and not unduly discriminatory or preferential. Additionally, 

the agency took action to continually promote the development of safe, reliable, and efficient energy 

infrastructure that serves the public interest. 

My organization focused on core responsibilities that supported mission accomplishment and 

maximized resource utilization. In this regard, we maintained a robust internal control environment 

which facilitated compliance with an extensive regulatory framework. We continued to implement 

innovative processes which optimized productivity and delivered required goods and services to our 

customers. Moreover, we have built and maintained a highly-skilled workforce that successfully 

executed operational and policy requirements. This strategic approach to managing our acquisition 

and financial functions has aligned my organization’s efforts with the broader mission of the agency. 

This Performance and Accountability Report further demonstrates this vital alignment of resources to 

agency mission. 

Additionally, I would like to offer the following achievements to demonstrate the effectiveness 

and efficiency of the Commission’s acquisition and financial functions. 

• The Commission obtained an unqualified opinion on its financial statements for the 19th 

consecutive year. In addition, it strengthened its internal control program by continuing on-going selfassessment efforts as required by OMB Circular No. A-123, Management’s Responsibility for Internal 

Control. The Commission has reasonable assurance that its internal controls over financial reporting 

were operating effectively during FY 2012. 

• The Commission collected over $337 million in offsetting receipts during the fiscal year. 

Financial management staff issued 100% of the related regulatory assessments electronically to 

jurisdictional entities and hydropower licensees. As a result of these efforts, the Commission exceeded 

its statutory collection requirements to offset its annual appropriation by more than $32 million. 

• The Commission awarded over 35% of its total contract dollars to small, women-owned and 

minority businesses. This level of performance met the target established for the fiscal year. 

Additionally, in responding to accountability initiatives established by the President, the Commission 

has reduced its combined share of dollars obligated on high risk contracts by 11%. This exceeded the 

administration’s established target for FY 2012 of 10%. 
FY 2012 Performance & Accountability Report 

Our keen focus on program performance and significant financial accomplishments demonstrate the 

high regard we have for accountability and public disclosure. This report demonstrates a lasting 

commitment to fulfill our fiduciary responsibilities to Commission stakeholders. I am proud of the role 

my organization has played in being effective stewards protecting the interests of the American public. 

Anton C. Porter 

Chief Financial Officer 

Federal Energy Regulatory Commission 

November 6, 2012 

Federal Energy Regulatory Commission 

Page 31 
Independent Auditors’ Report

The Federal Energy Regulatory Commission and the 

Inspector General, United States Department of Energy: 

We have audited the accompanying balance sheets of the Federal Energy Regulatory Commission (the 

Commission) as of September 30, 2012 and 2011, and the related statements of net cost, changes in net 

position, budgetary resources, and custodial activity (hereinafter referred to as “financial statements”) for 

the years then ended. The objective of our audits was to express an opinion on the fair presentation of these 

financial statements. In connection with our fiscal year 2012 audit, we also considered the Commission’s 

internal control over financial reporting and tested the Commission’s compliance with certain provisions of 

applicable laws, regulations, and contracts that could have a direct and material effect on these financial 

statements.

Summary

As stated in our opinion on the financial statements, we concluded that the Commission’s financial 

statements as of and for the years ended September 30, 2012 and 2011, are presented fairly, in all material 

respects, in conformity with U.S. generally accepted accounting principles. 

As discussed in our Opinion on the Financial Statements, the Commission changed its presentation for 

reporting the statement of budgetary resources in fiscal year 2012.

Our consideration of internal control over financial reporting was not designed to identify all deficiencies 

in internal control over financial reporting that might be deficiencies, significant deficiencies, or material 

weaknesses. We did not identify any deficiencies in internal control over financial reporting that we 

consider to be material weaknesses as defined in the Internal Control Over Financial Reporting section of 

this report. 

The results of our tests of compliance with certain provisions of laws, regulations, and contracts disclosed 

no instances of noncompliance or other matters that are required to be reported under Government Auditing 

Standards, issued by the Comptroller General of the United States, and Office of Management and Budget 

(OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements, as amended. 

The following sections discuss our opinion on the Commission’s financial statements; our consideration of 

the Commission’s internal control over financial reporting; our tests of the Commission’s compliance with 

certain provisions of applicable laws, regulations, and contracts; and management’s and our 

responsibilities.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of the Federal Energy Regulatory Commission as of 

September 30, 2012 and 2011, and the related statements of net cost, changes in net position, budgetary 

resources, and custodial activity for the years then ended. 

KPMG LLP

Suite 12000

1801 K Street, NW 

Washington, DC 20006

KPMG LLP is a Delaware limited liability partnership,

the U.S. member firm of KPMG International Cooperative

(“KPMG International”), a Swiss entity.
Federal Energy Regulatory Commission

November 6, 2012 

Page 2 of 4 

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of the Federal Energy Regulatory Commission as of September 30, 2012 and 2011, and 

its net costs, changes in net position, budgetary resources, and custodial activity for the years then ended, 

in conformity with U.S. generally accepted accounting principles. 

As discussed in Note 2 to the financial statements, the Commission changed its presentation for reporting 

the Statement of Budgetary Resources in fiscal year 2012, based on new reporting requirements under 

OMB Circular No. A-136, Financial Reporting Requirements. As a result, the Federal Energy Regulatory 

Commission’s statement of budgetary resources for fiscal year 2011 has been adjusted to conform to the 

current year presentation. 

U.S. generally accepted accounting principles require that the information in the Management’s Discussion 

and Analysis section be presented to supplement the financial statements. Such information, although not a 

part of the financial statements, is required by the Federal Accounting Standards Advisory Board who 

considers it to be an essential part of financial reporting for placing the financial statements in an 

appropriate operational, economic, or historical context. We have applied certain limited procedures to the

required supplementary information in accordance with auditing standards generally accepted in the United 

States of America, which consisted of inquiries of management about the methods of preparing the 

information and comparing the information for consistency with management’s responses to our inquiries, 

the financial statements, and other knowledge we obtained during our audits of the financial statements. 

We do not express an opinion or provide any assurance on the information because the limited procedures 

do not provide us with sufficient evidence to express an opinion or provide any assurance.

Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. 

The information in the Performance Report section and the Appendices of the Performance and 

Accountability Report are presented for the purposes of additional analysis and are not a required part of 

the financial statements. Such information has not been subjected to the auditing procedures applied in the 

audits of the financial statements, and accordingly, we do not express an opinion or provide any assurance 

on them. 

Internal Control Over Financial Reporting

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to prevent, or 

detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination 

of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of 

the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. 

Our consideration of internal control over financial reporting was for the limited purpose described in the 

Responsibilities section of this report and was not designed to identify all deficiencies in internal control 

over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. In our 

fiscal year 2012 audit, we did not identify any deficiencies in internal control over financial reporting that 

we consider to be material weaknesses, as defined above. 

We noted certain additional matters that we will report to management of the Commission in a separate 

letter. 
Federal Energy Regulatory Commission

November 6, 2012 

Page 3 of 4 

Compliance and Other Matters

The results of our tests of compliance as described in the Responsibilities section of this report, exclusive 

of those referred to in the Federal Financial Management Improvement Act of 1996 (FFMIA), disclosed no 

instances of noncompliance or other matters that are required to be reported herein under Government 

Auditing Standards or OMB Bulletin No. 07-04. 

The results of our tests of FFMIA disclosed no instances in which the Commission’s financial management 

systems did not substantially comply with the (1) Federal financial management systems requirements, (2) 

applicable Federal accounting standards, and (3) the United States Government Standard General Ledger at 

the transaction level. 

* * * * * * *

Responsibilities

Management’s Responsibilities. Management is responsible for the financial statements; establishing and 

maintaining effective internal control over financial reporting; and complying with laws, regulations, and 

contracts applicable to the Commission. 

Auditors’ Responsibilities. Our responsibility is to express an opinion on the fiscal year 2012 and 2011 

financial statements of the Commission based on our audits. We conducted our audits in accordance with 

auditing standards generally accepted in the United States of America; the standards applicable to financial 

audits contained in Government Auditing Standards, issued by the Comptroller General of the United 

States; and OMB Bulletin No. 07-04. Those standards and OMB Bulletin No. 07-04 require that we plan 

and perform the audits to obtain reasonable assurance about whether the financial statements are free of 

material misstatement. An audit includes consideration of internal control over financial reporting as a 

basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of 

expressing an opinion on the effectiveness of the Commission’s internal control over financial reporting. 

Accordingly, we express no such opinion. 

An audit also includes: 

• Examining, on a test basis, evidence supporting the amounts and disclosures in the financial 

statements;

• Assessing the accounting principles used and significant estimates made by management; and

• Evaluating the overall financial statement presentation.

We believe that our audits provide a reasonable basis for our opinion. 

In planning and performing our fiscal year 2012 audit, we considered the Commission’s internal control 

over financial reporting by obtaining an understanding of the Commission’s internal control, determining 

whether internal controls had been placed in operation, assessing control risk, and performing tests of 

controls as a basis for designing our auditing procedures for the purpose of expressing our opinion on the 

financial statements, but not for the purpose of expressing an opinion on the effectiveness of the 

Commission’s internal control over financial reporting. Accordingly, we do not express an opinion on the 

effectiveness of the Commission’s internal control over financial reporting. We did not test all internal 
Federal Energy Regulatory Commission

November 6, 2012 

Page 4 of 4 

controls relevant to operating objectives as broadly defined by the Federal Managers’ Financial Integrity 

Act of 1982. 

As part of obtaining reasonable assurance about whether the Commission’s fiscal year 2012 financial 

statements are free of material misstatement, we performed tests of the Commission’s compliance with 

certain provisions of laws, regulations, and contracts, noncompliance with which could have a direct and 

material effect on the determination of the financial statement amounts, and certain provisions of other 

laws and regulations specified in OMB Bulletin No. 07-04, including the provisions referred to in Section 

803(a) of FFMIA. We limited our tests of compliance to the provisions described in the preceding 

sentence, and we did not test compliance with all laws, regulations, and contracts applicable to the 

Commission. However, providing an opinion on compliance with laws, regulations, and contracts was not 

an objective of our audit and, accordingly, we do not express such an opinion. 

______________________________ 

This report is intended solely for the information and use of the Commission’s management, the 

Department of Energy’s Office of Inspector General, OMB, the U.S. Government Accountability Office, 

and the U.S. Congress and is not intended to be and should not be used by anyone other than these 

specified parties.

