Document ID: FERC-2009-1742-0001
Agency: ferc
Document Type: Rule
Title: Standards of Conduct for Transmission Providers; Order on Rehearing and Clarification
Posted Date: 2009-11-20T05:00Z

[Federal Register: November 20, 2009 (Volume 74, Number 223)]
[Rules and Regulations]               
[Page 60153-60154]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20no09-5]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 358

[Docket No. RM07-1-002; Order No. 717-B]

 
Standards of Conduct for Transmission Providers; Order on 
Rehearing and Clarification

Issued November 16, 2009.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Order on rehearing and clarification.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) issued 
Order No. 717-A to make even clearer the Standards of Conduct as 
implemented by Order No. 717. This order addresses requests for 
rehearing and clarification concerning paragraph 80 of Order No. 717-A 
and whether an employee who is not making business decisions about 
contract non-price terms and conditions is considered a ``marketing 
function employee.''

DATES: Effective Date: This rule will become effective November 23, 
2009.

FOR FURTHER INFORMATION CONTACT: Leonard Tao, Office of the General 
Counsel--Energy Markets, Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426, (202) 502-8214.

SUPPLEMENTARY INFORMATION:

129 FERC ] 61,123
Before Commissioners: Jon Wellinghoff, Chairman; Suedeen G. Kelly, 
Marc Spitzer, and Philip D. Moeller.

I. Introduction

    1. On October 16, 2008, the Commission issued Order No. 717 
amending the Standards of Conduct for Transmission Providers (the 
Standards of Conduct or the Standards) to make them clearer and to 
refocus the rules on the areas where there is the greatest potential 
for abuse.\1\ On October 15, 2009, the Commission issued Order No. 717-
A to address requests for rehearing and clarification of Order No. 717, 
largely affirming the reforms adopted in Order No. 717.\2\ In this 
order, the Commission grants limited rehearing and clarification to 
address certain specific matters petitioners raised regarding one of 
the Commission's determinations in Order No. 717-A.
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    \1\ Standards of Conduct for Transmission Providers, Order No. 
717, 73 FR 63796 (Oct. 27, 2008), FERC Stats. & Regs. ] 31,280 
(2008) (``Order No. 717'').
    \2\ Standards of Conduct for Transmission Providers, Order No. 
717-A, 74 FR 54463 (Oct. 22, 2009), FERC Stats. & Regs. ] 31,297 
(2009) (``Order No. 717-A'').
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II. Discussion

Independent Functioning Rule: Marketing Function Employees

    2. In paragraph 80 of Order No. 717-A, the Commission stated the 
following:

    The Commission clarifies that an employee in the legal, finance 
or regulatory division of a jurisdictional entity, whose 
intermittent day-to-day duties include the drafting and redrafting 
of non-price terms and conditions of, or exemptions to, umbrella 
agreements is a ``marketing function employee.'' ``Marketing 
functions'' are not limited to only price terms and conditions of a 
contract, because non-price terms and conditions of a contract could 
contain information that an affiliate could use to its advantage. 
For example, delivery or hub locations in a contract are non-price 
terms that could be used to favor an affiliate. In addition, 
negotiated terms and conditions could affect the substantive rights 
of the parties. For this reason, we decline to make a generic 
finding to limit ``marketing functions'' to only price terms and 
conditions, but will consider waiver requests concerning an employee 
whose intermittent duties involve drafting non-price terms and 
conditions.\3\
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    \3\ Order No. 717-A at P 80.
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Requests for Rehearing and Clarification

    3. Several parties have requested expedited clarification regarding 
paragraph 80 of Order No. 717-A.\4\ Specifically, EEI and Western 
Utilities request that the Commission clarify that legal, finance, and 
regulatory personnel can be shared between an entity's transmission and 
marketing function units.\5\ Similarly, Otter Tail and Central Vermont 
seek clarification that lawyers, finance, and regulatory personnel may 
continue to provide support to

[[Page 60154]]

marketing function employees, including drafting and redrafting 
contract non-price terms, without being classified as marketing 
function employees.\6\
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    \4\ Edison Electric Institute (EEI) Oct. 30, 2009 Request for 
Clarification at 7; The Western Utilities Compliance Group (Western 
Utilities) Nov. 2, 2009 Request for Clarification at 6; Otter Tail 
Power Company (Otter Tail) Nov. 10, 2009 Request for Clarification 
at 1; Central Vermont Public Service Corporation (Central Vermont) 
Nov. 12, 2009 Request for Clarification at 1.
    \5\ EEI at 7; Western Utilities at 6.
    \6\ Otter Tail at 1; Central Vermont at 1.
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    4. EEI also requests clarification that paragraph 80 in Order No. 
717-A was ``intended to convey that making business decisions about 
non-price terms and conditions can be a marketing function if the other 
`marketing function' criteria are met.'' \7\
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    \7\ EEI at 7-8.
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    5. If the Commission does not grant these requested clarifications 
prior to Order No. 717-A taking effect, EEI, Western Utilities, Otter 
Tail, and Central Vermont request that the Commission change the 
effective date of paragraph 80 until 90 days after the Commission 
issues an order addressing the merits of the issue.

Commission Determination

    6. The Commission clarifies that the language in paragraph 80 of 
Order No. 717-A was overly broad. The Commission further clarifies that 
we intended to state in paragraph 80 of Order No. 717-A that an 
employee making business decisions about non-price terms and conditions 
can be considered a ``marketing function employee'' because that 
employee is actively and personally engaged in marketing functions. 
However, an employee who simply drafts or redrafts a contract, 
including non-price terms and conditions, without making business 
decisions is not a ``marketing function employee.'' In making our 
findings in paragraph 80 in Order No. 717-A, the Commission did not 
intend to depart from the finding in paragraph 131 in Order No. 717 
that employees are not subject to the Independent Functioning Rule if 
they do not perform transmission functions or marketing functions or to 
depart from the following examples in P 131:

    [I]f an attorney is rendering legal advice, he may consult with 
both transmission function employees and marketing function 
employees. Likewise, a risk management employee may develop risk 
guidelines for both transmission function employees and marketing 
function employees. And regulatory personnel may present before 
regulatory bodies filings that cover both transmission and marketing 
issues. Of course, all such employees would remain subject to the No 
Conduit Rule, and are prohibited from transmitting transmission 
function information to marketing function employees.\8\
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    \8\ Order No. 717 at P 131.

    7. In light of the above clarification to paragraph 80 of Order No. 
717-A, we will deny the petitioners' request to extend the compliance 
date with respect to paragraph 80.

III. Document Availability

    8. 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.gov) and in FERC'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.
    9. From FERC'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.
    10. User assistance is available for eLibrary and the FERC'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.

IV. Effective Date

    11. Changes to Order No. 717-A adopted in this order on rehearing 
and clarification are effective November 23, 2009.

    By the Commission.

Kimberly D. Bose,
Secretary.
[FR Doc. E9-27875 Filed 11-19-09; 8:45 am]

BILLING CODE 6717-01-P