[Federal Register Volume 65, Number 231 (Thursday, November 30, 2000)]
[Rules and Regulations]
[Pages 71247-71256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30241]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 385

[Docket No. RM98-1-001; Order No. 607-A]


Regulations Governing Off-the-Record Communications

Issued: November 21, 2000.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Order on rehearing and clarification.

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SUMMARY: On September 15, 1999, the Federal Energy Regulatory 
Commission (Commission) issued a final rule (Order No. 607), revising 
its regulations governing off-the-record communications between persons 
outside the Commission and the Commission and its employees. The 
general framework established by the

[[Page 71248]]

rule remains the same. The order does, however, grant rehearing and 
clarification in instances where the suggested changes will improve the 
new procedures.

EFFECTIVE DATE: The regulations are effective January 2, 2001.

FOR FURTHER INFORMATION CONTACT: Samuel Soopper, Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, D.C. 20426 (202) 208-0154.

SUPPLEMENTARY INFORMATION: This order addresses the requests for 
rehearing and clarification of the Commission's final rule (Order No. 
607) revising its regulations governing off-the-record communications 
between persons outside the Commission and the Commission and its 
employees.\1\ The general framework established by the rule remains the 
same. This order does, however, grant rehearing and clarification in 
instances where the suggested changes will improve the new procedures 
and contribute to ensuring that the final rule fulfills its intention 
to permit fully informed decisionmaking while ensuring the integrity of 
the Commission's decisionmaking process.
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    \1\ Regulations Governing Off-the-Record Communications, Order 
No. 607, 64 FR 51222 (Sept. 15, 1999).
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I. Background

    In promulgating Order No. 607, the Commission recognized that its 
prior ex parte regulations had been difficult to interpret and apply, 
both by its own staff as well as private parties. As the result of a 
public conference held in March 1992, a general consensus developed 
favoring a revised rule that would provide the Commission, the public, 
the industries it regulates and interested governmental bodies with a 
clearer statement of what communications are prohibited and when the 
prohibitions apply. Additionally, the Commission recognized the 
benefits of enhancing its access to information from Federal and state 
agencies and other interested persons to the extent consistent with law 
and fair process.
    On September 16, 1998, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) to revise its procedural rules concerning 
communications between the Commission and its employees and persons 
outside the Commission.\2\ The NOPR requested comments on the proposed 
changes to the Commission's procedural rules governing such 
communications.\3\ Thirty-two commenters, representing the hydropower, 
electric power, and natural gas pipeline industries, as well as state 
and Federal resource agencies, filed comments generally supporting 
adoption of the rule as proposed in the NOPR.
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    \2\ Regulations Governing Off-the-Record Communications, 63 FR 
51312 (Sept. 25, 1998); FERC Stats. & Regs. [Proposed Regulations 
1988-1998] para. 32,534 (Sept. 16, 1998).
    \3\ The Commission sought comments notwithstanding that, because 
this is a procedural rule, no opportunity for comment is required by 
the Administrative Procedure Act (APA).
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    The final rule promulgated by the Commission was based on the 
fundamental APA principles that are the foundation for the ex parte 
prohibition, and furthers the basic tenets of fairness: (1) a hearing 
is not fair when one party has private access to the decision maker and 
can present evidence or argument that other parties have no opportunity 
to rebut; \4\ and (2) reliance on ``secret'' evidence may foreclose 
meaningful judicial review.\5\ The final rule sets out when 
communications between the Commission and Commission staff and persons 
outside the Commission may take place off the record, and when such 
communications must take place on the record. The final rule also 
provided specific directions on how both prohibited and exempted off-
the-record communications will be handled by the Secretary's office and 
how public notice of such communications will be made.
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    \4\ WKAT, Inc. v. FCC, 296 F.2d 375 (D.C. Cir.), cert. denied, 
360 U.S. 841 (1961).
    \5\ Home Box Office, Inc. v. FCC, 567 F.2d 9, 54 (D.C. Cir.), 
cert denied, 434 U.S. 829 (1977); U.S. Lines v. Federal Maritime 
Commission, 584 F.2d 519, 541-542 (D.C. Cir. 1978).
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    The final rule prohibits off-the-record communications made in a 
``contested on-the-record proceeding,'' defined as ``any proceeding 
before the Commission to which there is a right to intervene and in 
which an intervenor disputes any material issue, or any proceeding 
initiated by the Commission on its own motion or in response to a 
filing.'' Proceedings not covered by this rule include informal (i.e., 
notice and comment) rulemaking proceedings under 5 U.S.C. 553; 
investigations under part 1b of the Commission's regulations; any other 
proceeding not having a ``party or parties,'' as defined in Rule 102 of 
the Commission Rules of Practice and Procedure; \6\ and any proceeding 
in which no party disputes any material issues.
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    \6\ 18 CFR 385.102 (2000). This would also include any 
proceeding that does not have a docket number.
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    The final rule articulated seven exemptions to the general 
prohibition against off-the-record communications relevant to the 
merits of proceedings at the Commission: (1) communications expressly 
permitted by rule or order; (2) certain communications related to 
emergencies; (3) communications agreed to by all parties; (4) written 
communications from non-party elected officials; (5) certain 
communications with other Federal, state, local and Tribal agencies 
that are not parties; (6) certain communications related to preparation 
of National Environmental Policy Act (NEPA) documentation; and (7) 
communications with individual non-party landowners. Additionally, the 
final rule established notice and disclosure requirements for both 
prohibited and exempted communications, as well as sanctions for 
noncompliance with the rule.
    Timely requests for rehearing and/or clarification of Order No. 607 
were filed by Chevron Pipe Line Company (Chevron); Edison Electric 
Institute (EEI); Indicated Shippers; \7\ Interstate Natural Gas 
Association of America (INGAA); Southern Company Services, Inc. (SCSI); 
and the United States Department of the Interior (Interior). Their 
requests for rehearing and/or clarification will be addressed below. 
The topic headings in the discussion section generally track those used 
in Order No. 607. In addition, the Commission, upon further 
consideration, has identified several implementation issues that 
require clarification of the rule, as discussed below.
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    \7\ Indicated Shippers consist of Amoco Production Company, 
Amoco Energy Trading Corporation, Anadarko Petroleum Corporation, 
Chevron U.S.A. Inc., Exxon Corporation, Marathon Oil Company, and 
Shell Offshore Inc.
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II. Discussion

A. Definitions in the Final Rule

(1) Contested On-the-Record Proceeding
    In the final rule, the Commission defined a ``contested on-the-
record proceeding'' in Rule 2201(c)(1)(i) as follows:

    Except as provided in paragraph (c)(1)(ii) of this section, any 
proceeding before the Commission to which there is a right to 
intervene and in which an intervenor disputes any material issue, or 
any proceeding initiated by the Commission on its own motion or in 
response to a filing. [\8\]
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    \8\ 18 CFR 385.2201(c)(1)(i). Paragraph (c)(1)(ii) excludes from 
the definition notice-and-comment rulemakings under 5 U.S.C. 553, 
investigations under 18 CFR Part 1b, proceedings that do not have a 
party or parties, and any proceeding in which no party disputes any 
material issue. 18 CFR 385.2201(c)(1)(ii).