November 6, 2012 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 36

FEDERAL ENERGY REGULATORY COMMISSION 

Balance Sheets 

As of September 30, 2012 and 2011 

(in dollars) 

2012 2011 

Assets (note 3): 

Intragovernmental: 

Fund balance with Treasury (note 4) $ 163,574,245 $ 54,600,682 

Accounts receivable (note 5) 78,903 1,941 

Total intragovernmental 163,653,148 54,602,623 

Accounts receivable, net (note 5) 11,208,573 9,076,833 

Property and equipment, net (note 6) 9,401,019 7,265,682 

Total assets $ 184,262,740 $ 70,945,138

 

Liabilities: 

Intragovernmental: 

Accounts payable $ 1,928,095 $ 3,281,152

Other (note 7): 

Accrued payroll and benefits 845,903 606,598

Resources transferable to Treasury and other 

Federal entities 3,278,395 1,179,285

Workers' compensation payable (note 9) 698,925 583,653

Total intragovernmental 6,751,318 5,650,688

Accounts payable 13,052,291 15,467,725

Other (note 7): 

Accrued payroll and benefits 3,831,843 3,190,631 

Collections due to states - 1,566,870 

Revenue collected under protest 2,249,253 187,575 

Refunds and other amounts due 10,811,140 89,089 

Accrued leave (note 9) 14,308,471 14,053,693 

FECA Actuarial Liability (note 9) 3,042,357 2,466,002 

Resources transferable to other entities from 

disgorged funds 111,847,489 7,847,489

Total liabilities 165,894,162 50,519,762

Net Position: 

Unexpended appropriations - other funds 37,566,059 30,147,320

Cumulative results of operations - other funds (19,197,481) (9,721,944)

Total net position 18,368,578 20,425,376

Total liabilities and net position $ 184,262,740 $ 70,945,138

The accompanying notes are an integral part of these statements. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 37

FEDERAL ENERGY REGULATORY COMMISSION 

Statements of Net Cost 

For Years Ending September 30, 2012 and 2011 

(in dollars) 

 

 2012 2011 

Program costs: 

 Regulation: 

 Just and Reasonable Rates, Terms, 

 & Conditions (note 14): 

 Gross costs $ 167,946,133 $ 176,895,475

 Less: earned revenue 167,946,133 176,895,475

 Net program costs $ - $ -

 Infrastructure (note 14): 

 Gross costs $ 142,423,246 $ 139,024,817

 Less: earned revenue 142,423,246 139,024,817

 Net program costs $ - $ -

 Total (note 14): 

 Gross costs $ 310,369,379 $ 315,920,292

 Less: earned revenue 310,369,379 315,920,292

 Net Cost of Operations $ - $ -

The accompanying notes are an integral part of these statements. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 38

FEDERAL ENERGY REGULATORY COMMISSION 

Statements of Changes in Net Position 

For Years Ending September 30, 2012 and 2011 

(in dollars)

 

2012 2011 

Cumulative Results of Operations: 

Beginning balances $ (9,721,944) $ (9,129,213) 

Budgetary Financing Sources: 

Appropriations used 297,181,261 299,750,466

Other Financing Sources (Non-Exchange): 

 Transfers – out to Treasury without reimbursement (320,976,897) (315,885,244)

 Imputed financing from costs absorbed by others (note 10) 14,320,099 15,542,047 

Total Financing Sources (9,475,537) (592,731)

Net Cost of Operations - -

Net Change (9,475,537) (592,731)

Cumulative Results of Operations $ (19,197,481) $ (9,721,944)

 

Unexpended Appropriations: 

Beginning balances $ 30,147,320 $ 31,897,786

Budgetary Financing Sources: 

 Appropriations received 304,600,000 298,000,000 

 Appropriations used (297,181,261) (299,750,466)

 Total Budgetary Financing Sources 7,418,739 (1,750,466)

Total Unexpended Appropriations $ 37,566,059 $ 30,147,320

Net Position $ 18,368,578 $ 20,425,376

 

 

The accompanying notes are an integral part of these statements. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 39

FEDERAL ENERGY REGULATORY COMMISSION 

Statements of Budgetary Resources 

For Years Ending September 30, 2012 and 2011 

(in dollars) 

2012 2011 

Budgetary Resources: 

Unobligated balance, brought forward, October 1 $ 19,972,915 $ 11,791,937

Recoveries of prior year unpaid obligations 1,218,246 2,530,760

Unobligated balance from prior year budget activity, net 21,191,161 14,322,697

Appropriation 3,127,757 5,790,138

Spending authority from offsetting collections earned 304,686,540 298,035,515

Total budgetary resources $ 329,005,458 $ 318,148,350

Status of Budgetary Resources: 

 Obligations incurred (note 15) $ 308,107,570 $ 298,175,435

 Unobligated balances, end of year: 

 Apportioned 18,367,126 19,972,915

 Unapportioned 2,530,762 -

 Total unobligated balance, end of year 20,897,888 19,972,915

 Total status of budgetary resources $ 329,005,458 $ 318,148,350

Change in Obligated Balance: 

Unpaid obligations, brought forward, October 1 $ 34,337,808 $ 45,548,555

Less: Uncollected customer payments from 

 Federal sources, brought forward, October 1 (40,947) (39,935)

Obligated balance, net, start of year 34,296,861 45,508,620

 

Obligations incurred, net 308,107,570 298,175,435

Less: Gross outlays (304,811,931) (306,855,420)

Change in uncollected customer payments 

 from Federal sources (76,962) (1,012)

Less: Recoveries of prior year unpaid 

 obligations, actual (1,218,246) (2,530,760)

 

Obligated balance, end of year 

 Unpaid obligations, end of year 36,415,201 34,337,808

 Less: Uncollected customer payments from 

 from Federal sources (117,909) (40,947)

Obligated balance, end of year $ 36,297,292 $ 34,296,861

 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 40

Budget Authority and Outlays, Net:

 Budget authority, gross 307,814,297 303,825,651

 Less: Offsetting collections (304,609,578) (298,034,503)

 Change in uncollected customer payments from Federal 

 sources (76,962) (1,012)

 Budget authority, net $ 3,127,757 $ 5,790,136

 

 Outlays, gross $ 304,811,931 $ 306,855,420

Less: Offsetting collections (304,609,578) (298,034,503)

 Outlays, net 202,353 8,820,917

 Less: Distributed offsetting receipts (179,321,698) (40,279,404)

 Agency outlays, net $ (179,119,345) $ (31,458,487)

 

 

The accompanying notes are an integral part of these statements. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 41

FEDERAL ENERGY REGULATORY COMMISSION 

Statements of Custodial Activity 

For Years Ending September 30, 2012 and 2011 

(in dollars) 

 

 2012 2011 

Revenue Activity: 

 Sources of Collections: 

Cash collections – annual charges $ 178,283,446 $ 47,566,629

Accrual adjustment 960,241 (19,648,365)

 Total custodial revenue (note 12) 179,243,687 27,918,264

Disposition of Collections: 

Transferred to others: 

United States Army – Corps of 

 Engineers (7,872,888) (9,288,982)

 Department of Interior (7,074,799) (12,949,513)

 United States Treasury (159,748,981) (19,456,212)

 Various states (3,086,244) (5,831,575)

Decrease (increase) in Amounts Yet to be 

 transferred (1,460,775) 19,608,018

 Total Disposition of Collections (179,243,687) (27,918,264)

 Net Custodial Activity $ - $ -

 

 

The accompanying notes are an integral part of these statements. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 42

NOTES TO FINANCIAL STATEMENTS 

September 30, 2012 and 2011 

(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. 

On September 30, 2009, the Commission 

submitted to Congress its updated Strategic 

Plan which will serve as a guide through FY 

2014. As part of the update process, the 

Commission realigned its resources and 

activities with its key statutory authorities. This 

resulted in an updated mission statement and 

two strategic goals. 

The Commission’s activities are separated into 

the following two goals: 

Just and Reasonable Rates, Terms and 

Conditions. One of the Commission’s 

fundamental statutory responsibilities is to 

ensure that rates, terms and conditions for 

wholesale sales and transmission of electric 

energy and natural gas are just and 

reasonable and not unduly discriminatory or 

preferential. The Commission uses a 

combination of regulatory and market means 

to achieve this goal, including reviewing tariffs 

and making rate determinations. Oversight of 

the energy markets and enforcement of the 

associated laws, rules and regulations are 

essential complements to the regulatory and 

market means. The Commission uses a 

balanced approach in its oversight and 

enforcement efforts, including: educating 

affected entities about market rules and other 

regulations; promoting internal compliance 

programs; employing robust audit and 

investigation programs; and, where 

appropriate, exercising the Commission’s civil 

penalty authority as a deterrent to violations. 

Infrastructure. The Commission plays an 

important role in the development of a strong 

energy infrastructure that operates efficiently, 

safely and reliably. The Commission has siting 

authority that includes licensing non-federal 

hydropower projects, certificating interstate 

natural gas pipelines and storage projects, 

authorizing liquefied natural gas (LNG) 

facilities, and, in certain circumstances, 

permitting electric transmission lines. The 

Commission relies primarily on physical 

inspections of facilities to ensure the safety of 

LNG and non-federal hydropower facilities 

throughout the entire life cycle of a project: 

design review, construction and operation. 

Further, the Commission promotes efficient 

operation of energy infrastructure by 

encouraging, for example, the use of new 

technologies, and other procedures that may 

enhance economic efficiency. 

 

Lastly, the Commission has an important role 

in maintaining the reliability of the electric 

transmission grid. The Commission 

established, and now oversees, the Electric 

Reliability Organization (ERO). The ERO 

develops and enforces mandatory reliability 

and cyber security standards, subject to the 

review and approval by the Commission. The 

Commission also monitors system 

disturbances to identify near and long-term 

issues affecting generation and transmission. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 43

Cost Recovery 

As described below, the Commission recovers 

100% of its annual appropriation from the U.S. 

Department of the 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 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 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: 

 Identify the service for which the fee is to 

be assessed; 

 Explain why that particular service benefits 

an identifiable recipient more than it 

benefits the general public; 

 Base the fee on as small a category of 

service as possible; and 

 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 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 44

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.) A136, 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. 

(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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 45

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 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 and 

equipment purchases (other than 

furniture and software) with a cost 

greater than $25,000 and a total useful 

life exceeding two years. The 

Commission capitalizes individual 

furniture purchases with a cost greater 

than $50,000 and bulk furniture 

purchases related to the acquisition of 

newly leased space or total renovation of 

existing Commission space with a cost 

greater than $250,000. The Commission 

also capitalizes commercially purchased 

or internally developed software with a 

cost greater than $100,000 and 

leasehold improvements over $250,000 

that are related to initial move-ins, buildouts of newly leased space, and/or a 

complete renovation of already leased 

space. 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) 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 workrelated occupational disease and 

beneficiaries of employees 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. 

(j) Collections Due to States 

The Commission disburses 37.5% 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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 46

(k) Revenue Collected Under Protest 

Revenue collected under protest is 

deferred and recorded as a liability until 

the protest is resolved. 

(l) 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. 

(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 the 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. 

(q) Comparative Data 

In FY 2012, changes to the presentation 

of the Statements of Budgetary 

Resources were made in accordance 

with guidance provided in OMB Circular 

No. A-136, and as such, FY 2011 activity 

and balances reported on the Statement 

of Budgetary Resources have been 

reclassified to conform to the 

presentation in the current year. Certain 

FY 2011 amounts have been reclassified 

to conform to the FY 2012 presentation. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 47

(3) Non-Entity Assets 

Non-entity assets at September 30, 2012 and 2011 consisted of: 

2012 2011 

 

Intragovernmental: 

 Fund balance with Treasury: 

 Collections due to states $ - $ 1,566,070

 Revenue collected under protest 2,249,253 187,575

 Disgorged funds 104,012,730 12,730

 Miscellaneous receipts held in suspense 117,083 89,089

Total intragovernmental assets 106,379,066 1,855,464

Accounts receivable, net 8,898,545 9,078,774

 Total non-entity assets 115,277,611 10,934,238

Total entity assets 68,985,129 60,010,900

 Total assets $ 184,262,740 $ 70,945,138

(4) Fund Balance with Treasury 

Fund balance with Treasury at September 30, 2012 and 2011 consisted of: 

 2012 2011 

 

Fund Balances: 

 General: 

 Appropriated funds $ 57,195,179 $ 52,745,218

 Other: 

 Collections due to states - 1,566,070

 Revenue collected under protest 2,249,253 187,575

 Disgorged funds 104,012,730 12,730

 Miscellaneous receipts held in suspense 117,083 89,089

 Total $ 163,574,245 $ 54,600,682

Status of Fund Balance with Treasury: 

 Unobligated balance: 

