Electricity Regulation

Although the Federal Energy Regulatory Commission (FERC) has tried to cut the time required to process electric power applications, further improvements are possible. FERC is responsible for regulating the rates, the terms, and the conditions of proposed wholesale electricity transactions--a growing portion of the nation's electricity business--as well as mergers and other deals among utilities. These improvements are especially important considering the potential increased workload arising from the Energy Policy Act. FERC's management information system could be upgraded to give agency managers more-specific information with which to spot problems and assess performance. By examining the information exchanged by applicants and FERC staff at the initial filing stage, FERC could determine if changing policy statements or filing requirements would reduce the number of incomplete applications. Alternative resolution techniques could reduce the need for time-consuming trial-like hearings. Similar techniques could help applicants settle disputes before submitting applications to FERC. GAO summarized this report in testimony before Congress; see: Electricity Regulation: Factors Affecting the Processing of Electric Power Applications, by Victor S. Rezendes, Director of Energy and Science Issues, before the Subcommittee on Environment, Energy, and Natural Resources, House Committee on Government Operations. GAO/T-RCED-93-65, Aug. 6, 1993 (16 pages).

GAO found that: (1) processing times for electric power applications are determined by the application's volume and characteristics; (2) of the 4,475 applications FERC processed between 1990 and 1992, FERC required an average of 68 days to process routine applications, 169 days to process nonroutine applications requiring reviews, and nearly 2 years to process and resolve applications that needed trial-type hearings; (3) new legislation and industry changes will likely increase the number of applications requesting electricity transmission services and wholesale electricity sellers needing FERC transaction approval; (4) FERC actions to improve its application processing time include expanding FERC staff decision authority, revising procedures to expedite voluntary settlements, and adopting procedures to conduct settlement negotiations and expedite litigated applications; and (5) FERC could increase its application processing efficacy by revising its tracking of applications in its management information system, improving the accuracy of the information on applications, increasing the use of voluntary settlement procedures, and developing a policy to encourage alternatives to lengthy trial-type hearings.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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