    However, the general rule prohibiting off-the-record communications 
goes on to state that it applies to, inter alia, ``[c]omplaints 
initiated pursuant to rule

[[Page 71249]]

206 from the date of the filing of the complaint with the Commission.'' 
\9\
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    \9\ 18 CFR 385.2201(d)(1)(iii).
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    A. On rehearing, Chevron states that there is ``clear 
contradiction'' between these provisions, in that Rule 2201(c)(1)(i) as 
promulgated apparently does not include a complaint proceeding as a 
``contested on-the-record proceeding'' until a response is filed, while 
Rule 2201(d)(1)(iii) prohibits ex parte communications from the date of 
the filing of the complaint.\10\ Chevron requests that the Commission 
amend the definition of Rule 2201(c)(1)(i) to specifically include a 
complaint pursuant to Rule 206.
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    \10\ Chevron Rehearing at 2.
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    The Commission grants rehearing on this issue. We will resolve this 
inconsistency by amending Rule 2201(c)(1)(i) to read as follows:

    Except as provided in paragraph (c)(1)(ii) of this section, any 
proceeding before the Commission to which there is a right to 
intervene and in which an intervenor disputes any material issue, 
any proceeding initiated pursuant to rule 206 by the filing of a 
complaint with the Commission, or any proceeding initiated by the 
Commission on its own motion or in response to a filing.

    B. Chevron also argues on rehearing that the definition established 
by Order No. 607 for ``off-the-record communication'' is too broad 
because it does not take into account that the Commission's complaint 
regulations ``allow both a complainant and a respondent to file 
information with the Commission that is not served on other parties to 
the proceeding pending execution of a protective agreement.'' \11\ 
Chevron proposes that the Commission remedy this situation by adding an 
additional exemption to Rule 2201(e) for documents and information 
filed with the Commission with a request for privileged treatment, but 
not served on a party pending the execution of a protective agreement.
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    \11\ Id. at 3 (citations omitted).
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    The Commission denies Chevron's request for rehearing on this 
issue. Rule 2201(e)(1)(i) specifically provides an exemption from the 
ex parte prohibitions of the rule for ``[a]n off-the-record 
communication permitted by law and authorized by the Commission.'' \12\ 
Because requests for privileged treatment in a complaint proceeding are 
authorized by the Commission's regulations, it follows that they fall 
within this exemption and do not violate the ex parte rule. We further 
observe that a party requesting privileged treatment of documents under 
the Commission's rules, 18 CFR 388.112, is required to file a public 
version of any document for which such treatment is sought. Thus, the 
public will have notice of any such filing, which is consistent with 
the public notice provisions for exempt off-the-record communications 
established by Order No. 607, and can request access to the privileged 
information subject to the terms of an appropriate protective 
order.\13\
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    \12\ 18 CFR 385.2201(e)(1)(i).
    \13\ 18 CFR 385.2201(h).
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    C. Interior argues on rehearing that Rule 2201(c)(1)(i) should 
require the Commission to provide notice that the ex parte rule has 
been triggered in specific proceedings. According to Interior, relying 
on the parties to determine whether the rule applies, based on whether 
an intervention renders a proceeding contested, is arbitrary and unduly 
burdensome.
    The Commission denies rehearing. We do not believe that the rule 
places an undue burden on a person to ascertain from the face of a 
motion to intervene filed in a proceeding whether it is a mere 
formality or raises issues so as to render a proceeding ``contested.'' 
Under the Commission's regulations ``[a]ny motion to intervene must 
state, to the extent known, the position taken by the movant and the 
basis in fact and law for that position.'' \14\ Further, any person who 
is uncertain of the significance of a particular motion to intervene 
can avoid the application of the ex parte rule simply by making his or 
her communication on the record.
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    \14\ 18 CFR 385.214(b)(1).
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(2) Relevant to the Merits
    The final rule established that ``[p]rocedural inquiries, such as a 
request for information relating solely to the status of a 
proceeding,'' are not considered communications that are ``relevant to 
the merits'' of a proceeding for purposes of rule.\15\ In discussing 
this provision in Order No. 607, we observed:
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    \15\ 18 CFR 385.2201(c)(5)(i).

    Although simple requests for action by a specific date or for 
expedited action may be viewed as not relevant to the merits, the 
Commission strongly encourages that any such requests be made in 
writing and on the record. [\16\]
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    \16\ 64 FR at 51226. Any such requests not formally filed with 
the Commission of course would not be entertained by the Commission.

    A. On rehearing, Indicated Shippers object that this discussion 
represents a ``prohibition against timing communications * * * [that] 
will chill if not eliminate altogether legitimate inquiries into the 
timing of a Commission decision in a contested matter.'' \17\ According 
to Indicated Shippers, this conclusion is contrary to the APA's 
exclusion of requests for status reports from its definition of 
prohibited ex parte communications,\18\ as well as judicial and 
Commission precedent.\19\ Indicated Shippers also believe that the 
Commission's position runs afoul of the stated goal of Order No. 607 to 
increase flexibility in communications.
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    \17\ Indicated Shippers Request for Rehearing at 5-6.
    \18\ Id. at 6, citing 5 U.S.C. 551(14).
    \19\ Id., citing Gulf Oil Company v. FPC, 563 F.2d 588, 611 (3rd 
Cir. 1977) (Gulf Oil) and Iroquois Gas Transmission System, L.P., 52 
FERC para. 61,091 at 61,431 n.17, on reh'g, 53 FERC para. 61,194 
(1990), on reh'g, 54 FERC para. 61,103 (1991) (Iroquois).
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    The Commission denies rehearing. We reject the contention that this 
aspect of Order No. 607 or our interpretation of it runs afoul of 
either the APA or the precedent on which the Indicated Shippers rely. 
First, nothing in the APA is contrary to our view that a request for 
expedited action must be made on the record to properly lie before the 
Commission. The APA does not prohibit an agency from taking such a 
measure to ensure the orderly processing of its dockets. Neither, for 
that matter, does Gulf Oil or Iroquois.\20\
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    \20\ In Gulf Oil, the court found that, on the facts before it, 
actions by some Members of Congress to have the Commission 
accelerate disposition of a case did not relate to the merits of the 
case and were insufficient under the circumstances presented to 
render the Commission's decision invalid. Gulf Oil, 563 F.2d at 610-
612. The excerpt from Iroquois relied on by Indicated Shippers is 
taken from a General Counsel's ``Memorandum to the Record'' appended 
to the Commission's decision. This Memorandum discusses the 
applicability of the Commission's ex parte regulations that were 
then in place to the factual circumstances specific to that 
proceeding.
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    Furthermore, status reports, as referred to by the statute, refer 
to reports about events that have already occurred, not requests for 
future action by an agency. Nothing in the APA requires an agency to 
provide status reports to persons making such requests. In this regard, 
we observe that the Commission has a specific rule that the nature and 
timing of its proposed actions are ``confidential and shall not be 
divulged to anyone outside the Commission.'' \21\
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    \21\ 18 CFR 3c.3(b). This rule gives the Secretary of the 
Commission the exclusive responsibility for authorizing the initial 
public release of information concerning Commission proceedings.
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    B. While the NOPR had proposed an exemption for certain staff 
communications concerning compliance matters where the compliance issue 
is not a subject of the rehearing, the final rule did not include such 
an exemption. Rather, Rule 2201(c)(5)(iii) provides that ``relevant to 
the merits'' does not include ``[c]ommunications relating to