 Available $ 20,779,978 $ 19,973,480

 Obligated balance not yet disbursed 36,415,201 34,337,808

 Non-budgetary fund balance with Treasury 106,379,066 289,394

 Total $ 163,574,245 $ 54,600,682
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 48

(5) Accounts Receivable, net 

Entity and non-entity accounts receivable at September 30, 2012 and 2011 consisted of: 

 2012 

Annual 

Charges Other Total 

Entity 

Uncollected billings $ 2,214,609 $ 101,360 $ 2,315,969

Unbilled billings - - -

Uncollected intragovernmental billings - 78,903 78,903

Allowance for doubtful accounts - (5,941) (5,941)

 Total entity accounts receivable, net 2,214,609 174,322 2,388,931

Non-entity 

Uncollected billings 479,279 70,948,032 71,427,311

Allowance for doubtful accounts - (62,528,766) (62,528,766)

Total non-entity accounts receivable, net 479,279 8,419,266 8,898,545

 Total accounts receivable, net $ 2,693,888 $ 8,593,588 $ 11,287,476

 2011 

Annual 

Charges Other Total 

Entity 

Uncollected billings $ 522,253 $ 85,294 $ 607,547

Unbilled billings 49,776 - 49,776

Uncollected intragovernmental billings - 1,941 1,941

Allowance for doubtful accounts - (23,304) (23,304)

 Total entity accounts receivable, net 572,029 63,931 635,960

Non-entity 

Uncollected billings 36,069 70,935,511 70,971,580

Allowance for doubtful accounts - (62,528,766) (62,528,766)

Total non-entity accounts receivable, net 36,069 8,406,745 8,442,814

 Total accounts receivable, net $ 608,098 $ 8,470,676 $ 9,078,774
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 49

(6) Property and Equipment, net 

Property and equipment and related accumulated depreciation at September 30, 2012 and 2011 

consisted of: 

 2012 

Acquisition 

Amount 

Accumulated 

Depreciation Net 

Equipment $ 5,809,819 $ 3,675,552 $ 2,134,267 

Furniture 11,500,547 9,489,000 2,011,547 

Leasehold improvements 11,713,238 8,503,757 3,209,481 

ADP software 16,238,259 16,238,259 - 

Construction in process 2,045,724 - 2,045,724 

Capital assets 29,000 29,000 - 

 Total property and equipment, net $ 47,336,587 $ 37,935,568 $ 9,401,019 

 2011 

Acquisition 

Amount 

Accumulated 

Depreciation Net 

Equipment $ 5,173,374 $ 3,255,278 $ 1,918,096

Furniture 10,636,907 9,257,214 1,379,693

Leasehold improvements 11,713,238 7,807,004 3,906,234

ADP software 16,418,335 16,418,335 -

Construction in process 61,659 - 61,659

Capital assets 29,000 29,000 -

 Total property and equipment, net $ 44,032,513 $ 36,766,831 $ 7,265,682
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 50

(7) Other Liabilities 

Other liabilities at September 30, 2012 and 2011 consisted of: 

 2012 

Current NonCurrent Total 

Intragovernmental 

 Accrued payroll and benefits $ 845,903 $ - $ 845,903 

 Resources transferable to Treasury 

 and other Federal entities 3,278,395 - 3,278,395 

 Workers' compensation payable 115,272 583,653 698,925 

 Total other intragovernmental liabilities 4,239,570 583,653 4,823,223 

 

Accrued payroll and benefits 3,831,843 - 3,831,843 

Collections due to states - - - 

Revenue collected under protest 2,249,253 - 2,249,253 

Refunds and other amounts due 10,811,140 - 10,811,140 

Accrued leave 14,308,471 - 14,308,471 

FECA Actuarial Liability - 3,042,357 3,042,357 

Resources transferable to other entities 

 from disgorged funds 111,847,489 - 111,847,489 

 Total other liabilities $ 147,287,766 $ 3,626,010 $ 150,913,776 

 

 2011 

Current NonCurrent Total 

Intragovernmental 

 Accrued payroll and benefits $ 606,598 $ - $ 606,598 

 Resources transferable to Treasury 

 and other Federal entities 1,179,285 - 1,179,285 

 Workers' compensation payable 288,134 295,519 583,653 

 Total other intragovernmental liabilities 2,074,017 295,519 2,369,535 

 

Accrued payroll and benefits 3,190,631 - 3,190,631 

Collections due to states 1,566,870 - 1,566,870 

Revenue collected under protest 187,575 - 187,575 

Refunds and other amounts due 89,089 89,089 

Accrued leave 14,053,693 - 14,053,693 

FECA Actuarial Liability - 2,466,002 2,466,002 

Resources transferable to other entities 

 from disgorged funds 7,847,489 - 7,847,489 

 Total other liabilities $ 29,009,364 $ 2,761,521 $ 31,770,885 

Resources transferable to Treasury and other Federal entities represent future collections on accounts 

receivable that will be forwarded to Treasury upon receipt. 

Revenue collected under protest represents 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 and other amounts due for miscellaneous activities, such as parking. 

Resources transferable to other entities from disgorged funds represents monies that will be disbursed 

to specific entities in the future. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 51

(8) Leases 

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 executes an 

occupancy agreement with GSA, which 

normally includes a requirement to give 30-120 

days notice to vacate. Expenses incurred for 

building leases amounted to $23.2 million and 

$20.7 million for periods ended September 30, 

2012 and 2011, respectively.

Real Property Operating Leases – Future Payments 

 

Fiscal Year GSA Non-GSA Total 

FY 2013 $ 13,835,921 $ 36,807 $ 13,872,728 

FY 2014 13,910,762 12,269 13,923,031 

FY 2015 13,946,453 - 13,946,453 

FY 2016 17,259,593 - 17,259,593 

FY 2017 17,260,237 - 17,260,237 

Beyond FY 2017 127,283,020 - 127,283,020 

 Total future minimum lease payments $ 203,495,986 $ 49,076 $ 203,545,062 

 

(9) Liabilities Not Covered by Budgetary Resources 

Liabilities not covered by budgetary resources at September 30, 2012 and 2011 consisted of: 

 2012 2011 

 Intragovernmental 

 Workers' compensation payable $ 698,925 $ 583,653

 Total intragovernmental 698,925 583,653

 

 Accrued leave 14,308,471 14,053,693

 FECA Actuarial Liability 3,042,357 2,466,002

 Total liabilities not covered by budgetary resources $ 18,049,753 $ 17,103,348

(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 11.9% of basic pay. 

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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 52

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 FYs 2012 

and 2011 was approximately $17.9 million and 

$17.3 million, respectively, as of September 

30th. During FYs 2012 and 2011 as of 

September 30th, an additional $14.3 million 

and $15.5 million, respectively, of pension and 

life and health insurance expense was 

recognized by the Commission for amounts 

that will ultimately be funded through the U.S. 

Office of Personnel Management. This amount 

is also recorded as an imputed financing 

source. 

(11) Commitments and Contingencies 

Certain hydroelectric licensees have filed 

appeals claiming the Commission erroneously 

accepted certain “other agency costs” (costs 

incurred by Other Federal agencies in 

administering Part I of the FPA component of 

the licensees’ annual charges) in their 

calculation of FY annual charges. The 

combined liabilities of these appeals total $2.2 

million as of September 30, 2012 and are 

included herein as revenue collected under 

protest. This liability is fully funded and 

therefore poses no adverse or material future 

effect on the Commission’s financial position. 

In addition, the Commission has an Equal 

Employment Opportunity case pending where 

the probability of success for the claimant is 

reasonably possible. The amount of monetary 

relief, if awarded, could be between $100,000 

and $125,000 as of September 30, 2012. 

(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 FY 2012 and FY 

2011, these custodial collections totaled 

approximately $178.3 million and $47.6 million, 

respectively as of September 30th. For FY 

2012 and FY 2011, custodial revenue totaled 

approximately $179.2 million and $27.9 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, Identifying and Reporting 

Earmarked Funds, the Commission is required 

to report separately on the Balance Sheets 

and Statements of Changes in Net Position, 

the non-exchange 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, 2012 and 2011 

were $0 and $1.6 million respectively. 

 

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 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 53

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, 2012 and 

2011. 

(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, 2012 and 2011 consisted of: 

2012 2011 

Just and Reasonable Rates, Terms, & Conditions 

 Intragovernmental costs $ 35,620,037 $ 34,953,335

 Public costs 132,326,096 141,942,140

 Total Just and Reasonable Rates, Terms, and 

 Conditions costs 167,946,133 176,895,475

 

 Intragovernmental earned revenue 65,474 20,168 

 Public earned revenue 167,880,659 176,875,307 

 Total Just and Reasonable Rates, Terms, and 

 Conditions earned revenues 167,946,133 176,895,475

 

Infrastructure 

 Intragovernmental costs 30,206,836 27,468,754 

 Public costs 112,216,410 111,556,063 

 Total Infrastructure costs 142,423,246 139,024,817 

 

 Intragovernmental earned revenue 55,524 51,362 

 Public earned revenue 142,367,722 138,973,455 

 Total Infrastructure earned revenues 142,423,246 139,024,817 

 

Costs 

 Intragovernmental costs 65,826,873 62,422,089 

 Public costs 244,542,506 253,498,203 

 Total costs 310,369,379 315,920,292 

 

Revenue 

 Earned intragovernmental revenue 120,998 71,530 

 Earned public revenue 310,248,381 315,848,762 

 Total earned revenue $ 310,369,379 $ 315,920,292 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 54

(15) Apportionment Categories of Obligations Incurred 

Apportionment categories of obligations incurred as of September 30, 2012 and 2011 

consisted of: 

 2012 2011 

Category A: 

 Direct $ 308,021,030 $ 298,139,919 

 Reimbursable 86,540 35,516 

Total obligations incurred $ 308,107,570 $ 298,175,435 

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, 2011. 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, 

2012 is not presented, because the 

submission of the FY 2013 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 2013. 

(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 30, 2012 

and 2011 were $16.8 million and $10.3 million, 

respectively. 

(Remainder of page intentionally left blank.) 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 55

(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.

 2012 2011 

Resources used to finance activities: 

Budgetary resources obligated: 

 Obligations incurred $ 308,107,570 $ 298,175,435

 Less: spending authority from offsetting collections (305,904,786) (300,566,275)

 Obligations, net of offsetting collections 2,202,784 (2,390,840)

 Less: Distributed offsetting receipts (179,321,698) (40,279,404)

 Net obligations (177,118,914) (42,670,244)

Other resources: 

 Transfers-out, net of appropriations received (4,561,167) (17,908,008)

 Imputed financing from costs absorbed by others 14,320,099 15,542,047 

 Net other resources used to finance activities 9,758,932 (2,365,961)

Total resources used to finance activities (167,359,982) (45,036,205)

Resources (used to) or generating finance items not part of 

the net 

 cost of operations 

 Change in budgetary resources obligated for goods/ 

 services/benefits ordered but not yet provided (+/-) (6,493,767) 9,931,444

 Budgetary distributed offsetting receipts that do not affect 

 the net cost of operations 179,321,698 40,279,404 

 Resources that finance the acquisition of assets (3,803,906) (732,895)

 Payments to States (3,127,757) (5,790,062)

Total resources (used to) or generating finance items not part 

of the net cost of operations 165,896,268 43,687,891

Total resources used to finance the net cost of operations (1,463,714) (1,348,314)

Costs that do not require resources: 

Components requiring or (generating) resources in future 

periods: 

 Increase in unfunded liabilities 946,405 (51,499)

 Increase in exchange revenue receivable from the public (1,187,846) 22,764

 Total components of net cost of operations that will 

 require or (generate) resources in future periods (241,441) (28,735)

Components not requiring or generating resources: 

 Depreciation and amortization 1,668,570 1,632,015 

 Other 36,585 (254,966)

Total components of net cost of operations that will not 

 require or (generate) resources 1,705,155 1,377,049

Total net cost of operations that do not require or 

 (generate) resources in the current period 1,463,714 1,348,314

Net Cost of Operations $ - $ -

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 56

Performance Report 

(Unaudited) 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 57

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 Part 6 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.

