
[Federal Register Volume 76, Number 221 (Wednesday, November 16, 2011)]
[Proposed Rules]
[Pages 70913-70918]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29663]


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FEDERAL ENERGY REGULATORY COMMISSION

5 CFR Chapter XXIV

18 CFR Chapter I

[Docket No. AD12-6-000]


Retrospective Review Under Executive Order 13579

AGENCY: Federal Energy Regulatory Commission.

ACTION: Plan for retrospective analysis of existing rules.

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[[Page 70914]]

SUMMARY: On July 11, 2011, the President issued Executive Order 13579, 
requesting independent regulatory agencies follow the key principles of 
Executive Order 13563. These principles were designed to promote public 
participation, improve integration and innovation, promote flexibility 
and freedom of choice, and ensure scientific integrity during the 
rulemaking process in order to create a regulatory system that protects 
public health, welfare, safety, and the environment while promoting 
economic growth, innovation, competitiveness, and job creation. The 
Chairman of the Federal Energy Regulatory Commission (FERC or the 
Commission) directed Commission staff to develop a plan in support of 
the principles and goals of the Executive Order.

DATES: Issued November 10, 2011.

ADDRESSES: Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Kimberly D. Bose, Secretary, (202) 
502-8400.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary of Plan

    On July 11, 2011, the President issued Executive Order 13579, 
requesting independent regulatory agencies follow the key principles of 
Executive Order 13563. These principles were designed to promote public 
participation, improve integration and innovation, promote flexibility 
and freedom of choice, and ensure scientific integrity during the 
rulemaking process in order to create a regulatory system that protects 
public health, welfare, safety, and the environment while promoting 
economic growth, innovation, competitiveness, and job creation.
    As part of this effort, Executive Order 13579 requests that 
independent agencies issue public plans for periodic retrospective 
analysis of their existing ``significant regulations.'' Retrospective 
analysis should identify ``significant regulations'' that may be 
outmoded, ineffective, insufficient, or excessively burdensome, and to 
modify, streamline, expand, or repeal them in order to achieve the 
agency's regulatory objective. Plans for retrospective analysis should 
be made available to the public by November 8, 2011.
    The Chairman of the Federal Energy Regulatory Commission (FERC or 
the Commission) directed Commission staff to develop a plan in support 
of the principles and goals of the Executive Orders. This plan sets 
forth a schedule for reassessing the Commission's regulations in order 
to comply with the key principles and achieve the goals of Executive 
Orders 13579 and 13563.
    This plan summarizes the Commission's continuing efforts to 
identify regulations that warrant repeal or modification, or 
strengthening, complementing, or modernizing where necessary or 
appropriate. The Commission voluntarily and routinely, albeit 
informally, reviews its regulations to ensure that they achieve their 
intended purpose and do not impose undue burdens on regulated entities 
or unnecessary costs on those entities or their customers. In addition, 
the Commission considers the spirit of these Executive Orders when 
evaluating possible new regulations.
    This plan also outlines additional steps for the future to identify 
regulations that warrant repeal or modification, or strengthening, 
complementing, or modernizing where necessary or appropriate. This plan 
is in addition to the Commission's current voluntary review of its 
regulations.
    Executive Order 13579 asks independent agencies to review 
``significant regulations.'' The executive order does not define what 
should be considered ``significant regulations.'' Commission staff 
considered the definition of a ``significant regulatory action'' 
provided in Executive Order 12866, which is the executive order that 
established the modern regulatory review structure.\1\ Commission staff 
also considered the Office of Management and Budget's definition of 
``major rules'' in section 351 of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA) to guide our review. In 
particular, 5 U.S.C. 610 provides for a 10-year review of rules that 
have a ``significant economic impact upon a substantial number of small 
entities.'' However, the Commission, in consultation with OMB, has 
determined that a very limited number of the Commission's rules are 
``major rules'' because they do not have a ``significant economic 
impact upon a substantial number of small entities.'' \2\ FERC's rules, 
likewise, are typically not considered a ``significant regulatory 
action.''
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    \1\ Section 3(f) of Executive Order 12866 defines ``significant 
regulatory action'' to be one that is likely to result in a rule 
that may:
    (1) Have an annual effect on the economy of $100 million or more 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
    (4) Raise novel, legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.
    \2\ The following rules have been considered ``major rules'': 
Order Nos. 888 and 889 (considered together) adopting a pro forma 
open access transmission tariff (OATT) and a related open access 
same-time information system (OASIS), Order No. 693 approving the 
first batch of Reliability Standards, and Order No. 706 approving 
the first batch of cyber security standards. In addition, the Smart 
Grid Policy Statement was considered a major rule by OMB.
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    Because the Commission has relatively few ``major rules'' or 
``significant regulatory actions'', this plan establishes a process for 
reviewing both those Commission actions and other Commission rules that 
nonetheless would be considered of particular importance to the 
industry regulated by the Commission and the public. Commission staff 
will develop an internal list of such regulations and other actions. On 
a biennial basis, staff will prepare a memo detailing which of the 
listed regulations are ripe for evaluation based on a 10-year review 
cycle. This plan establishes a 10-year review cycle because that period 
is consistent with OMB regulations requiring a 10-year review of all 
major regulations. In addition, there may be sufficient changes in the 
industries that the Commission regulates over a 10-year period to 
warrant an evaluation of whether the regulations are outdated.
    Commission staff will make its memo available for public comment, 
providing an opportunity for public input as to which of the 
regulations that are ripe for evaluation warrant a formal public 
review. This input, in addition to staff's recommendation, will inform 
the Commission's decision as to which regulations will be the subject 
of a formal public review. This public review could be initiated by a 
Notice of Inquiry seeking public comment on whether the regulations 
continue to meet their original objectives \3\ or by a proposal of 
specific changes to the regulations, similar to the changes proposed in 
the Notice of Proposed Rulemaking leading to Order No. 890.\4\
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    \3\ See, e.g., Promoting Transmission Investment Through Pricing 
Reform, 135 FERC 61,146 (2011).
    \4\ See, e.g., Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, FERC Stats. & Regs. 31,241, 
order on reh'g, Order No. 890-A, FERC Stats. & Regs. 31,261 (2007), 
order on reh'g, Order No. 890-B, 123 FERC 61,299 (2008), order on 
reh'g, Order No. 890-C, 126 FERC 61,228 (2009), order on 
clarification, Order No. 890-D, 129 FERC 61,126 (2009).
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II. Scope of Plan

