Summary

Created as an independent regulatory agency within the Department of Energy (DOE), the Federal Energy Regulatory Commission (FERC) is primarily responsible to regulate directly or indirectly electric power, natural gas, and oil in interstate commerce. Under the law, it has also been assigned most of the functions of the former Federal Power Commission, jurisdiction over oil pipeline rates, and other functions previously the responsibilities of the Federal Energy Administration, the Energy Research and Development Administration, and other agencies. The Natural Gas Policy Act of 1978 imposed upon FERC new additional regulatory responsibility for 45 percent of the market for natural gas by bringing much of the previously unregulated intrastate market under FERC jurisdiction. Effective administration of these responsibilities is necessary to provide consumers adequate supplies of energy at reasonable prices and give energy producers the incentives necessary to increase domestic supplies. FERC carries out its assigned functions either through rulemaking or adjudicatory procedures. However, its ability to carry out its responsibilities has been severely hampered by an inefficient case management process; it has a backlog of more than 10,000 unresolved cases, some as old as 17 years.

Despite the progress FERC has made toward improving case management, it needs to be even more aggressive in expediting case processing in each of its major case processing phases of technical analysis, hearings, and Commission decisionmaking. Two major factors contributing to unnecessary delays in processing time are the large numbers of deficient or incomplete applications received and the extensive delays in the FERC preparation of environmental impact statements. Deficient applications are caused by the FERC lack of clarity in defining the required data. Delays in completing environmental impact statements are attributable to poor interagency coordination and inordinate delays in starting environmental reviews. While less than 1 percent of the FERC cases go to hearing, they include almost half of those having a significant impact on the Nation's nonnuclear energy supplies and policy. The hearing process can take from 2 to 5 years. The principal cause of this delay was inadequate incentives for administrative law judges (ALJ) and for FERC itself to expedite the hearing process. Decisionmaking, the final phase of the caseload management process, often consumes one-half to three-fourths of total case processing time. Procedural problems collectively delaying this phase for over 1 year include: inefficient intermediate legal review procedures, inadequate managerial accountabililty for new cases and reconsiderations, and insufficient delegation of authority to expedite considerations of high priority energy decisions.