[[Page 71250]]

compliance matters not the subject of an ongoing proceeding.'' \22\
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    \22\ 18 CFR 385.2201(c)(5)(iii).
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    Interior and Indicated Shippers object to the fact that the final 
rule does not cover communications concerning compliance with an order 
while a request for rehearing of the order is pending. Indicated 
Shippers allege that as it now stands, the parties who engage in such 
communications ``will have determined on their own, without notice or 
opportunity for challenge, that the compliance issue raised in the 
communication is unrelated to the rehearing issues.'' \23\ In a similar 
vein, Interior complains that there may be ``legitimate disputes'' 
whether a compliance matter is the subject of an on-going proceeding, 
and that ``[t]he integrity of the Commission's processes'' should not 
be left to the judgment of licensee and Commission staff.\24\
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    \23\ Indicated Shippers Request for Rehearing at 7.
    \24\ Interior Request for Rehearing at 8.
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    The Commission denies rehearing on this issue.\25\ In our view, it 
is both necessary and appropriate to rely on the judgment of decisional 
staff to properly resolve such questions. Indeed, the premise of the ex 
parte rule is that staff members will exercise their professional 
judgment in these matters. We believe that Rule 2201(c)(5)(iii) 
adequately balances our goal of permitting fully informed Commission 
decisions while ensuring the integrity of the decisional process.
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    \25\ It is worth noting that the concerns raised by Interior are 
by and large limited to the hydroelectric project context. 
Compliance filings arising from gas and electric cases are routinely 
docketed, so that service on the parties is required.
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B. Exempt Off-the-Record Communications

(1) Off-the-Record Communications Expressly Permitted by Rule or Order
    The final rule exempts from its purview (and does not require 
disclosure of) off-the-record communications ``permitted by law and 
authorized by the Commission.'' \26\ In Order No. 607, the Commission 
interpreted this exemption as being limited to a situation in which 
there is ``specific statutory authority permitting or directing 
interagency consultations to take place on an ex parte basis.'' \27\ 
The Commission concluded that the Endangered Species Act (ESA) does not 
specify that the interagency consultations it requires take place on an 
ex parte basis, and that such consultations thus do not fall under the 
purview of this exemption.
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    \26\ 18 CFR 385.2201(e)(1)(i).
    \27\ 64 FR at 51227.
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    Interior requests rehearing on this issue, claiming that the 
Commission neither cited authority nor provided an analysis for its 
limitation of Rule 2201(e)(1)(i)'s exemption to statutes specifically 
permitting ex parte communications. Interior asserts that as with 
interagency consultations under NEPA, off-the-record communications 
subject to disclosure would ``support the goals'' of the ESA, 
facilitate statutorily-required consultation between agencies, and 
accord sufficient weight to the ``unique roles'' of the consulting 
agencies and their relationship with the Commission.\28\
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    \28\ Interior Request for Rehearing at 5. We note that in spite 
of the way in which Interior frames its argument, communications 
under NEPA are not governed by exemption (e)(1)(i), but rather by 
exemption (e)(1)(vi).
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    The Commission denies Interior's request for rehearing. As 
discussed in the NOPR as well as Order No. 607,\29\ limiting the 
exemption for off-the-record communications expressly permitted by rule 
or order to situations where there is specific statutory authority for 
such ex parte contacts is fully consistent with the APA. There is 
nothing in the ESA that suggests that required consultations should 
occur ex parte, and, as a matter of practice, the Commission has found 
that conducting interagency consultations in noticed meetings has not 
interfered with ESA compliance.
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    \29\ 64 FR at 51227 & n.48, citing 63 FR at 51312, 51316.
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    As Order No. 607 discussed, we view the process under NEPA as 
providing its own procedural assurances of notice, opportunity for 
comment, and record development, thus justifying a separate exemption 
to permit the Commission to develop an environmental record consistent 
with NEPA procedures. The ESA does not require the same opportunities 
for notice and comment. We will continue to have ESA consultation 
subject to notice. We have found this practice workable, and we are 
committed to making it as effective as possible. Finally, we note that 
the rule includes an exemption permitting off-the-record consultations 
in certain circumstances with non-party agencies under the ESA and 
other statutes.\30\
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    \30\ 18 CFR 385.2201(e)(1)(v).
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    (2) Off-the-Record Communications Related to Emergencies
    Order No. 607 established an exemption for off-the-record 
communications ``made by a person outside of the agency related to an 
emergency,'' subject to the disclosure requirement of 385.2201(g).\31\ 
In promulgating this exemption, we acknowledged the concern of some 
commenters that permitting off-the-record communications during 
economic emergencies could have an adverse effect on regulated markets 
in the context of a contested proceeding, and agreed that such 
emergencies could be dealt with by the Commission's investigative 
powers. Nonetheless, we concluded that ``especially with regard to 
emergencies affecting a regulated entity's ability to deliver energy, 
it is imperative that, in the face of an emergency, it may initiate 
communications'' with the Commission without fear of violating the 
prohibition on off-the-record communications.\32\
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    \31\ 18 CFR 385.2201(e)(1)(ii).
    \32\ 64 FR at 51227.
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    A. Indicated Shippers request rehearing of our decision to include 
off-the-record communications regarding economic emergencies (as 
opposed to such physical emergencies as natural disasters and equipment 
failures) within this exemption. Indicated Shippers assert that Order 
No. 607 fails to address ``the problems inherent in defining when an 
economic situation is harmful to a participant in a contested 
proceeding, and when it is an `emergency.' '' \33\ They also argue that 
modern communications capabilities render it ``difficult to envision an 
economic emergency'' that would preclude a party in a contested 
proceeding from filing an emergency communication and serving it on the 
parties.\34\
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    \33\ Indicated Shippers Request for Rehearing at 4.
    \34\ Id.
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    The Commission finds the Indicated Shippers' reasoning on this 
issue persuasive. We therefore hold that Rule 2201(e)(1)(ii) does not 
apply to emergencies that are solely economic in nature, but only to 
physical emergencies involving injury or threat of injury to persons, 
property or the environment. We further clarify that this exemption 
does not apply only to such disasters as earthquakes, floods and 
explosions, but to any physical emergency at a regulated facility or 
project or a facility that provides regulated services (such as 
electric generation and transmission facilities). Emergency actions may 
be necessary at a hydroelectric project, for example, to protect 
turbine blades from injury, to provide emergency flows to protect some 
species of fish in the case of a clogged minimum flow pipe, or to draw 
down a reservoir in case of extreme high flow events. Similarly, 
emergency actions might be necessary to protect the reliability of the 
electric transmission grid. Thus, we will amend the text of the final 
rule to limit this