    This plan covers existing regulations, significant guidance 
documents available on the Commission's Web site,

[[Page 70915]]

existing information collections, and unfinished proposed rules.

III. Rules for Retrospective Review

    The Commission regularly reviews its regulations to ensure that 
they achieve their intended purpose and do not impose undue burdens on 
regulated entities or unnecessary costs on those entities or their 
customers. To this end, the Commission has recently reviewed or is in 
the process of reviewing several important regulations. Those efforts 
are outlined in Section V, below.

Rules Reviewed Pursuant to Executive Order 13563

Changes to Electric Quarterly Reports
    In response to the review performed pursuant to Executive Order 
13563, Commission enforcement staff noted the requirement for companies 
to correct previously-filed Electronic Quarterly Reports (EQRs). At the 
time of the issuance of Executive Order 13563, if there was an 
inaccuracy in one or more of a company's previously-filed EQRs, the 
Commission had required the company to go back and correct all of its 
previously-filed EQRs affected by the error. Staff determined that 
correcting errors on all affected prior reports is not particularly 
useful and imposes a growing burden on filers that serves little 
purpose. The Commission has now implemented an informal policy of 
directing filers to correct the most recent 12 reports (three years of 
data) with a note placed in the EQR stating that other reports may also 
contain the error. This approach provides as much useful information to 
staff and the public as the previous policy of correcting all affected 
previously-filed EQRs, while being less burdensome to filers. This 
change did not necessitate a change in the Commission's regulations.
Proposed Retirement of Semi-Annual Storage Reports for Interstate and 
Intrastate Natural Gas Companies
    On December 16, 2010, the Commission in Docket No. RM11-4-000 
issued a Notice of Inquiry regarding whether to revise regulations 
requiring interstate and intrastate natural gas pipelines to report 
semi-annually on their storage activities. In analyzing the comments 
received in response to the Notice of Inquiry, the Commission 
considered the comments received and the goals of those executive 
orders. Subsequently, on September 15, 2011, the Commission issued a 
Notice of Proposed Rulemaking proposing to retire the Semi-Annual 
Storage Report for both interstate and intrastate natural gas 
companies.\5\ The Commission is seeking to streamline its natural gas 
pipeline reporting requirements, as part of its continuing efforts to 
ensure Commission regulations are effective, timely, and up to date. 
Retiring the Semi-Annual Storage Report would reduce the filing and 
administrative burden on filers. More significantly, the retirement 
would avoid the generation of duplicative data that is available from 
other Commission information collections and via company web postings. 
The Commission is still in the process of reviewing comments to the 
Notice of Proposed Rulemaking and has not taken final action on this 
proposal.
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    \5\ Storage Reporting Requirements of Interstate and Intrastate 
Natural Gas Companies, Notice of Proposed Rulemaking, 136 FERC 
61,172 (2011).
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Review of Significant Regulations

