Federal Energy Regulatory Commission

A n n u a l R e p o rt

208-674_FER_CV1-4.indd 1 11/27/06 2:30:
Federal Energy Regulatory Commission

A n n u a l R e p o rt

Message from the Chairman 1

Section 1. Management’s Discussion and Analysis 3

Vision and Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Regulatory Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Organizational Structure and Resources . . . . . . . . . . . . . . . . . . . . 5

Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Section 2. Energy Infrastructure: 

Serving the Nation’s Needs 9

Expedite Development of Energy Infrastructure Projects . . . . . . . . . . . 9

Encourage Investment in Energy Infrastructure . . . . . . . . . . . . . . . . 13

Address Landowner and Environmental Concerns Fairly . . . . . . . . . . 15

Protect the Reliability, Security and Safety of the Energy Infrastructure . . 16

Section 3. Competitive Markets: 

Benefiting the Consumer . . . . . . . . . . . . . .21

Promote Effective Competition in Electric and Gas Markets . . . . . . . . 22

Establish Clear Market Rules to Govern Electric Markets . . . . . . . . . . 24

Section 4. Enforcement and Oversight: 

Guarding the Consumer 29

Vigilant and Effective Oversight of Market Operations . . . . . . . . . . . 30

Firm But Fair Enforcement of Commission Rules . . . . . . . . . . . . . . . 32

Appendix A: Hydropower Tables . . . . . . . . . . . . . . . . . . . . . . . . . 37

Contents
A N N U A L   R E P O R T


I

am pleased to submit to the Congress the Federal Energy 

Regulatory Commission’s annual report, covering the fiscal 

year from October 1, 2004, through September 30, 2005.

For fiscal year 2005, Congress appropriated $210,000,000 to support Commission activities. Under 

the authority of the Omnibus Budget Reconciliation Act of 1986 and other laws, the Commission recovers all of its costs from regulated industries through fees and annual charges. Revenues generated from 

these sources completely offset congressional appropriations and results in a net cost of zero dollars to 

the treasury. Thus, the users and beneficiaries of the Commission’s services pay its operating costs—not 

the general taxpayers. 

This 85th Annual Report issued by the Commission and its predecessor, the Federal Power Commission, demonstrates that the Commission’s overall duties remain the same: promoting safe and reliable 

energy supplies at just and reasonable rates, and preventing undue discrimination and preference. Those 

have been the same duties that have guided the Commission since 1935 and 1938, when the Federal 

Power Act and Natural Gas Act were enacted. 

However, on August 8, 2005, the Energy Policy Act of 2005 (EPAct) was enacted. EPAct marked the 

most significant increase in Commission regulatory authority in 70 years. Among the most important of 

these tools is new authority to establish rules to prevent manipulation of electric and gas markets, with 

significant new penalty authority. These new regulatory tools also include authority to establish and 

enforce electric reliability standards, new tools to prevent the accumulation and exercise of generation 

market power by granting us authority to review acquisitions and transfers of generation facilities, and 

discretionary authority to provide greater price transparency in electric and gas markets.

This important new law gives the Commission the authority we need to prevent unjust and unreasonable rates in wholesale power sales, to prevent undue discrimination or preference in wholesale power 

sales and transmission service, and to encourage the development of a stronger energy infrastructure. 

Sincerely, 

Joseph T. Kelliher 

Chairman

To the Senate and House of Representatives:
A N N U A L   R E P O R T



Mission

The Federal Energy Regulatory Commission regulates and 

oversees energy industries in the economic, environmental, and 

safety interests of the American public.

Vision

Reliable, affordable energy through reliance on competition 

and effective regulation.


Management’s 

Discussion and Analysis 

The Federal Energy Regulatory Commission 

(FERC or the Commission) is an independent 

agency that regulates the electric, natural gas, 

and oil pipeline industries. FERC also reviews 

proposals to build liquefied natural gas (LNG) 

terminals and interstate natural gas pipelines as well as licensing hydropower projects. The Energy Policy Act of 2005 (EPAct 

2005) gave FERC additional responsibilities. With this expanded 

responsibility, the Commission:

s	Regulates the transmission and sale of natural gas for 

resale in interstate commerce; 

s	Regulates the transmission of oil by pipeline in interstate 

commerce;

s Regulates the transmission and wholesale sales of electricity in interstate commerce; 

s	Reviews mergers, acquisitions, asset sales, and certain 

security transactions in the electricity industry;

s	Licenses and inspects private, municipal, and state hydroelectric projects; 

s	Approves the siting of and abandonment of interstate 

natural gas facilities, including pipelines, storage and 

liquefied natural gas; 

s	Approves the siting of certain electric transmission facilities;

s	Ensures the reliability of the bulk power transmission 

system;

s	Monitors and investigates energy markets;

s	Enforces compliance with FERC rules, through the use of 

civil penalties and other means;

s	Oversees environmental matters related to natural gas 

and hydroelectricity projects; and

s	Administers accounting and financial reporting regulations and conduct of regulated companies. 

The Commission’s vision, mission, regulatory authority, 

organizational structure and resources, goals, and information 

technology described in this section reinforce the efforts to 

achieve desired results and accomplish the new responsibilities 

in EPAct 2005.

Section 1


A N N U A L   R E P O R T

Regulatory Authority

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. 

Hydropower regulation, the oldest area of the Commission’s jurisdiction, began with the Federal Water Power 

Commission’s regulation of non-federal hydroelectric generation 

in 1920 and includes authorizing the construction of projects in 

interstate commerce and overseeing their operation and safety.

In 1935, the Commission’s role was expanded to include 

certain electric industry activities by the Federal Power Act 

(FPA). Under FPA sections 205 and 206, the Commission 

oversees the rates, terms and conditions of sales for resale of 

electric energy and transmission service in interstate commerce 

by public utilities. The Commission must ensure that those 

rates, terms and conditions are just and reasonable, and not 

unduly discriminatory or preferential. Under FPA section 203, as 

amended by EPAct 2005, the Commission reviews mergers and 

certain corporate transactions involving public utilities and public utility holding companies. Under FPA sections 203, 205 and 

206, the Commission primarily regulates investor-owned utilities 

and independent power producers. Government-owned utilities (e.g., Tennessee Valley Authority, federal power marketing 

agencies, and state and municipal utilities) and generally, most 

cooperatively-owned utilities are not subject to Commission 

regulation (with certain exceptions).

The Commission may not regulate retail sales or local 

distribution of electricity, as the FPA leaves these matters to 

the states. In addition, the Commission does not have a role in 

authorizing the construction of new generation facilities (other 

than non-federal hydroelectric facilities) or transmission facilities, as these activities are the responsibility of state and local 

governments. However, under EPAct 2005, the Commission 

now has, if certain conditions are met, the authority to permit 

the construction or modification of transmission facilities 

located in “national interest electric transmission corridors” that 

are designated by the Secretary of Energy. Pursuant to such a 

permit, a permit holder may, through the exercise of eminent 

domain, acquire rights-of-way for just compensation. 

The Commission’s role regulating the natural gas industry is 

largely defined by the Natural Gas Act (NGA). Under the NGA, 

the Commission regulates the construction of new on-shore 

LNG import terminals, and natural gas pipelines and related 

facilities and oversees the rates, terms and conditions of sales for 

resale and transportation of natural gas in interstate commerce. 

The Commission’s jurisdiction over wholesale sales of natural 

gas, however, is limited by the Natural Gas Policy Act of 1978 

and the Natural Gas Wellhead Decontrol Act of 1989. Pipeline 

siting and construction is authorized by the Commission if 

found to be required by the public convenience and necessity. 

As with hydropower licensing, the Commission’s actions on 

LNG and pipeline projects typically require consideration of 

factors set forth in the National Environmental Policy Act of 

1969 (NEPA), the Endangered Species Act, the Coastal Zone 

Management Act and similar statutes. Currently, regulation of 

production and gathering of gas, as well as retail sales and local 

distribution of natural gas, are matters within the jurisdiction of 

the states.

Finally, the Interstate Commerce Act gives the Commission 

jurisdiction over the rates, terms and conditions of transportation services provided by interstate oil pipelines. The Commission has no authority over the construction of new oil pipelines, 

or over other aspects of the industry such as production, refining or wholesale or retail sales of oil.

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 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 to the agency.


Commissioner Commissioner Chairman Commissioner Commissioner

Office of 

Administrative 

Law Judges

Office of 

the Secretary

Office of 

Administrative 

Litigation

Office of 

External Affairs

Office of the 

Executive Director

Office of the

General Counsel

Office of Markets, 

Tariffs and Rates

Office of the

Energy Products

Office of Market 

Oversight and 

Investigations

Federal Energy Regulatory Commission

Organizational Structure

and Resources

The Commission is an independent regulatory agency 

within the U.S. Department of Energy (DOE) whose function is 

to oversee the Nation’s electric, natural gas, hydroelectric, and 

oil pipeline industries. It is headed by a bi-partisan, five-member 

Commission, comprised of the Chairman and four Commissioners who are appointed by the President and confirmed by the 

Senate. The Chairman serves as the chief executive officer. In 

FY05, FERC was organized by nine functional offices (see table). 

The Commission’s headquarters are in Washington, D.C., and it 

has five regional offices throughout the country.

In FY 2005, Congress appropriated $210,000,000 to support 

Commission activities. As of September 30, 2005, the Commission had 1,236 staff, including 1,215 permanent staff and 21 

temporary staff.


A N N U A L   R E P O R T

Offices/Organizations Descriptions

Office of Administrative Law Judges

Resolves contested cases as directed by the Commission effectively, efficiently 

and expeditiously, either through impartial hearing and decision or through 

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

Office of Administrative Litigation

Represents the public interest and seeks to litigate or settle cases set for hearing in a timely, efficient and equitable manner while ensuring the outcomes 

are consistent with Commission policy

Office of External Affairs Handles all external communications with the public, Congress and the states 

for the Commission.

Office of the Executive Director

Provides administrative support services to the Commission including human 

resources, procurement, information technology, organizational management, 

financial, logistics and others.

Office of Energy Projects Strengthens energy infrastructure through the approval and oversight of hydroelectric and natural gas energy projects that are in the public interest.

Office of the General Counsel

Provides legal services to the Commission. OGC represents the Commission 

before the courts and Congress, and is responsible for the legal phases of the 

Commission’s activities.

Office of Market Oversight and Investigations

Ensures effective regulation and protects consumers through understanding 

markets and their regulation, timely identification and remediation of market 

problems, and assuring compliance with rules and regulations. 

Office of Markets, Tariffs and Rates Addresses markets, tariffs and rates relating to electric, natural gas, and oil 

pipeline facilities and services.

Office of the Secretary

Serves as the official focal point through which all filings are made for proceedings before the Commission, issues notices and Commission orders, records and preserves the minutes of all official actions taken by the vote of the 

members of the Commission. 


Goals

Energy Infrastructure: Serving the Nation’s Needs 

The Nation is best served by a secure and reliable energy 

infrastructure. The Commission seeks to encourage investment 

in the energy infrastructure by expediting the development of 

energy infrastructure projects while maintaining a high level of 

regulatory certainty in Commission policies. Project applications 

will be reviewed to ensure the reliability, security and safety of 

the energy infrastructure while ensuring that landowner and 

environmental concerns are addressed in a fair manner. 

Competitive Markets: Benefiting the Consumer 

Competition in wholesale power benefits consumers by 

supporting a strong, stable national economy. The Commission 

seeks to establish clear market rules to govern electric markets 

to prevent the exercise of market power, undue preference and 

self dealing, to provide regulatory certainty and to promote 

transparency of competitive electric and gas markets. 

Enforcement and Oversight: Guarding the 

Consumer 

The public is best served by the vigilant and effective 

oversight of energy markets. The Commission works to protect 

customers and market participants through vigilant and fair 

oversight of both traditionally regulated entities and transitioning energy markets. Monitoring of the markets, including 

identifying and remedying problems with market structure and 

operations, ensures long-term market development and the 

prevention of the exercise of market power. 
A N N U A L   R E P O R T




Energy Infrastructure: 

Serving the 

Nation’s Needs

Competitive energy markets require robust 

infrastructure and the United States must 

encourage rapid, flexible infrastructure investment to meet market and operational demands. Adequate infrastructure helps make 

competitive markets work by:

s	improving reliability;

s	reducing barriers to entry;

s	encouraging economically efficient markets;

s	better matching of demand and supply;

s	improving customer access to low-cost resources; and

s	allowing customers to choose between multiple 

supply sources.