[[Page 71251]]

exemption to physical emergencies, and to clarify that it applies to 
any physical emergency at a regulated facility or a facility that 
provides a regulated service.
    B. Upon reflection, the Commission believes that another aspect of 
Rule 2201(e)(1)(ii) requires revision. Under the emergency exemption as 
promulgated by Order No. 607, a member of Commission staff could be in 
violation of the final rule if, for example, he or she must telephone a 
hydroelectric licensee to resolve emergency flow conditions at a 
project while a licensing action is pending where such flow conditions 
are at issue. While emergency situations occurring during the license 
or certificate processes are not the norm, the Commission believes that 
it makes sense to ensure that the communications between the staff and 
the regulated parties are free and open in such situations, regardless 
of who happens to initiate the communication. Of course, any 
communication under this exemption, whether made from inside or outside 
of the agency, is subject to the disclosure requirement of Rule 
2201(g)(1) and will be placed in the decisional record.
    We therefore will amend 18 CFR 385.2201(e)(1)(ii) to delete the 
language ``made by a person outside the agency.''
(3) Off-the-Record Communications with Other Federal, State, Local and 
Tribal Agencies
    Under Rule 2201(e)(1)(v), certain off-the-record communications 
between the Commission and other governmental agencies are permitted, 
subject to disclosure:

    An off-the-record communication to or from a Federal, state, 
local or Tribal agency that is not a party in the Commission 
proceeding, subject to disclosure under paragraph (g) of this 
section, if the communication involves:
    (A) an oral or written request for information made by the 
Commission or Commission staff; or
    (B) a matter over which the Federal, state, local, or Tribal 
agency and the Commission share jurisdiction, including authority to 
impose or recommend conditions in connection with a Commission 
license, certificate, or exemption.\35\
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    \35\ 18 CFR 385.2201(e)(v).

    SCSI, EEI and Interior request rehearing on different aspects of 
this exemption. At the outset, however, the Commission believes a 
change in the language of subpart (A) is necessary to clarify our 
intent that, as to requests for information made by the Commission or 
Commission staff, the request itself is not covered by the rule because 
it is not relevant to the merits of a contested proceeding. However, 
any response to such a request is covered by the rule, subject to this 
exemption and the disclosure requirement. We will therefore change the 
language of subpart (A) to refer to ``an oral or written response to a 
request for information made by the Commission or Commission staff.''
    A. Both SCSI and EEI take issue with the idea that the Commission 
``shares jurisdiction'' with resource agencies under the FPA.
    We grant rehearing of the contention of SCSI and EEI that the 
Commission does not ``share jurisdiction'' with resource agencies under 
the licensing provisions of the FPA. Rather, it is more accurate to 
refer to non-party agencies that have regulatory responsibilities with 
respect to particular matters before the Commission, and we will amend 
the regulatory provision accordingly.
    B. Additionally, SCSI and EEI generally object to Rule 
2201(e)(1)(v), arguing that off-the-record communications with non-
party agencies should be prohibited in licensing proceedings. More 
specifically, SCSI argues that this exemption, even with disclosure, 
exceeds the Commission's statutory authority and violates the ex parte 
provisions of the APA ``by creating a blanket exemption allowing non-
party, governmental agencies not otherwise authorized by law to make 
prohibited off-the-record communications.'' \36\ According to SCSI, the 
APA does not provide ``a generic exemption for interested officials'' 
of governmental agencies, who must be considered ``interested persons 
outside the agency'' to whom the APA's ex parte provisions thus 
apply.\37\
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    \36\ SCSI Request for Rehearing at 12.
    \37\ Id. at 13. In this regard, SCSI relies on PATCO v. FLRA II, 
685 F.2d 547, 562-63 (D.C. Cir. 1982) (PATCO) and Portland Audubon 
Society v. Endangered Species Committee, 984 F.2d 1534 (9th Cir. 
1993).
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    The Commission denies the requests for rehearing of SCSI and EEI 
that this exemption cannot stand. We believe that the fact that this 
exemption is subject to the disclosure requirement protects the due 
process rights of parties to a proceeding. We disagree that this 
procedure, with its disclosure requirement, runs afoul of the APA. 
While such officials of non-party agencies may be ``interested 
persons'' for purposes of the APA, the disclosure process established 
by the rule sufficiently protects the rights of the parties to a 
contested proceeding from jeopardy, while recognizing the need for 
cooperation between governmental agencies and the development of 
cohesive government policy. We believe this approach is consistent with 
the court's view in PATCO:

    Congress sought to establish common-sense guidelines to govern 
ex parte contacts in administrative hearings, rather than rigidly 
defined and woodenly applied rules. The disclosure of ex parte 
communications serves two distinct interests. Disclosure is 
important in its own right to prevent the appearance of impropriety 
from secret communications in a proceeding that is required to be 
decided on the record. Disclosure is also important as an instrument 
of fair decisionmaking; only if a party knows the arguments 
presented to a decisionmaker can the party respond effectively and 
ensure that its position is fairly considered.\38\

    \38\ 685 F.2d at 563.
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    In our view, the final rule's exemption for non-party agencies, 
subject to a disclosure requirement, is such a common-sense approach to 
balancing the competing interests at issue here. In this context, it 
also bears emphasis that our experience with the rule in the year since 
it has been promulgated indicates that the Commission staff has been 
prompt in submitting notices of exempt or prohibited communications to 
the Secretary's office, thus ensuring timely disclosure to affected 
parties.
    C. SCSI believes that the disclosure requirement is insufficient in 
that agencies can later become parties to a proceeding, and suggests 
that Rule 2201(e)(1)(v) gives them ``strategic advantages * * * to wait 
to subject themselves to the strictures of Rule 2201 by intervening 
formally at the last possible minute.'' \39\ EEI expresses similar 
concerns.
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    \39\ SCSI Request for Rehearing at 8.
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    We do not believe such concerns are warranted. Under Rule 214(d) of 
the Commission's Rules of Practice and Procedure, the existing parties 
to a contested proceeding have an opportunity to oppose a motion for 
late intervention, and the decision whether to grant such a motion is a 
matter committed to the Commission's sound discretion, based on, inter 
alia, whether the movant can demonstrate good cause to be permitted to 
intervene late, and whether permitting late intervention might result 
in prejudice to the existing parties.\40\ This procedural mechanism 
provides a sufficient safeguard against an agency attempting to 
unfairly manipulate the system.\41\
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    \40\ 18 CFR 385.214(d)(i) and (d)(iv).
    \41\ Similarly, Commission policy prevents a cooperating agency 
under NEPA from subsequently intervening in a proceeding, to the 
prejudice of other parties. See n.50, supra.
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    D. Finally, Interior challenges this provision of the ex parte rule 
from the opposite perspective, arguing that the Commission should 
expand the

