Opinion ID: 186342
Heading Depth: 2
Heading Rank: 2

Heading: FERC's Regulations

Text: 16 FERC regulations implementing § 557(d) are found at 18 C.F.R. § 385.2201 (2003). The most recent version of these regulations, known as Order No. 2201, was adopted in 1999. Regulations Governing Off-the-Record Communications, F.E.R.C. Stats. & Regs., Regs. Preambles ¶ 31,079 (1999), order on reh'g, F.E.R.C. Stats. & Regs., Regs. Preambles ¶ 31,112 (2000). In January 2003, the Commission, by order, amended its ex parte regulations, purporting to exempt from the Sunshine Act communications between Commission-approved market monitors and Commission decisional staff in those situations in which a market monitor is not a party to and does not appear on behalf of a party to the on-the-record proceeding to which the ex parte communication relates. Initial Order at 61,088, 61,091. Under this purported exemption, an ex parte communication will only be memorialized and included in the official record of the relevant proceeding if the Commission determines that it relied on the ex parte communication in reaching a decision in an on-the-record proceeding. Rehearing Order at 61,526. The Commission explicitly acknowledged that exempted communications could involve matters that are at issue in ongoing on-the-record proceedings, Initial Order at 61,090, and that Commission-approved market monitors are persons outside the agency, id. at 61,091. 17 Market monitor functions were endorsed by the Commission as part of its Order No. 2000 initiative. In Order No. 2000, FERC directed all transmission owning utilities to participate in a regional transmission organization (RTO). Regional Transmission Organizations, F.E.R.C. Stats. & Regs., Regs. Preambles ¶ 31,089 (1999) ( Order No. 2000 ), order on reh'g, Order No. 2000-A, F.E.R.C. Stats. & Regs., Regs. Preambles ¶ 31,092 (2000), dismissed sub nom. Pub. Utility Dist. No. 1 v. FERC, 272 F.3d 607 (D.C.Cir.2001). RTOs, in turn, were ordered to perform a market monitoring function to `ensur[e] that markets within the region covered by an RTO do not result in wholesale transactions or operations that are unduly discriminatory or preferential or provide opportunity for the exercise of market power.' Br. for Respondent at 5-6 (quoting Order No. 2000, F.E.R.C. Stats. & Regs., Regs. Preambles at 31,155). RTOs can choose to perform the monitoring function themselves or use an independent contractor. Br. for Respondent at 6 (citing Order No. 2000, F.E.R.C. Stats. & Regs., Regs. Preambles at 31,155-56). 18 [M]arket monitors must report to the Commission objective information about RTO markets, evaluate the behavior of market participants, and recommend how markets can operate more competitively and efficiently. Br. for Respondent at 6 (citing Order No. 2000, F.E.R.C. Stats. & Regs., Regs. Preambles at 31,155-56). It is undisputed, however, that market monitors are private parties who work outside the agency. They are not hired, paid, or directly managed by FERC in their work.