1.  In a release dated August 19, 2003, the Department of Energy (DOE) provided details about the composition of the "US-Canada Task Force" established to investigate the recent electricity outages. Although that announcement did not specify that the Federal Energy Regulatory Commission (FERC) would be involved, your statement of August 20, 2003, indicates the Commission already was involved and would continue its "close coordination" with DOE and the Task Force.

The August 20 announcement also indicates that "FERC has numerous technical experts and other staff working on the blackout event and recovery, and we have committed these professionals to assist the Energy Department investigation. The Commission will make available whatever resources are required to support the investigation."

a. Please describe the statutory authority that governs FERC’s involvement in the Task Force, including commitment of staff and other resources.

b. How was the decision made to involve FERC in the Task Force, and by whom?

c. Please outline the number of FERC personnel you expect to be involved in the Task Force, and the roles they, you, and other commissioners plan to take in the work of the Task Force.

d. To what degree will FERC’s participation in the Task Force divert personnel that otherwise would be dedicated to work before the Commission?

2.  Your August 20 announcement also indicates that FERC’s involvement in the Task Force will entail efforts "to piece together reams of available transmission data" to determine the causes of the blackout.

Does this statement refer to data amassed by FERC? If so, under what statutory authority does the Commission collect and disseminate such information?

3.  Please describe the role that the Commission (and the Federal Power Commission before it) played in inquiries into past significant power outages. In particular, did the Commission conduct its own investigation, or participate in any investigation conducted by industry or other government entities such as DOE? If so, please describe the Commission’s actions and any reports or recommendations that resulted, either from its own investigation or any in which it participated.

4.  The Federal Power Act provides FERC broad authority to conduct independent investigations into significant events, such as the recent power outages, that bear on its regulatory responsibilities and legislative recommendations to the Congress.

Section 307(a) of the Act authorizes FERC to "investigate any facts, conditions, practices, or matters" necessary for (inter alia) "prescribing rules or regulations thereunder, or in obtaining information to serve as a basis for recommending further legislation concerning the matters to which this Act relates."

Section 311 of the Act suggests FERC in fact may have an obligation to conduct its own independent investigation, providing that "In order to secure information necessary or appropriate as a basis for recommending legislation, the Commission is authorized and directed to conduct investigations regarding the generation, transmission, distribution, and sale of electric energy . . . . " Section 311 also directs FERC to "secure and keep current information regarding the ownership, operation, management, and control of all facilities for such generation, transmission, distribution, and sale" and "the capacity and output thereof" and "the relation of any or all such facts to the development of navigation, industry, commerce, and the national defense." Finally, section 311 provides that FERC "shall report to Congress the result of investigations made under the authority of this section."

a. Why has FERC not undertaken its own independent investigation of the blackout? Is it not important that the Commission use its investigative authority to ascertain whether its policies, such as Order 2000 which encourages transmission owners to join regional transmission organizations (RTOs) and its pending Standard Market Design (SMD) rule, are adequate in light of this breakdown of the interstate transmission system?

b.  To the extent FERC expects its legislative recommendations on grid improvement to be credible, is not an independent Commission investigation appropriate and indeed required under section 311 of the Act in light of the blackout?

c.  Did DOE or anyone else in the Administration or elsewhere suggest, advise, or pressure FERC against conducting its own independent investigation into the blackouts?

5.  In your March 5, 2003, testimony before the Subcommittee on Energy and Air Quality, you noted that a January 2003 proposed Commission policy statement on rate incentives for transmission expansion would permit a higher return on equity when a utility participates in an RTO, sells its RTO-operated transmission asset to an independent company, or pursues certain other specific measures.

Some utilities, notably those operating in Virginia and Kentucky, face constraints under state law with respect to participation in RTOs. Does the Commission’s proposed transmission incentive policy undermine the reliability of the grid by denying such utilities an opportunity to earn higher rates of return? Specifically, to the extent such utilities’ lines are used not only to serve their own customer base but also to facilitate wholesale transmission for others, does not such a restriction on incentive rates contradict FERC’s stated goal of making the grid more robust?