The tables on the following pages include 

the Commission’s complete performance 

measurement data for fiscal years 2007 

through 2012. 

As a result of the Commission’s updated FY 

2009 – 2014 Strategic Plan, which went into 

effect on September 30, 2009, the 

performance measures for fiscal years 2010 

through 2012 are aligned with the 

Commission’s current Strategic Plan. The 

Performance Measures for fiscal years 2007 

– 2009 are aligned with previous versions of 

the Commission’s Strategic Plan. 

The Commission did not engage in an 

independent program evaluation during FY 

2012. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 58

PERFORMANCE DATA FOR ENERGY INFRASTRUCTURE: FY 2007 - 2009 

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. 

Percentage of pipeline certificate cases 

with no precedential issues completed 

 90% of unprotested cases within 159 

days of filing 

 90% of protested cases within 304 

days of filing 

Targets Met. 

 98% of unprotested cases were 

completed within 159 days of filing. 

 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 prefiling study plan determinations were 

completed within 150 days of 

applicant’s filing of the proposed study 

plan. 

Percentage of infrastructure studies 

completed 

 100% for regional and issue-based 

infrastructure conferences 

 100% for Commission- and 

Congressional-directed studies 

Targets Met. 

 100% of infrastructure studies 

completed for regional and issue-based 

conference. 

 100% of infrastructure studies 

completed for Commission- and 

Congressional-directed studies. 

Percentage of NEPA documents 

completed for projects utilizing the prefiling 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 nonindependent electric transmission 

provider OATTs 

Within 60 days of filing date or 

applicants’ requested date, whichever is 

later 

Target Met. All 126 amendments to 

non-RTO/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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 59

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) 

 100% of statutory cases addressed by 

Commission order within statutory 

deadlines 

 95% of certificate cases within 12 

months or applicants’ requested date, 

whichever is later 

 90% of cases set for hearing within 12 

months of briefs opposing exceptions 

Targets Met. 

 100% of all 3,164 statutory items, 

including cost recovery cases, were 

completed within statutory due dates. 

 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 prefiling process—the rate analyses were 

provided to the lead Office within the 

required time period. 

 

 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. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 60

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 significanthazard-potential dams inspected 

annually 

100% 

Target Met. 100% of all high and 

significant hazard-potential dams were 

inspected annually. 

Percentage of high- and significanthazard-potential 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: 

 LNG import terminals 

 LNG peak-shaving facilities 

 100% 

 50% 

Targets Met. 

 All 5 of the operating LNG import 

terminals were inspected. 

6 of the 12 peak-shaving facilities 

were inspected. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 61

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

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. 

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: 

 with settlement agreements 

 without settlement agreements 

 85% within 12 months 

 85% within 24 months 

 Target Met. 100% of final NEPA 

documents (5 of 5) were issued within 

12 months for ALP/TLP cases with 

settlement agreements. 

 Target Met. 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, 

onshore-pipeline 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 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 62

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Resolve Regulatory and Other Challenges to Needed Development 

Timeliness of processing complete 

filings containing amendments to nonindependent 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. 

Percentage of pipeline certificate cases 

with no precedential issues completed 

 90% of unprotested cases within 159 

days of filing 

 90% of protested cases within 304 

days of filing 

Target Met. 94% of unprotested 

pipeline certificate cases with no 

precedential issues were completed 

within 159 days of filing. 

Target 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 prefiling 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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 63

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Percentage of infrastructure studies 

completed 

 95% for regional and issue-based 

infrastructure conferences 

 95% for Commission- and 

Congressional-directed studies 

 Target Met. 100% of regional and 

issue-based infrastructure studies were 

completed for regional and issue-based 

infrastructure conferences. 

 Target Met. 100% of infrastructure 

conferences were completed for 

Commission- and Congressionaldirected studies. 

Encourage Investment and Effect Timely Cost Recovery 

Timeliness of processing complete 

applications for incentive rates 

 100% of statutory cases processed 

within statutory deadlines or by 

applicant’s requested date, whichever is 

later 

 80% of declaratory orders filed for 

Commission action within 180 days of 

filing date or by applicant’s requested 

date, whichever is later. 

 Target Met. 100% (16 out of 16) 

statutory incentive rate cases were 

processed within the statutory 

timeframes. 

 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) 

 100% of statutory cases processed 

within statutory deadlines or by 

applicant’s requested date, whichever is 

later 

 90% of rate inserts for certificate 

cases processed within 30 days prior to 

lead office’s target date for completion 

of pipeline certificate case 

 85% of cases that were set for hearing 

filed for Commission action within 12 

months of briefs opposing exceptions 

 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 

 Target Met. 96% (55 out of 57) of 

rate inserts were processed within the 

appropriate timeframe. 

 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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 64

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

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). 

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 significanthazard-potential dams inspected 

annually 

100% 

Target Met. 100% of high- and 

significant-hazard-potential dams were 

inspected. 

Percentage of high- and significanthazard-potential dams that either meet 

all current structural safety standards or 

are undergoing investigation or 

remediation 

100% 

Target Met. 100% of high- and 

significant-hazard-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). 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 65

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

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. 

Percentage of final NEPA documents 

issued for ALP/TLP cases: 

 with settlement agreements 

 without settlement agreements 

 75% within 12 months of settlement 

filing date 

 75% within 24 months of REA date 

 Target Met. 100% of final NEPA 

documents were issued for ALP/TLP 

cases with settlement agreements within 

12 months of the settlement filing date 

 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, 

onshore-pipeline 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. 

FY 2009 

Performance Measure Performance Target Results 

Resolve Regulatory and Other Challenges to Needed Development

Timeliness of processing complete filings containing amendments to nonindependent electric transmission provider OATTs 

100% processed by statutory due date or 

applicant’s requested date, whichever is 

later 

Target Met - 100% of the 62 

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 

2009 

Target Met. Reports issued in 

February and August 2009. 

Percentage of pipeline certificate cases 

with no precedential issues completed 

▪ 90% of unprotested cases within 159 

days of filing 

▪ 90% of protested cases within 304 days 

of filing 

▪ Target Met. 96.8% of unprotested 

cases completed within 159 days of 

filing 

▪ Target Met. 100% of protested cases 

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. 94.7% of first impression 

cases completed within 365 days of 

filing 

Percentage of pipeline certificate cases 

requiring a major environmental assessment or EIS completed 90% within 480 days of filing Target Met. 100% of major cases 

completed within 480 days of filing 

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. 100% of NEPA 

documents completed for projects 

utilizing the pre-filing process within 8 

months of determining an application 

was complete 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 66

FY 2009 

Performance Measure 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 activity 

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 determinations 

were completed within 30 days of 

applicant filing revised study plan for 

Commission approval 

Percentage of infrastructure studies 

completed 

▪ 95% for regional and issue-based 

infrastructure conferences 

▪ 95% for Commission- and Congressional-directed studies 

▪ Target Met. 100% studies completed 

for regional and issue-based 

infrastructure conferences 

▪ Target Met. 100% studies completed 

for Commission- and Congressionaldirected studies 

Percentage of electric transmission siting 

cases completed 90% within 365 days of filing 

n/a. One electric transmission case 

entered the pre-filing stage, but it was 

withdrawn. 

Timeliness of processing complete applications for incentive rates 

▪ 100% of statutory cases processed 

within statutory deadlines or by applicant’s requested date, whichever is later 

▪ 80% of declaratory orders filed for 

Commission action within 180 days of 

filing date or by applicant’s requested 

date, whichever is later. 

▪ Target Met - 100% of the 15 statutory 

incentive rate cases were processed 

within the statutory timeframes 

▪ Target met; 100% (6 of 6) of 

declaratory orders related to incentive 

rates were filed within target dates. 

Timeliness of processing cost recovery 

cases (including prudently-incurred 

expenses to safeguard and enhance the 

reliability, security and safety of the 

energy infrastructure) 

▪ 100% of statutory cases processed 

within statutory deadlines or by applicant’s requested date, whichever is later 

▪ 90% of rate inserts for certificate cases 

processed within 30 days prior to lead 

office’s target date for completion of 

pipeline certificate case 

▪ 85% of cases that were set for hearing 

filed for Commission action within 12 

months of briefs opposing exceptions 

▪ Target Met - 100% of the 3,808 

statutory items, including cost recovery 

cases, were processed within the 

statutory deadlines 

▪ Target Met. Provided timely rate 

inserts for 94% (47 out of 50) of the 

cases that were targeted for completion 

by the lead office during the fiscal year 

▪ Target not met; 50% (2 of 4) filed 

within 12 months of Briefs Opposing 

Exceptions. 

Timeliness of verification of EQR submissions Within 10 business days of filing due date 

Target met. 100 percent of 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 percent 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. 97 percent of financial 

accounting filings were completed on 

time. 

Percentage of reporting requirement 

filings completed timely 75% within 60 days of filing date 

Target met. 100 percent 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, 2008 

Target met. The draft order approving 

the 2009 ERO/RE budgets and 

business plans was issued in Docket 

No. RR08-6-000 on October 16, 2008. 

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 filed reliability 

standards have orders issued within 18 

months. 

Review the performance of the ERO 

Complete within 12 months of the submission by the ERO of an assessment of 

its performance 

n/a. ERO performance assessment 

filing was made on July 20, 2009 in 

Docket No. RR09-7-000, with a 

targeted completion date of December 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 67

FY 2009 

Performance Measure Performance Target Results 

2009. 

Number of ERO Regional Entity compliance audits in which FERC participates 

At least one in each of the eight regions 

Target met. Participated on 8 Regional 

Entity audits, one in each region, by 

June 25, 2009. 

Percentage of ERO / industry reliability 

readiness evaluations of Reliability 

Coordinators in which FERC participates 

75% 

N/A. The ERO/industry reliability 

readiness evaluations of Reliability 

Coordinators were discontinued in 

FY2009. 

Percentage of load served, included in 

ERO / industry reliability readiness 

evaluations, in which FERC participates 

35% 

Target Met. Participated in 2 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. In FY 2009, 35 Notices of 

Penalty covering 83 violations were 

filed. All 35 were reviewed for 

appropriateness of the finding of 

violation and penalty and accepted by 

operation of law, with a public notice 

of each acceptance issued within the 

required period for Commission action. 

Assess Notices of Alleged Violation and 

Sanction received from the ERO 

Review 60% of Notices of Alleged Violation and Sanction received from ERO 

within two weeks of receipt for appropriateness of sanction 

Target met. In FY2009, 149 Notices of 

Alleged Violations and Sanctions 

covering 579 alleged violations were 

submitted through the portals. Each 

was reported on and recorded routinely 

by way of (1) The Overview of 

Reliability Orders, Matters and 

Deadlines Chart, and (2) The Pending 

Case Report prepared by the Division 

of Investigations. 

Timeliness of reporting to the Commission on ERO and Regional Entity audits Within 120 days of the Commencement 

Letter 

Target met. 100 percent (3/3) of 

Regional Entity audits reported to the 

Commission within 120 days. 

Percentage of ERO and Regional Entity 

audit recommendations issued and implemented 90% within 6 months 

Target met. 100 percent (20/20) of 

Regional Entity audit 

recommendations implemented in 6 

months. 