Healthy natural gas and electric markets require adequate infrastructure because both markets can experience rapid and large 

price fluctuations when demand and supply diverge, due to either 

insufficient supply or insufficient demand flexibility in response 

to those high prices. The Commission has to meet its goal of 

promoting development of a robust energy infrastructure: 

s	expedite development of energy infrastructure projects;

s	encourage investment in energy infrastructure;

s	address landowner and environmental concerns fairly; and

s	affirm the reliability and safety of the energy infrastructure.

In August 2005, President George Bush signed EPAct 2005 

into law. The Act contains several new authorities to strengthen 

the Commission’s ability to implement these objectives.

Expedite Development of Energy

Infrastructure Projects

Natural Gas and LNG: The Commission 

continues to strive to make decisions on 

project applications in a timely manner and 

to make improvements in its procedures. 

During FY 2005, the Commission continued to refine its 

procedures to reduce the time that applications are before 

the Commission before final decisions are made, while ensuring the processes are consistent with statutory mandates and 

due process. 

A significant step in improving the quality and timely 

review of LNG applications are the new pre-filing rules that have 

been proposed in accordance with the recently enacted EPAct 

2005. The new rules will establish mandatory pre-filing procedures for all applicants seeking to site, construct and operate 

new LNG terminals and related facilities, such as pipelines, that 

would transport the revaporized LNG to markets. The rules will 

require potential developers of new LNG terminals to initiate 

pre-filing procedures at least six months prior to filing a formal 

application. These improvements will help the Commission in 

its consideration of the LNG proposals before it. During FY 2005 

the Commission authorized the construction of six new LNG 

import terminals. In addition, the Commission staff reviewed 

Section 2
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A N N U A L   R E P O R T

proposals for 12 new import terminals and expansion of three 

recently approved terminals. 

With respect to natural gas storage projects, the Commission took an average of seven months to issue final orders for gas 

storage projects in FY 2005. This included expansions of existing 

storage reservoirs to new solution mined salt cavern storage facilities. The fastest action, an expansion of an existing reservoir by 

Freebird Gas Storage, took only five months to complete.

In response to EPAct 2005, the Commission also initiated action designed to promote the expansion of natural 

gas storage capacity to provide for mitigation of natural gas 

price volatility. The goal is to provide further incentives for the 

development of new natural gas storage capacity to ensure 

access to storage services at just and reasonable rates, while at 

the same time ensuring that adequate storage capacity will be 

available to meet anticipated market demand. During FY 2005, 

the Commission authorized 12 storage projects resulting in 4.4 

Bcf of peak day deliverability as well as LNG projects resulting 

in 44.8 Bcf of storage capacity and 6.5 Bcf per day of peak day 

deliverability from LNG storage facilities. In FY 2005, there were 

13 storage projects under analysis representing approximately 

1.6 Bcf of peak day deliverability. 

Since 1992, the Commission has actively promoted outreach through its industry training sessions. During FY 2005, 

Commission staff conducted four sessions of its Environmental 

Report Preparation Seminars and Post-Certificate Environmental 

Compliance Seminars. Further, staff revised its Third-Party Contracting Handbook to better address prospective applicants’ 

questions on LNG projects and to incorporate the guidelines 

and goals of the Pre-Filing Process. Staff also worked with the 

Interstate Natural Gas Association of America to develop 

geographic information system standards in anticipation of the 

Commission’s movement toward electronic filing of certificate 

applications. Staff in OEP and OEA worked jointly to develop A 

Guide to LNG – What All Citizens Should Know. The informative 

brochure serves as a much-needed source of accurate information that can be used by Commission staff to inform the public 

about the LNG industry and the Commission’s regulations

In Order No. 2005, the Commission reaffirmed and clarified 

its rules establishing requirements governing the conduct of 

open seasons for potential shippers to compete for and acquire 

initial capacity and future expansion capacity on any potential 

Alaska pipeline.

In FY 2005, 28 major pipeline projects were certified, resulting in 14.5 Bcf per day of additional capacity, 147,000 horsepower of compression, and 935 miles of new pipeline. 

Modernize and enforce power plant 

interconnection rules 

Standardized interconnection procedures and agreements 

for electric generators encourage needed investment in generation and transmission infrastructure, as well as reduce opportunities for transmission owners to favor affiliated generation and 

encourage efficient generation and transmission siting decisions. 

The Commission issued several orders directed at small and intermittent resources, thus removing a major barrier to bringing 

generation to the national energy markets, where needed. 

s	In May 2005, the Commission issued a final rule (Order 

No. 2006) establishing standard procedures and agreements for the interconnection of small generators with a 

capacity up to 20 megawatts (large generator interconnection rules were issued in FY 2003). This rule will help 

preserve grid reliability, increase energy supply, lower 

wholesale electric costs for customers by increasing the 

number and types of new generators available in the 

electric market, and include the development of non-polluting alternative energy resources. The rule encourages 

standardization of interconnection practices across the 

nation, both at state and federal levels. It provides small 

generators reasonable certainty about the costs they will 

bear, the terms and conditions affecting their interconnection to the transmission system, and expedites the 

interconnection process.

s	In June 2005, the Commission issued a final rule (Order 

No. 661) addressing the interconnection requirements for 

wind power facilities larger than 20 megawatts. The rule 

requires transmission providers to address technical and 

procedural requirements in their open access transmission tariffs (OATT) for integrating wind power facilities 
11

into their transmission systems. The rule recognizes the 

unique characteristics of wind generating technology, and 

removes unnecessary obstacles to further development 

of wind generating resources while ensuring that reliability is protected.

During FY 2005, the Commission’s infrastructure policy 

group participated in a number of conferences and presentations for senior Commission staff, commissioners, and the Chairman. In particular, the group prepared and delivered an overview of coal’s contribution to the electric generation industry 

as part of a Commission technical conference in West Virginia.

In addition, they took part in the analysis of electric transmission deficiencies in southwest Connecticut. Also, the group 

prepared and delivered the opening presentation on California’s 

current electric infrastructure and supply and demand at a 

Commission technical conference in San Francisco before the 

California Public Utilities Commission and the California Energy 

Commission. 

Improved Hydropower licensing through the 

integrated licensing and pre-filing processes 

and interagency agreements

The Commission continues to encourage early stakeholder involvement in the licensing process through the use 

of tools such as the hydropower licensing pre-filing process in 

the context of the Alternative Licensing Procedure (ALP) and 

the new Integrated Licensing Process (ILP). The environmental 

review process includes numerous opportunities for stakeholder involvement. The Commission has expanded those 

opportunities by: providing staff resources, providing all readily 

available project information and holding additional, issuespecific meetings in the project areas. In FY 2005, Commission 

staff actively participated in 21 projects that were using the 

pre-filing process to engage stakeholders in the identification 

and resolution of stakeholder concerns prior to the filing of a 

license application with the Commission. The staff’s participation and initiative in these efforts will allow for the filing of 

better license applications enabling more efficient and expeditious licensing actions by the Commission. 

Section 241 of EPAct 2005 permits license applicants and 

others to request a trial-type hearing and to propose alternatives to mandatory section 4(e) conditions and section 18 

fishway prescriptions issued by Interior, Commerce, or Agriculture. Commission staff has provided: guidance to the required 

Departments on the ILP process; methods to implement these 

EPAct provisions; and comments on the Departments’ joint 

rulemaking. This rulemaking was scheduled for issuance in 

November 2005. 

The Commission has made great progress in implementing its new ILP. In FY 2005, the percentage of hydropower 

projects using the ILP increased by 450 percent. The Commission expanded the use of the ILP which, among other things, 

merges prefiling consultation with the development of the 

environmental analysis document under NEPA. Throughout 

FY 2005, the Commission undertook numerous outreach 

efforts to educate the industry, resource agencies, Indian 

tribes, nongovernmental organizations, citizen groups and 

other stakeholder groups on the ILP. Staff made presentations 

and led discussions on the ILP at several national hydropower 

meetings. In addition, regional conferences and intensive project-specific meetings with multiple stakeholder groups were 

held to educate participants on the ILP. 

The ILP is currently being used by the following ten 

projects: Morgan Falls (Georgia), Canaan (New Hampshire/

Vermont), Smith Mountain (Virginia), Metro Hydro (Ohio), 

Coon Rapids (Minnesota), De Sabla (California), Tacoma-Ames 

(Colorado), Mystic Lake (Montana), Packwood Lake (Washington), and Allison Lake (Alaska). Licensees for all five relicenses 

that needed to select the preferred licensing process in FY 2005 

opted for the ILP. In addition, three original license applicants 

opted to use the ILP in FY 2005.

One of the primary benefits of the ILP is the opportunity 

to resolve any study disputes early in the licensing process. An 

informal dispute resolution process is available to all participants 

and a formal dispute resolution process is available for mandatory conditioning agencies. Five projects have resolved study 

disputes through the informal process. One project, Morgan 

Falls, used the formal dispute resolution process. A technical 
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A N N U A L   R E P O R T

expert from the Commission unassociated with the project 

acted as the chair of the panel. The team reached consensus on 

recommendations within the prescribed time frame for the ILP. 

In addition, the Commission undertook a three-pronged 

approach to monitor the extent the ILP achieves its goals of 

reducing processing time and costs while ensuring appropriate environmental protection. Furthermore, the Commission 

conducted multi-stakeholder teleconferences, followed by four 

regional workshops, and, finally, a technical conference in Washington DC. The Commission received positive feedback on the 

ILP as well as ideas for improving implementation.

Fifteen applications for hydropower relicensing of existing 

facilities were filed in FY 2005. There were also six exemption 

applications filed. These applications, along with others that will 

be filed over the next 10 years, represent over 38 projects with 

installed capacities in excess of 100 megawatts. Many of these 

applications are for regionally important cases that affect the 

full spectrum of environmental concerns ranging from shoreline 

development (marinas vs. residential development vs. public 

access) to conflicting uses of instream flows for water supply, 

irrigation interests, white-water boating and endangered fish 

species. The expeditious processing of hydropower license and 

exemption applications, while ensuring that the concerns of 

those affected by hydropower projects are addressed, remains 

an ongoing goal for the Commission. 

The Commission’s practice of approving comprehensive 

settlements and incorporating in whole or in part the terms of 

the settlements recommended by stakeholder groups into the 

license has encouraged stakeholders to formulate such agreements. Through this practice, the Commission has empowered 

the various stakeholder groups to resolve, in large part, the 

issues during the licensing process through reaching consensus. 

Of the 27 licenses issued in FY 2005, seven contained measures 

contained in proposed settlement agreements. 

Examples of licenses issued in FY 2005 that included some or all provisions of settlement agreements:

In January 2005, the Commission issued a license for the 380–megawatt Tapoco Hydroelectric Project located on the Little 

Tennessee and Cheoah Rivers in North Carolina and Tennessee. The license was issued a mere 11 days after the licensee 

completed a land exchange with the Great Smoky Mountains National Park authorized by P.L. 108–343. The Commission approved a settlement agreement signed by 20 stakeholder groups and included provisions in the project license that addressed 

fish and wildlife resources including fish passage, threatened and endangered species protection, land protection, whitewater 

boating, vegetation management, and contingencies for drought management. The license also authorized an additional 20 

megawatts of installed capacity.

In June 2005, the Commission issued a license for the 367–megawatt Pelton Round Butte Hydroelectric Project located on 

the Deschutes River in Oregon. The Commission approved most of the provisions of a settlement agreement signed by more 

than 20 stakeholder groups and included a multitude of provisions in the project license for the protection and enhancement 

of fish, wildlife, and recreation in the project area. Such measures included fishway measures and habitat improvements for 

the reintroduction of salmon and steelhead in the Deschutes River basin upstream of the project. 

In June 2005, the Commission issued a license for the 21–megawatt Lamoille Hydroelectric Project located on the Lamoille 

River in Vermont. The Commission approved a settlement agreement signed by the licensee and five state and local government agencies and nongovernmental organizations that included provisions for minimum instream flows and fish passage.

In July 2005, the Commission issued a license for the 44–megawatt Wallenpaupack Hydropower Project No. 487 located on 

the Wallenpaupack Creek and the Lackawaxen River in Pennsylvania. The license incorporates terms of a settlement agreement, signed by 28 agencies and nongovernmental organizations that provide fish and wildlife enhancements, recreational 

opportunities, and protection of historic properties.
13

In December 2004, the Commission sponsored the fourth 

in a series of workshops on long-running hydropower licensing 

proceedings. Interested stakeholders were invited to discuss, on 

a project-specific basis, procedural impediments that precluded 

the Commission from taking final action. Because of the actions 

spurred by the first three workshops, the number of five-year 

old cases and older dropped from 51 identified in the first 

workshop to 13 discussed at the December 2004 workshop. 