[[Page 71252]]

exemption for off-the-record communications to include agencies that 
are parties to contested proceedings. Interior asserts that the 
Commission ``provided no basis for its assertion that the public 
interest does not favor the free flow of information when an agency is 
also a party.'' \42\
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    \42\ Interior Request for Rehearing at 6.
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    The Commission denies rehearing. We believe that such an approach 
conflicts with fundamental fairness contemplated by the restrictions on 
ex parte communications established by the APA. Moreover, we find that 
such an approach adds little to the free flow of information that can 
occur on the record, while threatening to prejudice, or to appear to 
prejudice, the due process rights of other parties to a contested 
proceeding.
(4) Off-the-Record Communications Relating to NEPA Documentation
    The final rule includes a specific exemption (subject to 
disclosure) for certain communications relating to NEPA documents:

    (vi) An off-the-record communication, subject to disclosure 
under paragraph (g) of this section, that relates to:
    (A) The preparation of an environmental impact statement if 
communications occur prior to the issuance of the final 
environmental impact statement; or
    (B) The preparation of an environmental assessment where the 
Commission has determined to solicit public comment on the 
environmental assessment, if such communications occur prior to the 
issuance of the final environmental document.\43\

    \43\ 18 CFR 385.2201(e)(1)(vi)(A) and (B).

    SCSI and INGAA seek rehearing of certain aspects of this exemption.
    A. SCSI attacks the exemption's application to preparation of an EA 
in cases where the Commission solicits public comment on the ground 
that ``[p]ublic participation does not justify or support exempting 
communications related to the preparation of an EA (whatever that might 
encompass).'' \44\ SCSI also objects to the exemption permitting off-
the-record communications in assessing whether an applicant has 
complied with all relevant environmental statutes during the term of 
its license.
---------------------------------------------------------------------------

    \44\ SCSI Request for Rehearing at 10.
---------------------------------------------------------------------------

    We deny SCSI's request for rehearing on this issue. In our view, 
the exemption strikes an appropriate balance: The rights of the parties 
to a licensing proceeding are adequately protected by the combination 
of public participation in the EA and EIS process and the disclosure 
requirement for the off-the-record communications, while at the same 
time the exemption promotes communications which ``may assist in the 
development of sound environmental analysis.'' \45\
---------------------------------------------------------------------------

    \45\ 64 FR at 51229.
---------------------------------------------------------------------------

    B. SCSI further contends that allowing the off-the-record 
communications to be exchanged until the issuance of the final EA or 
EIS is unfair to the parties in a contested licensing proceeding 
because ``more often than not'' those documents are issued 
simultaneously with the Commission's final order.\46\ In SCSI's view, 
this limits a party to seeking rehearing or reconsideration of 
substantive issues, procedures ``wholly unsuited for submitting 
substantive evidence and argument that the applicant was in compliance 
with any or all relevant statutes.'' \47\ INGAA likewise expresses 
concern that pursuant to this provision, ``information that may affect 
either the EIS or the EA will not be disclosed to all parties in a 
timely manner.'' \48\
---------------------------------------------------------------------------

    \46\ SCSI Request for Rehearing at 11.
    \47\ Id. at 12.
    \48\ INGAA Request for Rehearing at 3.
---------------------------------------------------------------------------

    The Commission is cognizant of the concerns raised by SCSI and 
INGAA that parties must have adequate time to respond once off-the-
record communications are disclosed. However, we see no need to grant 
rehearing with respect to Rule 2201(e)(1)(vi)'s exemption for NEPA-
related documents on this basis. Rather, the Commission does not 
anticipate that such timing problems will arise in licensing 
proceedings, because we will not issue an order without first giving 
the applicant ample opportunity to respond to an off-the-record 
communication relied upon in the order. In most cases, this opportunity 
will be provided by the Commission's issuing a final NEPA document with 
its description and responses to comments prior to the issuance of a 
final order. Where the final NEPA document and the final order are 
issued simultaneously, the staff will ensure that disclosure of off-
the-record communications is completed in advance. Finally, a request 
for rehearing is always available to a party as a due process safeguard 
in the event that a problem arises with respect to timely disclosure 
that the Commission has not foreseen in promulgating this rule.
    C. Rule 2201(g), governing disclosure of exempt off-the-record 
communications, establishes an exception to the disclosure requirement 
where the ``communication was with a cooperating agency as described in 
40 CFR 1501.6, made under paragraph (e)(1)(v) of this section [relating 
to off-the-record communications to or from non-party agencies]'' \49\
---------------------------------------------------------------------------

    \49\ 18 CFR 385.2201(g).
---------------------------------------------------------------------------

    EEI, INGAA and SCSI seek rehearing concerning this provision, 
contending that while the Commission stated in Order No. 607 that the 
exemption is limited to cooperating agencies under NEPA, the rule as 
promulgated contains no such limitation.
    The provision at 40 CFR 1501.6 is a Council on Environmental 
Quality Regulation dealing expressly with NEPA and the role of 
cooperating agencies in the NEPA process. The Commission clarifies that 
the term cooperating agency as used in Rule 2201(g) is limited, by 
definition, to the context of NEPA.\50\
---------------------------------------------------------------------------

    \50\ Both EEI and SCSI question whether the exclusion in subpart 
(g) should properly refer to communications made under paragraph 
(e)(1)(vi), the NEPA exemption, rather than paragraph (e)(1)(v), the 
exemption for non-party agencies. The rule correctly refers to 
paragraph (e)(1)(v), as it is meant to apply only where the 
cooperating agency is not a party. Commission policy prevents an 
agency that has served as a cooperating agency from subsequently 
intervening in a proceeding. See Rainsong Company, 79 FERC para. 
61,338 at p. 62,457 n. 18 (1997); Order No. 596, Regulations for the 
Licensing of Hydroelectric Projects, III FERC Stats. and Regs. 
Preambles, para. 31,057 at 30,644 (1997). Thus, the intervention 
opportunity provided for in the Commission's environmental 
regulations, accepting as timely those motions to intervene that are 
filed within the comment period for a draft EIS, could not be used 
to circumvent this policy. See 18 CFR 380.10(a).
---------------------------------------------------------------------------