    As stated above, the Commission, in consultation with OMB, has 
determined that a very limited number of the Commission's rules are 
considered ``major rules'' or ``significant regulatory actions.'' The 
actions discussed below were considered ``major rules.'' This plan 
calls for the Commission to review these actions at least every ten 
years.
Promoting Wholesale Competition Through Open Access Non-Discriminatory 
Transmission Services by Public Utilities
    Order Nos. 888 and 889, issued in 1996, were together considered 
major rules pursuant to section 351 of the SBREFA.\6\ Order No. 888 
prohibited public utilities from using their monopoly power over 
transmission to restrain or prevent competition. Order No. 889 
established rules governing an Open Access Same-time Information System 
(OASIS) and prescribing standards of conduct. However, the Commission 
certified that these final rules would not have a significant economic 
impact on a substantial number of small entities under the Regulatory 
Flexibility Act (RFA).\7\ In 2007, the Commission undertook a 10-year 
review of its electric transmission open access regulations culminating 
in the issuance of Order No. 890, which revisited the Commission's open 
access policies and amended its pro forma Open Access Transmission 
Tariff to further improve competition in wholesale markets by, among 
other things: eliminating the wide discretion that transmission 
providers had in calculating available transfer capability; increasing 
the ability of customers to access new generating resources and promote 
efficient utilization of transmission by requiring an open, 
transparent, and coordinated transmission planning process; promoting 
more efficient use of the transmission grid by establishing a new 
conditional firm service; and strengthening compliance and enforcement 
efforts.
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    \6\ See 5 U.S.C. 804(2) (2006). Under SBREFA, if an order is a 
``major rule,'' it may not go into effect until 60 Congressional 
days after it has been submitted to Congress. During that time, 
Congress may review, and potentially reject, a rule. A major rule is 
defined by SBREFA has the following:
    a. An annual effect on the economy of $100,000,000 or more;
    b. A major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or 
geographic regions; or
    c. Significant adverse effects on competition, employment, 
investment, productivity, innovation, or the ability of U.S. 
companies to compete with foreign companies in domestic and export 
markets.
    \7\ The RFA requires agencies in drafting a proposed rule: (1) 
To assess the affect that their regulation will have on small 
entities; (2) to analyze effective alternatives that may minimize a 
regulation's impact; and (3) to make their analyses available for 
public comment. 5 U.S.C. 601-604 (2006). In its Notice of Proposed 
Rulemaking, the agency must either include an initial regulatory 
flexibility analysis (Initial RFA) or certify that the proposed rule 
will not have a ``significant impact on a substantial number of 
small entities.''
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Mandatory Reliability Standards for the Bulk Power System
    Order No. 693 was issued in 2007. This major rule concerned a 
Congressional mandate to adopt mandatory standards to protect electric 
reliability under section 215 of the Federal Power Act (FPA). That rule 
required compliance with 83 previously voluntary Reliability Standards 
developed by industry. These Reliability Standards are reviewed 
periodically by the entity developing mandatory reliability standards 
for Commission approval, the North American Electric Reliability 
Corporation (NERC). Any revisions to those standards come to the 
Commission for review and approval. According to NERC's rules of 
procedure, it must ``complete a review of each NERC reliability 
standard at least once every five years from the effective date of the 
standard or the latest revision to the standard, whichever is later.'' 
\8\
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    \8\ See Rules of Procedure of the North American Electric 
Reliability Corporation, Rule 315.
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    Order No. 706, issued in 2008, was also issued pursuant to Part 40 
of the Commission's regulations and was considered a major rule 
pursuant to the SBREFA, but did not have a significant economic impact 
on a substantial number of small entities. Order No. 706 was issued to 
make mandatory certain cyber security reliability standards to protect 
the reliability of the electric system. The rules were developed by 
industry consensus and have been updated several times. NERC most