As a result of this decline the Commission was able to lower 

the threshold to three years and older for the December 2004 

workshop where a total of 22 cases were discussed. As with 

the other workshops, this last workshop identified a key source 

of licensing delay as the applicants’ receipt of necessary state 

certifications and permits. 

In FY 2005, the Commission authorized 117 megawatts of 

additional capacity at existing licensed hydropower projects. 

The Commission also granted a large number of preliminary 

permits authorizing feasibility studies for 2,266 megawatts of 

capacity for new projects. The purpose of a preliminary permit 

is to maintain priority of application for a license for three years 

while the permit holder conducts investigations and secures 

data necessary to determine the feasibility of a new project and 

prepares an application to develop it. 

During FY 2005, the Commission acted on a total of 30 

hydropower applications which included a total of 24 applications to relicense, three original license applications and three, 

five-megawatt exemption applications. These applications 

represented an installed capacity of over 1,000 megawatts. The 

Commission also initiated the processing of 15 proposals to relicense, seven of which have an installed capacity in excess of 100 

megawatts. Meanwhile, the Commission reduced the average 

processing time for hydropower relicensing by 5.5 percent.

During FY 2005, interest in non-conventional hydropower 

development has continued, but at a slower pace. The Commission had three preliminary permit applications—Golden Gate 

Energy’s San Francisco Bay Project No. 12585, Verdant Power’s 

Roosevelt Island Project No. 12611 and Tacoma Power’s Tacoma 

Narrows Project No. 12612—for proposals to develop wave action and tidal action hydropower facilities. 

There are currently three different proposals where applicants are proceeding with development of non-conventional 

hydropower projects. These proposals include: 

s	AquaEnergy Group Ltd.’s (AquaEnergy) preparation of a 

license application for the Makah Bay Wave Energy Project using the ALP. This is a pilot project designed to test 

the relatively new and developing wave energy technology off the coast of Washington State which, according 

to the proposal, would consist of up to four, 250–kW 

units. 

s	Verdant Power is proposing to install what can best be 

described as underwater windmills, capable of producing 

16 kW of energy, in the East River in New York City. It has 

been estimated that the total expansion potential of this 

site could range from five to ten megawatts. 

s	Energetech proposes to build a 500 kW wave action facility off the coast of Rhode Island. 

The overall staff workload in the hydropower compliance 

and administration area is increasing. The issuance of 220 new

hydropower licenses between FY 2000 and 2010 will add about 

2,200 more license articles, requiring numerous compliance filings and amendment applications. In addition, the annual workload in this area has become increasingly complex as agencies 

and the public participate more fully and vigorously in setting 

license requirements and negotiating settlements and agreements that are incorporated as conditions of the license. As a 

result, average annual workload is expected to increase about 15 

percent each year.

Encourage Investment In

Energy Infrastructure

Maintain high level of regulatory certainty in 

Commission policies through guidance, and 

policy statements

Without assurance that the Commission’s policies will 

be consistently applied, investors would bear greater risks and 
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A N N U A L   R E P O R T

require higher returns on their investments, thereby increasing 

customer costs, and industry participants would find it harder 

to obtain financing to build much needed infrastructure, and 

invest in fewer projects.

The Commission is committed to providing such assurances and has issued policy statements to that effect. For example, 

in May 2005, the Commission issued a policy statement to 

permit cost-of-service rates to reflect actual or potential income 

tax liability for all public utility assets, regardless of the form of 

ownership (e.g., corporations or partnerships). Under the policy, 

all entities or individuals owning public utility assets would be 

permitted income tax allowances on the income from those 

assets, provided they have an actual or potential income tax 

liability on that income. Other examples include: 

s	In April 2005, the Commission issued a guidance order 

providing a structure in which flaws in regional transmission organization (RTO) and independent system 

operator (ISO) tariffs can be fixed promptly through an 

expedited tariff revision process;

s	In June 2005, the Commission issued a guidance order on 

how jurisdictional natural gas companies should account 

for costs associated with implementing new pipeline 

integrity management requirements of the U.S. Department of Transportation’s Office of Pipeline Safety;

s	In June 2005, the Commission issued a guidance order on 

its ratemaking policy with respect to the American Jobs 

Creation Act of 2004 tax deduction for manufacturing 

activities, which provided a tax deduction for income attributable to, among other things, sales of electricity and 

natural gas produced in the United States.

The Commission also has used its declaratory order process 

to provide clear cost recovery processes to energy industry 

stakeholders. In March 2005, the Commission approved a cost 

recovery methodology to allow the restart and reconfiguration 

of an idle pipeline system that permits the delivery of much 

needed crude oil supplies from Canadian sources to refineries in 

Oklahoma, Kansas, and Texas. The Spearhead Pipeline Project, 

proposed by Enbridge Energy Company, will be used to transport 125,000 barrels of crude oil per day and will offer a more 

varied grade mix of crude oil to meet the needs of the U.S. 

petroleum market. By reversing the flow, the project will offer 

more domestic refiners access to crude oil that will be extracted 

from Canada’s western tar sand reserves using new technology. Additionally, the conversion of an idle system benefits the 

environment because the project will use the same route, thus 

reducing adverse impact that would result from the construction of a new pipeline.

Using orders to establish pricing policies that 

encourage investment in electric generation 

and transmission

In FY 2005, the Commission approved several rate proposals providing rate flexibility or incentives needed for infrastructure additions. Specifically, in June 2005, in an effort to remove 

barriers to the formation of independent transmission companies, the Commission clarified its policy on passive ownership 

of independent transmission companies by signaling a more 

flexible approach to passive equity ownership of independent 

transmission companies by market participants. This policy 

statement is a step toward policies that will encourage development of a more reliable transmission grid for the nation’s 

consumers.

EPAct 2005 directed the Commission to develop incentive-based rate treatments for transmission of electric energy 

in interstate commerce, to provide regulatory certainty, and 

to support expanded and improved transmission infrastructure while ensuring that transmission rates remain just and 

reasonable. The Commission’s goal is to establish a proposal 

for transmission pricing reforms designed to promote needed 

investment in energy infrastructure. 

In FY 2005, the Commission approved various rate proposals that facilitate development of infrastructure by ensuring that 

revenue levels and rate designs for regulated company services are 

just and reasonable and support long-term competitive markets:

Proposals by the Southwest Power Pool (SPP) to implement a regional cost allocation plan; an experimental program 

where transmission customers who frequently use short-term 
15

transmission service can, on a voluntary basis, prepay for service 

thus providing a means of funding transmission expansion for 

the provision of additional short-term service; and an aggregate transmission study process and cost allocation that allows 

SPP to review transmission service requests over a four month 

period for the purpose of determining the aggregate required 

upgrades and cost allocation.

s	A methodology established by PJM Interconnection 

(PJM) and the PJM transmission owners for the recovery 

of costs incurred under PJM’s Regional Transmission 

Expansion Plan (RTEP) that provided transmission owners 

with the ability to fully recover all reasonably incurred 

costs under the RTEP, thus removing disincentives for 

transmission owners to build regional transmission upgrades quickly.

s	ITC Holdings Corporation’s revised business model to 

allow passive ownership, thus attracting new interest and 

capital as an encouragement to independent transmission companies to build needed transmission infrastructure and to operate their transmission facilities in a 

non-discriminatory and efficient manner.

In FY 2005, the Commission also accepted or approved several rate proposals by electric utilities that spurred development 

of badly needed new transmission capacity on the West Coast. 

For example, the Commission:

s	Acted on TransElect’s Path 15 expansion in California;

s	Facilitated development of new transmission to serve the 

capacity constrained areas of San Francisco (Trans Bay 

Cable between Pittsburg, CA, and San Francisco); 

s	Approved the Olympic peninsula in Washington state, 

the Sea Breeze’s cable between Vancouver, BC, and Port 

Angeles, WA; and

s	Accepted Southern California Edison’s proposal to 

construct and roll-in to its rate base the costs of a new 

trunk line designed to serve wind power generators 

(­approved in part).

Address Landowner and

Environmental Concerns Fairly

Encourage potential applicants for licenses 

or certificates to utilize the Commission’s 

collaborative pre-filing process

Addressing Environmental Concerns Fairly

The Commission continues its efforts to incorporate 

reasonable environmental conditions into permits, licenses and 

certificates and regulate compliance with conditions, while 

avoiding unnecessary delay in developing environmental impact 

statements (EISs). 

During FY 2005, the Commission staff completed the environmental review of 465 gas pipeline and LNG filings, including 

52 environmental assessments (EAs) and ten EISs. Concurrently, 

the Commission staff continued work on 17 additional EAs 

and 20 additional EISs, primarily for new LNG import terminals, 

both onshore and offshore. Because of the effective use of the 

Commission’s pre-filing process, the average time for the staff’s 

completion of the ten EISs was about 10 months. The EIS for 

the Ingleside LNG project was completed in less than seven 

months.

The Commission staff also completed the environmental 

review of 31 hydroelectric license and exemption applications, 

including 27 EAs and four EISs. Concurrently, the Commission 

staff continued work on eight draft EAs and five draft EISs.

The Commission also worked with parties to ensure that 

appropriate environmental conditions were placed on hydroelectric licenses. These conditions require licensees to prepare 

and file plans or reports with the Commission that may deal 

with project operation, recreation, fisheries, water quality, wildlife, wetlands and others. In FY 2005, the Commission completed reviews of about 1,000 of these applications. For example, 

the Commission required the development of a protection plan 

for populations of a threatened plant species related to dam rehabilitation at the Catawba-Wateree Project in North Carolina. 

These measures were in addition to procedures included in the 

biological opinion for this species that occurs in the work area. 
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A N N U A L   R E P O R T

The protection plan was implemented to ensure the plant’s protection during the rehabilitation work. 

Also, additional water quality protection measures were approved by the Commission during this fiscal year at the Castaic 

pumped storage powerhouse of the California Aqueduct Project. A Commission environmental inspection found secondary 

containment to be insufficient at some of the large transformers 

at the project and required the development of plans for retrofitting the structures and continuously monitoring the sites. The 

approved measures for secondary containment were needed 

to prevent oil pollution of nearby water resources should a spill 

from failure of the transformers occurs. Improved secondary 

containment is now in place to prevent the horizontal migration of oil should a discharge occur at the site. 

The Commission required the licensees for the Burnham 

Project and Benton Falls Project, both in Maine, to assist the 

state for its expense in passing fish upstream. Because of the 

delay in constructing fish passage facilities, the state had to pass 

fish upstream by trapping and then trucking the fish upstream 

in order to meet the state’s fish management objectives. The 

Commission also required the licensees to undertake an aggressive schedule to install the facilities for use during next year’s 

fish migration season. 

The Commission approved provisions of the Penobscot 

River Basin Settlement Agreement, which is the first step towards the restoration of approximately 500 miles of river for migration in Maine. The projects involved are PPL Maine’s Veazie 

Project, Milford Project, Medway Project, Stillwater Project, and 

Bangor-Pacific Hydro’s West Enfield Project. 

The Commission approved construction of fish passage 

facilities for the Fiske Mill Project, on the Ashuelot River in 

New Hampshire, which will open approximately 10 miles of the 

Ashuelot River upstream of the Fiske Mill Project to spawning 

for American shad and river herring.

The Commission requires environmental measures in certificates, inspects natural gas facilities for adherence to prescribed 

environmental mitigation measures, and demonstrates its 

commitment to expedited project reviews and addressing landowner concerns when performing NEPA reviews. For example, 

in August 2005 in the Entrega pipeline project, the Commission 

issued an order eleven months after filing. The order imposed 48 

environmental mitigation conditions on the project, which will 

reduce the impact on bald eagles, cultural resources, and water 

bodies along the route, establish a landowner hotline for complaints, and require two route variations, among other things.

In the Capacity Restoration Project proposed by Northwest 

Pipeline to address needed integrity management repairs on 

their system, the Commission issued a September 2005 order 

that included 27 environmental mitigation conditions. These 

conditions addressed landowner concerns in residential subdivisions crossed by the Northwest system, cultural resources, 

Coastal Zone Management Act consistency, erosion control 

and other resource issues.

The Commission continued to offer training sessions on 

compliance with Commission regulations and certificate conditions. In addition to helping certificate applicants, the well-attended sessions are also valuable to Commission staff. The 

comments and questions from the sessions help us monitor the 

clarity and effectiveness of certificate conditions.