C. Handling and Notice of Off-the-Record Communications

    The final rule established a requirement that the Secretary of the 
Commission issue a public notice, at least as often as once every 14 
days, concerning the receipt of any off-the-record communications, 
whether prohibited or exempt.\51\ For prohibited communications, the 
notice will disclose the particulars of the communication (identity of 
the maker, date of receipt by the Commission, docket number of the 
proceeding to which it relates), and state that the communication will 
not be considered by the Commission.\52\ For exempt off-the-record 
communications which fall under Rule 2201(g), the Secretary is only 
required to list the communications or summaries of the communications.
---------------------------------------------------------------------------

    \51\ 18 CFR 385.2201(h).
    \52\ 18 CFR 385.2201(h)(1).
---------------------------------------------------------------------------

    EEI, Indicated Shippers and SCSI contest certain aspects of these 
provisions on rehearing.
    A. EEI asserts that while the preamble to the rule in Order No. 607 
indicated that notice of exempt off-the-record communications would 
include ``prompt electronic notice through an

[[Page 71253]]

electronic service list,'' the text of Rules 2201(f) and (g) does not 
reflect that copies of off-the-record communications, or even notice of 
such communications, will be individually served on the parties to the 
proceeding.\53\ EEI requests the Commission to clarify that under the 
rule such communications ``will be promptly and directly served on the 
parties, or at least that the documents will be promptly posted on the 
Commission's website and the parties will be promptly notified on an 
individual basis.'' \54\
---------------------------------------------------------------------------

    \53\ EEI Request for Rehearing at 5-6, quoting 64 FR at 51233.
    \54\ Id. at 6.
---------------------------------------------------------------------------

    The Commission rejects EEI's request. The text of the final rule 
limits public notice to that made by the Secretary's office and does 
not require individual service to parties in a proceeding. Rather, 
notice of off-the-record communications will be placed on the public 
record in the Federal Register. To the extent the language in the 
preamble on which EEI relies appears to indicate a contrary view, we 
hereby disavow that language.
    B. EEI asserts that mere posting by the Secretary every 14 days 
``may not be rapid enough'' notice in ``time sensitive proceedings.'' 
\55\ SCSI makes a related argument, contending that the 14-day notice 
provision provides insufficient time to allow a hydroelectric license 
applicant to respond to exempt communications to or from a non-party 
agency under Rule 2201(e)(1)(v)(A).\56\
---------------------------------------------------------------------------

    \55\ Id.
    \56\ SCSI also claims that the notice provision may negatively 
affect protocols entered into by the parties under the Alternative 
Licensing Process (ALP), if participants are unwilling to agree to 
time or disclosure requirements that vary from Rule 2201(g). 
However, the rule prohibiting off-the-record communications do not 
apply to the ALP, because the alternative procedures occur before a 
license application is filed, prior to any ``proceeding'' at the 
Commission. Moreover, SCSI may negotiate terms for communication it 
determines to be appropriate within the context of each ALP.
---------------------------------------------------------------------------

    The Commission rejects the arguments of EEI and SCSI that the 
notice provisions of the rule are insufficient. The Commission 
continues to believe, as discussed in the preamble to the final rule, 
that the posting of prohibited or exempt communications at least every 
14 days will provide sufficient notice. All prohibited and exempt 
communications covered by the rule will be available in the 
Commission's electronic records system in the affected docket as soon 
as they are processed by the Secretary's office. Parties to proceedings 
may routinely check the dockets in the proceedings if they are 
concerned that a 14-day notice will not provide sufficient time.
    In any event, the Commission observes that the rule establishes the 
minimum required notice, and that it will resolve individual situations 
on a case-by-case basis. Thus, if the Commission believes that the 14-
day notice period is insufficient in a particular case, it retains the 
discretion to have the Secretary post the information on a more timely 
basis, or even to provide personal notice to the parties in the rare 
circumstances where, in its judgment, this is necessary to prevent 
prejudice to the participants in a proceeding governed by the ex parte 
communications rule.
    C. Indicated Shippers assert that the notice disclosing an ex parte 
communication should identify the recipient of a communication, which 
it believes could be significant information for parties considering 
whether to seek to have the recipient recused. We reject as unnecessary 
Indicated Shippers' request that the rule be amended to require 
disclosure of the identity of the recipient of an off-the-record 
communication as unnecessary. As a general matter, written ex parte 
communications will ordinarily include the names of the sender and the 
addressee, as would a memorandum or written summary memorializing an 
oral off-the-record communication. More importantly, we do not agree 
that such information is of crucial significance to the parties. Under 
the rule, such off-the-record communications will be placed in the 
administrative record of a proceeding for all to see. In any event, in 
the case of a prohibited communication, the remedy protecting the 
interests of the affected parties is for the Commission not to rely on 
the communication in reaching its decision.

D. Other Issues

    Upon reflection, the Commission believes that it would be helpful 
to clarify that the reference to ``person'' in the definition of the 
``General rule prohibiting off-the-record communications'' employed the 
definition of ``person'' found in the general definitions applicable to 
the Commission's Rules of Practice and Procedure, which excludes the 
Commission and its employees.\57\ As the rule now stands, it states 
that
---------------------------------------------------------------------------

    \57\ 18 CFR 385.102(d).

    Except as permitted in paragraph (e) of this section, in any 
contested on-the-record proceeding, no person shall make or 
knowingly cause to be made to any decisional employee, and no 
decisional employee shall make or knowingly cause to be made to any 
---------------------------------------------------------------------------
person, any off-the-record communication.\58\

    \58\ 18 CFR 385.2201(b).

    We are changing the references to ``person'' to ``person outside 
the Commission,'' to make clear that the rule applies only to 
communications between those outside the agency and the Commission's 
decisional employees. Communications within the Commission are 
generally governed by the separation of functions rule.\59\
---------------------------------------------------------------------------

    \59\ 18 CFR 385.2202. For example, the separation of functions 
rule addresses certain internal communications between decisional 
staff and staff involved in litigated proceedings or certain 
investigatory proceedings.
---------------------------------------------------------------------------

    The Commission recognizes that both the ex parte rule as well as 
the separation of functions rule have an impact on the manner in which 
it will conduct its market monitoring and oversight responsibilities. 
As our market monitoring and oversight program evolves, with the 
transition of energy industries to competitive markets, the Commission 
may in the future determine that changes in either or both of these 
rules are necessary in order for it to adequately conduct these 
responsibilities.
    We further observe that while the rule uses the term ``off-the-
record'' interchangeably with ``ex parte,'' there are situations where 
``off-the-record'' communications are clearly not of an ex parte nature 
and not prohibited by the rule. For example, technical and settlement 
conferences under Subpart F of the Commission's regulations are off the 
record in that no transcript is kept, but all parties receive notice 
and can attend. Because discussions at these conferences are open to 
all participants, they are not barred by the rule. The rule does apply, 
however, to any private or ``sidebar'' conversations between 
participants and Commission staff that are relevant to the merits of 
pending contested matters, occurring during the course of the 
conference.
    Additionally, we have made a few minor editorial changes in the 
regulatory text for the sake of clarity.

