Document ID: FERC-2008-0750-0002
Agency: ferc
Document Type: Rule
Title: Ex Parte Contacts and Separation of Functions
Posted Date: 2008-10-22T04:00Z

[Federal Register: October 22, 2008 (Volume 73, Number 205)]
[Rules and Regulations]               
[Page 62881-62886]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc08-11]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 385

[Docket No. RM08-8-000; Order No. 718]

 
Ex Parte Contacts and Separation of Functions

Issued October 16, 2008.
AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Final rule.

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SUMMARY: The Commission is revising its regulations to clarify its 
rules governing ex parte contacts and separation of functions as they 
apply to proceedings arising out of investigations initiated under Part 
1b of the Commission's regulations. The revisions specify when 
Commission litigation staff and persons outside the Commission may 
contact decisional employees once the Commission has established 
proceedings on matters that had been investigated under Part 1b. The 
Commission also is revising its regulations governing intervention to 
clarify that intervention is not permitted as a matter of right in 
proceedings arising from Part 1b investigations.

DATES: Effective Date: This rule will become effective November 21, 
2008.

FOR FURTHER INFORMATION CONTACT: Wilbur Miller, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 502-8953, wilbur.miller@ferc.gov.

SUPPLEMENTARY INFORMATION:
    1. On May 15, 2008, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) \1\ proposing to revise its regulations governing ex 
parte contacts and interventions in the context of investigations under 
Part 1b of its regulations.\2\ Specifically, the NOPR proposed to 
revise the Commission's regulations governing ex parte contacts and 
separation of functions to clarify the circumstances in which 
Commission litigation staff and outside persons may contact 
Commissioners and decisional staff while an investigation is pending. 
The NOPR further proposed to clarify the Commission's regulations 
governing intervention to provide that intervention is not available as 
of right in a proceeding arising from an investigation under Part 1b.
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    \1\ Ex Parte Contacts and Separation of Functions, 73 FR 29451 
(May 21, 2008), FERC Stats. & Regs. ] 32,634 (2008).
    \2\ 18 CFR part 1b.

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[[Page 62882]]

I. Background

    2. In the NOPR, the Commission noted that, while its regulation 
governing interventions provided that there is no intervention in a 
Part 1b investigation, the regulation did not address the subject of 
intervention in a proceeding arising from a Part 1b investigation.\3\ 
The NOPR explained that the Commission's precedents have recognized 
that, because a proceeding arising from an investigation is focused on 
the alleged conduct of a specific entity, intervention ordinarily is 
inappropriate and may delay or sidetrack the proceeding.\4\ The NOPR 
therefore proposed to revise the regulation to provide that 
intervention is not available as of right in a proceeding arising from 
a Part 1b investigation. The Commission noted that, under this 
revision, it would retain the ability to permit intervention in cases 
where it might be appropriate, as the Commission had in fact done on 
past occasions.
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    \3\ Rule 214 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.214.
    \4\ See Energy Transfer Partners, L.P., 121 FERC ] 61,282, at P 
19 & n.28 (2007) (ETP).
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    3. With respect to off-the-record communications, the NOPR 
explained that the current Commission rules created a potential 
inconsistency between the ability of Commission litigation staff and 
persons outside the Commission to contact Commissioners and decisional 
staff in situations where, as the result of a Part 1b investigation, 
the Commission initiates proceedings other than trial-type proceedings. 
The NOPR further noted some uncertainty within the regulated community 
about the application of the ex parte rules in the context of Part 1b 
investigations. The NOPR proposed to revise the Commission's ex parte 
\5\ and separation of functions \6\ regulations to provide that neither 
outside persons nor litigation staff may engage in off-the-record 
communications with Commissioners and decisional staff once the 
Commission has initiated a proceeding in connection with a Part 1b 
investigation, regardless of the type of proceeding.
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    \5\ Rule 2201 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.2201 (2008).
    \6\ Rule 2202 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.2202 (2008).
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    4. The NOPR also made reference to the Revised Policy Statement on 
Enforcement,\7\ which was issued at the same time as the NOPR. In the 
Revised Policy Statement on Enforcement, the Commission announced that, 
as a matter of policy, Commissioners and their personal staffs will no 
longer accept oral communications about pending investigations from the 
subjects of those investigations. Such communications will have to be 
in writing. This measure is a policy and not a part of the Commission's 
regulations.
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    \7\ Enforcement of Statutes, Regulations, and Orders, 123 FERC ] 
61,156 (2008).
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    5. In total, the Commission received 14 comments regarding the 
NOPR. Multiple State Utilities Commissions joined the comments of the 
National Association of Regulatory Utility Commissioners (NARUC).\8\ In 
addition, the Industry Associations' (IA) comments represented the 
views of several entities.\9\ In general, the commenters expressed 
appreciation of the Commission's attempt to refine its enforcement 
practices, but expressed concern with both the proposal prohibiting 
intervention as a matter of right in enforcement proceedings, as well 
as the proposal regarding ex parte contacts with decisional staff prior 
to the issuance of an order to show cause.\10\
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    \8\ The Public Utilities Commissions of California, Indiana, 
Nevada, Ohio, and South Dakota, as well as the Public Service 
Commissions of New York, Maryland, and West Virginia, and the 
Illinois Commerce Commission, supported the comments of NARUC.
    \9\ The Industry Association consists of the American Gas 
Association, the Edison Electric Institute, the Electric Power 
Supply Association, the Independent Petroleum Association of 
America, the Interstate Natural Gas Association of America, the 
Natural Gas Supply Association, and the Process Gas Consumers Group.
    \10\ Several commenters filed interventions or requested to 
intervene out of time, or requested to file late comments. These 
included the Indiana Utility Regulatory Commission, the Public 
Service Commission of West Virginia, the Illinois Commerce 
Commission, the Maryland Public Service Commission, the Public 
Utilities Commission of the State of California, the Public Service 
Commission of the State of New York, and the Public Utilities 
Commission of Ohio. The Commission will treat all such submissions 
as comments on the NOPR and has considered them regardless of when 
they were filed.
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II. Discussion