[[Page 70916]]

recently filed to modify the Reliability Standards approved in Order 
No. 706 on February 10, 2011. Those revisions are currently under 
review by the Commission.'' \9\
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    \9\ On September 15, 2011, the Commission issued a notice of 
proposed rulemaking proposing to approve those revisions, while 
providing that the electric industry, through the NERC standards 
development process, should continue to develop an approach to 
cybersecurity that is meaningful and comprehensive to assure that 
the nation's electric grid is capable of withstanding a 
cybersecurity incident. Version 4 Critical Infrastructure Protection 
Reliability Standards, Notice of Proposed Rulemaking, 136 FERC ] 
61,184 (2011).
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Smart Grid Policy Statement
    The Smart Grid Policy Statement that the Commission issued in 2009 
is also considered by OMB to be a ``major rule.'' \10\ This Policy 
Statement provides guidance regarding the development of a smart grid 
for the nation's electric transmission system, focusing on the 
development of key standards to achieve interoperability and 
functionality of smart grid systems and devices. In response to the 
need for urgent action on potential challenges to the bulk-power 
system, in this Policy Statement the Commission provided additional 
guidance on standards to help to realize a smart grid. The Commission 
also adopted an Interim Rate Policy for the period until 
interoperability standards are adopted by the Commission, which will 
encourage investment in smart grid systems.
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    \10\ Smart Grid Policy Statement, 128 FERC ] 61,060 (2009).
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Review of Other Commission Regulations

    Because the Commission has relatively few rules that are considered 
``major rules'' or ``significant regulatory actions,'' the review to be 
conducted under this plan is broader than just a review of rules 
considered ``major rules'' or ``significant regulatory actions.'' \11\
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    \11\ The determination that a rule is suitable for the purpose 
of this review should be distinguished from a determination that the 
rule is a ``significant regulatory action'' or ``major'' for the 
purpose of OMB reporting.
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    Commission staff will develop an internal list of other Commission 
rules that nonetheless would be considered of particular importance to 
the industry regulated by the Commission and the public. On a biennial 
basis, staff will prepare a memo detailing which of the listed 
regulations are ripe for evaluation based on a 10-year review cycle. In 
other words, in 2012, staff will evaluate whether those regulations 
last revised in 2001 and 2002 should be formally reviewed. There would 
be no evaluation in 2013. In 2014, staff would evaluate the regulations 
last revised in 2003 and 2004.
    Evaluating regulations every ten years is consistent with OMB 
regulations requiring a 10-year review of all major regulations. It is 
also consistent with other agencies which review their major 
regulations every 10 years.\12\ Further, there may be sufficient 
changes in the industries it regulates over a 10-year period to warrant 
an evaluation of whether the regulations are outdated.
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    \12\ For example, the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 requires certain independent agencies (Office 
of the Comptroller of the Currency, the Board of Governors of the 
Federal Reserve System, National Credit Union Association, and the 
Federal Deposit Insurance Corporation) to review regulations once 
every 10 years to identify any outdated, unnecessary, or overly 
burdensome rules or requirements.
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    There are several reasons why this plan calls for a biennial 
evaluation. First, while the Commission, as an economic regulator 
covering multiple industries, has a significant number of regulations, 
it has only a few major rules or significant regulatory actions. 
Second, as outlined in section V, the Commission regularly, 
voluntarily, and routinely, albeit informally, reviews its regulations 
to ensure that they achieve their intended purpose and do not impose 
undue burdens on regulated entities or unnecessary costs on those 
entities or their customers. The formal plan created pursuant to 
Executive Order 13579 is in addition to this current voluntary review. 
Third, evaluating regulations every year may take too many staff 
resources.

