[Federal Register Volume 66, Number 250 (Monday, December 31, 2001)]
[Rules and Regulations]
[Pages 67480-67482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-32068]



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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 385

[Docket No. RM02-5-000; Order No. 623]


Amendment to Rules Governing Off-the-Record Communications; Final 
Rule

December 21, 2001.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
revising its regulations governing off-the-record communications. The 
revisions ensure that the regulations do not impede the Commission's 
ability to quickly address issues relating to national security which 
may arise within the context of pending proceedings and its ability to 
maintain the confidentiality of sensitive security-related information.

EFFECTIVE DATE: This final rule is effective December 31, 2001.

FOR FURTHER INFORMATION CONTACT: Moira Notargiacomo, Office of the 
General Counsel, Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426, Telephone: (202) 208-1079.

Before Commissioners: Pat Wood, III, Chairman; William L. Massey, 
Linda Breathitt, and Nora Mead Brownell.

I. Background

    The September 11, 2001 terrorist attacks have prompted the 
Commission to reexamine its rules governing prohibited off-the-record 
communications at 18 CFR 385.2201 (Rule 2201). Specifically, the 
Commission has determined that in the interest of national security, 
Rule 2201 should be amended so as not to impede the Commission from 
immediately addressing issues related to national security where that 
would require discussions, in particular with other government 
entities, off-the-record. The need to change Rule 2201 recently became 
apparent when the Commission was called upon to assess the national 
security implications of certificating an expansion to and reactivating 
the operations of the Cove Point LNG facilities in Calvert County, 
Maryland. See Cove Point LNG Limited Partnership, 97 FERC para. 61,181 
(2001). In that situation, the rule frustrated the Commission's ability 
to talk to persons, including parties in the case, as quickly as 
desired, without violating the existing prohibition on off-the-record 
communications. As a result, the Commission convened a technical 
conference to which it invited all parties and non-party state and 
Federal agencies that share jurisdiction or regulatory responsibilities 
over security matters that could be implicated by the Commission's 
actions in the proceeding. See 97 FERC para. 61,834-35. Subsequently, a 
transcript of the conference was placed in the non-public decisional 
file in the case. Access to that transcript was limited to the parties, 
on the condition that they sign a non-disclosure agreement. See 
``Notice to Parties,'' in Docket No. CP01-76, et al., issued November 
21, 2001.

II. Discussion

    The communications dilemma which the Commission faced in the Cove 
Point proceeding was due in large part to the current structure of Rule 
2201, which prohibits any off-the-record communication between a 
Commission decisional employee and any person outside the Commission on 
the merits of any issue in a contested on-the-record proceeding. See 18 
CFR 385.2201(b). Rule 2201 exempts certain off-the-record 
communications from this prohibition, subject to disclosure and 
notice.\1\ As relevant here, Rule 2201 exempts an off-the-record 
communication from anyone related to any emergency. See 18 CFR 
385.2201(e)(1)(ii). The emergency exemption, however, was intended to 
cover events like earthquakes, floods, severe weather conditions, 
fires, or explosions that damage or threaten to damage FERC-regulated 
facilities, i.e. emergencies affecting a regulated entity's ability to 
deliver energy. See Regulations Governing Off-the-Record 
Communications, Order No. 607, FERC Stats. & Regs. para. 31,079 at 
30,885 (Sept. 15, 1999). At that time, neither the Commission nor 
anyone commenting on the proposed rule contemplated the vulnerability 
of the nation's energy infrastructure to terrorist attacks as part of 
the concept of ``emergency'' in Rule 2201. Indeed, Order No. 607's 
requirement of prompt notice and disclosure of such off-the-record 
communications indicates that the Commission did not consider that some 
of the information could be sensitive. As a separate matter, Rule 2201 
also exempts, subject to disclosure and notice, written communications 
from non-party members of Congress (See 18 CFR 385.2201(e)(1)(iv)) and 
any communications from a non-party Federal, state, local or Tribal 
agency over a matter which the Commission and the other agency shares 
jurisdiction (See 18 CFR 385.2201(e)(1)(v)).
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    \1\ The notice and disclosure procedure works as follows. Any 
decisional employee who makes or receives a prohibited or an exempt 
off-the-record communication is obligated promptly to deliver to the 
Office of the Secretary (OSEC) a copy of the communication, if 
written, or a summary of the substance of any oral communication. 
Next, OSEC places the written communication or summary of an oral 
communication in the non-decisional record (if a prohibited 
communication) or in the decisional record (if an exempt 
communication). Every 14 days OSEC publishes a notice in the Federal 
Register identifying both types of communications, to which parties 
then have an opportunity to respond. See 18 CFR 385.2201 (f)-(h).
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    Thus, as currently structured and as relevant here, Rule 2201 
prohibits all off-the-record communications relating to emergencies 
with national security implications, oral off-the-record communications 
with non-party members of Congress, all off-the-record communications 
with State and Federal agencies with shared responsibilities and 
members of Congress who are parties in a proceeding, and all other 
persons, including licensees and certificate holders and their security 
personnel.
    The Commission finds that the current scope of Rule 2201 is 
inadequate to enable it to carry out its licensing and other 
responsibilities under its organic statutes, to address possible 
breaches of national security through critical infrastructure 
vulnerabilities. In particular, we find that to the extent such 
circumstances require us to communicate with other government employees 
or anyone with whom we deem communication appropriate, we need to be 
able to do so without the restriction of the prohibition against off-
the-record communications in Rule 2201. Therefore, we determine that 
Rule 2201 needs to be amended to treat all communications involving 
critical energy infrastructure matters as exempt communications, 
subject to a limited form of disclosure and notice. As explained below, 
while the communications may be with anyone, its disclosure will be 
limited to parties in a proceeding who sign non-disclosure statements. 
In our view, this amendment to Rule 2201 strikes the proper balance 
between maintaining the fairness of our proceedings and enabling us to 
protect sensitive information.