A. Intervention

    6. The bulk of the comments expressed concern about the NOPR's 
proposal to revise the Commission's intervention rules to provide that 
there is no intervention as a matter of right in proceedings arising 
from Part 1b investigations. For the most part, the commenters were 
concerned with specific situations that may arise from time to time in 
which they believe intervention would be warranted. A few comments 
reflected broader concerns about possible restrictions on intervention.
1. Broader Issues
    7. With respect to broader concerns, the National Rural Electric 
Cooperative Association and American Public Power Association (NRECA/
APPA), and Ergon Energy Partners, LP (Ergon), assert that the 
Commission should not adopt the proposed rule abolishing intervention 
as a matter of right in enforcement proceedings. NRECA/APPA state that 
the proposed rule is ``likely unlawful to the extent it purports to 
eliminate statutory intervention rights'' and is unnecessary in light 
of the standards contained in Rule 214.\11\ They assert that it would 
be more consistent with the Administrative Procedure Act (APA) if the 
Commission followed the standards contained in the existing rule.\12\ 
They further suggest that, as an alternative to the automatic grant of 
a timely, unopposed intervention, the Commission could adopt procedures 
employed by other agencies that provide for public notice and comment 
periods on consent decrees.\13\ Ergon, while agreeing that intervention 
in an investigation may be inappropriate, suggests that the Commission 
modify the rule to allow third parties the opportunity for meaningful 
participation in proceedings that directly affect their interests, and 
to allow intervention once the Commission finds culpable conduct.\14\
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    \11\ NRECA/APPA Comments at 2, 5.
    \12\ Id. at 6-9 (citing 5 U.S.C. 554(c)(1)).
    \13\ Id. at 6, 11. NRECA/APPA cite Federal Trade Commission and 
Department of Justice Regulations. Id. at 11.
    \14\ Ergon Comments at 2.
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    8. We do not agree that the proposed revisions will contravene any 
statutory right to intervene. The APA requires agencies to give 
interested parties an opportunity for ``the submission and 
consideration of facts, arguments, offers of settlement, or proposals 
of adjustment when time, the nature of the proceeding, and the public 
interest permit.'' \15\ The concerns underlying the NOPR's proposal are 
directly related to these considerations. In an adjudicative proceeding 
before the Commission, third parties typically provide facts to assist 
us in developing a case. However, the purpose of investigations and 
enforcement proceedings is to examine instances of potential wrongdoing 
and take remedial action where needed. Only in unusual circumstances, 
as discussed below, would third parties have additional information 
that is necessary for the Commission's investigation. As we have stated 
previously:
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    \15\ 5 U.S.C. 554(c)(1) (emphasis added).