IV. Public Access and Participation

    As stated above, on a biennial basis, staff will prepare a memo 
detailing which of the Commission's regulations are ripe for evaluation 
based on a 10-year review cycle. Staff will make that memo available 
for public comment, providing an opportunity for public input as to 
which of the regulations that are ripe for evaluation warrant a formal 
public review. This input, in addition to staff's recommendation, will 
inform the Commission's decision as to which regulations will be the 
subject of a formal public review.
    Of course, members of the public and industry participants always 
may suggest the need for revisions in existing regulations, even 
outside of existing proceedings. The Commission seriously considers 
such input. Input from the public and industry participants is often 
part of the Commission's determination to reevaluate existing policy 
and rules. Similarly, members of the public and industry participants 
may submit filings to the Commission if they believe that ongoing 
information reporting obligations may no longer be needed.
    Public participation is a regular and crucial part of the 
Commission's rulemaking process. The Commission's rulemaking 
proceedings typically provide multiple opportunities for public 
participation through the submission of comments on Notices of Inquiry 
and Notices of Proposed Rulemaking; where appropriate, participation in 
any public outreach meetings; and the filing of requests for rehearing 
of final rules.

V. Current Agency Efforts Already Underway Independent of Executive 
Order 13579

    Since the issuance of Executive Order 13563, the Commission has 
made efforts to adhere to the spirit of the executive order even 
though, as an independent agency, it is not subject to the executive 
order.
    Even prior to the issuance of Executive Orders 13563 and 13579, the 
Commission has adopted a culture of retrospective review and analysis 
of its regulations and processes. The Commission constantly examines 
ways to reduce regulatory burdens, simplify the regulatory process, 
remove barriers to entry, and to otherwise make its regulations more 
effective and less burdensome. Below are examples of measures that the 
Commission has taken in recent years to identify areas where burdens 
could be reduced.
    This year, the Commission issued a Notice of Inquiry to reassess 
whether its electric transmission ratemaking incentive regulations are 
effectively encouraging the development of transmission infrastructure 
in a manner consistent with the intent of the Energy Policy Act of 2005 
(EPAct 2005), which directed FERC to establish rules to provide 
incentive rates to encourage development of electric transmission 
infrastructure. The development of transmission infrastructure will 
facilitate competition in regional electricity markets, which helps 
ensure just and reasonable rates without burdensome regulatory 
oversight.
    In the natural gas markets, the Commission, last year, exempted 
certain transactions from natural gas index reporting requirements, 
particularly with reference to blanket sales certificates, because it 
found that those transactions were burdensome to report and provided 
little market information. The Commission also exempted small entities 
that were obligated to report solely by virtue of possessing a blanket 
sales certificate. Thus, the Commission removed regulatory burdens on

[[Page 70917]]