Protect the Reliability, Security

and Safety of the Energy

Infrastructure

Oversee the development and enforcement 

of mandatory grid-reliability standards to 

protect the bulk power supply

Reliability is essential to ensuring adequate energy infrastructure that serves the nation’s needs. With this goal in mind, 

the Commission’s Reliability Division became fully operational 

in October 2004. On February 8, 2005, the North American 

Electric Reliability Council (NERC) Board of Trustees approved 

Version 0 Reliability Standards, which have the goal of restating existing standards in a manner that is unambiguous and 

measurable. These standards replace NERC’s operating policies, 

planning standards and compliance requirements to ensure that 

clear and unambiguous standards are set as to “what needs to 

be done and who needs to do it” to achieve reliable grid operations. The next day, the Commission issued a policy statement 
17

that supplemented an earlier reliability policy by making clear 

that the term “Good Utility Practice,” as that term is used in the 

pro forma OATT, includes compliance with NERC’s Version 0 

Reliability Standards. 

On September 1, 2005, three weeks after EPAct 2005 was 

signed into law, the Commission issued proposed rules to 

implement the reliability provisions of the bill. The proposal 

established criteria for an Electric Reliability Organization (ERO) 

that will propose and will enforce reliability standards under the 

regulatory review and oversight of the Commission. These new 

rules will, for the first time, make compliance with electric reliability standards mandatory and enforceable. In addition to ERO 

criteria, the proposal includes:

s	Procedures governing enforcement actions by the ERO 

and the Commission;

s	Procedures under which the ERO may delegate authority 

to a regional entity to enforce reliability standards;•

s	Procedures for the establishment of regional advisory 

bodies that may advise the Commission, the ERO, or a 

regional entity on governance and reliability standards, 

and propose fees within a region, or undertake other 

responsibilities designated by the Commission;•

s	Regulations for issuing periodic reports by the ERO on 

reliability assessment and adequacy; and

s	Regulations on funding the ERO. 

By serving as the lead Federal agency on siting 

and authorization, FERC assures the safety of 

hydropower projects, energy projects and LNG 

import facilities licensed by the Commission

The Commission has adopted a policy statement on 

development of consolidated federal administrative records 

for judicial review of proceedings involving authorization of 

interstate natural gas pipelines and LNG facilities. The policy 

statement provides interim guidance pending a future rulemaking to implement provisions of EPAct 2005. This new law requires the Commission to implement a coordinated method for 

authorizing proposals to develop interstate natural gas pipelines 

and import terminals for LNG. 

Hydropower Projects: The Commission’s dam safety 

program, through its many components, helps ensure dam 

safety, public safety, environmental resource protection, and reliability in the electric industry. Inspections verify the structural 

integrity of dams and compliance with engineering, environmental, and public safety conditions and regulations. They also 

identify necessary maintenance and remedial modifications. The 

Commission is responsible for inspecting about 2,600 dams and 

related water retention structures. It conducts periodic inspections starting from the receipt of an application for a proposed 

jurisdictional project, throughout the term of a license. Types 

of inspections are pre-license, construction, operation, instrumentation, exemption, and special. The Commission’s Division 

of Dam Safety and Inspections with its five regional offices 

conducts the inspections.

During FY 2005, the Commission was actively resolving 

dam safety deficiencies at 43 projects and overseeing operation 

and maintenance repairs at 107 projects, totaling more than 

$600 million in construction costs. Most notably the Commission worked with the licensee and independent engineering 

consultants on the remediation of the Saluda Dam in Columbia, 

South Carolina. Engineers determined that the dam would fail 

if subjected to a repeat of the 1886 Charleston earthquake, 

threatening over 120,000 downstream residents. To alleviate this 

potential hazard, a massive rock fill and concrete structure was 

constructed at the existing dam, which was completed in June 

2005. Throughout the three-year and $275 million project, the 

Commission worked with the licensee, engineering consultants, 

state and federal agencies and the public to fix the dam as 

quickly as possible, while minimizing the associated disruption 

to the local area.

Applying instrumentation to dams and related water-retaining structures to monitor otherwise-undetectable changes 

in these structures are critical component of the Commission’s 

dam safety program. By applying the correct technology and 

instrumentation to each unique situation for early detection 

and evaluation of deficiencies, serious problems are identified, 
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A N N U A L   R E P O R T

evaluated, and corrected before they fully develop. In FY 2005, 

the Commission entered its third year of implementation of an 

important aspect of its performance monitoring program called 

potential failure modes analysis. About 600 dams have now 

undergone a potential failure modes analysis, a comprehensive, 

rigorous study of each project, with emphasis on failure possibilities. This program helps safeguard important hydropower 

infrastructure, and provides cost-effective, targeted results. 

LNG Import Facilities: In FY 2005, the Commission staff 

started the process of producing guidelines for its engineering 

and cryogenic review of LNG facilities, drafting guidelines on 

the content and level of engineering detail required for LNG 

applications. Final versions of the guidelines for the program 

are scheduled to be completed and fully implemented by May 

2007, with guidance on all facets of the Commission’s LNG program scheduled to be issued throughout FY 2006 and FY 2007. 

The LNG Engineering Branch, created in 2004 in the Office 

of Energy Projects, continued its commitment to enhance the 

Commission’s LNG expertise. Extensive training programs were 

developed and implemented for the four new LNG engineers 

hired last year, and two new positions were established for 

senior LNG modeling experts. As part of the staff’s efforts to 

enhance and maintain the LNG program, a contract was issued 

to ioMosaic to conduct an independent review of the LNG 

engineering program. The final report was issued in September 

and the staff is in the process of implementing the recommendations. One of the recommendations was to establish standard 

engineering guidelines for LNG facility safety, and these are 

being created. 

Throughout FY 2005, the staff worked closely with National Association of State Fire Marshals and the Department 

of Transportation to develop a training module on LNG for first 

responders that included a film. Under its continuing inspection 

program, Commission staff conducted 11 biennial inspections 

of jurisdictional LNG peak-shaving and import facilities, placing 

increased emphasis on plant security measures and improvements. In addition, the Commission staff conducted bi-monthly 

inspections of the three existing LNG terminals being expanded 

and of the three new terminals that are under construction. Regarding pipeline safety, the staff developed and issued guidance 

to the industry on conducting emergency pipeline repairs 

required by the Pipeline Safety Integrity Act. 

Other Energy Projects: Commission staff conducted 204 

inspections of natural gas pipelines to ensure compliance with 

environmental regulations and certificate conditions. Of the 87 

projects that were inspected, 15 involved environmental issues 

and affected populated areas and were inspected at least once 

every four weeks during construction, and at least once following the completion of construction.

Work with other agencies and industry to 

address and improve infrastructure security.

 The Commission is an active member of the Interagency 

Committee on Dam Safety, the U.S. Society on Dams, the 

National Dam Safety Review Board, and the Association of State 

Dam Safety Officials, and shares its dam safety expertise internationally as well. During FY 2005, the Commission also provided 

dam inspection and evaluation services to the Nuclear Regulatory Commission and the Department of Energy, and assisted 

the Director of the Federal Emergency Management Agency in 

implementing the National Dam Safety Program. 

The Commission places high importance of emergency 

management personnel working closely with dam owners to 

understand their Emergency Action Plan and ensure that it 

continues to be a point of emphasis and program development. 

The need for well-functioning Emergency Action Plans was 

highlighted by the aftermath of Hurricane Katrina. Beginning in 

2004, dam owners were required to have annual coordination 

meetings with emergency management personnel to ensure 

all parties understand their roles and responsibilities. These are 

in addition to annual drills performed by the dam owners, and 

periodic tabletop and functional exercises. During FY 2005, 

the Commission focused closely on security issues and further 

developed the hydropower security program by:

s	Conducting two workshops on dam site security and 

emergency action planning;

s	Providing significant contributions to Department of 

Homeland Security (DHS) on dam security and criticality 

of dams;
19

s	Continuing to work with DHS and the Federal Bureau of Investigation to coordinate a national security response at dams;

s	Leading interagency coordination on federal infrastructure security at dams, including the creation of the 

Government Coordinating Council for Dams;

s	Continuing coordination efforts between Commissionjurisdictional dam owners and law enforcement and 

emergency management agencies; and

s	Reviewing the results of 1,050 required vulnerability and 

security assessments of dams and how licensees are 

implementing security upgrades.

Staff assisted in drafting the National Protection Plan 

specific to dams and in the creation of the National “Top 100” 

Critical Dam List. DHS utilized Commission security guidance as 

the basis for their “Protective Measures Infrastructure Category: 

Dams” directive. The Commission continued security efforts 

with the FBI and DHS on several security incidents throughout 

the country. Staff participated in workgroups, including the 

Government Coordinating Council for Dams, the Interagency 

Forum on Infrastructure Protection, a Security Task Force of the 

National Dam Safety Review Board, and the FERC Hydro Security Task Force, comprised of FERC staff and licensee representatives, to assist in developing a unified and effective national 

response to security at dams. The Commission also held a 

three-day security workshop on responding to emergencies at 

dams: Unifying Dam Safety and Security.

In keeping with the Commission’s goal to strengthen 

relationships with other federal agencies, the staff developed a 

Memorandum of Understanding with the U.S. Army Corps of 

Engineers to better define the roles and responsibilities of each 

agency, and the necessary interaction related to the defining of project purpose and need and scope of alternatives 

discussed in EISs.

Allow prompt recovery of prudently-incurred 

expenses to safeguard and enhance the 

reliability, security and safety of the energy 

infrastructure

In FY 2005, the Commission timely processed all 14 oil 

pipeline and three gas pipeline proposals to recover prudently 

incurred costs to safeguard the security and safety of energy 

transportation and supply infrastructure. Specifically, the Commission approved surcharges to recover capital costs (including costs to enhance security) for two natural gas pipelines, a 

recovery of software costs to meet security requirements for an 

electric public utility, and security surcharge requests received 

from oil pipelines. The Commission also timely processed 313 

proposals to recover prudently incurred costs to improve the 

reliability of the transmission grid. Through the timely processing of these filings, the Commission has aided the companies in 

promptly recovering their costs.

During the 2005 hurricane season, the Gulf of Mexico 

region endured two major hurricanes that caused major 

disruptions to the nation’s energy infrastructure. In anticipation 

of flooding and wind damage, gulf coast pipelines evacuated 

personnel and shut down their systems. The storms had direct 

and devastating effects. Energy production was shut-in, natural 

gas processing plants were closed and natural gas pipelines were 

seriously damaged. Safety inspections and damage assessments 

continue. Section 260.9 of the Commission’s regulations requires 

natural gas pipeline companies to report service interruptions 

to firm customers lasting three or more hours. However, in the 

occurrence of a major event, such as Hurricanes Katrina and 

Rita, FERC requested all regulated companies, as well as the various industry associations (American Gas Association, Interstate 

Natural Gas Association of America), to report all service interruptions and related infrastructure issues. For easy reporting 

FERC established a central e-mail address: pipeline.service.

interruptions@ferc.gov.
A N N U A L   R E P O R T

20
21

Competitive Markets: 

Benefiting the Consumer

One of the Commission’s primary goals is to 

prevent the exercise of market power by 

wholesale power sellers, electric transmission companies, and natural gas and oil 

pipelines. This is accomplished by striking 

the right balance between competition and regulation. Achieving this balance has been particularly challenging for electricity 

where Congress has not deregulated the underlying commodity, as it did for natural gas, and where basic generation and 

transmission siting authority and retail regulation remain with 

the states. The Commission has been steadily reforming its electricity policies to find this balance in its regulation of wholesale 

power sales and transmission. The Commission will continue 

its generation policy reforms, as appropriate, and is undertaking reforms to transmission open access and pricing policies. 

Section 3

The Commission still believes competition is the right national 

policy for wholesale power markets – when combined with effective regulation. Meeting this goal includes two objectives:

s	Promoting Effective Competition in Electric Gas Markets.

Commission policies must recognize the differences in 

regional power markets, prevent the exercise of market 

power, and improve transparency. The Commission also 

needs to take steps to lower trade barriers among regions.

s	Establishing Clear Market Rules to Govern Electric Markets. Reforming transmission open access policies to prevent undue discrimination and preference and providing 

regulatory certainty through our rules and case-specific 

decisions will provide the first line of customer protection 

in competitive wholesale energy markets.