Protect Safety at LNG and Hydropower Facilities

Percentage of high- and significant- -

hazard-potential dams inspected annually 90% 

Target Met. 90% of high- and 

significant- hazard-potential dams 

inspected 

Percentage of high- and significanthazard-potential dams that either meet 

all current structural safety standards or 

are undergoing investigation or remediation 

90% 

Target Met. 90% of high- and 

significant hazard-potential dams either 

met all current structural safety 

standards or are undergoing 

investigation or remediation. 

Percentage of LNG peak-shaving facilities inspected biennially 90% Target Met. 100% of LNG peakshaving facilities were inspected 

Percentage of LNG import terminals 

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

Percentage of qualifying dams that either 

comply with EAP requirements or are 

conducting follow-up action(s) on 

outstanding item(s) 

90% Target Met. 90% of qualifying dams 

complied with EAP requirements or are 

conducting follow-up action(s) on 

outstanding item(s) 

Control access to CEII 

No instances of improper access or improper denial affecting national security or 

Commission proceedings 

Target Met. No instances. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 68

FY 2009 

Performance Measure Performance Target Results 

Incorporate Environmental Considerations into Commission Decisions

Percentage of final inspection reports 

completed 75% within 4 months of inspection 

Target Met. 100% of final inspection 

reports completed within 4 months of 

inspection 

Timeliness of issuing environmental 

licensing requirements 

Licensing responsibility letters sent within 

60 days of license issuance date 

Target Met. All licensing 

responsibility letters sent within 60 

days of license issuance date 

Percentage of final NEPA documents 

issued for ALP/TLP cases: ▪ with 

settlement agreements ▪ without 

settlement agreements 

▪ 75% within 12 months of settlement 

filing date 

▪ 75% within 24 months of REA date 

▪ Target Met. 100% within 12 months 

of settlement filing date 

▪ Target Met. 100% within 24 months 

of REA date 

Percentage of qualifying, major, onshore-pipeline projects inspected during 

ongoing construction activity 

90% of projects inspected at least once 

every four weeks 

Target Met. 97% of qualifying projects 

were inspected at least once every 4 

weeks. 

PERFORMANCE DATA FOR COMPETITIVE MARKETS: FY 2007 - 2009 

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, 

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 unopposed rulemakings 

within 9 months 

 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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 69

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

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. 

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) 

 Within 180 days for non-major 

mergers 

 Within 360 days for major mergers 

Targets Met. 

 100% of the 100 non-major 

dispositions were completed within 180 

days. 

 100% of the 9 major merger cases 

were completed within 360 days. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 70

FY 2007 

Strategy 

Performance Measurement Performance Target Data Source 

 

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 marketbased rate filings 

Within 60 days of filing date or by 

applicant’s requested date, whichever is 

later 

Target Met. 100% of the 167 initial 

market-based 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. 

FY 2008 

Strategy 

Performance Measurement Performance Target Results 

Employ Best Practices in Rules 

Percentage of initial orders completed on 

third-party complaints 

 75% filed with the Commission 

within 60 days of the date of the answer 

or by complainant’s requested date, 

whichever is later 

 90% filed with the Commission 

within 180 days of the date of the 

answer, or by complainant’s requested 

date, whichever is later 

 Target Met. 83% (40 of 48) filed 

within 60 days of the date of the answer. 

 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) 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 71

FY 2008 

Strategy 

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. 

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) 

 100% processed within 180 days 

for non-major dispositions 

 100% processed within 360 days 

for major dispositions 

 Target Met. 100% (142 out of 

142) of non-major dispositions 

were completed by the statutory 

deadlines 

 Target Met. 100% (7 out of 7) of 

major merger cases were 

completed by the statutory 

deadline. 

 

Address Market Power in Jurisdictional Wholesale Markets 

Timeliness of processing initial electric 

market-based 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. 

FY 2009 

Performance Measure Performance Target Results 

Employ Best Practices in Rules

Percentage of initial orders completed on 

third-party complaints 

▪ 75% filed with the Commission within 

60 days of the date of the answer or by 

complainant’s requested date, whichever 

is later 

▪ 90% filed with the Commission within 

180 days of the date of the answer, or by 

complainant’s requested date, whichever 

is later 

▪ Target met; 78% (28 of 36) filed within 

60 days. 

▪ Target met; 97% (35 of 36) filed within 

the 180 days. 

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% of the 221 filings 

from PJM, ISO New England, New 

York ISO, Southwest Power Pool, 

Midwest ISO, and California ISO were 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 72

FY 2009 

Performance Measure Performance Target Results 

acted on by the statutory due dates 

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% of the 15 filings to 

encourage demand response were acted 

on by the statutory deadlines 

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 23 sessions in the first quarter, 

24 sessions in the second quarter, 17 

sessions in the third quarter, and 11 

sessions in the fourth quarter of the 

fiscal year 

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% of the 8 filings 

dealing with border utility issues 

between markets were completed by the 

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) 

100% processed within 180 days for 

non-major dispositions 100% processed 

within 360 days for major dispositions 

Target Met - 100% of the 95 non-major 

dispositions and the 1 major merger case 

were completed by the established 

deadlines 

Address Market Power in Jurisdictional Wholesale Markets

Timeliness of processing initial electric 

market-based 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% of the 189 initial 

market-based rate applications were 

completed by the established target date 

Revise and clarify Standards of Conduct Issue Final Rule by December 31, 2008 

Target met. Order No. 717 revising 

Standards of Conduct for Transmission 

Providers issued October 16, 2008, and 

became effective November 26, 2008. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 73

PERFORMANCE DATA FOR ENFORCEMENT: FY 2007 - 2009 

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 

 Issue a data dictionary for all 

undefined fields with restricted entries 

 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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 74

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. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 75

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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 76

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 noaction 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. 

FY 2009 

Performance Measure Performance 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. The Division of Energy 

Market Oversight (DEMO) produced a 

Weekly Market Review (WMR) in 48 

weeks during FY 2008. The weeks 

during which we did not publish a WMR 

occurred during holiday periods. These 

WMRs included 24 special reports that 

provided in depth analysis of emerging 

market issues.

Timeliness of actions on significant 

issues identified by regular monitoring 

of natural gas and electric markets 

Within 6 months of completed report 

Target Met. The Division of Energy 

Market Oversight completed all items 

within 6 months. 

Fully implement the Research in Market 

Oversight (RIMO) program 

Perform at least four RIMO projects per 

year 

Target Met. The Division of Energy 

Market Oversight hosted staff of Italy’s 

Regulatory Authority for Electricity and 

Gas. In addition, DEMO has hosted over 

ten foreign delegations and State Public 

Service Commission representatives in 

the Market Monitoring Center.
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 77

FY 2009 

Performance Measure Performance Target Results 

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. Submitted 

recommendations for civil penalties to 

be assessed on 16 subjects. Each 

recommendation included discussion of 

facts, analysis of applicable Policy 

Statement factors, and comparison to 

actions taken in similar cases. 

Timeliness of reporting to the Commission on operational audits Within 120 days of the Commencement 

Letter 

Target met. 100 percent (19/19) of 

operational audits reported to the 

Commission within 120 days. 

Percentage of operational audit recommendations issued and implemented 90% within 6 months 

Target met. 99 percent (75/76) of 

operational audit recommendations 

implemented in 6 months.

Timeliness of reporting to the Commission on financial audits Within 120 days of the Commencement 

Letter 

Target met. 100 percent (9/9) of 

financial audits reported to the 

Commission within 120 days. 

Percentage of financial audit recommendations issued and implemented 90% within 6 months 

Target met. 100 percent (36/36) of 

financial audit recommendations 

implemented in 6 months.

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. Four MMU referrals were 

received and all were acted on within 30 

days. 

Percentage of enforcement investigations not involving market manipulation 

issues completed 

75% within one year of initiation 

Target not met. 41% of nonmanipulation investigations completed 

in FY 2009 (9 of 22) were completed 

within one year. This target was missed 

due to circumstances surrounding two 

major market manipulation cases in 

which management was required to shift 

staff resources from non-market 

manipulation cases to these two highprofile market manipulation cases. This 

did not have a negative impact on the 

performance of the enforcement 

program. To the contrary, the successful 

outcome of these market manipulation 

cases demonstrates the strength of the 

Commission’s enforcement program. 

The Commission has consistently met 

this target in previous years. 

Percentage of market manipulation enforcement investigations completed 75% within two years of initiation 

Target met. All market manipulation 

investigations completed in FY2009 

were completed within two years. 

Percentage of Hotline calls resolved 70% within 2 weeks of initial contact 

Target met. DOI received 502 Hotline 

calls and closed 485 Hotline matters. 

70.5% of the calls were resolved within 

two 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. 100 percent of regulated 

entities included in annual audit plan 

audited to ensure internal compliance 

programs and processes are in place.
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 78

FY 2009 

Performance Measure Performance Target Results 

Process complete requests for “No Action” Within 60 days of receipt of final request 

Target not met. Three out of four NoAction letters were issued in fewer than 

60 days; the fourth was issued in 69 

days. This did not have a negative 

impact on the program. 

Timeliness of reporting on compliance 

issues raised by regulated entities Reports completed monthly 

Target met. Compliance issues raised by 

regulated entities are reported monthly 

as part of the DOI Pending Case Report. 

PERFORMANCE DATA FOR SUPPORTING INITIATIVES: FY 2007 - 2009 

FY 2007 

Performance Measurement Performance Target Data Source 

Develop and implement a competencybased 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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 79

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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 80

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 

 Issue 95% of press releases for 

important agency actions on the 

same day as the underlining action 

 Post 95% of important agency 

actions on the same day as the 

underlining action 

 Provide an initial and complete 

response to 70% of inquiries at the 

time of the receipt of the request 

 Develop webpages within the 

assigned timeframe to enhance and 

support the Commission’s 

initiatives and goals 

Targets Met. 

 In FY 2007, 80 out of 80 or 100% 

of press releases were issued within 

1 hour of action being taken. 

 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 

 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. 

 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. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 81

FY 2007 

Performance Measurement Performance Target Data Source 

Enhance communication with National 

and International groups 

 Respond to 50% of Official 

Congressional correspondence 

within 10 business days 

 Provide email notification of 

significant Commission actions to 

Congress within 1 to 2 business 

days of the underlining action 

along with briefing offers where 

appropriate 

 Provide timely and effective 

briefings to members of Congress 

 Provide email notification of 

significant Commission actions to 

effected State regulatory agencies 

within 1 to 2 business days of the 

underlining action 

 Accommodate visitation requests 

from delegations from various 

countries and organizations 

Targets Met. 

 130 out of 205 pieces of official 

Congressional correspondence, or 

63%, were responded to within 10 

business days. 

 In FY 2007, email notifications to 

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. 

 In FY 2007, the Commission 

provided 38 briefings to members 

of Congress. 

 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. 

 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 

 75% of Track I cases in 29.5 weeks 

 75% of Track II cases in 47 weeks 

 75% of Track III cases in 63 weeks 

Targets Met. 

 There were no Track I cases. 

 80% of Track II cases in 47 weeks. 

 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.
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 82

FY 2008 

Performance Measure Performance Target Results 

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. 

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 

 Issue 95% of press releases for 

important agency actions within 1 

hour of action being taken 

 Post 95% of important and timesensitive agency actions on the 

Commission’s internet website 

within 1 hour of issuance 

 Provide an initial and complete 

response to 70% of inquiries at the 

time of the receipt of the request 

 Develop webpages within the 

assigned timeframe to enhance and 

support the Commission’s 

initiatives and goals 

 Target Met. 95% (71 out of 75) 

press releases were issued within 1 

hour of action being taken. 

 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. 

 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. 