regulated entities, including small businesses.
    In 2007, the Commission conducted a comprehensive review of its 
electric transmission open-access regulations, including its landmark 
Order No. 888, which prohibited public utilities from using their 
monopoly power over transmission to restrain or prevent competition. It 
reached out to the regulated industry and other stakeholders. This 
effort culminated in the issuance of Order No. 890, which revisited the 
Commission's open-access policies and amended its pro forma Open Access 
Transmission Tariff to further improve competition in wholesale markets 
by, among other ways, increasing the ability of customers to access new 
generating resources and promoting efficient utilization of 
transmission by requiring an open, transparent, and coordinated 
transmission planning process.
    In the hydropower arena, the Commission has entered into a number 
of memoranda of understanding with other Federal agencies and state 
governments to reduce regulatory conflict and overlap.
    In March 2010, the Commission issued a final rule to exempt 
generating facilities that are 1 MW and smaller from the need to file a 
Form 556 in order to be certified by the Commission as a Qualifying 
Facility (QF). This change will facilitate the development of small 
generating facilities. The final rule also removed the content of Form 
556 from the Commission's regulations and, in their place, provided 
that an applicant seeking to certify QF status of a small power 
production or cogeneration facility must complete, and electronically 
file, the Form 556 that is in effect at the time of filing. The 
Commission stated that this change takes advantage of newer 
technologies that will reduce both the filing burden for applicants and 
the processing burden for the Commission.
    In addition to reducing regulatory burdens, the Commission has 
sought out ways to simplify the regulatory process and provide 
educational resources, thereby helping entities, particularly small 
ones, navigate the Federal regulatory process. One example of this 
outreach is the Commission's encouragement of small hydropower 
development. In 2010, the Commission signed a memorandum of 
understanding with the State of Colorado to simplify procedures for the 
development of small-scale hydropower projects. Similarly, in response 
to rising public interest in small and low-impact hydropower projects, 
the Commission has developed a publicly available and user-friendly 
website that provides detailed information on how to navigate the small 
hydropower regulatory process. Commission staff also has been and will 
continue to host public tutorials and webinars tailored to the needs of 
entities intending to file applications to develop small hydropower 
projects. In addition, Commission staff conducted a study last year in 
coordination with the hydropower industry, government agencies, Native 
American tribes, non-governmental organizations, and the general public 
to evaluate the effectiveness of the Commission's integrated licensing 
process for hydroelectric facilities.
    The Commission has coordinated seminars around the country on 
environmental review and compliance for natural gas facilities. In the 
past two years, over 1,000 people have attended these seminars. These 
seminars increase transparency, help stakeholders better understand the 
natural gas regulatory process, improve inter-agency coordination, and 
allow faster processing of applications.
    The Commission has also taken various steps to simplify the 
regulatory process by moving from paper to electronic formats in a 
number of areas. Most notably, the Commission has developed and 
implemented a standard electronic tariff filing system known as 
eTariff. Electronic filing allows the public and regulated entities 
faster and easier access to tariffs. Similarly, the Commission is 
moving to automate various forms to simplify the regulatory process. 
For example, section 205(f) of the FPA requires respondents to submit 
certain information in Form 580, Interrogatory on Fuel and Energy 
Purchase Practices. In 2010, the Commission established Form 580 in an 
electronic pdf-fillable form and streamlined the information required 
by the Form.
    The eTariff filing process described above has greatly improved 
public access to tariff filing documents by posting such filings in 
near real-time into the public record, and increased ten-fold the 
number of FERC regulated tariffs that are now available through the 
Commission's Web site.
    Another way that the Commission has adopted a culture of 
retrospective review is to examine ways to reduce the barriers to entry 
for new businesses and emerging technologies. In recent years, 
improvements in technology have led to an increasing variety of 
resources being capable of contributing to reliable, efficient, and 
sustainable energy services. The Commission has recently initiated a 
number of rulemaking proceedings that are responsive to these 
developments to ensure that regulations do not inhibit the use of 
emerging technologies to provide services subject to the Commission's 
jurisdiction.
    Last year, for example, the Commission initiated a rulemaking 
proceeding on issues related to the reliable integration of variable 
energy resources, such as solar, wind, and hydrokinetic generation, to 
determine whether operational and pricing reforms would result in more 
efficient integration of variable energy resources into the grid, 
which, in turn, would lay a foundation for continued development of 
variable energy resources.
    Further, the Commission has taken steps to remove barriers to the 
use of emerging technologies, such as flywheels and other electric 
storage devices, that are capable of responding to certain transmission 
system needs more quickly than traditional generators. In October 2011, 
the Commission revised its regulations pertaining to organized 
wholesale electric markets of regulation service to ensure that 
resources that provide faster and more accurate regulation services are 
compensated appropriately for their performance.\13\ This would result 
in increased competition, which will tend to place downward pressure on 
rates for regulation service.
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    \13\ Frequency Regulation Compensation in the Organized 
Wholesale Power Markets, Order No. 755, 137 FERC ] 61,064 (2011).
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    Similarly, the Commission issued a Notice of Inquiry in June 2011, 
seeking public comment on ways in which the Commission can facilitate 
competition in the provision of ancillary services from all resource 
types, including electric storage, and whether the Commission's 
accounting requirements present a barrier to development of electric 
storage.
    The Commission also has recently taken a number of steps to remove 
barriers to demand response participation in organized wholesale 
electric markets. Pursuant to a Congressional directive, Commission 
staff in 2009 found that the potential for peak electricity demand 
reductions across the country is between 38 GW and 188 GW, up to 20 
percent of national peak demand, depending on the penetration of 
advanced metering and the applicable regulatory policies. The 
Commission also has amended its regulations to facilitate demand 
response participation in organized markets. In Order No. 719, for 
example, the Commission amended its regulations to eliminate certain 
barriers to participation by demand response

[[Page 70918]]

resources that are technically capable of providing ancillary services 
on the grid. More recently, the Commission issued Order No. 745, which 
addresses compensation for demand response resources participating in 
organized wholesale energy markets.