    As a general proposition, when a Part 1b investigation becomes 
an enforcement action, we find that it would be inappropriate to 
allow entities to intervene as parties to the proceeding. We find 
that allowing parties to

[[Page 62883]]

intervene during an enforcement action potentially would be contrary 
to the public interest and would interfere with the Commission 
considering issues in a timely and judicious manner. This is because 
in such an enforcement proceeding, the Commission is considering 
closely the particular actions/inactions, rights, obligations and, 
potentially violations and penalties of the subject party--here, 
ETP. Such a proceeding is different from a rate filing, rulemaking, 
or other proceeding where the rights of third parties are clearly 
affected. Allowing third parties to intervene in enforcement 
proceedings in pursuit of their own objectives could delay or 
sidetrack a proceeding extending or even creating additional 
uncertainty for the subject party.\16\
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    \16\ ETP, 121 FERC ] 61,282, at P 19.

    Furthermore, the presence of intervenors could damage the ability 
of the Commission to conduct investigations, impair our ability to 
enter into settlements, and be contrary to the public interest. If our 
ability to enter into settlements is impaired, the result could be 
litigation of matters that could otherwise be settled, draining 
Commission enforcement resources. Since litigation could be prolonged, 
the benefits of settlements could be delayed, perhaps for years. 
Another result from the strain on the Commission's investigative 
resources could be fewer investigations, with fewer remedies being 
imposed and fewer signals being sent to the industry regarding which 
sorts of behaviors might expose an entity to an enforcement action, 
along with greater costs and prolonged uncertainty imposed on the 
subjects of investigation.
    9. We consider our views in line with judicial precedent on the 
subject of an agency's considerable discretion in making enforcement 
decisions.\17\ This discretion extends, among other things, to the 
decision whether to initiate an enforcement proceeding \18\ as well as 
the conduct of the proceeding and any settlement efforts.\19\ Inclusion 
of third parties as a matter of right would necessarily cede a portion 
of the Commission's discretion to those parties. Furthermore, the 
proposal made by NRECA/APPA that the Commission rely on the standards 
currently contained in Rule 214 would limit or eliminate the 
Commission's ability to take into account parameters such as time and 
the nature of the proceeding, even though those parameters are 
specifically set out in the APA. The current rule focuses on the nature 
of the prospective intervenor's interest, not on the unique 
considerations that pertain to an enforcement proceeding.\20\ We 
therefore find that NRECA/APPA's proposal is not appropriate to the 
enforcement context.
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    \17\ See Heckler v. Chaney, 470 U.S. 821, 831 (1985) (agency 
decisions regarding conduct of enforcement actions are presumptively 
unreviewable by the courts).
    \18\ Baltimore Gas & Electric Co. v. FERC, 252 F.3d 456, 459 (DC 
Cir. 2001) (BG&E) (``agency's decision not to exercise its 
enforcement authority, or to exercise it in a particular way, is 
committed to its absolute discretion'').
    \19\ Id. at 458 (decision to settle is committed to FERC's 
nonreviewable discretion).
    \20\ Rule 214(b) of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.214(b).
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    10. In our view, the NOPR's proposal addresses Ergon's concerns 
that third parties be able to participate in proceedings that directly 
implicate their interests, where those interests can be addressed in a 
manner that does not unduly hamper the Commission's enforcement 
efforts. As noted in the NOPR, the Commission has recognized that, on 
occasion, special circumstances might justify intervention in an 
