The issues of whether to encourage independent power producers and whether to permit utility diversification into non-regulated markets resulted in a call for further regulatory reform. It was seen that this exemption would encourage investment in IPP facilities. EWGs can be constructed anywhere, including foreign countries. Electricity from these facilities that is sold in the United States must be sold at wholesale to a utility or other generator, not to retail customers. This rule covers filing requirements and procedures for applicants seeking EWG status.
EWG status is primarily self-regulating.
FERC requires that an applicant file sworn statements that it complies with the statutory requirements for EWGs. Applicants are guaranteed a ruling on their application within 60 days without any public hearings. FERC acknowledged some consumer groups' concerns that the proposed rule did not allow for sufficient public notice and, in the final rule, FERC agreed to consider comments that specifically question the adequacy or accuracy of an application. During the legislative debate, opposing views were expressed on the sensibility of allowing transactions between affiliates. Some utilities, however, argued that some affiliate transactions would benefit consumers and should be allowed.