In addition, the Commission continued to beef up its market monitoring capabilities, greatly augmented by EPAct’s new 

penalty authority.
22

A N N U A L   R E P O R T

Promote Effective Competition In

Electric and Gas Markets

Current Commission policy promotes the voluntary formation of RTOs and ISOs, as evidenced by the Commission’s July 

2005 order terminating the proposed Standard Market Design 

rule. The Commission is promoting the voluntary formation of 

RTOs to promote efficiency in wholesale electricity markets and 

the lowest price possible for reliable service. 

The key to expansion of organized markets is whether 

the existing RTOs and ISOs prove to be a success and deliver 

on their promised benefits. During FY 2005, two RTOs 

became operational, bringing the number of RTOs that serve 

various regions of the country to six. These two applications 

were processed within six months of the filing. A number 

of existing RTOs expanded or adopted important market 

reforms. These include:

s	Southwest Power Pool (SPP), covering Kansas and Oklahoma, and parts of Missouri, New Mexico, Texas, Louisiana and Arkansas, was granted full recognition as an RTO 

on October 1, 2004, subject to limited compliance issues.

s	ISO New England (ISO–NE), serving the New England 

region, achieved RTO status on February 1, 2005.

s	ISO–NE adopted revisions to implement a test program 

to address differences in market rules across regions, including changes to scheduling of energy transactions between the New England and New York control areas and 

allowing for the partial de-listing of capacity resources for 

sales to neighboring control areas. 

s	American Electric Power, with its facilities in Indiana, 

Kentucky, Michigan, Pennsylvania, Ohio and Virginia, was 

integrated into PJM on October 1, 2004; and Duquesne 

Light Company was integrated into PJM effective January 

1, 2005.

s	PJM added Virginia Electric Power Company as a transmission owner to form “PJM South” on May 1, 2005, 

which extended the RTO’s geographic scope throughout 

Virginia and into a portion of North Carolina.

s	PJM adopted revisions to its OATT and restated its operating agreement to create a special membership category 

to reduce the cost of participation of smaller Curtailment 

Service Providers that wish to participate in PJM’s realtime economic load response program.

s	The Midwest Independent Transmission System Owner 

(MISO) formally launched its new competitive wholesale 

power market on April 1, 2005. 

s	The New York Independent System Operator (NYISO) 

adopted revisions to implement a comprehensive planning process for reliability, provisions to reduce the price 

volatility in NYISO’s real-time market that is attributable 

to real-time forecasting uncertainties rather than to 

actual market conditions, and provisions that reduce the 

amount of collateral required by virtual transactions.

Additionally, the Commission gave preliminary positive 

guidance to new forms of regional entities in the Southeast and 

Northwest. While these entities are not seeking RTO or ISO status, they are proposed as independent entities that will oversee 

and/or provide regional transmission service, thereby providing 

an added assurance of nondiscriminatory treatment and greater 

customer access to low cost power in the region.

Encourage the reduction or elimination of 

seams between organized markets

Seams issues are trade barriers and inefficiencies resulting 

from equipment limitations and differences in market rules and 

designs, operating and scheduling protocols, and other controlarea practices that inhibit or preclude the ability to transact 

capacity and energy sales between regions. Resolving seams 

differences between regions can lower the cost of transacting 

power sales between regions, permit dispatch of lower cost 

power, increase reliability and, ultimately, lower costs to customers. Actions taken during FY 2005 to eliminate seams issues at 

RTO and ISO boundaries include the following:
23

s	The Commission accepted filings to eliminate through 

and out rates (transmission charges for power originating 

in one region and transmitted to another region) from 

the combined MISO and PJM regions. The new pricing 

structure will, after a transition period, eliminate “pancaking,” or multiple charges for transacting across multiple 

transmission systems, and promote more efficient interstate electricity flows between the two RTOs. 

s	MISO and PJM entered into a Joint Operating Agreement 

(JOA) which became effective April 1, 2005, consistent 

with MISO’s start-up of its energy markets. The JOA 

coordinates the market-to-market operations between 

the entities pending implementation of the joint and 

common market between MISO and PJM which is under 

development. MISO also entered into joint operating 

and/or coordination agreements to coordinate marketto-nonmarket seams resulting from the start of its energy 

markets with SPP, Mid-Continent Area Power Pool, Tennessee Valley Authority, and Manitoba-Hydro.

s	In PJM and MISO, the Commission conditionally accepted a utility-to-utility interconnection agreement between 

Indiana Michigan Power Company, a PJM transmission 

owner, and Northern Indiana Public Service Company, a 

MISO transmission owner.

s	The Commission accepted a transmission operating 

agreement between ISO–NE and Maine Electric Power 

Company, which granted ISO–NE authority to operate its 

345 kV intertie between Central Maine Power Company 

and Bangor Hydro Electric Company, thus integrating 

Maine Electric Power Company into the New England 

Control Area.

Support the creation of regional state 

committees to advise RTOs and ISOs

The Commission has encouraged the establishment of regional state committees to ascertain views of states on the development of regional market rules. In FY 2005, the Commission 

convened technical conferences for the Commission, state 

regulators, and industry officials to discuss regional market design issues. The Commission met in Dallas, Texas, with members 

of the Southwest Power Pool (SPP) and representatives of the 

states covered by the newly approved SPP RTO, and in New 

Orleans, Louisiana, and Jackson, Mississippi, with representatives 

from Entergy Corporation, its state regulators, and other electric 

industry market participants, to discuss Entergy’s ICT proposal.

Commission staff located at the MISO continued to work 

with the Midwest stakeholders on issues regarding pre-filing, 

tariff implementation, and market protocol implementation. 

They have met with state regulatory commissions and staffs to 

discuss seams issues, cost control, financial transmission right 

allocations, and the treatment of grandfathered agreements.

The Commission continues to have staff at the California 

Independent System Operator (CAISO), the Commission’s first 

regional outpost, established in October 2002 after the Western 

Energy Crisis. At the CAISO, Commission staff meets with state 

regulatory commission staffs and other state governmental 

entities on a variety of market design, reliability, and operational 

issues.

The Commission also encouraged the development of a 

regional state committee at the recently formed SPP RTO and 

deployed Commission staff at the SPP RTO offices to work with 

state regulators and regional stakeholders. The MISO and SPP 

regional state committees have both proved to be effective 

organizations.

Promote transparency of competitive electric 

and gas markets

In order to assure well-functioning competitive markets, 

the Commission took several steps to promote transparency. 

The Commission’s standards for internet-based Open Access 

Same-Time Information System (OASIS) were designed to 

provide transparency by making information about electric 

transmission capacity and requests for, and awards of, capacity 

available to utility customers and the public. The Commission 

continues to encourage industry’s improvement of OASIS and 

in May 2005 issued a Notice of Proposed Rule or NOPR to 
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A N N U A L   R E P O R T

address, among other things, ways for industry to make business 

easier through greater transparency and use of OASIS.

The Commission also proposed in May 2005 to update its 

Uniform System of Accounts and its quarterly and annual financial reporting requirements for public utilities and hydropower 

licensees, including RTOs and ISOs. The Commission proposed 

these changes to add visibility and uniformity to accounting and 

financial reporting for the cost of utility assets and the expenses 

utilities incur in providing services along with revenues collected 

from RTO members. The proposed revisions will allow the 

Commission and the public to better understand transactions 

and events that affect RTOs and ISOs, and their members.

Ensure that mergers and jurisdictional facility 

sales are consistent with the 

public interest

The Commission examines mergers under its jurisdiction 

and sales of jurisdictional facilities to ensure that they do not 

harm the overall competitive balance of the energy markets. 

In FY 2005, the Commission processed 125 corporate applications under section 203 of the FPA. Specifically, the Commission 

authorized the following:

s	The merger of Exelon and PSEG, creating a combined 

company with nearly 40,000 megawatts of electricity 

generation capacity in the PJM and the MISO areas. The 

Commission based its decision to approve this merger 

on the applicants’ commitment to divest 4,000 MW of 

intermediate and peaking generation facilities located in 

PJM, along with the long-term sale of energy from 2,600 

MW of nuclear capacity, in order to address the potential harm to competition resulting from the increase in 

market concentration. This is the largest divestiture ever 

ordered by the Commission.

s	The acquisition of TNP Enterprises, Inc. and Texas-New 

Mexico Power Company (TNMP) by PNM Resources. 

Approval was accepted on TNMP’s commitment to 

continue to participate in regional transmission planning.

s	The acquisition of UniSource Energy, Tucson Electric and 

UNS Electric by Saguaro Utility Group I Corp. 

Establish Clear Market Rules To

Govern Electric Markets

Reform transmission open access policy to 

prevent undue discrimination and preference

The electric industry that existed when Order No. 888 

was issued has changed considerably. It has evolved from an 

industry characterized by large, vertically integrated utilities to 

one with increasing wholesale trade and increasing numbers of 

independent buyers and sellers of wholesale power. Questions 

have arisen concerning the continued reasonableness of various 

non-rate terms and conditions of OATTs. To address these 

issues, the Commission issued a notice of inquiry in September 

2005 to seek comments on what reforms are necessary to the 

Order No. 888 pro forma OATT and to the individual public 

utility OATTs. The inquiry asks commentators to focus on 

OATT reforms necessary to prevent undue discrimination and 

preference in the provision of transmission service. 

In addition, the Commission recognized that there are 

areas where the transmission provider’s obligation under Order 

No. 888 may not be sufficiently clear in some respects. This can 

be a source of uncertainty regarding the transmission provider’s 

compliance obligation and ultimately makes it difficult to 

determine whether the terms and conditions of the OATT have 

been violated. The inquiry asks numerous questions to explore 

this issue. For example, it seeks comment on whether the OATT 

needs to better define how public utility transmission providers 

must respond to a request for transmission service. Similarly, the 

Commission seeks comment on whether more specific rules, 

standards, and business practices need to be incorporated into 

individual public utility tariffs. It is important that jurisdictional 

entities fully understand their compliance obligations under the 

OATT and the Commission’s inquiry will help this to happen.
25

Reform market-based ratemaking policy to 

prevent exercise of market power and provide 

regulatory certainty

The Commission allows wholesale electric power sales at 

market-based rates if the seller and its affiliates do not have, 

or have adequately mitigated market power in generation and 

transmission and cannot erect other barriers to entry by other 

suppliers. The Commission also considers whether there is 

evidence of affiliate abuse or reciprocal dealing. As a condition 

of a company’s authorization to sell power at market-based 

rates, the company must file an updated market power analysis 

every three years. These filings help the Commission ensure that 

market power is not being exercised in wholesale electricity 

markets. During FY 2005, the Commission handled 434 marketbased ratemaking filings and reviewed 346 market-based rates 

triennial review cases. 

In February 2005, the Commission finalized new rules to 

standardize market-based rate sellers’ reporting requirement for 

changes in status and provide guidance as to the events that 

would trigger this reporting requirement. The rule benefits customers by ensuring compliance with market-based rates. It also 

eliminates the option to delay reporting changes in status until 

the submission of a market-based rate seller’s triennial market 

power analysis. In addition, the Commission requires that the 

reporting requirement be incorporated into the market-based 

rate tariffs of each entity that is currently authorized to make 

sales at market-based rates, as well as that of all future applicants. In May 2005, the Commission issued an order directing 

companies which were delinquent in filing their market-based 

rate triennial review to demonstrate that they continue to 

qualify to charge market-based rates under the new indicative 

screening process.

Provide regulatory certainty through clear 

market rules and case specific decisions 

Finding that the absence of clear rules governing the 

wholesale electric industry and other impediments were preventing markets from realizing their full potential, the Commission implemented power market rules designed to help prevent 

market abuse, provide a more stable marketplace and create an 

environment that will attract needed investment capital in the 

electric and natural gas industries.

The need for clear market rules arose because of persistent 

and costly problems in the Nation’s wholesale electric power 

markets. These include a decade of under-investment in needed 

transmission, which raises energy costs by billions of dollars 

across the grid and exacerbates reliability problems, complaints 

of unduly discriminatory behavior by transmission providers 

against independent generators, and deficient market rules in 

certain existing electricity markets that reduced efficiency of 

grid operations. Sound market rules and fair and open transmission access, as implemented under these rules, should cure 

many of these problems.

Proposed market rules evolved over many months as the 

result of extensive outreach efforts with interested parties. The 

Commission indicated in its RTO rulings that flexibility is needed to accommodate regional concerns. For example, in FY 2005, 

the CAISO filed tariff provisions to implement an oversight and 

investigations program. The CAISO’s enforcement protocols 

provide for monitoring, investigating and enforcing the new 

rules of conduct included in the CAISO tariff. The Commission 

conditionally accepted the CAISO’s behavioral rules.