III. Analyses of the Amendments to Rule 2201

    As explained above, in the interests of national security, we will 
amend Rule 2201 in two respects. First, we will expand the exemptions 
to prohibited off-the-record communications by adding a new paragraph 
(viii) to 18 CFR 385.2201(e)(1), to permit any person to

[[Page 67481]]

discuss off-the-record with the Commission and its decisional staff 
their concerns about any national security-related issue in a 
proceeding regarding a facility regulated by the Commission or a 
facility that provides Commission-regulated services. This exemption 
recognizes that the public interest favors a free flow of information 
involving the security of our nation, especially among Federal 
employees with a shared responsibility to protect our nation.
    Second, we will amend the disclosure requirements under 18 CFR 
Sec. 385.2201(g) by adding a new paragraph (3), which will treat 
national security-related communications as confidential, unless the 
Commission determines that such protection is unnecessary. Accordingly, 
this new paragraph requires that any such document, or the summary of 
the substance of any oral communication, be submitted to the Secretary 
and placed in the relevant non-public decisional file and made 
available only to parties to the proceeding in which the communications 
were made, subject to the parties' signing a non-disclosure agreement. 
Any responses to such off-the-record communications will also be placed 
in the non-public decisional file and held confidential. Should the 
Commission determine that the information is not sensitive national 
security information, it will place the information, if written, or a 
summary of it, if oral, in the public record. This amendment to the 
disclosure requirements protects sensitive security-related 
communications so that they do not compromise public safety. At the 
same time, the amendment ensures that such communications do not 
undermine the procedural rights of the parties or the integrity of the 
Commission's decisional record by allowing the parties to rebut the 
information and to discern the basis of the Commission's decision by 
viewing actual information obtained through off-the-record 
communications with any person and relied upon by the Commission in 
reaching its decision.

IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act \2\ requires rulemakings either to 
contain a description and analysis of the impact the rules will have on 
small entities or a certification that the rule will not have a 
substantial economic impact on a substantial number of small entities. 
The Commission certifies promulgating this rule does not represent a 
major Federal action having a significant economic impact on a 
substantial number of small entities. Therefore, no regulatory 
flexibility analysis is required.
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    \2\ 5 U.S.C. 601-12 (1994).
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V. National Environmental Policy Act Analysis

    The Commission concludes that promulgating this Final Rule does not 
represent a major Federal action having a significant adverse effect on 
the human environment under the Commission's regulations implementing 
the National Environment Policy Act (see 18 CFR Part 380). This rule is 
procedural in nature and therefore falls within the categorical 
exemptions provided in the Commission's regulations. Consequently, 
neither an environmental impact statement nor an environmental 
assessment is required. See 18 CFR 380.4(a)(1).

VI. Paperwork Reduction Act Statement

    The Paperwork Reduction Act of 1995 (Pub. L. No. 104-13, 109 Stat. 
163 (1995)) and the Office of Management and Budget's (OMB's) 
regulations (5 CFR Part 1320) require that OMB approve certain 
information collection requirements imposed by agency rule. However, 
this rule contains no information collection requirements and therefore 
is not subject to OMB approval.