 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 

 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 

 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 

 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 

 Provide email notification of 

outreach efforts (i.e., panel 

discussions, workshops, 

conferences or other forums) to 

State Officials and Governors 

within 3 business days 

 Respond to 80% of international 

delegation meeting requests within 

3 business days of rendering a 

decision 

 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. 

 Target Met. Email notifications 

concerning 292 significant 

Commission actions were sent 

within 1 to 2 business days of the 

underlying action. 

 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. 

 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. 

 Target Met. 82% (40 out of 47) of 

requests were responded to within 

3 business days. 

Maintain an effective recruiting program 

 Recruit at least 3 students each 

from at least 4 target universities 

 Increase new hires from recruiting 

program by 10 over FY 2007 

 Hire 20% of interns into permanent 

positions 

 Target Met. A total of 19 students 

were recruited from 4 target 

universities. 

 Target Met. 58 new hires in FY 

2008; 41 more than FY 2007 

 Target Met. 36% (4 out of 11) of 

summer interns from FY 2007 

hired in FY 2008. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 83

FY 2008 

Performance Measure Performance Target Results 

Implement employee development 

programs 

 Launch leadership development 

program 

 Develop competency based 

training for mainstream 

occupations 

 Target Met. The LDP was 

launched in October 2007. 15 

candidates will graduate from 

program in February 2009. 

 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 

Central Training Fund 

prioritization. 

Maintain an effective performance 

management system 

 All employees receive training 

annually 

 Provide feedback to managers to 

ensure ratings reflect meaningful 

distinctions between performance 

 High achievers are rewarded 

appropriately 

 Target Met. FERC NonSupervisory Employees received 

training in August and September 

2008. 

 Target Met. All FERC managers 

received feedback on ratings and 

training on meaningful distinctions 

during the corresponding rating 

cycle of their program office. 

 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. 

 Women. The representation of 

women was 45.5% in FY 2008, a 

7.4% decrease from FY 2007. 

 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 

 Unqualified audit opinion on 

financial statements 

 Unqualified assurance assertion on 

internal controls 

 Target Met. Unqualified opinion 

received November 6, 2008. 

 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 

 25% of total procurement dollars 

awarded to small, women-owned, 

and minority businesses 

 100% of qualified procurements 

are performance-based 

 Target Met. 31% of total 

procurement dollars awarded to 

small, women-owned and minority 

businesses. 

 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%. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 84

FY 2009 

Performance Measure Performance Target Results 

Number of ADR requests and referrals 

addressed by DRS Increase number over FY 2004 

Target met. In FY 2009, DRS addressed 

71 new ADR requests and referrals. FY 

2009 results exceeded the results of the 

base year, FY 2004, by 17 

requests/referrals. (In FY 2004 DRS 

received 54 total requests and referrals.) 

Percentage of mediated or facilitated 

case that achieve partial or complete 

consensual agreement 

75% 

Target met. Of 18 cases DRS completed 

in FY 2009, all achieved consensual 

agreement through mediation and 

facilitation, resulting in a 100% success 

rate. 

Favorable DRS customer satisfaction for 

casework and outreach 80% customer satisfaction rate 

Target met. In FY 2009, customers for 

all casework and outreach services 

expressed favorable satisfaction with 

DRS. Of respondents to casework 

surveys, DRS received a 100% customer 

satisfaction rate. Of respondents to 

outreach surveys, DRS received a 91% 

customer satisfaction rate. 

Number of outreach events (e.g., trainings, workshops, and presentations) to 

promote the use of dispute resolution 

skills 

Increase number over FY 2004 

Target met. In FY 2009, DRS delivered 

24 outreach events, 13 more events than 

FY 2004’s 11 outreach events. (In FY 

2004, the DRS delivered 13 outreach 

events.) 

Of ADR processes concluded, percentage that resulted in savings of time and/ 

or money over traditional processes 

75% 

Target met. 100% of respondents to 

casework surveys affirmed that 

involvement of DRS saved them time 

and/or money over traditional processes. 

Percentage of cases set for hearing that 

achieve partial or complete consensual 

agreement 

75% Target Met. 90% 

Ensure timely and effective communication to all stakeholders 

▪ Issue 95% of press releases for important agency actions within 1 hour of 

action being taken 

▪ Post 95% of important and timesensitive agency actions on the 

Commission’s internet website within 1 

hour of issuance 

▪ Provide an initial and complete response to 70% of inquiries at the time of 

the receipt of the request 

▪ Develop webpages within the assigned 

timeframe to enhance and support the 

Commission’s initiatives and goals 

▪ Target met. In FY 2009, 42 out of 

43or 99% of press releases were issued 

within 1 hour of action being taken. 

▪ Target met. In FY 2009, 4066 out of 

4066 or 100% of important agency 

actions were posted on the 

Commission’s internet website within 1 

hour of issuance. 

▪ Target met. In FY 2009, the office 

provided an initial and complete 

response to 3476 out of 4753 or 73% of 

public inquiries at the time of receipt. 

▪ Target met. In FY 2009, this office 

developed 11 out of 11 web page 

requests. All were completed on 

schedule. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 85

FY 2009 

Performance Measure Performance Target Results 

Enhance communication with National 

and International groups 

▪ 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 

▪ 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 

▪ 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 

▪ Provide email notification of outreach 

efforts (i.e., panel discussions, workshops, conferences or other forums) to 

State Officials and Governors within 3 

business days 

▪ Respond to 80% of international delegation meetings requests within 3 business days of rendering a decision 

▪ Target met. In FY 2009, External 

Affairs responded to 100% (211 out of 

211) of congressional inquiries and 

briefing requests within 10 business 

days. 

▪ Target met. In FY 2009, 165 email 

notifications to members of Congress 

were sent out on top priority issues 

regarding significant Commission 

actions within 1 to 2 business days of the 

underlining action 

▪ Target met. In FY 2009, 46 briefings 

for Congress and State Officials were 

conducted on priority issues of natural 

gas pipelines, transmission planning and 

integration of renewables, demand 

response, and cyber security. 

▪ Target met. In FY 2009, email 

notifications were sent out 

simultaneously for 142 out of 142 

(100%) Commission actions of interest 

to State regulatory agencies on 

significant Commission actions within 1 

to 2 business days of the underlining 

action. 

▪ Target met. In FY 2009, OEA 

responded to and coordinated 52 

approved visits; 44 or 84.6% received 

responses within 3 business days. 

Maintain an effective recruiting program 

▪ Increase retention rate of new hires 

over FY 2008 

▪ Hire 20% of interns into permanent 

positions 

▪ Implement a formal mid-career recruiting program by December 31, 2008 

 Target Met - The annualized 

retention rate of new hires 

increased from 91.7% (144/157) 

for FY 08 to 92.1% (187/203) for 

FY 09. 

 Target Met - 34% (12 of 35) of 

interns from summer 2008 

program were converted in FY 09. 

 Target Not Met. The formal four 

phase mid-level recruitment 

program strategy was launched on 

6/1/09. No negative impact by the 

delay in meeting original date. 

Implement employee development programs 

▪ Launch competency based training 

program for mainstream occupations 

▪ Develop competency based training for 

all occupations 

 Target Met - Competency-based 

training needs assessment was 

conducted during April 2009. 

 Target Not Met. The 

implementation of competency 

based training for all occupations 

was deferred, pending the selection 

and acquisition of a learning 

management system which will not 

be available until FY 2011 due to 

resource constraints. Accordingly, 

FERC will reevaluate its employee 

develop program measures for FY 

2010. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 86

FY 2009 

Performance Measure Performance Target Results 

Maintain an effective performance management system 

▪ All employees and managers receive 

training annually 

▪ Provide feedback to managers to ensure ratings reflect meaningful distinctions between performance 

▪ High achievers are rewarded appropriately 

 Target Met - all employees and 

managers received Performance 

Management Training 

 Target Met. Managers received 

feedback which explained 

meaningful distinctions between 

performance. 

 Target Met – The Commission’s 

analysis identified that on average, 

FERC rewarded: 

o highly successful 

employees 31% higher 

monetary awards than 

fully successful 

employees; 

o outstanding employees 

49% higher monetary 

awards than highly 

successful employees; 

and 

o outstanding employees 

with 96% higher 

monetary awards than 

fully successful 

employees. 

Ensure appropriate representation of 

women and minorities at all levels 

within the organization 

Increase over FY 2008 baseline 

▪ Target Not Met - FY09 percentage for 

women was 44.6%. Decreased 

percentage from FY08 by less than 1% 

(FY08 – 45.5%). Modify target for FY 

2010 and future years to be “Equal to or 

greater than Total Federal Workforce 

percentage.” 

▪ Target Not Met - FY09 percentage for 

minorities was 32.3%. Decreased 

percentage from FY08 by less than 1% 

(FY08 – 32.9%). Modify target for FY 

2010 and future years to be “Equal to or 

greater than Total Federal Workforce 

percentage.” 

Maintain reliable financial management 

systems which generate accurate and 

timely financial information to support 

operating, budget, and policy decisions 

▪ Unqualified audit opinion on financial 

statements 

▪ Unqualified assurance assertion on 

internal controls 

▪ Target Met – Received unqualified 

audit opinion on FY 09 principal 

statements 11/6/09. 

▪ Target Met – Issued unqualified 

assurance assertion on controls in place 

as of 6/30/09. 

Manage acquisitions in accordance with 

federal requirements and ensure process 

provides for the efficient use of Commission resources 

▪ 25% of total procurement dollars 

awarded to small, women-owned, and 

minority businesses 

▪ 100% of qualified procurements are 

performance-based 

▪ Target Met - 33% of total available 

procurement dollars were awarded to 

small businesses during FY09. 

▪ Target Met - 100% of qualified FY09 

procurements were performance-based 

acquisitions. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 87

PERFORMANCE DATA FOR JUST & REASONABLE RATES, TERMS AND 

CONDITIONS: FY 2010 - 2012 

Further barriers to participation by demand resources in organized wholesale electric markets will be identified and 

eliminated. 

Year Target Result 

FY 2010 

Evaluate ISO/RTO filings on barriers to demand 

response. Complete and submit National Action Plan on 

Demand Response 

Target Met. In FY 2010, issued orders evaluating 6 

filings submitted by RTOs and ISOs to identify barriers to 

demand response and to comply with other requirements 

of Order No. 719. 

Completed and published on June 17, 2010, a National 

Action Plan on Demand Response (Docket No. AD09-10) 

FY 2011 

As appropriate, issue Notice of Proposed Rulemaking on 

further steps to eliminate barriers to demand resources, 

including steps identified in National Action Plan on 

Demand Response 

Target Exceeded. On March 18, 2010, the Commission 

issued a notice of proposed rulemaking in Docket No. 

RM10-17-000, on Demand Response Compensation in 

Organized Wholesale Energy Markets, which proposed to 

eliminate a barrier to demand response resources 

receiving the same compensation as other supply-side 

resources selling into the organized wholesale electric 

market. The Commission was able meet the FY 2012 

target ahead of schedule and issued the final rule, Order 

No. 745, requiring that demand response resources be 

paid the same market-clearing price as other resources 

was issued on March 15, 2011. 

FY 2012 As appropriate, issue Final Rule on further steps to 

eliminate barriers to demand resources 

Target Met. On December 15, 2011, the Commission 

issued Order 745-A, Demand Response Compensation in 

Organized Wholesale Energy Markets order on rehearing. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 88

Best practices for demand response products and procedures will be explored and, as appropriate, implemented in 

organized wholesale electric markets. 