Prevent undue preference and self dealing in 

affiliate transactions

In December 2004, the Commission held conferences to 

discuss transmission market power and barriers to entry, and 

additional conferences were held in January 2005 to discuss 

affiliate abuse and reciprocal dealing and generation market 

power. In addition, several publicly noticed technical conferences were held regarding market-based rate triennial review filings. In FY 2005, the Commission continued with its compliance 

efforts to assist the industry in addressing issues associated with 

undue preference and self dealing. For example, in May 2005 in 

Chicago, Illinois, the Commission hosted a technical conference 

to work with the industry to promote compliance. During the 

conference, Commissioners and Commission staff provided 
26

A N N U A L   R E P O R T

informal guidance to industry participants regarding implementation of the Standards of Conduct and market-based rate rules. 

Similar efforts are underway with regard to Order No. 889 

OASIS requirements. In its initial compliance review of 190 

transmission providers’ internet and OASIS web sites, the Commission found that only 58 transmission providers posted all 

the required elements. That number has dramatically improved, 

as all of the companies have followed the mandate and come 

into compliance. In Phase 2 of its effort, the Commission began 

on-site operational audits of specific transmission providers 

to determine whether and how they are complying with the 

remainder of the requirements of the Standards of Conduct, 

including the independent-functioning requirement and the 

information-sharing prohibitions. The Commission completed 

four of these audits in FY 2005.

Encourage the development of business rules 

and practices that maximize market efficiency, 

ease market entry and reduce transactions 

costs, relying on NAESB, NERC and the RTO/

ISOs where appropriate 

The Commission has been working extensively with the 

North American Energy Standards Board’s (NAESB) Wholesale 

Gas Quadrant. In May 2005, the Commission issued a final rule 

adopting the Wholesale Gas Quadrant’s latest standards, which 

included their Version 1.7 standards, which implemented the 

Commission’s Standards of Conduct, and standards implementing gas quality reporting requirements. The Wholesale 

Gas Quadrant’s Version 1.7 standards include business practice 

standards dealing with creditworthiness. In June 2005, the Commission issued a policy statement on credit issues relating to 

transportation on natural gas pipelines.

The Commission is working with NAESB’s Wholesale Electric and Wholesale Gas Quadrants on a joint effort to identify 

and develop business practice and communication standards 

needed to coordinate the scheduling of electric and gas transactions. In June 2005, NAESB filed a report outlining business 

practice standards to improve coordination between the two 

industries during times of weather related emergencies and 

highlighting Commission action policy issues that may inhibit 

such coordination.

Following issuance of a report by the National Petroleum 

Council and a Commission conference on natural gas quality 

and interchangeability issues, the natural gas industry initiated 

an industry-wide collaborative effort to examine the need for, 

and the possible scope of, industry-wide consensus on these 

issues. The results of this collaborative effort; two white papers 

that addressed interchangeability and liquid hydrocarbon 

drop out, were filed with the Commission in February 2005. 

The Commission held a technical conference in May 2005 to 

discuss the white papers. The Natural Gas Supply Association, 

which participated in the collaborative effort, filed a petition 

for rulemaking to adopt national standards for gas quality and 

interchangeability. The Commission solicited comments on this 

proposal and considered the need for further action.

In addition, in the final rule adopting the Wholesale Gas 

Quadrant’s latest standards, the Commission adopted several 

standards requiring posting of gas quality information. These 

standards require a pipeline company to provide a link on its informational posting web site to its gas quality tariff provisions, or 

a simple reference guide to such information. Furthermore, these 

companies are required to provide on their website, in a downloadable format, daily average gas quality information for prior 

day(s) to the extent available for location(s) that are representative 

of mainline gas flow for the most recent three-month period.

Promote development of policies that 

accommodate effective demand response 

programs

In June 2005, the Commission co-sponsored a National 

Town Meeting on Demand Response, which included state 

participation and live web casts to state commissions throughout the United States. In September 2005, the Commission conducted a demand response technical conference with California 

state officials. At the end of FY 2005, pursuant to EPAct 2005 

section 1252(e)(3), the Commission began preparing a report, by 

appropriate region, that assesses demand response resources, 

including those available from all consumer classes. 
27

Remove unduly discriminatory barriers to 

entry affecting renewable energy

The Commission has conducted extensive outreach with 

the industry and public on wind energy issues and means to 

facilitate the renewable energy technology’s integration into the 

nation’s highly interconnected electric power grid. 

In November 2004, the Commission issued a briefing paper, 

Assessing the State of Wind Energy in Wholesale Electric Markets,

followed by a technical conference to discuss the issues associated with integrating wind energy in the energy market. In April 

2005, the Commission issued proposed new rules designed to 

better accommodate an increased participation of wind energy 

in wholesale markets. The proposal, Imbalance Provisions for 

Intermittent Resources, would encourage the development of 

renewable resources by removing barriers that affect intermittent resources’ access to the transmission grid. 

The Commission also made available to the public during 

FY 2005 a report, entitled Market Design Principles for Reactive 

Power, which described the role of reactive power in establishing 

reliable power systems. Reactive power supports the voltages 

that must be controlled for system reliability. The report discussed regulatory policy and reactive power pricing and market 

design, and looked at the physical characteristics and costs of 

producing reactive power. A technical conference on principles 

for efficient and reliable reactive power supply was held on 

March 8, 2005, to discuss issues raised in the staff report. 
A N N U A L   R E P O R T

28
29

Enforcement and 

Oversight: 

Guarding the Consumer

Competitive markets can only succeed when 

competition is combined with effective regulation. The Commission’s two main objectives in meeting our goal of effective market 

oversight are:

s	Vigilant and effective oversight of market operations; and

s	Firm but fair enforcement of Commission rules.

The Commission has adjusted its regulatory policies to 

meet the dramatic changes that have occurred in both the 

natural gas and electricity industries. While the legal duties of 

the Commission have not changed – to guard against unjust 

and unreasonable rates and undue discrimination and preference – the means of discharging this duty have evolved over 

time. The Commission ordered the unbundling of natural gas 

sales and transportation in a series of landmark orders, which 

proved to be an unqualified success. In the wake of these orders, 

the Commission witnessed:

s	A surge of activity by gas pipelines, as they sought to 

restructure the way they did business, and the way they 

interconnect to new markets;

s	Market areas are now served by more pipelines;

s	More competition for shippers’ business, who themselves 

have seen their number of choices increase; and

s	The cost of gas transportation has fallen while throughput has risen.

Section 4
30

A N N U A L   R E P O R T

The Commission seeks to detect violations quickly, publicize misconduct where appropriate, and take prompt action to 

prevent future misconduct. The Commission can identify violations by many methods, including review of market information 

required to be filed by market participants, investigation of 

significant price or market anomalies, periodic audits of compliance with Commission tariffs, rules, and regulations, referrals 

from RTO and ISO market monitors, and tips and complaints 

from the public and market participants. It is important that the 

Commission understands market dynamics, detects problems 

or issues in energy markets early, prevents violations of its rules, 

and enforces compliance with the laws under its jurisdiction. 

Most importantly, the Commission needs to ensure that entities subject to its jurisdiction have effective internal monitoring 

and compliance programs in place to help assure that they 

are following established Commission rules and regulations. 

Commission oversight must then provide an independent and 

external check to ensure that the compliance programs of each 

jurisdictional entity are adequate, and to periodically audit compliance with the Commission’s rules, regulations and statutory 

requirements. 

Vigilant and Effective Oversight

of Market Operations

Strengthen the Commission’s ability 

to perform market monitoring

For trustworthy analyses based on strong empirical 

evidence to be used as a basis for fair and farsighted decisions, 

the Commission has strengthened its ability to monitor the 

markets. This requires access to relevant and timely information 

about electric and natural gas markets. To achieve this, data 

systems have been maintained, updated and expanded, largely 

consisting of the resources available through the Market Monitoring Center to all of Commission staff. One of the Commission’s notable improvements to the timeliness and quality of 

Market Monitoring Center information is the establishment of 

17 automated market alerts. These automated alerts notify staff 

when certain natural gas or electric prices fluctuate beyond 

a set parameter, and are extremely beneficial to analysts that 

would normally need to sift through and analyze large quantities of raw data for price anomalies.

The Commission continued to supplement its data systems 

with access to RTOs and ISOs data, engaging states and other 

federal agencies in market oversight and reaching out to market 

participants. There has been a sustained drive to improve the 

accuracy of Electric Quarterly Report (EQR) filings. Entities 

subject to Commission jurisdiction provide summaries of all 

relevant contracts and identify, in detail, the characteristics of 

transactions under those contracts during a given quarter. During the fiscal year, the Commission began providing summaries 

of their submissions to companies that file, highlighting possible 

inconsistencies. Further, the Commission stepped up its efforts 

to correct instances of non-compliance with EQR reporting requirements. Also, the Commission initiated an effort to 

automate initial compliance screening, reviewing all submissions 

electronically for several key errors and notifying filers of those 

errors. 

As markets have developed, there have been significant 

changes in the structure of some regulated companies. As 

part of ongoing oversight efforts, the Commission developed 

profiles of electric and gas corporations under the Commission’s 

jurisdiction. The profiles provided an overview of corporate 

strategies, organizational structures, managements, lines of business, financial results and credit and conditions. In addition, the 

profiles explored company valuation, making comparisons with 

industry peers. The profiles also indicated if the company held 

market based rate authority and was applying to acquire or sell 

generation or transmission assets and if it was under non-public 

audits or investigations. 

While the Commission has access to a large portion of 

energy and related market data through its Market Monitoring 

Center data systems, much crucial energy price development 

takes place in less transparent bilateral physical and derivatives 

markets. The commission is reviewing its efforts to gathering 

that information through increased industry interaction, oversight, audit and investigation activities is critical, absent major 

structural change in these markets.
31

The Commission developed a standard process to ensure 

the acquisition of comprehensive and timely market-related information to the Commission. Specific checklists of information 

sources were developed that market oversight analysts would 

examine on a regular schedule. This was followed by a specific 

process to collect, verify and follow up on key market insights 

that each analyst developed. 

Included in the task of overseeing energy markets is 

analyzing apparent market anomalies such as high prices or 

abnormal volumes in unexpected places. Such anomalies can 

indicate problems with data, new patterns of market trading, 

or gaming of market rules. While information for these analyses 

largely comes from the Market Monitoring Center, the data is 

supplemented with information from industry contacts and by 

following up on audit and investigation results. 

Encourage effective RTO and ISO market 

monitoring units, as permitted by law

Each established RTO and ISO has a Market Monitoring 

Unit, with six in place today. The May 2005 Policy Statement 

on Market Monitoring Units provided guidance on their critical 

roles in evaluating market rules and performance, recommending market improvements, and referring potential violations to 

the Commission. 

In FY 2005, the Commission worked closely with the 

Market Monitoring Units through monthly conference calls 

and semi-annual conferences and Commission staff dedicated 

to specific regions communicated frequently with their Market 

Monitoring Unit contacts. In addition to RTO and ISO site visits 

and meetings with the Units, Commission staff directly monitored market development activities such as the start-up of the 

Midwest ISO and the rollout of NYISO’s new real-time market 

software. Also, Commission staff worked with the RTO and ISO 

Market Monitoring Units to enhance performance metrics that 

will enable them to measure themselves against others, and to 

strengthen their market monitoring abilities.

Identify and remedy problems with market 

structure and operations, and periodically 

review market rules for consistency with longterm market development

An important task of guarding the consumer is to identify 

market problems as they develop, so that the Commission can 

rectify them quickly. The Commission continually observes market developments via the Market Monitoring Center, reports 

new issues that develop in various internal reports, and strives 

to anticipate responses to long periods of relatively high energy 

prices. Other activities during FY 2005 included:

s	Pursuing follow-up efforts on price transparency;

s	Calling attention to the illiquidity of certain gas price 

indices and promoting discussion or remedies;

s	Investigating the communication of non-public storage 

inventory information in violation of the Commission’s 

Standards of Conduct; and

s	Improving working relationships with the Commodity 

Futures Trading Commission (CFTC), Department of 

Justice (DOJ), and states and federal agencies to encourage public discussion and resolution of energy industry 

problems such as capital availability for energy markets, 

credit issues, natural gas price formation, and price discovery and indices.

s	Encouraging self-reporting of violations by regulated entities and improving the process for regulated entities to 

seek clarification of Commission rules.