enforcement proceeding. One such situation was an intervention in an 
enforcement proceeding where a state public service commission sought 
to clarify the impact of a settlement on state interests.\21\ The 
Commission also has noted that intervention might be appropriate to 
allow parties to participate in the allocation of disgorged 
profits.\22\ The proposed revisions to Rule 214 do not categorically 
bar interventions in proceedings arising from Part 1b investigations. 
Situations in which intervention would be appropriate are, however, 
necessarily limited in keeping with the nature of the enforcement 
function and the significant discretion accorded the Commission in that 
area.
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    \21\ Williams Gas Pipelines Central, Inc., 94 FERC ] 61,285 
(2001).
    \22\ ETP, 121 FERC ] 61,282 at P 19 & n.28.
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2. Specific Situations
    11. NARUC and the state regulatory bodies argue that state entities 
should be able to intervene given their unique position as regulators 
charged with serving the public interest.\23\ The state regulators 
argue that they have a direct interest in enforcement proceedings due 
to the impact on their ratepayers \24\ and that their collaboration 
will enhance enforcement efforts by avoiding duplicative efforts and 
inconsistent outcomes.\25\ They further maintain that the NOPR's 
proposal is inconsistent with section 308 of the Federal Power Act 
(FPA),\26\ which authorizes the Commission to admit interested state 
and local entities as parties to its proceedings.\27\ According to 
NARUC, the FPA contains ``no qualifiers regarding the type of FERC 
proceedings'' to which a state may be granted party status.\28\ NARUC 
proposes to allow states to intervene as a matter of right, and 
institute a process requiring ``specific notification of parties that 
could have an interest in these determinations, including affected 
State commissions.'' \29\ NARUC also states that the Commission should 
clarify that the resolution of a Part 1b proceeding will not affect the 
rights of states to pursue their own remedies for the wrongdoing that 
was the subject of the FERC investigation.\30\ The Public Service 
Commission of Maryland additionally asserts that state commissions must 
be able to intervene as of right to request rehearing in enforcement 
proceedings.\31\ Finally, the Indiana Utility Regulatory Commission 
proposes that market monitors be allowed to intervene and be informed 
of the status of ongoing investigations.\32\
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    \23\ NARUC Comments at 5.
    \24\ Id. at 5-6.
    \25\ Id. at 6.
    \26\ 16 U.S.C. 825g(a).
    \27\ NARUC Comments at 3; see New York Pub. Serv. Comm'n 
Comments at 4 (Commission should preserve carefully crafted balance 
by continuing to recognize state interests); Pub. Serv. Comm'n of 
Maryland Comments at 3 (it would be counterproductive not to include 
state regulatory authority in enforcement proceedings).
    \28\ NARUC Comments at 3.
    \29\ Id. at 8.
    \30\ Id.
    \31\ Pub. Serv. Comm'n of Maryland Comments at 4.
    \32\ Indiana Utility Regulatory Commission Comments at 3-4.
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    12. One other specific circumstance drawing concern was North 
American Electric Reliability Corp. (NERC) Reliability Standards 
investigations, particularly so-called ``root cause'' investigations to 
determine which entity is at fault for alleged violations of NERC 
reliability standards.\33\ Public Service Electric and Gas Company 
(PSEG), while agreeing with the Commission generally about intervention 
in Part 1b investigations, states that, ``because in the RTO/ISO 
construct responsibility for complying with NERC Reliability Standards 
does not in every case align with responsibilities between PJM and its 
members,'' NERC Reliability Standards investigations are substantially 
different from other Part 1b investigations and participants deserve 
more latitude in joining other parties. PSEG asserts that, in the 
interest