Year Target Result 

FY 2010 

Perform outreach with ISOs/RTOs, demand response 

providers, and others; as appropriate, issue NOPR on 

best practices 

Target Met. Engaged in outreach between October 1, 

2009 and January 31, 2010 with RTOs/ISOs, demand 

response providers, retail industry, technology providers 

and state regulators regarding practices affecting demand 

response products and procedures. One of the best 

practices identified concerned the level of compensation 

paid to demand response resources participating in 

wholesale electricity markets. On March 18, 2010, issued 

a notice of proposed rulemaking (NOPR) entitled 

Demand Response Compensation in Wholesale Electric 

Markets (Docket No. RM10-17). 

FY 2011 As appropriate, issue Final Rule on best practices 

Target met. The Commission issued Order No. 745, 

Demand Response Compensation in Organized 

Wholesale Energy Markets, on March 15, 2011. Having 

identified a best practice used by some RTOs to 

compensate demand response resources at the same price 

received by other supply-side resources, such as 

generation, the final rule required all RTOs to pay 

comparable compensation to demand response resources 

in their own markets. 

FY 2012 Implement Final Rule as appropriate 

Target Met. The Commission has reviewed the filings 

made by six RTOs and ISOs to comply with Order No. 

745, Demand Response Compensation in Organized 

Wholesale Energy Markets. The Commission determined 

that implementation of the Final Rule as proposed by five 

of the six RTOs and ISOs is appropriate, subject to 

additional compliance requirements in some instances, 

and issued orders on these five compliance filings. The 

Commission is determining whether implementation of 

the Final Rule as proposed in the sixth compliance filing 

is appropriate. 

Further, the Commission addressed other best practices by 

issuing a notice of proposed rulemaking on Standards for 

Business Practice and Communication Protocols for 

Public Utilities - Wholesale Electric Quadrant Demand 

Response Standards on April 19, 2012. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 89

All resources that are technically capable of providing needed ancillary services have the opportunity to provide those 

services. 

Year Target Result 

FY 2010 

Perform outreach to identify the need for modification or 

creation of additional ancillary services, and issue 

NOPR, as appropriate 

Target Not Met. Engaged in outreach between October 1, 

2009 and June 30, 2010 with RTOs/ISOs, storage and 

other technology providers, industrial customers, and 

research organizations. On January 21, 2010, issued a 

Notice of Inquiry seeking public comment on the extent 

to which reforms are necessary to ensure that wholesale 

electricity tariffs, including those governing ancillary 

services, remain just, reasonable and not unduly 

discriminatory (Integration of Variable Energy Resources, 

Docket No. RM10-11-000). The Commission received 

over 2,000 pages of comments from industry, state & 

federal agencies, and consumer interests, which are being 

analyzed by Commission staff to determine the need to 

modify existing, or create additional, ancillary services 

through a NOPR. Because of the large number of 

comments, more time is needed to develop specific 

proposals to include in a NOPR. Work on a NOPR 

proposal will continue into the FY11. Although the 

Commission did not issue the NOPR in FY10, it will not 

have a negative impact on achieving future targets or 

overall program performance. 

FY 2011 As appropriate, issue Final Rule on ancillary service 

products and procedures 

Target not met. Until recently, generation resources 

provided all ancillary services used to support open access 

transmission services offered by transmission-owning 

utilities, RTOs and ISOs. New technologies, such as 

demand response and energy storage devices, are now 

available and capable of providing some needed ancillary 

services. A notice of inquiry was issued on Third-Party 

Provision of Ancillary Services; Accounting and 

Financial Reporting for New Electric Storage 

Technologies on June 15, 2011 (RM11-24-000). A notice 

of proposed rulemaking on Frequency Regulation 

Compensation in the Organized Wholesale Power 

Markets was issued on February 17, 2011. A draft final 

rule was submitted for the Commission’s consideration on 

September 29, 2011. This will not have a negative impact 

on program performance. 

FY 2012 Implement Final Rule as appropriate 

Target Met. The Commission issued Order Nos. 755 and 

755-A, Frequency Regulation Compensation in Organized 

Wholesale Power Markets on October 20, 2011 and 

February 16, 2012, respectively. The Commission has 

reviewed the filings made by five RTOs and ISOs to 

comply with the Final Rule. The Commission determined 

that implementation of the Final Rule as proposed by 

three of the RTOs and ISOs is appropriate, subject to 

additional compliance requirements in some instances, 

and issued orders on these three compliance filings. The 

Commission is determining whether implementation of 

the Final Rule as proposed in the two remaining 

compliance filing is appropriate. 

Further supporting this measure, the Commission issued a 

notice of proposed rulemaking on Third-Party Provision 

of Ancillary Services; Accounting and Financial 

Reporting for New Electric Storage Technologies on June 

21, 2012. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 90

Market reforms which will allow renewable resources to compete fairly will be explored and, as appropriate, implemented 

in Commission-jurisdictional markets. 

Year Target Result 

FY 2010 

Perform outreach with industry and issue staff white 

paper identifying potential need for and types of market 

reforms 

Target Met and Exceeded.Conducted outreach between 

October 1, 2009 and June 30, 2010 with RTOs/ISOs, 

storage and other technology providers, industrial 

customers, and research organizations. After the outreach 

was completed, the Commission determined a Notice of 

Inquiry could be issued in lieu of a staff white paper and 

still achieve the same purpose. On January 21, 2010, 

issued an NOI seeking comment on the integration of 

variable energy (renewable) resources (Integration of 

Variable Energy Resources, Docket No. RM10-11-000). 

FY 2011 Issue a NOI/NOPR on market reforms, if appropriate 

Target met. The Commission issued a notice of proposed 

rulemaking, Integration of Variable Energy Resources 

(RM10-17-000) on November 18, 2010. 

FY 2012 Issue Final Rule on market reforms, if appropriate Target Met. On June 21, 2012, the Commission issued 

Order No. 764, Integration of Variable Energy Resources. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 91

By FY 2014, efficiency in market operations will be enhanced through deployment of new software and optimization of 

hardware. 

Year Target Result 

FY 2010 

Internal release of staff white paper; industry outreach, 

including technical conferences, to identify best 

practices 

Target Met. Explored opportunities to enhance 

operational efficiency in jurisdictional markets through 

the deployment of new modeling software and 

optimization of market operations. Staff held three 

conferences in June 2010 to gather information from the 

public regarding modeling and software enhancements. 

On July 29, 2010, delivered a white paper to the 

Commission’s Chief of Staff outlining opportunities for 

further work on this project. 

FY 2011 

Pursue voluntary adoption of best practices by 

RTOs/ISOs; if appropriate, issue Policy Statement 

and/or NOI/NOPR 

Target met. A technical conference exploring best 

practices was convened on June 28-30, 2011. At the 

conference, market operators and others discussed best 

practices, software improvements and optimization 

processes. This forum allows for the diffusion of 

knowledge of useful best practices, reports to a wide 

audience on improvements under development, and 

provides useful information that market operators can use 

to access improvements in their own operations based on 

the best practices of their peers. 

FY 2012 Follow-up workshops on best practices implementation; 

issue Final Rule, if relevant 

Target Met. On March 20, 2012, a workshop on best 

practices in software planning modeling was held. 

A Final Rule is not relevant for this performance measure. 

In FY 2011, it was determined that a technical conference 

would be more effective in furthering implementation of 

best practices than initiating a rulemaking proceeding. 

Without a rulemaking proceeding in FY 2011, pursuance 

of a Final Rule in FY 2012 was no longer relevant. 

Rather, staff held a follow-up workshop to identify best 

practices in the specific area of software planning 

modeling. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 92

By FY 2014, the performance of markets within and outside of ISOs/RTOs will be measured 

using a common set of metrics.4

Year Target Result 

FY 2010 Explore and develop appropriate operational and 

financial metrics for ISOs/RTOs 

Target Not Met. 

During FY 2010, Commission staff worked with RTO 

and ISO staff, stakeholders and other experts to develop 

standardized metrics to track the performance of RTOs 

and ISOs and transactions in the markets they administer. 

Proposed metrics were made publicly available for 

comment in February 2010, and Commission staff has 

reviewed comments submitted on the proposed metrics. 

While the final metrics were not issued during FY 2010, 

this had no adverse impact on the program. The 

Commission expects to release the final metrics in early 

FY 2011 and to collect data from the RTOs and ISOs 

shortly thereafter. These final metrics will measure 

performance with respect to a number of areas, including: 

reliability standards, customer costs, demand response 

market penetration, and transmission investment. 

FY 2011 Explore and develop appropriate operational and 

financial metrics for non-ISO/RTO regions 

Target not met. Commission staff has been engaged in a 

voluntary and collaborative process with a diverse group 

of non-RTO utilities to develop proposed operational and 

financial performance metrics for non-RTO regions. 

Outreach meetings were held in September 2011 with 

major industry organizations to discuss the proposed 

performance metrics. Following these outreach meetings, 

the proposed performance metrics will be issued for 

public comment. In FY 2012, Commission staff will 

issue a report that addresses the comments and 

recommends the final list of performance metrics. 

Participating non-RTO utilities will then issue their 

reports on these final metrics and Commission staff will 

issue a final report. While the final metrics were not 

issued during FY 2011, Commission staff is on schedule 

to issue final metrics in FY 2012 which will have no 

adverse impact on the program. Commission staff 

expects to release the final metrics and collect data from 

non-RTO utilities on these metrics by the third quarter of 

FY 2012. 

FY 2012 Explore and develop appropriate operational and 

financial metrics for non-ISOs/RTO regions 

Target Not Met. Beginning in FY 2011, Commission 

staff has been engaged in a voluntary and collaborative 

process with a diverse group of non-RTO utilities to 

develop proposed operational and financial performance 

metrics. It has taken longer than anticipated for this 

group to organize and reach consensus on a list of 

proposed metrics. In February 2012, the draft metrics 

were issued for public comment with an extended 

comment period of 75 days, 45 days longer than the 

typical 30 day comment period. Commission staff 

expects to issue in FY 2013 a report that will recommend 

a final list of performance metrics. This will not have a 

negative impact on program performance. 

 

4

 The FY 2012 Performance Target reflects an adjustment made to the Commission’s Strategic Plan as allowed 

by the GPRA Modernization Act of 2010. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 93

By FY 2014, appropriate filings and issues will employ alternative dispute resolution and collaborative processes first.5

Year Target Result 

FY 2010 Develop guidelines/tariff provisions to apply to 

filings/issues amenable to consensual resolution 

Target Not Met 

During FY 2010, staff reviewed and categorized two 

years of recent Commission orders which set cases for 

consensual resolution/hearing. Internal dialogue with 

senior staff and program managers provided additional 

understanding into the types of cases which may be 

amenable to consensual resolution. Through these efforts, 

a baseline of the types of cases and issues that the 

Commission traditionally sets for consensual 

resolution/hearing was established. 

Following this internal communication, staff identified a 

list of approximately 30 external stakeholders who could 

provide valuable insight to the guideline development 

process. Acquiring the input from these external 

stakeholders has taken significantly more time than 

anticipated because the number of external parties is 

much higher than originally planned. The meetings that 

have occurred to date have been very productive and the 

Commission staff will continue to meet with the 

remaining parties throughout the first and second quarters 

of FY 2011. Although the Commission did not finalize 

the guidelines in FY 2010, it will not have a negative 

impact on overall program performance. The 

Commission staff will work diligently in FY 2011 to 

incorporate into the guidelines the external parties’ 

feedback. Further, the Commission will make every 

effort to initiate the pilot in the second half of FY 2011 in 

accordance with the established target date. 