III. Document Availability

    In addition to publishing the full text of this document in the 
Federal Register, the Commission also provides all interested persons 
an opportunity to view and/or print the contents of this document via 
the Internet through FERC's Home Page (http://www.ferc.fed.us) and on 
FERC's Public Reference Room during normal business hours (8:30 a.m. to 
5:00 p.m. Eastern time) as 888 First Street, N.E., Room 2A, Washington, 
DC 20426.

[[Page 71254]]

    From FERC's Home Page in the Internet, this information is 
available in both the Commission Issuance Posting System (CIPS) and 
RIMS.

    --CIPS provides access to texts of formal documents issued by the 
Commission since November 14, 1994.
    --CIPS can be accessed using the CIPS link or the Energy 
Information Online icon. The full text of this document is available on 
CIPS in ASCII and WordPerfect 8 format for viewing, printing, and/or 
downloading.
    --RIMS contains images of documents submitted to and issued by the 
Commission after November 16, 1981. Documents from November 1995 to the 
present can be viewed and printed from FERC's Home Page using the RIMS 
link or the Energy Information Online icon. Descriptions of documents 
back to November 16, 1981, are also available from RIMS-on-the-Web; 
requests for copies of these and other older documents should be 
submitted to the Public Reference Room.

    User assistance is available for RIMS, CIPS, and the FERC Website 
during normal business hours from our Help line at (202) 208-2222 (E-
mail to <a href="/cdn-cgi/l/email-protection#95c2f0f7d8f4e6e1f0e7d5f3f0e7f6bbf3f0f1bbe0e6"><span class="__cf_email__" data-cfemail="86d1e3e4cbe7f5f2e3f4c6e0e3f4e5a8e0e3e2a8f3f5">[email protected]</span></a>) or the Public Reference at (202) 208-
1371 (E-Mail to <a href="/cdn-cgi/l/email-protection#1a6a6f7876737934687f7c7f687f74797f687575775a7c7f6879347c7f7e346f69"><span class="__cf_email__" data-cfemail="314144535d58521f4354575443545f5254435e5e5c71575443521f5754551f4442">[email protected]</span></a>).
    During normal business hours, documents can also be viewed and/or 
printed in FERC's Public Reference Room, where RIMS, CIPS, and the FERC 
Website are available. User assistance is also available.
    For the reasons discussed in the body of this order, we deny in 
part and grant in part Indicated Shippers' request for rehearing of 
Order No. 608.

IV. Effective Date

    Changes to Order No. 607 made in this order on rehearing will 
become effective on January 2, 2001.

List of Subjects in 18 CFR Part 385

    Administrative practice and procedure, Electric power, Penalties, 
Pipelines, and Reporting and record keeping requirements.

    By the Commission.
David P. Boergers,
Secretary.

    In consideration of the foregoing, the Commission amends Part 385, 
Chapter I, Title 18, Code of Federal Regulations, as follows:

PART 385--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for Part 385 continues to read as 
follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16 
U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352; 49 
U.S.C. 60502; 49 App. U.S.C. 1-85.


    2. Section 385.2201 is revised to read as follows:


Sec. 385.2201  Rules governing off-the-record communications (Rule 
2201).

    (a) Purpose and scope. This section governs off-the-record 
communications with the Commission in a manner that permits fully 
informed decision making by the Commission while ensuring the integrity 
and fairness of the Commission's decisional process. This rule will 
apply to all contested on-the-record proceedings, except that the 
Commission may, by rule or order, modify any provision of this subpart, 
as it applies to all or part of a proceeding, to the extent permitted 
by law.
    (b) General rule prohibiting off-the-record communications. Except 
as permitted in paragraph (e) of this section, in any contested on-the-
record proceeding, no person outside the Commission shall make or 
knowingly cause to be made to any decisional employee, and no 
decisional employee shall make or knowingly cause to be made to any 
person outside the Commission, any off-the-record communication.
    (c) Definitions. For purposes of this section:
    (1) Contested on-the-record proceeding means
    (i) Except as provided in paragraph (c)(1)(ii), any proceeding 
before the Commission to which there is a right to intervene and in 
which an intervenor disputes any material issue, any proceeding 
initiated pursuant to rule 206 by the filing of a complaint with the 
Commission, or any proceeding initiated by the Commission on its own 
motion or in response to a filing.
    (ii) The term does not include notice-and-comment rulemakings under 
5 U.S.C. 553, investigations under part 1b of this chapter, proceedings 
not having a party or parties, or any proceeding in which no party 
disputes any material issue.
    (2) Contractor means a direct Commission contractor and its 
subcontractors, or a third-party contractor and its subcontractors, 
working subject to Commission supervision and control.
    (3) Decisional employee means a Commissioner or member of his or 
her personal staff, an administrative law judge, or any other employee 
of the Commission, or contractor, who is or may reasonably be expected 
to be involved in the decisional process of a proceeding, but does not 
include an employee designated as part of the Commission's trial staff 
in a proceeding, a settlement judge appointed under Rule 603, a neutral 
(other than an arbitrator) under Rule 604 in an alternative dispute 
resolution proceeding, or an employee designated as being non-
decisional in a proceeding.
    (4) Off-the-record communication means any communication relevant 
to the merits of a contested on-the-record proceeding that, if written, 
is not filed with the Secretary and not served on the parties to the 
proceeding in accordance with Rule 2010, or if oral, is made without 
reasonable prior notice to the parties to the proceeding and without 
the opportunity for such parties to be present when the communication 
is made.
    (5) Relevant to the merits means capable of affecting the outcome 
of a proceeding, or of influencing a decision, or providing an 
opportunity to influence a decision, on any issue in the proceeding, 
but does not include:
    (i) Procedural inquiries, such as a request for information 
relating solely to the status of a proceeding, unless the inquiry 
states or implies a preference for a particular party or position, or 
is otherwise intended, directly or indirectly, to address the merits or 
influence the outcome of a proceeding;
    (ii) A general background or broad policy discussion involving an 
industry or a substantial segment of an industry, where the discussion 
occurs outside the context of any particular proceeding involving a 
party or parties and does not address the specific merits of the 
proceeding; or,
    (iii) Communications relating to compliance matters not the subject 
of an ongoing proceeding.
    (d) Applicability of prohibitions.
    (1) The prohibitions in paragraph (b) of this section apply to:
    (i) Proceedings initiated by the Commission from the time an order 
initiating the proceeding is issued;
    (ii) Proceedings returned to the Commission on judicial remand from 
the date the court issues its mandate;
    (iii) Complaints initiated pursuant to rule 206 from the date of 
the filing of the complaint with the Commission, or from the date the 
Commission initiates an investigation (other than an investigation 
under part 1b of this chapter) on its own motion; and
    (iv) All other proceedings from the time of the filing of an 
intervention