[[Page 62884]]

of due process, it may be necessary in enforcement proceedings arising 
from reliability standards investigations to ``widen the scope of 
permitted interventions,'' \34\ and that an entity accused of a NERC 
violation must be allowed to argue that another entity is responsible 
for the violation, and join them as a party to the proceeding prior to 
the penalty phase in order to ensure that there is an accurate finding 
of the ``root cause'' entity.\35\
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    \33\ There may be many situations where several entities could 
be investigated for violations for facts arising out of the same 
event and in such a case we would expect each entity would be 
afforded the full rights allowed to a subject of an enforcement 
action. Moreover, the conduct of any entity that might mitigate the 
severity of the violation or penalty as to the subject of an 
investigation can always be evaluated in an enforcement action 
regardless of whether such other entity is an intervenor.
    \34\ PSEG Comments at 3.
    \35\ Id. at 5.
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    13. As we note above, nothing in the proposed revisions to Rule 214 
precludes intervention in enforcement proceedings. While clarifying 
that there is no right to intervene in proceedings arising from Part 1b 
investigations, the Commission nevertheless retains the discretion to 
take into account specific circumstances that might favor intervention, 
although such circumstances would be uncommon and the participation by 
intervenors may be limited to specific matters.
    14. We disagree with PSEG that there is any fundamental difference 
concerning interventions in investigations carried out by the Regional 
Entities and the Electric Reliability Organization (ERO) with respect 
to possible violations of Reliability Standards approved by the 
Commission and in Part 1b investigations conducted by the Commission 
staff into the same kinds of violations. The Commission found in Order 
No. 672 that, in general, there should be no right to intervene in 
investigations carried out by Regional Entities or the ERO, for the 
same reasons that interventions are not permitted in our staff's Part 
1b investigations.\36\ We note that in its investigation, a Regional 
Entity or the ERO has authority to inquire into all facts relevant to 
whether a violation of a Reliability Standard occurred, and to identify 
all entities, whether listed on the ERO's compliance registry or not, 
whose actions related to the possible violation of a Reliability 
Standard.\37\
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    \36\ Rules Concerning Certification of the Electric Reliability 
Organization; and Procedures for the Establishment, Approval, and 
Enforcement of Electric Reliability Standards, Order No. 672, 71 FR 
8662 (Feb. 17, 2006), FERC Stats. & Regs. ] 31,204 at P 510, order 
on reh'g, Order No. 672-A, 71 FR 19814 (April 18, 2006), FERC Stats. 
& Regs. ] 31,212 (2006).
    \37\ See Reliability Standard Compliance and Enforcement in 
Regions with Regional Transmission Organizations or Independent 
System Operators, 122 FERC ] 61,247, at P 19 (2008) (NERC and 
Regional Entities will conduct thorough investigations that will 
examine the ``root cause'' of violations, and would extend such 
investigations to entities not listed on NERC's compliance registry 
if necessary).
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    15. We also stated in Order No. 672 that if a Regional Entity or 
the ERO concluded that interventions would be appropriate in a 
particular proceeding it would conduct arising from an investigation 
into possible violations of Reliability Standards, it must receive 
advance authorization to do so from the Commission.\38\ The Commission, 
therefore, will be in a position to evaluate on a case-by-case basis 
whether allowing interventions in a particular Regional Entity or ERO 
proceeding would be appropriate.\39\ We anticipate that the Commission 
could consider the issues PSEG mentions when making this determination 
in particular cases.
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    \38\ Order No. 672 at P 511.
    \39\ See, e.g., North American Electric Reliability Council; 
North American Electric Reliability Corporation, 119 FERC ] 61,060, 
at P 150, order on reh'g, 120 FERC ] 61,260 (2007) (recognizing 
exceptions to the general rule that no interventions should be 
permitted in Regional Entity and NERC enforcement proceedings, but 
stating that exceptions to this rule exist, which the Commission 
would evaluate in advance upon request on a case-by-case basis).
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    16. We do not agree with the expansive view of state participation 
in enforcement proceedings taken by NARUC and some of the state 
regulatory bodies. The proposed revisions are in no way inconsistent 
with the FPA. Section 308 of the FPA states as follows:

    In any proceeding before it, the Commission, in accordance with 
such rules and regulations as it may prescribe, may admit as a party 
any interested State, State commission, municipality, or any 
representative of interested consumers or security holders, or any 
competitor of a party to such proceeding, or any other person whose 
participation in the proceeding may be in the public interest.\40\
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    \40\ 16 U.S.C. 825g(a). Section 15(a) of the Natural Gas Act, 15 
U.S.C. 717n(a), includes a nearly identical provision.