FY 2011 Implement rules setting forth guidelines/tariff provisions 

and initiate pilot programs 

Target not met. The Commission was not able to meet 

this target due to the retirement of key management 

personnel during FY 2011. However, staff was able to 

make significant progress by meeting with 13 external 

stakeholder organizations. These organizations represent 

a broad spectrum of industries subject to Commission 

regulation. Their input was sought on new areas and 

types of issues where collaborative processes could foster 

the settlement of proceedings. Based on suggestions 

received in these meetings, staff prepared 

recommendations on additional issues and types of 

Commission proceedings where collaborative processes 

may be the most effective. Although the guidelines were 

not implemented in FY 2011, it will not have a negative 

impact on overall program performance. 

FY 2012 Implement rules setting forth guidelines/tariff provisions 

and initiate pilot programs 

Target Not Met. No additional measures for consensual 

resolution were identified as feasible; therefore, this 

measure is no longer applicable. This will not have a 

negative impact on program performance. 

 

5

 The FY 2012 Performance Target reflects an adjustment made to the Commission’s Strategic Plan as allowed 

by the GPRA Modernization Act of 2010. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 94

By FY 2014, 70 percent of company compliance programs reviewed on Commission audits for the audit focus areas are 

found to be adequate to demonstrate a culture of compliance. 

Year Target Result 

FY 2010 10% 

50% (2/4) of compliance programs were found to 

demonstrate an adequate culture of compliance. 

Because this performance measure is new for FY 2010, 

only audits that were started and completed in FY 2010 

were included. In determining which audits would be 

included in the universe for this measure, the Commission 

developed general guidelines. In order to maintain 

consistency over time, only large, multi-scope audits will 

be included in this measure’s universe. 

FY 2011 25% 

Target met. The Commission found that 63% (5/8) of 

compliance programs were adequate to demonstrate a 

culture of compliance. 

FY 2012 40% 

Target Met. The Commission found that 67% (8 of 12) 

compliance programs were adequate to demonstrate a 

culture of compliance. 

By 2014, 70 percent of compliance programs reviewed through investigations that involve a penalty are found to be 

sufficiently robust to merit credit to reduce the penalty. 

Year Target Result 

FY 2010 10% 

Target Met. During FY 2010, 26 percent (20 out of 77) of 

the relevant cases, the Commission found compliance 

programs in place at the time of the violation to be 

sufficiently robust as to merit credit to reduce or eliminate 

penalties. 

FY 2011 25% 

Target met. In 32% (32/100) of the relevant cases, the 

Commission found compliance programs in place at the 

time of the violation to be sufficiently robust as to merit 

credit to reduce or eliminate penalties. 

FY 2012 40% 

Target Met. In 43% of the relevant cases, the 

Commission found compliance programs in place at the 

time of the violation to be sufficiently robust as to merit 

credit to reduce or eliminate penalties. 

By FY 2014, 80 percent of the Commission’s audit program will be planned using a risk-based approach. 

Year Target Result 

FY 2010 40% Target Met. 55% (52/94) audits planned using a riskbased approach. 

FY 2011 60% Target met. 85% (57/67) of the audits were planned by 

the Commission staff using a risk-based approach. 

FY 2012 80% Target Met. 88% (43 of 49) of the audits were planned by 

the Commission staff using a risk-based approach. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 95

PERFORMANCE DATA FOR INFRASTRUCTURE: FY 2010 - 2012 

By FY 2014, 50 percent of all new transmission projects will incorporate advanced technologies. 

Year Target Result 

FY 2010 5% 

Target Met. In FY 2010, the Commission acted on 11 

requests for incentives or negotiated rate authority for 

new transmission. Of those 11 requests, the Commission 

found one project (9 percent) which included advanced 

transmission technologies. 

FY 2011 10% Target met. Of the projects that met the criteria, 67% 

(10/15) incorporated advanced technologies. 

FY 2012 20% Target met. Of the projects that met the criteria 68% (17 

projects) incorporated advanced technologies. 

By 2014, all public utilities will implement open and transparent transmission planning processes that include analysis 

and consideration on a comparable basis of proposed solutions involving any of generation, transmission, and demand 

resources. 

Year Target Result 

FY 2010 

Assessment of transmission planning process best 

practices, including the potential for collaborative 

decision making, and issue NOPR, as appropriate 

(Assessment includes how options to transmission are 

considered.) 

Target Met. Upon review of more than 3,000 pages of 

comments and significant staff-led outreach, staff 

prepared recommendations for Commission consideration 

that led to the issuance of a NOPR on June 17, 2010 

(Transmission Planning and Cost Allocation by 

Transmission Owning and Operating Public Utilities, 

Docket No. RM10-23-000). 

FY 2011 As appropriate, issue Final Rule on transmission 

planning process best practices 

Target met. The Commission issued the final rule, Order 

No. 1000, Transmission Planning and Cost Allocation by 

Transmission Owning and Operating Public Utilities, 

(RM10-23-000) on July 17, 2011. 

FY 2012 Implement Final Rule as appropriate 

Target Met. The Commission in Order No. 1000 

encouraged public utility transmission providers to 

engage in frequent dialogue with Commission staff to 

explore issues that are specific to each transmission 

planning region in preparing their compliance filings 

(which are due in October 2012). To facilitate that dialog, 

Commission staff identified regional meetings where 

public utilities intended to discuss compliance with Order 

No. 1000, and participated, by phone and in-person, at 

173 of those meetings. Staff’s participation was both to 

monitor the progress of each region and to act as a 

resource for public utility transmission providers and 

stakeholders about issues related to Order No. 1000. In 

addition, staff was available to answer questions and meet 

with public utility transmission providers and 

stakeholders that had specific questions about Order No. 

1000 compliance. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 96

By FY 2014, 100 percent of jurisdictional natural gas companies will be examined for feasibility of installing waste heat 

recovery systems. 

Year Target Result 

FY 2010 20% 

Target Met. In FY 2010, Commission staff examined 44 

(20 percent) of the Commission’s jurisdictional natural 

gas companies for feasibility of installing waste heat 

recovery systems. 

FY 2011 40% 

Target met. Commission staff examined a total of 40% of 

the Commission’s jurisdictional natural gas companies 

(65 of 159) for feasibility of installing waste heat 

recovery systems. In FY 2011 specifically, Commission 

staff examined 32 companies. 

FY 2012 60% 

Target Met. In FY 2012, Commission staff examined a 

total of 62% of the Commission’s jurisdictional natural 

gas companies (98 of 159) for feasibility of installing 

waste heat recovery systems. In FY 2012 specifically, 

Commission staff examined 33 companies. 

By FY 2014, risk-informed decision making will be incorporated into the FERC dam safety program. 

Year Target Result 

FY 2010 Develop action plan 

Target Met. In FY 2010, the Commission developed and 

finalized its RIDM Action Plan which outlines the work 

efforts required over the next four years to incorporate 

RIDM into its dam safety program. 

FY 2011 Portfolio Risk Assessment of FERC dam inventory 

Target not met. In FY 2011 the Commission did not 

complete the Portfolio Risk Assessment; however, the 

screening level portfolio risk assessment tool was 

finalized. 

FY 2012 Determine RIDM is consistent with regulatory process 

Target Met. As a result of the Screening Level Portfolio 

Risk assessment of the Commission’s dams conducted in 

FY 2012, it was determined that RIDM could be 

incorporated into the Commission’s dam safety program. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 97

By FY 2014, proposed Reliability Standards will be processed in a timely manner at least 80 percent of the time. 

Year Target Result 

FY 2010 75% Target Met. 96% of filed reliability standards have orders 

issued within 18 months. 

FY 2011 75% Target met. 97% of proposed reliability standards have 

been processed with orders issued within 18 months. 

FY 2012 75% 

Target Met. 100% of filed reliability standards (including 

regional and CIP standards) have been processed with 

orders issued within 18 months. 

By FY 2014, Reliability Standards will be enforced effectively, resulting in a reduction of the frequency of repeat 

violations by at least 10 percent. 

Year Target Result 

FY 2010 Establish tracking process 

Target Met. The Commission developed in FY 2010 a 

database to track violations from Notices of Penalty filed 

by the ERO. As part of this process, the Commission 

determined the measurable parameters (e.g., what 

constitutes a repeat violation over a designated time 

period) to facilitate a determination as to the observed rate 

of repeat violations of the Reliability Standards. 

FY 2011 Track violations per entity 

Target met. Through the tracking mechanism established 

in FY 2010, staff has been tracking violations per entity 

during FY 2011 to analyze the current rate of violations 

and establish a baseline rate. A report analyzing the 

collected data from Notices of Penalty filed by the ERO 

was completed by 8/31/11. 

FY 2012 Track violations per entity 

Target Met. The annual report analyzing FY 2011 data 

was completed on December 2, 2011 and an additional 

mid-year report was completed on July 30, 2012. 

 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 98

By FY 2014, reliability parameters that could affect national goals of reducing carbon and increasing the penetration of 

renewable energy resources on the electric transmission grid will be finalized. 

Year Target Result 

FY 2010 Establish contacts and develop research, data collection 

and reporting processes 

Target Met. In FY 2010, Commission staff established 

approximately 100 industry contacts across the nation and 

internationally. The Commission has led and participated 

in the efforts to conduct technical studies on Frequency 

Response, Electromagnetic Pulse and the potential impact 

of early Coal Plant retirements due to potential 

regulations. The research the Commission staff has done 

on complex and highly technical studies provide guidance 

and direction in establishing the parameters to protect and 

preserve reliability as industry integrates large amounts of 

renewable generation into the bulk power system. 

FY 2011 

Track studies and identify or propose reliability 

parameters. Perform initial analysis to assess if they are 

feasible for the bulk power system 

Target met. Commission staff performed and completed 

analyses on the Frequency Response study including 

identifying reliability parameters. The report on 

Frequency Response was issued in January 2011. 

NERC's Reliability Metrics Work Group adopted 

Frequency Response as a reliability parameter to track on 

a trial basis. 

FY 2012 

Track studies and identify or propose reliability 

parameters. Perform expanded analysis to assess if they 

are feasible for the bulk power system 

Target Met. Commission staff tracked three studies 

identifying several reliability parameters and performed 

two expanded analyses to assess their feasibility. 

Specifically, staff 1) performed detailed technical analysis 

related to the Arizona-Southern California outages 

showing system operating limits, interconnection 

reliability operating limits, voltage collapse and special 

protection scheme reliability parameters were not 

appropriately considered; 2) tracked and conducted an 

expanded detailed analysis of the EPA regulations on the 

Bulk Power System and participated in the Commissionled technical conference; and 3) analyzed documentation 

and conducted a technical workshop on voltage 

coordination on high voltage grids to assess the feasibility 

of adjusting voltage reliability parameters. 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 99

Appendix A: Statutory Authority 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 100

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) 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 101

Appendix B: Acronym Listing 
FY 2012 Performance & Accountability Report

Federal Energy Regulatory Commission

Page 102

Acronym Full Description 

ADR Alternative Dispute Resolution 

CAISO California Independent System Operator 

CIP Critical Infrastructure Protection 

DOE Department of Energy 

DRS Dispute Resolution Service 

ERO Electric Reliability Organization 

EQR Electric Quarterly Report 

FERC Federal Energy Regulatory Commission 

FPA Federal Power Act 

FPC Federal Power Commission 

FTE Full Time Equivalent 

FY Fiscal Year 

ISO Independent System Operator 

ISO-NE ISO New England 

MISO Midwest Independent Transmission System Operator 

MMcf/d Million cubic feet per day 

MOU Memorandum of Understanding 

LNG Liquefied Natural Gas 

NEPA National Environmental Policy Act 

NERC North American Electric Reliability Corporation 

NOPR Notice of Proposed Rulemaking 

NYISO New York Independent System Operator 

OMB Office of Management and Budget 

PJM PJM Interconnection 

RIDM Risk-informed Decision Making 

RTO Regional Transmission Organization