VI. Elements of Plan

Plan To Develop Culture of Retrospective Analysis

    As described in Part V of this plan, the Commission has developed a 
strong and longstanding culture of retrospective analysis of its 
existing significant regulations. The Commission currently has several 
proceedings in which it is examining regulations to ensure they 
continue to be appropriate to meet the goal of the regulations without 
imposing an undue burden. These proceedings were initiated in large 
part because the Commission has a culture of retrospective analysis of 
its rules. In addition, since the issuance of Executive Orders 13563 
and 13579, Commission staff has sought to expand the Commission's 
effort to conduct regulatory reform and to make suggestions to modify, 
improve, or repeal regulations that may further the purpose of the 
executive orders. The Commission also considers the spirit of these 
Executive Orders when evaluating possible new regulations.

Prioritization

    Before Commission staff identifies candidate regulations to review, 
it will consider a number of factors, including measures to effectively 
carry out the Commission's statutory responsibilities; staff resources; 
market dynamics; the effect of regulations on small businesses; 
comments from other agencies, stakeholders, and regulated entities; 
stakeholder actions; government actions; technological developments; 
and the public interest. Currently, Commission staff has not compiled a 
list of candidate rules for which it will recommend review in the next 
two years.

Structure and Staffing

    Name/Position Title: Christy Walsh, Special Counsel, Office of the 
General Counsel.
    Email address: Christy.walsh@ferc.gov.

Independence

    Because of staff limitations, the Commission cannot separate staff 
involved with retrospective review of regulations from staff 
responsible for writing and implementing regulations. Instead, in order 
to maintain sufficient independence staff involved with the 
retrospective review, the Commission has created a team consisting of 
staff from all of the Commission's offices. In such an environment, the 
views of those who write and implement regulations pertaining to their 
respective office would be balanced by the views of the rest of the 
team. Such a structure ensures objective analysis of individual 
regulations.

Plan for Retrospective Review and Revision of Rules

    In addition to continuing the measures described in Part V, this 
plan establishes a process to enhance the Commission's retrospective 
analysis of regulations in the future. Beginning in November 2011, 
Commission staff will conduct reviews on a biennial basis to identify 
existing regulations that have become ineffective, outmoded, or overly 
burdensome.

Interagency Coordination and Peer Review

    The Commission, as an independent regulatory agency, cannot always 
coordinate with other federal agencies. The Commission has historically 
coordinated with state and other federal agencies and has harmonized 
related regulations, when feasible, in order to reduce redundancy and 
conflict. Over the last three decades, the Commission has entered into 
memoranda of understanding and letters of understanding with state 
governments and other federal agencies. This effort has lead to 
predictability, clarity, a decrease in costs for the public and 
regulated entities. The Commission will continue to look for 
opportunities to further promote interagency coordination.
    With respect to peer review, the Commission must seek comments on 
any proposed change to its regulations. The Commission routinely 
receives comments on its proposals from industry and other interested 
individuals. Before issuing a final decision, the Commission must 
review those comments.

VII. Components of Retrospective Analysis

    Fulfilling the Commission's mission involves pursuing two primary 
goals: ensuring that rates, terms and conditions are just, reasonable 
and not unduly discriminatory or preferential, and promoting the 
development of safe, reliable and efficient infrastructure that serves 
the public interest. When evaluating whether regulations should be 
reviewed under this Plan, Commission staff will consider a number of 
factors, including measures to effectively carry out the Commission's 
statutory responsibilities, staff resources, whether the regulations 
contain barriers to entry of new market participants, whether there 
have been changes in market dynamics, and if there have been 
stakeholder actions or government actions that could warrant regulatory 
change. In addition, Commission staff will consider whether new 
technologies have emerged that may warrant changes in the Commission's 
regulations. Commission staff's review will also include an examination 
of the effect of regulations on small businesses to ensure that they 
are not overly burdensome. Finally, Commission staff will consider the 
public interest, in order to make recommendations on retrospective 
review.

VIII. Publishing the Agency's Plan Online

    The Commission will publish its retrospective review plan in the 
Federal Register and on its Web site, http://www.ferc.gov. A docket on 
the Commission's eLibrary, which is its filing and document management 
system, will be opened for this plan.

    Dated: November 10, 2011.
Kimberly D. Bose,
Secretary.
 [FR Doc. 2011-29663 Filed 11-15-11; 8:45 am]
BILLING CODE 6717-01-P