Although this provision recognizes the role of state authorities, it 
does not draw a fundamental distinction between them and other 
interested persons. Furthermore, the FPA leaves the Commission with 
discretion to prescribe appropriate rules and to admit parties when it 
is ``in the public interest.'' By using `may' instead of `shall,' it is 
clear that section 308 establishes no right of intervention. The 
section merely authorizes the Commission to admit state commissions 
into FERC proceedings. Nothing in the provision prevents the Commission 
from recognizing the differing public interests that may be at stake in 
different types of proceedings. The provision likewise places no 
limitations on the considerations that the Commission may take into 
account in determining the public interest.
    17. In our view, as a general matter the availability of 
intervention in enforcement proceedings would be inconsistent with the 
discretion in pursuing enforcement measures that Congress has afforded 
the Commission. The DC Circuit, for instance, has determined that the 
Natural Gas Act (NGA) \41\ places no limitations on the Commission's 
exercise of its enforcement powers. The court has stated, ``At every 
turn the NGA confirms that FERC's decision how, or whether, to enforce 
that statute is entirely discretionary.'' \42\ Congress evinced no 
intention to ``cabin FERC's enforcement discretion,'' because if it 
had, it would have used ``obligatory terms such as `must,' `shall,' and 
`will,' not the wholly precatory language employed in the act.'' \43\
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    \41\ 15 U.S.C. 717, et seq. There is no meaningful difference 
between the relevant provisions of the NGA and those of the FPA. 
Compare 15 U.S.C. 717s(a) with 16 U.S.C. 825m, and 15 U.S.C. 717m 
with 16 U.S.C. 825f. Analogous provisions of the NGA and FPA are to 
be read in pari materia. See, e.g., Arkansas-Louisiana Gas Co. v. 
Hall, 453 U.S. 571, 577 n.7 (1981).
    \42\ BG&E, 252 F.3d at 460.
    \43\ Id. at 461.
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    18. We also see no reason why the revisions to Rule 214 would have 
any impact upon the ability of states to pursue remedies for wrongdoing 
that was the subject of a Part 1b investigation. The revisions address 
only the availability of intervention in proceedings arising from Part 
1b investigations. As the above discussion shows, the Commission's 
enforcement powers lie within its own discretion and the revisions 
therefore do not deprive any person or entity of any remedies that it 
previously possessed.
    19. Although we fully recognize the significant role played in 
oversight and enforcement by state regulatory commissions, the 
Commission has the sole authority to enforce its own jurisdictional 
statutes. As the courts have recognized, enforcement authority is 
generally considered discretionary with the agencies to which it is 
granted. In our view, the effective exercise of that discretion 
requires that enforcement proceedings remain focused on the primary 
issue, which is the alleged misconduct of the respondent. The revisions 
to Rule 214 nevertheless will leave the Commission with the ability in 
appropriate cases to permit the participation of third parties, but 
that participation will be tailored to appropriate situations based on 
factors that are unique to the particular enforcement context.
    20. For similar reasons, we are not persuaded by the various 
suggestions

[[Page 62885]]

that we solicit participation in investigations and enforcement 
proceedings. Given that we expect intervention to be permitted only in 
unusual situations, measures designed to invite such participation will 
in most cases result in delay and distraction from the central issues. 
Consequently, we find it appropriate to adopt the revisions to Rule 214 
contained in the NOPR.

B. Off-the-Record Communications

    21. The Commission received comments on the NOPR's proposed 
revisions to its ex parte and separation of functions rules from IA 
representing the views of several entities. The IA states that it 
supports the Commission's goal of equal treatment of investigative 
staff and subjects of an investigation subsequent to a show cause 
order, and argues that the Commission should extend the proposal to 
include the early stages of the investigation.\44\ In its view, 
allowing Commission investigative staff unrestricted access to 
decisional employees, while allowing the subject of an investigation 
only written communication, puts the subject of an investigation at a 
disadvantage in making its case to the Commission. The IA specifically 
requests that the Commission ``allow oral communications with 
Commissioners and other decision-making employees by both 
[i]nvestigative [s]taff and the [s]ubject.'' \45\
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    \44\ IA Comments at 2.
    \45\ Id. at 8-9.
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    22. The IA also makes specific procedural suggestions. It maintains 
that the subject of an investigation should be allowed to respond to 
the investigator's report and should be provided with ``the full set of 
material facts and legal conclusions appearing in the investigator's 
report, at the same time the report or draft is submitted to any 
decisional employee.'' \46\ It further requests clarification of Order 
No. 711.\47\ That Order states that a ``notice of intent to seek a show 
cause order `shall provide sufficient information and facts' to enable 
the Subject to prepare a response.'' \48\ The IA requests that 
``sufficient information and facts'' be clarified to mean ``all of the 
material facts and legal conclusions being relied on in the 
investigator's report.'' \49\ It further requests that a subject be 
allowed to respond to an investigator's report if it is revised after a 
response is filed.\50\
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    \46\ Id. at 3.
    \47\ Submissions to the Commission upon Staff Intention to Seek 
an Order to Show Cause, Order No. 711, 73 FR 29431 (May 21, 2008), 
FERC Stats. & Regs. ] 31,270 (2008).
    \48\ Id. at 9.
    \49\ Id.
    \50\ Id. at 10.
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    23. The IA's comments are outside the scope of this rulemaking. 
Although the NOPR made reference to the Revised Policy on Enforcement, 
which was issued on the same date, it was the latter that announced the 
policy whereby neither Commissioners nor their personal staffs will 
receive oral communications, in person or by telephone, about pending 
investigations from the subjects of those investigations. That policy 
does not appear in any regulation proposed here. The NOPR proposed only 
to revise the rules on separation of functions and off-the-record 
communications to clarify that both outside persons and Commission 
investigative staff will be able to communicate with decisional staff 
during the same time periods, specifically while an investigation is 
pending until the point at which the Commission initiates an 
enforcement proceeding. The NOPR did not in any way address the 
procedures for staff to submit, and the subject of an investigation to 
respond to, a request for a show cause order. Those procedures 
therefore cannot be addressed properly here. The Commission therefore 
will adopt the proposed revisions to its rules governing off-the-record 
communications and separation of functions.