VII. Administrative Procedure Act

    Administrative Procedure Act (APA), 5 U.S.C. 551, et seq., requires 
rulemakings to be published in the Federal Register. The APA generally 
mandates that an opportunity for comment be provided when an agency 
promulgates regulations. Notice and comment are not required, however, 
where a rule relates to (1) agency personnel or agency organization, 
procedure or practice or (2) when the ``agency for good cause finds 
that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest. See 5 U.S.C. 553 
(b)(A) and (B). The Commission finds that notice and comment are 
unnecessary for this rulemaking because the rule relates to 
Commission's rules of practice and procedure. Furthermore, the 
September 11 terrorist attacks and concerns raised regarding the Cove 
Point LNG facilities indicate that it would be contrary to the public 
interest to delay implementing regulations which would protect the 
country's critical infrastructure to give notice and seek comment.

VIII. Effective Date and Congressional Notification

    The APA generally mandates that publication or service of a 
substantive rule not be made less than 30 days before its effective 
date. This waiting period is not required, however, for interpretative 
rules and statements of policy or as otherwise provided by the agency 
for good cause found. For the same reasons stated above, the 
Commission, therefore, finds good cause in accordance with 5 U.S.C. 
553(d)(3) to make these rules effective upon less than 30 days' notice. 
This Final Rule, therefore, will be made effective upon publication in 
the Federal Register.
    The Small Business Regulatory Enforcement Fairness Act of 1996 
requires agencies to report to Congress on the promulgation of certain 
final rules prior to their effective dates. See 5 U.S.C. 801. That 
reporting requirement does not apply to this Final Rule because it does 
not substantially affect the rights or obligations of non-agency 
parties, and therefore falls within a statutory exception for rules 
relating to agency procedures or practices that do not substantially 
affect the rights or obligations of non-agency parties.\3\
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    \3\ 5 U.S.C. 804(3)(C).
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IX. Availability of Documents

    In addition to publishing the full text of this document in the 
Federal Register, the Commission 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 in 
FERC's Public Reference Room during normal business hours (8:30 a.m. to 
5:00 p.m. Eastern time) at 888 First Street, N.E., Room 2A, Washington, 
DC 20426.
    From FERC's Home Page on the Internet, this information is 
available in both the Commission Issuance Posting System (CIPS) and the 
Records and Information Management System (RIMS).
--CIPS provides access to the texts of formal documents issued by the 
Commission since November 14, 1994.
--CIPS can be assessed using the CIPS link or the Energy Information 
Online icon. The full text of this document will be available on CIPS 
in ASCII and WordPerfect 8.0 format for viewing, printing, and or/
downloading.
--RIMS contains images of documents submitted to and issued by the 
Commission after November 16, 1981.

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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 18, 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.
    Users assistance is available for RIMS, CIPS, and the Website 
during normal business hours from our Help Line at (202) 208-2222 (E-
mail to <a href="/cdn-cgi/l/email-protection#095e6c6b44687a7d6c7b496f6c7b6a276f6c6d277c7a"><span class="__cf_email__" data-cfemail="8cdbe9eec1edfff8e9fecceae9feefa2eae9e8a2f9ff">[email protected]</span></a>) or the Public Reference at (202) 208-
1371 (E-Mail to <a href="/cdn-cgi/l/email-protection#3b4b4e5957525815495e5d5e495e55585e495454567b5d5e4958155d5e5f154e48"><span class="__cf_email__" data-cfemail="176762757b7e74396572717265727974726578787a577172657439717273396264">[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.

List of Subjects in 18 CFR Part 385

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

    By the Commission.
Linwood A. Watson, Jr.,
Acting 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 continues to read as follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 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 (1988).


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

* * * * *

    2. In Sec. 385.2201 paragraphs (e)(1)(viii) and (g)(3) are added to 
read as follows:
    (e) Exempt off-the-record communications. (1) * * *
    (viii) An off-the-record communication from any person related to 
any national security-related issue concerning a facility regulated by 
the Commission or a facility that provides Commission-regulated 
services.
* * * * *
    (g) Disclosure of exempt off-the-record communications. * * *
    (3) Any document, or a summary of the substance of any oral 
communications, obtained through an exempt off-the-record communication 
under paragraphs (e)(1)(viii) of this section, will be submitted 
promptly to the Secretary and placed in a non-public decisional file of 
the relevant Commission proceeding and made available to parties to the 
proceeding, subject to their signing a non-disclosure agreement. 
Responses will also be placed in the non-public decisional file and 
held confidential. If the Commission determines that the communication 
does not contain sensitive national security-related information, it 
will be placed in the decisional file.
* * * * *

[FR Doc. 01-32068 Filed 12-28-01; 8:45 am]
BILLING CODE 6717-01-P


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