[[Page 71255]]

disputing any material issue that is the subject of a proceeding.
    (2) The prohibitions remain in force until:
    (i) A final Commission decision or other final order disposing of 
the merits of the proceeding is issued; or, when applicable, after the 
time for seeking rehearing of a final Commission decision, or other 
final order disposing of the merits, expires;
    (ii) The Commission otherwise terminates the proceeding; or
    (iii) The proceeding is no longer contested.
    (e) Exempt off-the-record communications.
    (1) Except as provided by paragraph (e)(2), the general 
prohibitions in paragraph (b) of this section do not apply to:
    (i) An off-the-record communication permitted by law and authorized 
by the Commission;
    (ii) An off-the-record communication related to any emergency 
concerning a facility regulated by the Commission or a facility that 
provides Commission-regulated services, involving injury or threat of 
injury to persons, property, or the environment, subject to disclosure 
under paragraph (g) of this section;
    (iii) An off-the-record communication provided for in a written 
agreement among all parties to a proceeding that has been approved by 
the Commission;
    (iv) An off-the-record written communication from a non-party 
elected official, subject to disclosure under paragraph (g) of this 
section;
    (v) An off-the-record communication to or from a Federal, state, 
local or Tribal agency that is not a party in the Commission 
proceeding, subject to disclosure under paragraph (g) of this section, 
if the communication involves:
    (A) an oral or written response to a request for information made 
by the Commission or Commission staff; or
    (B) a matter before the Commission in which a Federal, state, 
local, or Tribal agency has regulatory responsibilities, including 
authority to impose or recommend conditions in connection with a 
Commission license, certificate, or exemption;
    (vi) An off-the-record communication, subject to disclosure under 
paragraph (g) of this section, that relates to:
    (A) The preparation of an environmental impact statement if 
communications occur prior to the issuance of the final environmental 
impact statement; or
    (B) The preparation of an environmental assessment where the 
Commission has determined to solicit public comment on the 
environmental assessment, if such communications occur prior to the 
issuance of the final environmental document.
    (vii) An off-the-record communication involving individual 
landowners who are not parties to the proceeding and whose property 
would be used or abuts property that would be used by the project that 
is the subject of the proceeding, subject to disclosure under paragraph 
(g) of this section.
    (2) Except as may be provided by Commission order in a proceeding 
to which this subpart applies, the exceptions listed under paragraph 
(e)(1) will not apply to any off-the-record communications made to or 
by a presiding officer in any proceeding set for hearing under subpart 
E of this part.
    (f) Treatment of prohibited off-the-record communications.
    (1) Commission consideration. Prohibited off-the-record 
communications will not be considered part of the record for decision 
in the applicable Commission proceeding, except to the extent that the 
Commission by order determines otherwise.
    (2) Disclosure requirement. Any decisional employee who makes or 
receives a prohibited off-the-record communication will promptly submit 
to the Secretary that communication, if written, or a summary of the 
substance of that communication, if oral. The Secretary will place the 
communication or the summary in the public file associated with, but 
not part of, the decisional record of the proceeding.
    (3) Responses to prohibited off-the-record communications. Any 
party may file a response to a prohibited off-the-record communication 
placed in the public file under paragraph (f)(2) of this section. A 
party may also file a written request to have the prohibited off-the-
record communication and the response included in the decisional record 
of the proceeding. The communication and the response will be made a 
part of the decisional record if the request is granted by the 
Commission.
    (4) Service of prohibited off-the-record communications. The 
Secretary will instruct any person making a prohibited written off-the-
record communication to serve the document, pursuant to Rule 2010, on 
all parties listed on the Commission's official service list for the 
applicable proceeding.
    (g) Disclosure of exempt off-the-record communications.
    (1) Any document, or a summary of the substance of any oral 
communication, obtained through an exempt off-the-record communication 
under paragraphs (e)(1)(ii), (iv), (v), (vi) or (vii) of this section, 
promptly will be submitted to the Secretary and placed in the 
decisional record of the relevant Commission proceeding, unless the 
communication was with a cooperating agency as described by 40 CFR 
1501.6, made under paragraph (e)(1)(v) of this section.
    (2) Any person may respond to an exempted off-the-record 
communication.
    (h) Public notice requirement of prohibited and exempt off-the-
record communications.
    (1) The Secretary will, not less than every 14 days, issue a public 
notice listing any prohibited off-the-record communications or 
summaries of the communication received by his or her office. For each 
prohibited off-the-record communication the Secretary places in the 
non-decisional public file under paragraph (f)(1) of this section, the 
notice will identify the maker of the off-the-record communication, the 
date the off-the-record communication was received, and the docket 
number to which it relates.
    (2) The Secretary will not less than every 14 days, issue a public 
notice listing any exempt off-the-record communications or summaries of 
the communication received by the Secretary for inclusion in the 
decisional record and required to be disclosed under paragraph (g)(1) 
of this section.
    (3) The public notice required under this paragraph (h) will be 
posted in accordance with Sec. 388.106 of this chapter, as well as 
published in the Federal Register, and disseminated through any other 
means as the Commission deems appropriate.
    (i) Sanctions.
    (1) If a party or its agent or representative knowingly makes or 
causes to be made a prohibited off-the-record communication, the 
Commission may require the party, agent, or representative to show 
cause why the party's claim or interest in the proceeding should not be 
dismissed, denied, disregarded, or otherwise adversely affected because 
of the prohibited off-the-record communication.
    (2) If a person knowingly makes or causes to be made a prohibited 
off-the-record communication, the Commission may disqualify and deny 
the person, temporarily or permanently, the privilege of practicing or 
appearing before it, in accordance with Rule 2102 (Suspension).
    (3) Commission employees who are found to have knowingly violated 
this rule may be subject to the disciplinary actions prescribed by the 
agency's administrative directives.
    (j) Section not exclusive.

[[Page 71256]]

    (1) The Commission may, by rule or order, modify any provision of 
this section as it applies to all or part of a proceeding, to the 
extent permitted by law.
    (2) The provisions of this section are not intended to limit the 
authority of a decisional employee to decline to engage in permitted 
off-the-record communications, or where not required by any law, 
statute or regulation, to make a public disclosure of any exempted off-
the-record communication.

    3. The title to Section 385.2202 is revised to read as follows:


Sec. 385.2202  Separation of functions (Rule 2202).

[FR Doc. 00-30241 Filed 11-29-00; 8:45 am]
BILLING CODE 6717-01-P


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