III. Information Collection Statement

    24. Office of Management and Budget (OMB) regulations require OMB 
to approve certain information collection requirements imposed by 
agency rule.\51\ This Final Rule does not contain any information 
collection requirements and compliance with the OMB regulations is thus 
not required.

IV. Environmental Analysis

    25. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\52\ 
Issuance of this Final Rule does not represent a major federal action 
having a significant adverse effect on the quality of the human 
environment under the Commission's regulations implementing the 
National Environmental Policy Act of 1969. Part 380 of the Commission's 
regulations lists exemptions to the requirement to draft an 
Environmental Analysis or Environmental Impact Statement. Included is 
an exemption for procedural, ministerial or internal administrative 
actions.\53\ This rulemaking is exempt under that provision.
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    \51\ 5 CFR 1320.12.
    \52\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. 
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \53\ 18 CFR 380.4(1) and (5).
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V. Regulatory Flexibility Act

    26. The Regulatory Flexibility Act of 1980 (RFA) \54\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
This Final Rule concerns solely procedural matters. The Commission 
certifies that it will not have a significant economic impact upon 
participants in Commission proceedings. An analysis under the RFA is 
not required.
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    \54\ 5 U.S.C. 601-12.
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VI. Document Availability

    27. 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 the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, 
Washington DC 20426.
    28. From the Commission's Home Page on the Internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits of this document in 
the docket number field.
    29. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from FERC Online Support at 202-
502-6652 (toll free at 1-866-208-3676) or e-mail at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at 
public.referenceroom@ferc.gov.

VII. Effective Date and Congressional Notification

    30. These regulations are effective November 21, 2008. The 
Commission has determined, with the concurrence of the Administrator of 
the Office of Information and Regulatory Affairs of OMB, that this rule 
is not a ``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

[[Page 62886]]

List of Subjects in 18 CFR Part 385

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

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

0
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

0
1. The authority citation for Part 385 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-825v, 2601-2645; 28 U.S.C. 2461; 31 U.S.C. 3701, 9701; 
42 U.S.C. 7101-7352, 16441, 16451-16463; 49 U.S.C. 60502; 49 App. 
U.S.C. 1-85 (1988).

0
2. Amend Sec.  385.214 by adding new paragraph (a)(4) to read as 
follows:

Sec.  385.214  Intervention (Rule 214).

    (a) * * *
    (4) No person, including entities listed in paragraphs (a)(1) and 
(a)(2) of this section, may intervene as a matter of right in a 
proceeding arising from an investigation pursuant to Part 1b of this 
chapter.
* * * * *

0
3. Amend Sec.  385.2201 by revising paragraph (c)(1) to read as 
follows:

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

* * * * *
    (c) * * *
    (1) Contested on-the-record proceeding means
    (i) 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, any proceeding initiated by the Commission on its own 
motion or in response to a filing, or any proceeding arising from an 
investigation under part 1b of this chapter beginning from the time the 
Commission initiates a proceeding governed by part 385 of this chapter.
    (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.
* * * * *

0
4. Amend Sec.  385.2202 by revising it to read as follows:

Sec.  385.2202  Separation of functions (Rule 2202).

    In any proceeding in which a Commission adjudication is made after 
hearing, or in any proceeding arising from an investigation under part 
1b of this chapter beginning from the time the Commission initiates a 
proceeding governed by part 385 of this chapter, no officer, employee, 
or agent assigned to work upon the proceeding or to assist in the trial 
thereof, in that or any factually related proceeding, shall participate 
or advise as to the findings, conclusion or decision, except as a 
witness or counsel in public proceedings.

 [FR Doc. E8-25103 Filed 10-21-08; 8:45 am]

BILLING CODE 6717-01-P