An example of the Commission’s market anomaly analysis 

is the investigation into the November 2004 natural gas storage 

reporting error by the Energy Information Administration (EIA). In 

one of its Weekly Natural Gas Storage Report, the EIA showed a 

net withdrawal much higher than anticipated by market observers. The higher than expected report caused prices for expiring 

New York Mercantile Exchange contracts to rise by more than 

$1/MMBtu in December 2004 and January 2005. The Commission sent a data request to the ten largest storage operators to 
32

A N N U A L   R E P O R T

determine if an error had been made in compiling data reported 

to the EIA. We determined that an erroneous report had been 

submitted by Dominion Transmission, causing the market prices 

to jump. Further investigation showed that the reporting error was inadvertent and that Dominion did not profit from it. 

Subsequent to this investigation, the EIA proposed and adopted 

changes to its Weekly Natural Gas Storage Report.

Assess market and infrastructure conditions and 

incorporate analysis into Commission decisions

The Commission has developed benchmarks and standardized graphics to monitor natural gas, electric, associated fuel, 

financial and equity market conditions and developments, to 

show systematically how well markets are operating. Specifically, 

the Commission has identified several key data requirements to 

analyze energy markets via its Market Monitoring Center. 

Also, the Commission, worked closely with RTO and ISO 

Market Monitoring Units in developing a variety of measures 

to help assess and compare the performance of RTO and ISO 

markets. The measures show trends in prices, demand, trading, 

the climate for investment in supply, and market concentration. In spring 2005, RTO and ISO market monitors provided 

Commission staff the necessary market data for staff to compile 

and report on 13 annual “market metrics.” The purpose of the 

report is to provide information to the Chairman and Commissioners on the health of RTO and ISO markets.

Staff reports systematically review data to help identify 

irregular behavior or patterns that reflect potential market manipulation. Staff analyses of market operations have been incorporated into Commission decisions, such as orders on tariffs for 

organized markets and actions taken to improve the accuracy, 

reliability, and transparency of wholesale price indices. Orders 

on the organization and operation of the CAISO, ISO-NE, PJM, 

and NYISO have been influenced by observations and information gleaned from staff oversight of these markets. 

In addition to monitoring the markets and reporting, 

routinely, to the Chairman and Commissioners, the Commission generated reports on market developments throughout 

the year, some for internal use and some made available to 

the public. These reports identified problems including EIA’s 

storage reporting process, major weather disturbances (i.e. Hurricanes Katrina and Rita), and pre-summer market issues in California and the West. Overall, the reports identify key problems 

for the Commission to consider, present possible responses, 

and, in the case of apparent behavioral problems, lead to further 

investigations and audits. The reports are:

s	Special Reports: developed during and after major market 

events, they provide updates and in-depth analysis.

s	State of the Markets Report: a public document, which 

gave a comprehensive review of the preceding year and 

provides measures for energy market performance. 

s	Energy Market Surveillance Report: developed every 

three weeks for internal use, to provide information on 

new developments in energy markets and updates general energy market information.

s	FY 2005 Seasonal Assessments: developed semi-annually to highlight key issues in the electric and natural gas 

industries prior to the heating and cooling seasons. The 

Commission issues the two assessments in public Commission meetings.

s	Snapshot Reports: developed from the Commission’s periodic staff reports, and offered to State Commissions and 

RTO Market Monitoring Units and currently delivered to 

19 State Public Utility Commissions and five RTOs. For 

New England and the West, the Snapshot Reports are 

supplemented with periodic conference calls to discuss 

key issues raised in the reports.
33

Firm But Fair Enforcement of

Commission Rules

Improve the Commission’s enforcement 

capabilities

EPAct 2005 gave the Commission substantial new enforcement responsibilities. First, the law provides for Commission 

enforcement of the express prohibition of manipulation of 

electricity and gas markets. The new law allows the Commission to issue rules to implement this provision, and enforcement 

will require making swift decisions on potentially manipulative 

practices. 

The second enforcement responsibility under the new law 

is the Commission’s authority to enforce reliability standards. 

Under the law, the Commission is responsible for reviewing 

preliminary enforcement actions taken by the ERO, a self-regulatory organization. While there were approximately 338 reliability 

standards violations in 2004, the first year the North American 

Electric Reliability Council began reporting this information, it 

is difficult to estimate how many enforcement actions the ERO 

will take, and how many would be reviewed by the Commission. In addition, the Commission is also authorized to initiate 

enforcement action on its own motion, which is a new enforcement responsibility for the Commission.

In FY 2005, the Commission’s enforcement and audit staff 

received training in current forensic techniques and tools to 

assure that they are training in the latest investigations and 

auditing techniques. 

Implement the market power and enforcement 

provisions of EPAct 2005

With the passage of EPAct 2005, the Commission was 

granted enhanced civil penalty authority and a clear mandate 

to prevent market manipulation. The Commission now has 

authority to impose civil penalties of up to $1 million per day 

per violation for violations of rules, regulations, and orders under 

the NGA and all of Part II of the FPA, and up to $1 million for 

any violation of the Natural Gas Policy Act of 1978. 

Investigate statutory and rule violations, 

imposing penalties where appropriate and 

promptly terminating investigations when no 

violations are identified

In FY 2005, the Commission completed 16 operational 

audits, 18 financial audits and 29 investigations of energy 

companies and municipalities, including natural gas pipelines 

and electric utilities. These audits and investigations resulted 

in refunds, penalties and payments of more than $67 million. 

The twenty-six operational audits the Commission completed 

focused on transmission market power, tariff compliance, affiliate abuse, standards of conduct and code of conduct compliance, and filing requirements. These operational audits resulted 

in stringent compliance plans containing 87 corrective actions 

involving organizational, procedural, and process remedies. In 

addition, the Commission ordered refunds of $10.5 million to 

energy customers as a result of its operational audits. 

The 18 financial audits the Commission completed during FY 2005 covered a wide range of financial accounting and 

reporting topics, including cash management compliance filings, 

data reported by gas pipelines in FERC Form No. 2 reports, RTO 

and ISO operations, and formula rate billings. Currently, audits 

are underway to examine EQR data submissions and compliance under the Commission’s interlocking directorate rules for 

officers and directors of electric companies, operating expense 

data reported by electric companies in FERC Form No. 1 reports, and nuclear decommissioning trust fund accounting for a 

nuclear generating unit undergoing decommissioning.

The Commission’s 29 investigations focused on possible instances of market power and manipulation, undue discrimination 

or affiliate abuses, violations of rules and tariffs and the Enron-related manipulation of short-term prices in the electric or natural 

gas markets or undue influence over wholesale prices during the 

western energy market crisis of 2000 and 2001. Additionally, the 

Commission has investigated the communication of nonpublic 

storage inventory information in violation of the Commission’s 

Standards of Conduct rule. Many of the settlements also included 

strict compliance plans containing numerous process and procedural remedies. Some notable examples are:
34

A N N U A L   R E P O R T

s	American Electric Power Company, Inc. (AEP), American Electric Power Service Corporation and AEP Energy 

Services, Inc. Commission staff investigated allegations 

that a wholly-owned pipeline provided transportation 

service on an unduly preferential basis to an affiliated 

marketer. The Commission approved a settlement in 

which the named companies agreed to pay a $21 million 

civil penalty and to adhere to a detailed four-year compliance plan to settle. Commission staff coordinated its 

investigation with the CFTC and DOJ, each of which also 

assessed penalties in settlements. 

s	Commission staff conducted an audit of MidAmerican 

Energy’s (MidAmerican) compliance with its OATT, Standards of Conduct, Codes of Conduct, OASIS, and Order 

No. 2004 information posting requirements. In response 

to findings of three major areas of noncompliance, 

MidAmerican agreed to build $9.2 million in unplanned 

transmission system upgrades and to accelerate another 

$14.7 million in planned transmission improvements. 

MidAmerican also agreed to implement a strict compliance plan to ensure future compliance with FERC regulations.

s	Commission staff continued to achieve settlements in 

the California Refund Proceedings, which arose from the 

California energy crisis of 2000 and 2001, including settlements with Mirant (already approved by the Commission) and with Enron, Reliant, and Public Service Company of Colorado (with settlement approvals pending). 

These settlements will result in more than $2.5 billion in 

refunds to consumers.

These cases and others show the Commission’s increasing 

ability to audit and investigate market abuses and its continuing commitment to effectively police tariff and rule violations. 

This ability has recently been enhanced by EPAct 2005 that has 

provided the Commission with even greater tools to enforce its 

statutes, orders and rules.

Encourage settlements to resolve disputes in 

an expeditious manner

The Commission encourages parties to use alternative 

dispute resolution (ADR) whenever appropriate to resolve 

conflicts. ADR supports the Commission’s objective to be 

more citizen-centered, results-oriented, and market-driven. The 

Commission’s experience with ADR demonstrates that it provides for effective public participation in government decisions, 

encourages respect for affected parties, averts future complaints 

that enable the Commission to direct more of its resources for 

critical matters, and avoids costs that would normally finance 

extensive litigation.

Overall, in FY 2005, the Commission specifically facilitated 

and accepted the following settlements:

s	In December 2004, Duke Energy agreed to settle Western 

Energy Crisis issues with States and FERC.

s	In January 2005, AEP Co. agreed to a settlement to 

resolve an investigation into the natural gas storage and 

transportation activities of two intrastate pipeline units 

formerly owned by the Columbus, Ohio-based utility 

holding company, and AEP-affiliated marketers.

s	In June 2005, Williams Companies to pay $7.6 million in 

refunds and civil penalty to settle a staff investigation into 

sharing of natural gas storage information.

s	In July 2005, Staff facilitated Enron’s proposed $1.5 billion 

agreement to settle California energy refund and gaming 

issues. 

s	In August 2005, Reliant Energy agreed to pay $460 million 

to settle Western Energy Crisis issues with States and 

FERC. 

In FY 2005, the Commission’s Dispute Resolution Service 

(DRS) continued to be a great resource for facilitation and mediation, and offers consultation and training in effective facilitation and negotiation skills to individuals and organizations that 

do business with the Commission, state agency personnel, and 

Commission staff. To help achieve the objective of increased use 
35

of ADR, the DRS is implementing the Commission’s Conflict 

Resolution Training Program, which emphasizes training staff 

in negotiation and facilitation skills, as well as conflict assessment, early neutral evaluation, and the design and maintenance 

of a successful collaborative process. This effort has further 

increased exposure for the Commission’s DRS and consistently 

results in successful mediation of at least 75 percent of the cases 

referred to it.

Act swiftly on complaints, using 

administrative litigation as needed to 

determine factual issues

In FY 2005, the Commission made a concerted effort 

to provide timely resolution of third-party complaints. The 

Commission issued initial orders 50 percent of the time within 

60 days of the filing of the complaint. In many cases, however, 

extension requests by the parties, complainant withdrawal 

of complaints, and deferral requests by the parties to pursue 

settlement made it difficult for the Commission to process 

these complaints in such an expeditious manner.

The Enforcement Hotline is also widely used by the public 

to informally resolve disputes in matters within the Commission’s jurisdiction without litigation or other formal, lengthy 

proceedings. Hotline staff mediators resolve disputes, including 

landowner/pipeline disputes, tariff disputes, market disputes 

and disputes over procedural questions. In some cases, the 

complaints have been resolved at the initial stages while some 

complaints are processed through administrative litigation to 

determine contentious factual issues. In FY 2005, the Enforcement Hotline closed out 74 percent of the calls within two 

weeks of initial contact. 

Encourage self-reporting of violations by 

regulated entities and improve processes to 

allow regulated entities to seek clarifications 

of Commission rules

It is incumbent upon the Commission to ensure that its 

market, reliability, and other regulatory rules are clear, enforceable and fully understood by the jurisdictional entities regulated. 

However, the obligation to comply with those regulations, rules 

and standards lies with the regulated entity. Therefore, it is 

important that regulated entities have a rigorous internal compliance program that provides them with the tools, processes, 

and high-level management support to identify problems or 

areas of noncompliance and to report such problems to the 

Commission. The Commission needs to work with entities it 

regulates to help them develop and maintain good compliance 

procedures such that any necessary enforcement actions by the 

Commission (including penalties or sanctions) are a regulatory 

tool of last resort – invoked only when the compliance process 

has failed.
A N N U A L   R E P O R T

36
37

Appendix A

Hydroelectric Power Table

(Projects For Which Licenses Will Expire Between January 1, 2005 and December 31, 2010)

License	 	 FERC	 	 	 Period	 Facilities	

Expiration	 	 Project	 	 	 Installation	 of	 Under	 Subj.

Date	 Licensee	 No.	 State	 County	 River	 {KW}	 Years	 License	 Fed.

 

2/28/2010 Energy Northwest 2244 VA Lewis Lake Cr 26125 50 DM PH Y

3/31/2010 Appalachian Power Co 2210 ID Campbell Roanoke R 636000 50 DM PH Y

4/10/2010 Consumers Energy Co 785 MI Allegan Kalamazoo R 2550 30 DM PH Y

4/12/2010 Jacobson Eric R 733 CO Ouray Uncompahgre R 700 30 DM PH N

4/30/2010 Willis Ken 1992 CA Tehama Fern Springs C 15 30 DM PH N

6/30/2010 Public Service Co of CO 400 CO Laplata Animas R 11500 25 DM PH Y

6/30/2010 Idaho Power Co 503 ID Ada/Owyhee Snake R 25000 40 DM PH Y

8/11/2010 Kaukanuna 2677 WI Outagamie Fox R 8000 20 PH Y

8/31/2010 South Carolina Elec & Gas 516 SC Richland Saluda R 207300 25 DM PH Y

10/31/2010 Mackay Bar Corp 3041 ID Idaho Smith CR 12 30 DM PH N

2/28/2005 Tapoco Inc 2169 NC Blount Tennessee 326500 50 DM PH Y

2/28/2005 Southern Calif Edison Co 382 CA Kern Kern R 12000 30 DM PH Y

3/31/2005 Northern States Power Co 2181 WI Dunn Red Cedar R 5400 50 DM PH Y

3/31/2005 Northern States Power Co 2697 WI Dunn Red Cedar R 6000 20 DM PH Y

3/31/2005 Southern Calif Edison Co 2174 CA Fresno Rancheria Cr 10800 50 DM PH Y

4/30/2005 Alabama Electric Coop 2586 AL Covington Conecuh R 8250 25 DM PH Y

4/30/2005 Pacific Gas & Electric Co 178 CA Kern Kern R 9540 30 DM PH Y

5/31/2005 City of Marshall, Michigan 6514 MI Calhoun Kalamazoo R 319 20 DM PH N

5/31/2005 Grand River Dam Auth 2183 OK Mayes Neosho R 100000 50 DM PH N

6/30/2005 N. E. W. Hydro Inc Et Al 7264 WI Outagamie Fox R 1390 20 DM PH N

6/30/2005 FPL Energy Maine Hydro 2194 ME York Saco R 4000 50 DM PH Y

7/1/2005 Pacificorp 2630 OR Jackson N Fk Rogue R 36760 25 DM PH Y

7/31/2005 Duke Power 2603 NC Macon Little Tennessee 1040 25 DM PH N

7/31/2005 Duke Power 2602 NC Jackson Tuckasegee R 225 25 DM PH N

7/31/2005 Duke Power 2601 NC Swain Oconaluftee R 980 25 DM PH N

7/31/2005 Idaho Power Co 1971 ID Adams Snake R 1166900 50 DM PH Y

8/1/2005 Duke Power 2619 NC Cherokee Hiwassee R 1800 25 DM PH Y

10/4/2005 Norquest Seafoods, Inc. 620 AK Aleutian Div Indian Cr 60 30 DM PH N
38

A N N U A L   R E P O R T

License	 	 FERC	 	 	 Period	 Facilities	

Expiration	 	 Project	 	 	 Installation	 of	 Under	 Subj.

Date	 Licensee	 No.	 State	 County	 River	 {KW}	 Years	 License	 Fed.

 

10/31/2005 Erie Boulevard Hydropower 7387 NY St Lawrence Raquette R 2700 20 DM PH Y

10/31/2005 Grant CTY PUD 2 2114 WA Grant Columbia R 1755000 50 DM PH N

11/10/2005 Louisville Gas And El Co 289 KY Jefferson Ohio R 80320 30 DM PH Y

12/31/2005 Public Service Co of NH 1893 NH Merrimack Merrimack R 29700 25 DM PH Y

1/31/2006 Duke Power 2686 NC Jackson Tuckasegee R 24600 25 DM PH N

1/31/2006 Duke Power 2698 NC Jackson Tuckasegee 26175 25 DM PH N

2/14/2006 Monroe City Corporation 632 UT Sevier Monroe Cr 250 28 DM PH N

2/28/2006 Duke Power 2692 NC Macon Nantahala R 43200 25 DM PH Y

2/28/2006 Pacificorp 2082 OR Klamath Klamath R 151000 50 DM PH Y

 2/28/2006 Union Electric Co 459 MO Miller Osage R 176200 25 DM PH Y

3/31/2006 SC Public Service Authority 199 SC Berkeley Santee R 134520 27 DM PH Y

4/12/2006 N Y St Elec & Gas Corp 2738 NY Clinton Saranac R 38950 26 DM PH Y

4/30/2006 Cowlitz Co PUD No 1 2213 WA Skamania Lewis R 70000 50 DM PH N

4/30/2006 Puget Sound Pwr and Lt Co 2150 WA Whatcom Baker R 162400 50 DM PH Y

4/30/2006 Pacificorp 2111 WA Skamania Lewis R 240000 50 DM PH Y

4/30/2006 Pacificorp 935 WA Clark Lewis R 136000 23 DM PH Y

6/30/2006 Chelan Co PUD No 1 2145 WA Douglas Columbia R 1237400 50 DM PH N

8/31/2006 Portland General Elec Co 2195 OR Clackamas Clackamas R 136600 50 DM PH Y

11/30/2006 Erie Boulevard Hydropower 7321 NY Franklin Salmon R 1000 20 DM PH N

12/31/2006 City & County of Denver 2204 CO Grand Williams Fk R 3000 50 DM PH N

1/31/2007 CA Dept of Water Res 2100 CA Butte Feather R 762850 50 DM PH N

2/28/2007 Holyoke City of MA 7758 MA Hampden Holyoke Cnl 760 20 PH N

3/27/2007 Pacific Gas & Electric Co 606 CA Shasta Cow Cr 4440 30 DM PH Y

3/31/2007 Flambeau Hydro, LLC 9185 WI Burnett Clam R 1200 20 DM PH N

4/30/2007 Garkane Power Assoc, Inc. 2219 UT Garfield W Fk Boulder 4300 50 DM PH Y

4/30/2007 Chugach Elec Assn ,Inc 2170 AK Seward Div Cooper Cr 15000 50 DM PH Y

6/9/2007 Flambeau Hydro, LLC 9184 WI Burnett Yellow R 1076 20 DM PH N

7/31/2007 Pacific Gas & Electric Co 2155 CA El Dorado S Fk American R 7000 45 DM PH Y

7/31/2007 Alabama Power Co 618 AL Elmore Coosa R 100000 27 DM PH Y

7/31/2007 Alabama Power Co 82 AL Chilton Coosa R 170000 32 DM PH Y

7/31/2007 Sacramento M U D 2101 CA Placer Gerle Cr 640950 50 DM PH N 

7/31/2007 Alabama Power Co 2146 AL Elmore Coosa R 690900 50 DM PH Y

8/1/2007 Avista Corp 2545 ID Spokane Spokane R 1366000 35 DM PH Y

8/29/2007 Alaska Power & Tel Co 1051 AK Skagway-Yak Dewey Cr 943 30 DM PH N

8/31/2007 Alabama Power Co 2165 AL Tuscaloosa Black Warrior 203250 50 DM PH Y

8/31/2007 South Carolina Elec & Gas 516 SC Newberry Saluda R 207300 23 DM PH Y

8/31/2007 New York Power Authority 2216 NY Niagara Niagara R 2755500 50 DM PH Y

11/30/2007 Wolverine Power Corp 2785 MI Midland Tittabawassee 3300 20 DM PH Y

11/30/2007 Southern Calif Edison Co 2085 CA Fresno San Joaquin R 150938 50 DM PH Y
39

License	 	 FERC	 	 	 Period	 Facilities	

Expiration	 	 Project	 	 	 Installation	 of	 Under	 Subj.

Date	 Licensee	 No.	 State	 County	 River	 {KW}	 Years	 License	 Fed.

12/31/2007 Montana Power, L.L.C. 2543 MT Missoula Clark Fk R 3200 40 DM PH Y

3/31/2008 Sitka City of & Borough AK 2230 AK Sitka Division Medvetcha R 7540 50 DM PH N

4/30/2008 Hyrum City Corp Utah 946 UT Cache Blacksmith Fk 400 27 DM PH N

4/30/2008 Ottumwa City of Iowa 925 IA Wapello Des Moines R 3250 26 DM PH N

4/30/2008 Progress Energy Carolinas 2206 NC Stanly Pee Dee R 108600 50 DM PH Y

4/30/2008 Alcoa Generating 2197 NC Davidson Yadkin R 209520 50 DM PH Y

6/15/2008 Virginia Elec & Pwr Co 906 VA Amherst James R 7500 30 DM PH Y

8/9/2008 Crisp County Power Comm 659 GA Worth Flint R 15200 30 DM PH N

8/31/2008 Duke Power 2232 NC Alexander Catawba R 804940 50 DM PH Y

9/30/2008 Pend Oreille Cty PUD 1 2225 WA Pend Oreille Sullivan Cr 0 50 DM PH N

11/30/2008 Eugene City of OR 2242 OR Linn Mckenzie R 124500 50 DM PH N

2/28/2009 Georgia Power Co 2237 GA Fulton Chattahoochee 16800 50 DM PH Y

2/28/2009 Eagle & Phenix Hydro Co 2655 AL Muscogee Chattahoochee 27660 50 DM PH Y

2/28/2009 Southern Calif Edison Co 2175 CA Fresno Big Cr 150150 50 DM PH Y

2/28/2009 Southern Calif Edison Co 120 CA Fresno San Joaquin R 165675 32 DM PH Y

2/28/2009 Southern Calif Edison Co 67 CA Fresno Big Cr 373320 38 DM PH Y

3/31/2009 Oroville-Wyandotte Dist 2088 CA Butte S Fk Feather R 104100 50 DM PH N

5/31/2009 Augusta Canal Authority 9988 GA Richmond Augusta Cnl 2050 20 DM PH Y

7/31/2009 Public Service Co of NH 7528 NH Coos Connecticut R 1100 25 DM PH N

8/31/2009 Boulder, City of 1005 CO Boulder Boulder Cr 20000 28 DM PH Y

10/11/2009 Pacific Gas & Electric Co 803 CA Butte Butte Cr 26650 30 DM PH Y

10/31/2009 Littleville Power Co Inc 2801 MA Berkshire Housatonic R 1140 30 DM PH N

12/31/2009 Moss, Richard 6885 CA Mono Middle Cr/Birch Cr175 50 DM PH N

12/31/2009 PP&L Montana, L.L.C. 2301 MT Stillwater W Rosebud Cr 10000 33 DM PH Y

2/28/2010 Energy Northwest 2244 VA Lewis Lake Cr 26125 50 DM PH

3/31/2010 Appalachian Power Co 2210 ID Campbell Roanoke R 636000 50 DM PH

4/10/2010 Consumers Energy Co 785 MI Allegan kalamazoo R 2550 30 DM PH

4/12/2010 Jacobson Eric R 733 CO Ouray Uncompahgre R 700 30 DM PH

4/30/2010 Willis Ken 1992 CA Tehama Fern Springs C 15 30 DM PH

6/30/2010 Public Service Co of CO 400 CO Laplata Animas R 11500 25 DM PH

6/30/2010 Idaho Power Co 503 ID Ada/Owyhee Snake R 25000 40 DM PH

8/11/2010 Kaukanuna 2677 WI Outagamie Fox R 8000 20 PH

8/31/2010 South Carolina Elec & Gas 516 SC Richland Saluda R 207300 25 DM PH

10/31/2010 Mackay Bar Corp 3041 ID Idaho Smith CR 12 30 DM PH

*Includes types of facilities at each project, but not total number of each type (e.g. A project may consist of multiple powerhouses of dams). DM Dam, RS 

Reservoir, CL Canal, TU Tunnel, FM Flume, PL Pipeline, PK Penstock, PH Powerhouse, TR Turbine, GN Generator(s), TC Tailrace, TL Transmission Line or 

connection thereto.

Federal Energy Regulatory Commission

888 First Street, NE, Washington, DC 20426

202/502-6088 • 1-866-208-3372 (toll free) • 202-502-8371 (TTY)

http://www.ferc.gov

208-674_FER_CV1-4.indd 4 11/27/06 2:31: