Ferc Plan Estrategico

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Federal Energy

Regulatory Commission

Strategic Plan

FY 2014–2018

March 2014


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Table of ContentsMessage from the Acting Chairman .......................................................................v

Mission ........................................................................................................................... 1

Introduction .................................................................................................................3

About the Federal Energy Regulatory Commission .......................................................................3

Strategic Plan Overview ......................................................................................................... .................. 4

Goal 1: Ensure Just and Reasonable Rates, Terms, and Conditions................7

Objective 1.1 Establish Commission rules and policy that will result in just, reasonable,and not unduly discriminatory or preferential rates, terms, and conditions of jurisdictional service....................................................................................................................................7

Objective 1.2 Increase compliance with FERC rules; detect and deter marketmanipulation ............................................................................................................. ................................... 12

Goal 2: Promote Safe, Reliable, Secure, and Efficient Infrastructure ........... 17

Objective 2.1 Foster economic and environmental benefits for the nationthrough approval of natural gas and hydropower projects. ...................................................... 17

Objective 2.2 Minimize risks to the public associated with FERC-jurisdictionalenergy infrastructure. .............................................................................................................. ................. 19

Goal 3: Mission Support through Organizational Excellence ........................ 25

Objective 3.1 Manage Commission resources effectively and efficiently. ............................ 25

Objective 3.2 Empower Commission employees to drive success. ....................................... 28

Objective 3.3 Facilitate public trust and understanding of Commission activities bypromoting transparency, open communication, and a high standard of ethics ................ 31

Appendix A: Future Challenges ........................................................................... 35

Appendix B: Statutory Authorities ...................................................................... 37

Appendix C: Organization Chart .......................................................................... 38

Appendix D: FERC’s Responsibilities .................................................................. 39


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Message from the Acting Chairman

Te Federal Energy Regulatory Commission (FERC or the Commission) will have very important work to do in the years covered by this Strategic Plan, fiscal years (FY) 2014 through 2018. Te nation is experiencing significant changesin energy supply due to a number o actors, including the increased availability o domestic natural gas; the growthin renewable, demand-side and storage technologies; and new environmental requirements. Both the nation’s energyinrastructure and energy markets must adapt to these changes to ensure that consumers have access to reliable, efficientand sustainable energy at a reasonable cost.

Tis Strategic Plan is not ocused on specific technology or policy adaptations, but rather on the underlying and

enduring responsibilities o the Commission under our enabling statutes. It is intended to be flexible and adaptable asenergy challenges evolve, while providing clear and measurable targets.

Tis Strategic Plan builds on the success o our prior Strategic Plan, which covered FY 2009 through 2014. Among otherchanges, it more clearly reflects all major unctions and operations o the Commission. In addition, this Strategic Planincludes a third strategic goal to highlight our commitment to our employees and empowering them to drive success atthe Commission. Te third strategic goal urther emphasizes the value the Commission places on serving the American

public through integrity, openness, and transparency.

Te Commission is ortunate to have a highly dedicated and proessional team o employees across all areas o itsoperations. We are dedicated to executing our Strategic Plan to achieve results and to address the challenges that ace theenergy industry and the nation.

Cheryl A. LaFleurActing ChairmanFederal Energy Regulatory Commission


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Mission

Reliable, Efficient, and Sustainable Energy

for Consumers

Assist consumers in obtaining reliable, efficient, and sustainableenergy services at a reasonable cost through appropriate regulatory

and market means.

Fulfilling this mission involves pursuing three primary goals:

Ensure Just and Reasonable Rates, Terms, and Conditions

Promote Safe, Reliable, Secure, and Efcient Infrastructure

Mission Support through Organizational Excellence

1

2

3


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IIntroduction

About the Federal EnergyRegulatory Commission

Statutory AuthorityTe Federal Energy Regulatory Commission (FERC orthe Commission) is an independent agency that regulatesthe transmission and wholesale sale o electricity andnatural gas in interstate commerce, and regulates thetransportation o oil by pipeline in interstate commerce.FERC also reviews proposals to build interstate naturalgas pipelines, natural gas storage projects, and liquefiednatural gas (LNG) terminals, and FERC licenses non-ederal hydropower projects. Congress assigned theseresponsibilities to FERC in various laws enacted overnearly 100 years, such as the Federal Power Act, PublicUtility Regulatory Policies Act, Natural Gas Act, and

Interstate Commerce Act. More recently, as part othe Energy Policy Act o 2005, Congress gave FERCadditional responsibility to protect the reliability andcybersecurity o the bulk power system through theestablishment and enorcement o mandatory standards,as well as additional authority to enorce FERC regulatoryrequirements through the imposition o civil penalties andother means.

Organizational StructureFERC is composed o up to five commissioners who areappointed by the President o the United States with theadvice and consent o the Senate. Commissioners serve

staggered five-year terms and have an equal vote on theorders through which FERC takes action. Te Presidentappoints one o the commissioners to be the chairman oFERC, the administrative head o the agency. FERC is abipartisan body; no more than three commissioners maybe o the same political party.

Te staff o FERC is organized into 12 offices:

" Te Office of Energy Projects (OEP) osters economicand environmental benefits or the nation throughthe approval and oversight o hydroelectric, natural

gas pipeline, natural gas storage, and liquefied naturalgas projects that are in the public interest.

" Te Office of Energy Market Regulation (OEMR) analyzes filings submitted by electric utilitiesand natural gas and oil pipelines to ensure thatrates, terms, and conditions o service are justand reasonable and not unduly discriminatory or

preerential. OEMR also analyzes filings submittedby the Electric Reliability Organization (ERO)dealing with its budget, rules o procedure, andbylaws.

" Te Office of Enforcement (OE) protects customers byconducting oversight o energy markets, identiyingand remedying market problems in a timely manner,assuring compliance with rules and regulations, anddetecting and combating market manipulation.

" Te Office of Energy Policy and Innovation (OEPI) advises the Commission on policies to ensure theefficient development and use o transmission,generation, and demand-side resources, removebarriers to the participation o emerging technologiesand resources, and create a platorm or innovation in

wholesale energy markets.

" Te Office of Electric Reliability (OER) oversees thedevelopment and review o mandatory reliability andsecurity standards and ensures compliance with theapproved mandatory standards by the users, owners,and operators o the bulk power system.

"

Te Office of Energy Infrastructure Security (OEIS)identifies and—working with other governmentalagencies, industry, and other stakeholders—seekscomprehensive solutions to potential threats toFERC-jurisdictional inrastructure rom cyber and

physical attacks, including geomagnetic disturbanceand electromagnetic pulse events.

" Te Office of General Counsel (OGC) providessound and timely counsel to the Commission andCommission staff as it ulfills responsibilities suchas assisting in the development o Commission draforders, rulemakings and other decisions; representingthe Commission beore the courts; advising the


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Federal Energy


Commission and Commission staff on legal matters;and advising other government agencies, regulatedentities and the public on matters within theCommission’s jurisdiction.

" Te Office of Administrative Litigation (OAL) advancesthe public interest in cases set or hearing by

providing expert and independent analyses, buildinga ull record o compelling evidence, and leadingnegotiations to achieve beneficial settlements.

" Te Office of Administrative Law Judges and DisputeResolution (OALJDR) develops an evidentiary recordin contested cases as directed by the Commission.Trough trial-type hearings and the issuance o an

initial decision, OALJDR ensures that the rightso all parties are preserved. OALJDR also assistsinterested parties engaged in disputes to achieveconsensual decision making through services such asmediation, negotiation, conciliation, arbitration, andacilitation.

" Te Office of the Secretary (OSEC) serves as theocal point through which all filings are made orall proceedings beore the Commission, notices o

proceedings are given, and rom which all officialactions are issued by the Commission. OSEC

promulgates and publishes all orders, rules, andregulations o the Commission and prescribes theissuance date or these unless such date is prescribed

by the Commission. " Te Office of External Affairs (OEA) is responsible

or communications and public relations o theCommission. OEA provides inormational andeducational services to Congress; ederal, state andlocal governments; the news media and the public;regulated industries; and consumer and publicinterest groups. Tis office also is the Commission’sliaison with oreign governments.

" Te Office of the Executive Director (OED) providesadministrative support services to the Commissionincluding human resources, procurement,inormation technology, organizational management,

financial, and logistics.

Strategic Plan Overviewo achieve the mission o Reliable, Efficient, andSustainable Energy or Consumers, FERC has establishedthree strategic goals. Each goal is in turn broken downinto multiple objectives that represent key components othe Commission’s approach to achieving the goal:

Goal 1: Ensure Just and Reasonable Rates,Terms, and Conditions

Objective 1.1: Establish Commission rules and policy that will result in just, reasonable, and notunduly discriminatory or preerential rates, terms,and conditions o jurisdictional service.

Objective 1.2: Increase compliance with FERC rules;detect and deter market manipulation.

Goal 2: Promote Safe, Reliable, Secure, andEfficient Infrastructure

Objective 2.1: Foster economic and environmentalbenefits or the nation through approval o naturalgas and hydropower projects.

Objective 2.2: Minimize risks to the publicassociated with FERC-jurisdictional energyinrastructure.

Goal 3: Mission Support throughOrganizational Excellence

Objective 3.1: Manage Commission ResourcesEffectively and Efficiently.

Objective 3.2: Empower Commission Employees toDrive Success.

Objective 3.3: Facilitate public trust andunderstanding o Commission activities by

promoting transparency, open communication, and ahigh standard o ethics.

Within the strategic plan, goals represent broad outcomesthat FERC is trying to achieve. Te first two goalsare mission critical and correspond to key aspects o


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FERC’s legislative authority. Te third goal is a missionsupport goal ocused on establishing a oundation oorganizational excellence that enables the achievement oFERC’s mission. Te objectives in this plan describe morespecific, action-oriented steps that FERC will employ tomeet the goal.

In presenting its strategic plan, FERC has identified andincorporated the ollowing elements.

A Core Function is an integrated and ocusedcombination o activities and capabilities that carryout a critical operational unction necessary toachieve the objective.

A Strategy is a particular approach, initiative,or course o action to achieve an objective andis designed to address specific challenges oropportunities relative to achieving the objective.

A Strategic Performance Measure provides a generalindication o progress toward achieving the objective.

Core unctions and strategies represent two importantand complementary means by which FERC achieves theobjectives. Core unctions are operational in nature anddescribe what, as a regulatory agency, the Commissionhas an obligation to do. Te core unctions represent aninvestment in and commitment to maintaining FERC’sability to ulfill its responsibilities as a regulatory agencyand demonstrate its dependability and commitmentto excellence. Strategies represent the Commission’s

proposed approach or adapting to emerging issuesand changing external conditions and demonstrate itsawareness and responsiveness.

Te graphic below depicts the overall structure o the

FERC strategic plan.

C FORE UNCTIONS

STRATEGIES

EXTERNAL

ENVIRONMENT

LEGISLATIVE

AUTHORITY

O B

J E C T I V E

S

G O A L

S

R ,ELIABLE

E ,FFICIENT AND

SUSTAINABLE

E FNERGY OR

CONSUMERS

Performance Measure TargetsTe strategic perormance measures are new to thisstrategic plan and represent an effort to employ moreoutcome ocused measurement within the strategic plan.Since these are new measures, the Commission will useFY 2014 to baseline the current level o perormance andestablish expectations or uture perormance. FERC

will also use the baseline period to identiy appropriatethresholds and enhance the interpretive ramework orthe measure. FERC will use this inormation to establishtargets or FY 2015 – FY 2018. FERC will identiytargets appropriate to the nature o the data and thespecific intent o the activities being measured.

Contractor SupportIn preparing this plan or publication, FERC was assistedby Energetics Incorporated, who provided technical inputinto the design and assembly o this document.


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The Strategic Plan

FY 2014–2018

Goal 1: Ensure Just and ReasonableRates, Terms, and ConditionsEnsure that rates, terms, and conditions o jurisdictional energy services are just, reasonable, and not unduly discriminatory or preerential.

1FERC determines the appropriate approach balancing twoElectricity, natural gas, and oil are vital resources that

uel economic activity and help to meet the nation’senergy needs. Trough the Federal Power Act, Public

Utility Regulatory Policies Act, Natural Gas Act, andInterstate Commerce Act, among other laws, Congressgave FERC authority to regulate the transmission and

wholesale sale o electricity and natural gas in interstatecommerce, and to regulate the transportation o oilby pipeline in interstate commerce. Te Commission’sresponsibility in the exercise o this authority is to ensurethat rates, terms, and conditions or wholesale sales andtransmission o electric energy and natural gas in interstatecommerce, as well as or transportation o oil by pipelinein interstate commerce, are just and reasonable and notunduly discriminatory or preerential. As part o thisresponsibility, the Commission balances the economic

viability o energy suppliers with the protection o

energy customers. Trough these efforts, FERC ensuresthat consumers have reasonable access to the resourcesthey need and that service providers are appropriatelycompensated. o achieve this goal, the Commission usesa range o ratemaking activities, including regulatoryand market means, as well as market oversight andenorcement.

Objective 1.1 Establish Commission

rules and policy that will result in

just, reasonable, and not unduly

discriminatory or preferential

rates, terms, and conditions ofjurisdictional service.

o establish rules and policies, FERC draws on bothmarket and regulatory means. When competitive marketsexist and there are assurances against the exercise o market

power, FERC leverages competitive market orces to promote efficiency or consumers while taking measuresto make those markets more efficient. When competitivemarket conditions do not exist and competitive orcesare inadequate to protect consumers, FERC relies ontraditional rate-setting authority and tools such as cost-o-service ratemaking.

important interests: protecting consumers against excessiverates, and providing an opportunity or regulated entities

to recover their costs and earn a reasonable return on theirinvestments. Regardless o the approach, the Commissionensures that interested stakeholders have the opportunityto provide their views and that the Commission’s ultimatedecisions are adequately supported by the evidentiaryrecord. Tese techniques produce just, reasonable, andnot unduly discriminatory or preerential rates, terms, andconditions.

Core Functionso carry out the key responsibilities incumbent in thisobjective, FERC maintains a high degree o capability to

perorm the ollowing core unctions.

Core Function 1: Analyze and act upon filingsby jurisdictional entities and interestedstakeholders in a fair, clear, and timelymanner.

Jurisdictional entities and interested stakeholders submitto FERC a continual stream o requests to change existingrates, terms and conditions o service, to implement newrates, terms and conditions o service, and to receiveguidance through declaratory orders and other actions.Other interested parties, including ratepayers, stategovernment agencies, and non-profit organizations, may

participate in FERC proceedings. Prompt Commission

action is essential to enable regulated entities to react tochanging market and industry conditions; thoughtulaction is critical because each filing raises an issue oimportance to the parties providing or taking service.eams o FERC economists, accountants, engineers, policyanalysts, and attorneys bring deep and diverse experienceto the analysis o each filing, and advise the Commission o

potential actions. Afer careul consideration o each filingand subsequent comments or protests, FERC issues air,clear, and timely orders based on the record establishedin each proceeding. Tese orders are careully consideredto protect energy customers by ensuring that the ratesand terms and conditions o jurisdictional service are just,reasonable, and not unduly discriminatory or preerential.


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Core Function 2: Develop adequateevidentiary records through hearing andsettlement processes.

Te Administrative Procedures Act (APA) requires thatFERC develop an adequate evidentiary record to supporteach o its decisions. Te inormation provided to theCommission at the onset o a proceeding may not beadequate to resolve all issues presented. When FERCdetermines that more inormation is needed, it may setthe matter or hearing or direct the parties to engage insettlement procedures. Either process—settlement orhearing—will address the identified inadequacy o theevidentiary record.

Te Office o Administrative Law Judges and DisputeResolution (OALJDR) and the Office o AdministrativeLitigation (OAL) play separate but important roles indeveloping an evidentiary record, providing FERC thetechnical, legal, and dispute resolution expertise necessaryto resolve highly technical legal, engineering, finance,accounting, cost-o-service, and market power issues.In the settlement phase, an OALJDR judge acilitatesnegotiations among parties; OAL and the parties securethe inormation necessary. In cases that go to hearing,OAL staff members file testimony by expert witnesseson the disputed issues, conduct cross-examination o

witnesses at the hearing, and file bries with the presiding judge. An OALJDR judge presides over the hearing,

rules on disputes over discovery and testimony, admitsevidence, compiles the evidentiary record, and issues aair and impartial initial decision afer briefing has beencompleted. Following additional briefing, FERC reviewsthe initial decision and either affirms, modifies, or reversesit.

Core Function 3: Conduct targeted outreach,technical conferences, and other proceedingsto explore important issues, be alert totrends, and provide stakeholder input tosupport development of policy.

FERC engages in ongoing review o existing regulatory policies to ensure that they are achieving their intendedgoals, and FERC undertakes inormation gatheringactions with respect to rates, terms, and conditionso jurisdictional service. Tese efforts assist FERC inidentiying and exploring important issues and trends.Based on its knowledge and experience with the industriesit regulates, FERC may gather inormation throughtechnical conerences or other means o outreach withinterested parties. Commission technical, legal, and

policy experts also careully review and analyze filingssubmitted in response to proposals. Where necessary,

the Commission will pursue changes to its regulationsor announce statements o policy to implement genericchanges to the tariffs o regulated utilities.

Strategieso address current challenges and opportunitiesincumbent in the achievement o Objective 1.1, FERC isimplementing the ollowing strategies.

Strategy 1: Employ competitive forcesthrough markets to establish just, reasonable,and not unduly discriminatory or preferentialrates, terms and conditions of jurisdictional

service.

Marketplace competition benefits energy consumers byencouraging diverse resources, spurring innovation anddeployment o new technologies, improving operating

perormance, and exerting downward pressure on costs.Harnessing competitive market orces where appropriate

promotes rates and terms and conditions o jurisdictionalservice that are just, reasonable, and not undulydiscriminatory or preerential. o capture the benefits ocompetition, FERC leverages market orces in each o itsregulated industries.

Building on its past efforts to enhance competition in

organized wholesale electricity markets, FERC willengage regional transmission organizations (RO) andindependent system operators (ISO), as well as otherregulated entities and interested stakeholders, to ensurethat energy, capacity, and ancillary services markets

provide appropriate price signals, support marketevolution, and provide appropriate opportunities or alleligible resources, including emerging technologies. TeCommission will also identiy and remove barriers toefficient trading between regional markets, including bothorganized and bilateral markets, and will work to improvecoordination between wholesale and retail markets.

Strategy 2: Employ traditional regulatory

tools to establish just, reasonable, and notunduly discriminatory or preferential rates,terms and conditions of jurisdictional service.

FERC also relies on traditional regulatory tools such ascost-o-service ratemaking to ensure that jurisdictionalrates, terms and conditions o service are just andreasonable and not unduly discriminatory or preerential.Commission rules require public utilities, natural gas

pipelines, and oil pipelines that have not been grantedmarket-based rate authority to establish their rates usinga cost-based rate structure. In this way, the Commission


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protects ratepayers rom unjust and unreasonable ratesand ensures that natural gas and electric transmissionservices are provided on an open-access basis, that oil

pipelines provide service consistent with their status ascommon carriers, and that all rates, terms, and conditionscomply with FERC requirements.

Using traditional ratemaking authority, FERC willencourage efficient operations o public utilities andinterstate natural gas and oil pipelines, while also ensuringthat regulated entities have the opportunity to receive areasonable return on their investments in inrastructure.Given the potential impact on rates, terms and conditionso jurisdictional service, FERC will continue to promote

both the robust evaluation o solutions to transmissionneeds in regional transmission planning processes andassociated cost allocation mechanisms. In addition,the Commission will enhance the coordination andharmonization o natural gas and electric inrastructureby engaging regulated entities and other stakeholders to

promote inter-industry communication on operationaland planning matters and to explore refinements toscheduling and contracting practices in each industry.

Strategy 3: Promote settlements to obtainprompt refunds and reductions in rates andfacilitate the rapid adoption of appropriateterms and conditions of service; use otherdispute resolution services as appropriate.

Settlements benefit energy users by reducing rates and providing reunds ar more quickly than litigation.Settlements may also acilitate the construction oneeded inrastructure in a timelier manner than the ullhearing process, and dramatically limit the time, expense,and resources that FERC and outside parties otherwise

would devote to litigating the case. FERC will continueto use OALJDR’s and OAL’s combined technical and

legal expertise, amiliarity with Commission precedentand policy, negotiating skills, and ability to craf creativeresolutions to resolve contested issues that are notamenable to summary resolution. Assigning such cases toOALJDR and OAL will acilitate achieving settlementsand result in more prompt reductions in rates and reundsor the benefit o ratepayers.


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Performance MeasuresTe ollowing measures will be used to indicate FERC’s progress toward achieving Objective 1.1.

Measure 1: Percent of interchange flows that are uneconomic, representing marketinefficiency.

FERC creates rules and policy that leverage competitive market orces to achieve just, reasonable, and notunduly discriminatory or preerential rates, terms and conditions o service through market means. As applied inappropriate circumstances, competition, through the market undamentals o supply and demand, will produceefficient outcomes and balance the economic viability o energy suppliers with the protection o energy customersrom rates, terms and conditions o service that are unjust, unreasonable, or unduly discriminatory. o supporteffective competition in wholesale energy markets, FERC seeks to identiy and address market inefficiencies asappropriate. o the extent that FERC’s efforts are successul, market inefficiencies should become ewer in number

and/or magnitude. Accordingly, the level o market inefficiency over time provides a measure o FERC’s impact.

Te percent o uneconomic interchange flows between adjacent ROs/ISOs is one indication o market inefficiencyand thus serves as an indicator o the Commission’s effectiveness in achieving Objective 1.1. Te measure is ocusedon interchange flows between adjacent ROs/ISOs where such data are readily available and there is establishedorganized market energy trading.

External Factors Affecting the Measure Results

Tere are a number o external actors that affect market dynamics and may influence the ability o FERC toreduce market inefficiencies. Tese include the composition and ownership o the inrastructure (e.g., supply andtransmission); the economy and demand or power; environmental and public policies at the state and ederal levels;reliability issues/measures; and advances in technology. FERC will monitor these external actors in order to inormthe interpretation o the measure results. In addition, FERC will enhance its interpretation o the results by looking

at other indicators o market inefficiency, including excessive differences between day-ahead and real-time prices andout-o-market dispatch.

Measure 2: Level of participation of stakeholders in regional transmission planningmeetings.

In order to achieve just and reasonable rates or consumers, public utility transmission providers must work togetherto address electric transmission needs in an efficient and cost-effective manner. Furthermore, collaboration across adiverse group o stakeholders, including transmission customers and non-incumbent entities proposing solutions totransmission needs, promotes effective transmission planning and the identification o efficient and cost-effectivesolutions. Recognizing the importance o effective transmission planning to minimizing inefficiencies, FERCissued Order No. 1000, which requires public utility transmission providers to collaborate in regional transmission

planning and takes steps to encourage participation by all stakeholders in those planning activities. Te success othese regional transmission planning processes is difficult to quantiy. However, participation by a broad group

o stakeholders in a regional transmission planning process is a leading indicator o the useulness o that processbecause stakeholders will cease devoting time and resources to a process they eel is ineffective. Accordingly, thelevel o participation by stakeholders in regional transmission planning meetings provides a measure o FERC’simpact on transmission planning processes and serves as an indicator o the Commission’s effectiveness in achievingObjective 1.1.


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A variety o external actors may influence the ability o FERC to support effective and inclusive regionaltransmission planning activities. Such actors include state or local laws that may be interpreted by prospectiveinrastructure developers as limiting their ability to participate effectively in regional transmission planning

processes. In addition, stakeholder interest may be a unction o economic developments that affect the timingin which new inrastructure is needed, as well as o the availability o resources dedicated to planning activities.Similarly, advances in technology may spur innovative transmission solutions and participation by new entrants thathad not previously participated in these planning processes. FERC will monitor these external actors in order toinorm the interpretation o the measure results. In addition, FERC will enhance its interpretation o the results bylooking at other indicators o transmission planning, including whether through the planning process alternative

projects were identified and whether a regional transmission plan was completed. ransmission plans that reflectthe outcome o a successul planning process would indicate the potential development o more cost-effective andefficient transmission acilities.

Measure 3: Percent of cases set for hearing or settlement procedures that are resolvedby settlements.

Contested rate, tariff, or complaint cases may be set or hearing and then resolved through either settlement orormal adjudicatory hearing. Settling cases saves energy companies, their customers, and the Commission significanttime and resources and provides quicker determination o appropriate rate, terms and conditions o service. Wheresettlement is not possible, a ull hearing develops the evidentiary record and permits FERC to decide contestedissues; create, apply, or modiy its policies; and provide guidance to the public and the energy industry. Teadjudicative process also helps to discourage energy companies rom seeking excessive rates or onerous conditions oservices by highlighting the risks associated with litigating a case. Accordingly, FERC seeks to maintain the optimalbalance o cases resolved through settlement versus hearing that is necessary or establishing just and reasonablerates, terms, and conditions. Tus, the percent o cases resolved through settlement serves as an indicator o theCommission’s effectiveness in achieving Objective 1.1.


Tere are a number o external actors that are beyond FERC’s control that may affect the number o cases thatsettle. Tese include economic conditions that affect the will ingness o the parties to settle. In addition, the natureand size o the cases that require resolution during a given year can vary. A preponderance o high-profile cases mayshif the balance toward hearing because these cases may be more l ikely to raise issues on which the parties preerCommission decisions on the merits. FERC will monitor these external actors in order to inorm the measureresults. In addition, FERC will enhance its interpretation o results by looking at other indicators o the settlementand hearing processes. In particular, FERC will monitor the percent o settled cases involving the rates to be chargedcustomers that result in a reduction in the filed rates and/or reunds to customers. FERC will also look at the

percentage o cases that are completed according to established timelines and the percentage o mediation cases thatare resolved by settlements.


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Objective 1.2 Increase compliancewith FERC rules; detect and deter

market manipulation.

Oversight and enorcement are essential tools orensuring that rates, terms and conditions o serviceare just, reasonable, and not unduly discriminatory or

preerential. Whereas regulatory and market meansocus on establishing rules and policy, oversight andenorcement ocus on increasing compliance o regulatedentities and detecting and deterring market manipulation.Te Commission’s oversight and enorcement programtakes proactive steps to detect problems in energy markets

and to reduce the probability that violations o applicablelaws, the Commission’s regulations, or market rules willoccur. FERC uses a balanced approach to oversight andenorcement efforts: conduct surveillance and analysiso market trends and data; promote internal compliance

programs; employ robust audit and investigation programs; and, when appropriate, exercise theCommission’s civil penalty authority to deter violations.FERC also makes market data transparent to the publicand market participants so that market efficiency is

promoted and anomalies and areas o concern may beidentified and reported.



Core Function 1: Conduct oversight,monitoring, and surveillance of the naturalgas and electric markets to detect anomaliesand potential market manipulation.

Highly trained staff monitors the markets on a dailybasis using sophisticated sofware developed by staffthat algorithmically screens data rom the physicaland financial energy markets. Staff develops and runs

sophisticated automated screens o market activities ona routine basis (daily, weekly, monthly, as appropriatedepending on the nature o the screen) and analyzes theresults. Any screen trips are pursued to explore reasonsor the potential anomalous behavior, including marketundamentals, weather or unusual market activity, orbusiness needs. o the extent data are available, thescreening and analysis will incorporate financial productsthat may create an incentive or anomalous physicaltransactions. Using screening data and other inormationobtained rom reviewing required orms submitted byregulated entities, staff also provides the public and market

participants inormation about market undamentals.In addition, careul analysis is conducted to observe andidentiy potential market participants’ misbehavior andanomalies, with the goal o promoting market efficiencies.

Core Function 2: Conduct audits ofjurisdictional entities to drive compliance.

Each fiscal year, FERC staff conducts audits o jurisdictional entities. Te primary objective o theseaudits and other audit activities is to increase compliance

with Commission rules and precedents. In addition,audits improve accountability and transparency andenhance efficiencies and effectiveness. Tese audits assesscompliance with careully crafed rules and regulationsand require a deep understanding o both FERC policyand the complexities o energy markets. o completethese audits, staff draws on the expertise o differentCommission offices with multidisciplinary skills inauditing, accounting, engineering, rate design, policy,and law. FERC staff thoroughly examines areas identified

within the scope o each audit to provide both inormaleedback during the audit engagements and ormaleedback in publicly issued audit reports. A risk-basedapproach to plan and prioritize audits helps FERCexamine areas o regulatory importance and make themost efficient use o its resources. Annual risk assessmentsgather input rom a variety o resources, including orms

filed with the Commission, state commissions, and theSecurities and Exchange Commission; rate inormation;FERC and state rate actions; discussions with industryand state officials; discussions with senior FERC officialsand staff; and internally developed audit screens.

Core Function 3: Conduct investigationsof potential violations of Commissionregulations or market rules.

FERC staff conducts public and non-public investigationso possible violations o the statutes, regulations, rules,orders and tariffs administered by the Commission.Investigations may arise rom a variety o sources

including sel-reports, tips, calls to the EnorcementHotline, reerrals rom organized markets or theirmonitoring units, other agencies, other offices within theCommission, or as a result o other investigations. In eachinvestigation, attorneys experienced and knowledgeableabout energy markets develop a record through datarequests, depositions, field audits, and similar discoverymethods. Many investigations are terminated in theearly stages o discovery because the evidence does notidentiy a violation. Where staff finds violations osufficient seriousness, staff reports its findings to theCommission and attempts to resolve the investigationthrough settlement with appropriate sanctions and uture


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compliance improvements beore recommending that theCommission initiate urther enorcement proceedings. Inattempting to achieve a air resolution o an investigation,attorneys will consider, among other things, the level ocooperation by the utility being investigated, whetherthe violation was sel-reported, the compliance culture othe organization, and harm or risk o harm posed by the

violation.

Strategyo address current challenges and opportunitiesincumbent in the achievement o Objective 1.2, FERC isimplementing the ollowing strategy.

Strategy 1: Promote internal complianceprograms and self-reporting of violationsby market participants, as necessarycomplements to the Commission’smonitoring, auditing, and investigatoryefforts.

FERC promotes internal compliance programs andsel-reporting o violations (e.g., penalty calculations or

violations include credit or a good compliance culture oror sel-reporting a violation). Te Commission engagesin extensive outreach to educate market participantsand affected stakeholders on compliance programs andimproper market behavior and disseminates findings

o noncompliance in audits and stipulated acts thatorm the basis o the alleged violation in the settlementdocuments. Collectively, these activities providetransparency or market participants to structure strongcompliance programs.


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Goal 2: Promote Safe, Reliable,Secure, and Efficient InfrastructurePromote the development o sae, reliable, secure, and efficient inrastructurethat serves the public interest.

2Core Functionso carry out the key responsibilities incumbent in this

objective, FERC maintains a high degree o capability to perorm the ollowing core unctions.

Core Function 1: Conduct thorough andtimely technical review of applications toconstruct, operate, or modify natural gas andhydroelectric infrastructure.

o meet the growing demand or energy, FERC mustrespond to energy inrastructure applications with timelyand well-reasoned decisions that protect the environment

while ostering the growth o a sustainable inrastructure.Te Commission’s authorization processes are designed toincrease efficiency and ensure expeditious determinations

by engaging stakeholders early in the process—during pre-filing—to identiy and resolve concerns with the

Te Natural Gas Act and the Federal Power Act, amongother statutory authorities, charge FERC with theresponsibility to promote the development o robust,

reliable and secure energ y inrastructure that operatessaely, reliably, and efficiently. FERC authorizes theconstruction and operation o interstate natural gas

pipelines and storage projects, liquid natural gas (LNG)acilities, and non-ederal hydropower projects. OtherCommission responsibilities include ensuring thesaety o non-ederal hydropower projects and LNGacilities throughout their entire lie cycle; overseeing thedevelopment and review o, as well as compliance with,mandatory reliability and security standards or the bulk

power system; and collaborating with regulated entitiesand other ederal and state governmental agencies toidentiy and seek solutions to cyber and physical threats toFERC-jurisdictional inrastructure.

Objective 2.1 Foster economic and

environmental benefits for the nation

through approval of natural gas and

hydropower projects.

Demand or natural gas in the United States is at itshighest levels on record, and natural gas productioncontinues to increase due to the development o shalegas. Among its many uses, natural gas is a substantial andgrowing resource or electric power generation, in partdue to the current low price o natural gas. Te responsible

development o interstate natural gas inrastructure— pipelines, storage, and LNG acilities—is a critical link inensuring that natural gas supply can reach market areas.

Interest in developing hydropower projects has alsoincreased, in part because hydropower offers the benefitso a renewable, domestic energy source that supportsefficient, competitive electric markets by providing low-cost energy reserves and ancillary services. Hydropower

projects may also provide other public benefits such asenvironmental protection and enhancement, water supply,irrigation, recreation and flood control.

application prior to filing. In accordance with the NationalEnvironmental Policy Act, highly-trained FERC technicalstaff, including biologists, archaeologists, geologists,other environmental scientists, and engineers thoroughlyanalyze the environmental effects o proposed natural gas

pipeline, gas storage, LNG, and hydropower acilities.Staff engineers model projects that propose to constructnatural gas pipelines, gas storage, and LNG acilities to

veriy that the design is appropriate or the proposedservice. In addition, FERC coordinates with otheragencies to consider environmental statutes as appropriate,including the Endangered Species Act, National Historic

Preservation Act, Coastal Zone Management Act, andClean Water Act. Tese actions help the Commissionmake well-reasoned and timely decisions on natural gasand hydroelectric inrastructure, ostering economic andenvironmental benefits.

Core Function 2: Ensure natural gas andhydroelectric infrastructure is constructedand operated in compliance with FERCorders.

Project authorizations issued by FERC or natural gas pipelines and storage acilities, LNG acilities, and


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hydropower acilities include terms and conditionsdesigned to protect, mitigate, and enhance theenvironmental resources o project areas. Tese termsand conditions address water and air quality; land useand recreation; erosion control; cultural resources; and

wildlie and endangered species, including fish habitatand passage. As specified by the issued order, licensees andcertificate holders implement specific environmental andoperational measures, generally afer filing detailed plans,

proposals, and reports regarding the implementation othe measures.

FERC ensures compliance with these measures throughextensive environmental review and inspection programs

in both the natural gas and hydropower industries.Tese programs evaluate and assess implementationand compliance with the environmental and public userequirements o authorizations to ensure the protectionand enhancement o resources at each project. On-site inspections conducted by qualified Commissionstaff amiliar with the project and FERC rules andregulations occur at regularly scheduled intervals toensure that projects are environmentally compliant duringconstruction and throughout the project’s lie cycle.

Strategyo address challenges to and opportunities incumbent inthe achievement o Objective 2.1, FERC is implementingthe ollowing strategy.

Strategy 1: Conduct outreach withstakeholders to promote the exchange ofinformation and ensure understanding ofFERC procedures.

Reconciling competing interests remains a significantchallenge throughout the inrastructure siting processes,

which can be complex, lengthy, and contentious. Issuesare best addressed openly and early in the application

processes. FERC encourages, and in certain circumstancesrequires, applicants or project proponents to engagein early involvement with ederal, state, and tribalgovernment agencies, affected landowners, and the public.Te Commission requently sponsors seminars and

workshops to aid in the understanding o and successuladherence to the FERC-issued licenses, certificates, andauthorizations. Early recognition and resolution o issuesleads to timely decisions or inrastructure projects thatmeet public demand or energy.

Performance MeasuresTe ollowing measures will be used to indicate FERC’s perormance toward Objective 2.1.

Measure 1: Percent of orders issued within established timeframes.

FERC regulated entities must obtain authorization beore beginning the construction o natural gas pipeline,natural gas storage, LNG, and hydropower acilities and implementing measures required rom relicensing ahydropower acility. In order to maximize both the economic and environmental benefits o these projects,FERC must process applications in an efficient and timely manner and ensure that its authorizations are basedon thorough environmental analysis. FERC has established timerames that balance the competing demands

o timeliness and thorough analysis. Accordingly, the percent o applications processed within establishedtimerames serves as a measure o FERC’s perormance in processing applications and also provides an indicationo its effectiveness in achieving Objective 2.1.


External actors may influence the ability o FERC to achieve this measure. Other agencies have input intoFERC’s processes and can greatly affect its ability to process applications within established timerames. Whetherapplicants file complete applications and respond in a timely manner to requests or inormation can also be aactor. FERC will monitor the impact o these actors in order to inorm the interpretation o the measure results.


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Objective 2.2 Minimize risks tothe public associated with FERC-

jurisdictional energy infrastructure.

In addition to reviewing applications and issuing orders with respect to construction, operation, and modificationo natural gas acilities and non-ederal hydropoweracilities, FERC has other responsibilities concerningenergy inrastructure subject to its jurisdiction. Teseresponsibilities include ensuring the saety o non-ederalhydropower projects and LNG acilities throughouttheir entire lie cycle; overseeing the developmentand review o, as well as compliance with, mandatory

reliability and security standards or the bulk powersystem; and collaborating with regulated entities andother governmental agencies at the ederal and statelevels to identiy and seek solutions to threats to FERC-

jurisdictional inrastructure rom cyber and physicalattacks. Trough these actions, FERC minimizes risks tothe public associated with jurisdictional inrastructure.



Core Function 1: Conduct comprehensive andtimely safety inspections of hydroelectric andLNG facilities.

Failure o an LNG acility or a non-ederal hydropower project can result in loss o lie and significantenvironmental and economic consequences. o ulfill itsresponsibility or ensuring the saety o these acilities,FERC relies on physical inspections or detecting and

preventing potential catastrophic structural ailures,thereby protecting the public against the risk associated

with such an event. FERC engineers are highly trainedand work closely with local officials at all stages o

project development and operation. Beore projects are

constructed, the designs, plans, and specifications o the proposed acility are reviewed and approved. Troughregularly scheduled and comprehensive inspections duringconstruction and operation, FERC engineers veriy that

dams and LNG acilities meet stipulated design criteria,identiy necessary remedial modifications or requiredmaintenance, and ensure compliance with requirements.Tis approach allows the Commission to ensure the saetyo the public, as well as the continued operation o theacilities to meet the energy demands o the nation.

Core Function 2: Provide for the reliableoperation of the bulk power system byoverseeing development and enforcement ofmandatory standards.

Te Energy Policy Act o 2005 amended the FederalPower Act to charge FERC with helping to ensure the

reliability o the bulk power system. In ulfilling thisresponsibility, the Commission draws on the substantialexpertise o its staff, including electrical engineers withmany years o experience in the utility industry. FERCengineers analyze standards proposed by the ElectricReliability Organization (ERO) to determine whetherthose standards support the reliable operation o thegrid. Te Commission also reviews major blackouts todetermine whether standards were violated or should bechanged to help prevent uture blackouts. In addition,the Commission oversees audits, investigations, and

proposed penalties o the ERO and the ERO regionalrepresentatives to help ensure that their efforts will resultin strong compliance with mandatory standards. Tese

actions together reduce the risk o interruption to thereliable supply o electricity that is vital or the nation.

Core Function 3: Coordinate with othergovernment agencies and regulated entitiesto identify and advance sound practicesto protect against cyber and physicalsecurity threats to infrastructure within theCommission’s jurisdiction.

Growing cyber and physical security threats, along withincreasing automation and a rapidly changing energysupply mix, demand an agile and ocused approach toenergy inrastructure security. Amid these threats, the

Commission coordinates with other government agenciesand regulated entities to maintain awareness o threats,activities, and capabilities o adversaries that may initiatea cyber or physical attack on energy inrastructure within


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FERC’s jurisdiction. Te Commission’s collaboration inthis area with regulated entities provides an importantcomplement to FERC’s related responsibilities or bothregulatory requirements and enorcement.

Te Commission supports the development andencourages implementation o effective tools andtechniques to enhance protection o jurisdictionalinrastructure though the extensive technical expertise oits staff, which includes highly skilled electrical engineersand computer scientists. Commission staff providesa unique perspective that draws on both decades oexperience in regulating this inrastructure and extensiveexperience in grid operations. Tese contributions rom

the Commission reduce the risk o cyber and physicalsecurity threats to vital energy inrastructure. Finally, theCommission collaborates with government partners andindustry to identiy key acilities that present the greatestrisk, helps guide security assessments, and proposesmitigation measures to protect jurisdictional energyinrastructure.


Strategy 1: Use risk-informed decisionmaking to evaluate dam safety.

Risk-inormed decision making (RIDM) providesthe capability to assess non-traditional ailure modes,levelize risk across different loading conditions, ocusinspections and surveillance on the specific potentialailure modes and monitoring programs at projects, andguide remediation projects to provide an overall reducedlevel o risk to the public. FERC will continue to developthe necessary risk assessment guidelines, procedures and

policies, and to train Commission staff, dam owners, andconsultants in risk assessment procedures, methodologiesand tools. Development o the guidelines and procedures

will continue to be carried out in an open, collaborative process with representatives o the hydropower industry,including FERC-regulated licensees. Tese efforts willrun parallel to the traditional dam saety inspections andtogether will ensure public saety.

Strategy 2: Address emerging issues byconducting, reviewing and overseeingassessment of the planning and operation ofthe bulk power system to ensure its reliability.

Challenges acing the bulk power system are not static,but evolve over time with demands on the system.Te electrical grid is changing rapidly in response todevelopments such as greater reliance on natural gasas a uel to produce electricity and greater reliance onrenewable sources o electricity. o help maintain thegrid’s reliability as these and other changes occur, FERC

will engage with the ERO to discuss such changesand their impact, and FERC will examine whethercorresponding changes in how the grid is operated areappropriate. Based on its findings, the Commission mayencourage utilities to change their operational methods or,i appropriate, require changes in reliability standards thatgovern operation o the grid.

Strategy 3: Promote improvement to energyinfrastructure security.

It is important to understand the impact that individualacilities have on the resilience o critical inrastructuresystems, as well as the risk o disruption to those systemsrom threats and vulnerabilities through cyber and

physical attacks. o these ends, the Commission will useits modeling and assessment capabilities as appropriatein support o analyzing inrastructure threats and

vulnerabilities to identiy particularly critical equipmentacross the Commission’s jurisdictional inrastructures.Te Commission will conduct outreach to acility ownersand operators to promote security improvements at thoseacilities. In coordination with these actions, Commissionstaff will proactively examine threats and potential

vulnerabilities in the cyber and/or physical security posture o those acilities through onsite assessments.Tese assessments will better enable acility owners andoperators to recognize current threats, potential attack

vectors, potential counter measures and effective practicesto minimize potential impacts and recovery time should aacility be compromised.


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Performance MeasuresTe ollowing measures will be used to indicate FERC’s perormance toward Objective 2.2.

Measure 1: Percent of hydropower facilities that have approved dam safety programs.

In order to minimize risks to the public, hydropower acilities are required to implement saety programs thatcomply with Commission regulations and industry standards or the lie o the acility. In addition, FERC requiresall high and significant hazard dams to develop and obtain approval or a rigorous Owners Dam Saety Program,

which acknowledges the dam saety responsibilities o each level o the licensee’s organization, establishes protocolsor internal and external dam saety communication, and has clear designation o dam saety responsibilities amongthe licensee’s staff. o the extent that these efforts are successul, acilities will maintain compliant saety programs.Accordingly, the percent o acilities that have either an approved Owners Dam Saety Program accepted or thathave an approved plan o action to correct any deficiencies identified by the Commission serves as an indicator o

the effectiveness in achieving Objective 2.2.


Tere are a number o external actors that affect the extent to which hydropower acilities maintain compliantsaety programs. Tese include adequate acility unding and personnel staffing on the part o the acility ownersto carry out their saety programs, as well as the extent to which these entities establish a corporate culture that

values compliance. In addition, or dam saety, other ederal and state agencies can impact licensee’s ability to carryout programs. FERC will monitor the impact o these actors in order to inorm the interpretation o the measureresults.

Measure 2: Number of LNG facility recommendations implemented by established timeframes.

In order to minimize risks to the public and to ensure reliable inrastructure, LNG acilities are monitored toensure that they are being maintained and operated in a manner consistent with the Commission’s certificate/authorization or the lie o the acility. FERC issues a letter afer each LNG inspection that lists anyrecommendations or sae and reliable operation and a timeline or completing these items. Companies areresponsible or completing these items on time to ensure that the acility continues to be in compliance with theCommission’s certificate/authorization. FERC makes a concerted effort to craf recommendations that clearlyidentiy equipment or operational issues/improvements with practical timelines or completion. FERC also

works with the acilities as needed to ensure that they understand the recommendations and how they can beimplemented. Accordingly, the percentage o recommendations implemented within established timerames

provides a measure o FERC’s impact on LNG acility saety and reliability and thus serves as an indicator o theCommission’s effectiveness in achieving Objective 2.2.


Tere are a number o external actors that affect the extent to which LNG acilities can implement FERC’s

recommendations in a timely manner. Tese include the acility operating status, adequate acility unding and personnel staffing on the part o the acility owners to carry out the recommendations, as well as the extent to which these entities establish a corporate culture that values compliance. FERC will monitor the impact o theseactors in order to inorm the interpretation o the measure results.


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Measure 3: The amount of lost megawatts in a given year resulting from bulk powersystem transmission-related events (unplanned disturbances), excluding weather-related outages.

FERC engages in a number o activities to oversee the users, owners and operators o the bulk power system toensure the reliability o the nation’s bulk power system, and to contribute to a dependable power supply or allconsumers. Under its authority over mandatory and enorceable reliability standards, the Commission can requirethe development o new reliability standards, as well as modifications to existing reliability standards, to supporta reliable grid. Te Commission also ensures the quality and sufficiency o reliability standards proposed by theElectric Reliability Organization (ERO). Te Commission urther supports these efforts by overseeing the ERO’senorcement o the reliability standards. In addition, the Commission monitors the operations o the bulk powersystem and investigates reliability events and outages to help find ways to prevent recurrences. Te Commissionalso conducts studies o emerging reliability issues to help craf policies to protect and improve the reliability othe nation’s bulk power system. All o these efforts are intended to minimize avoidable outages caused by problemson the bulk power system. Accordingly, the annual amount o lost load resulting rom unplanned disturbancesother than severe weather provides a measure o FERC’s impact on system reliability and serves as an indicator othe Commission’s effectiveness in achieving Objective 2.2.


Tere are a number o external actors that affect bulk power system reliability and thereore influence the abilityo FERC to minimize the amount o lost megawatts. FERC does not operate the bulk power system and cannotdirect utility operations except by approving and overseeing enorcement o stakeholder-developed reliabilitystandards. Also, many electrical outages are caused by severe weather or by problems on local distribution acilitiesnot regulated by FERC. As the electric grid grows in complexity and technological sophistication, the rate oemerging reliability issues is l ikely to accelerate. Although FERC investigates these issues to prevent recurrences,the initial occurrence is ofen extremely difficult to anticipate. FERC will monitor causes o outages and thenature and requency o emerging issues in order to inorm the interpretation o the measure results. In addition,

FERC will enhance its interpretation o the results by looking at other indicators o bulk power system reliability,including the number o events each year and the affected number o customers.


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Goal 3: Mission Support throughOrganizational ExcellenceAchieve organizational excellence by using resources effectively, adequatelyequipping FERC employees or success, and executing responsive andtransparent processes that strengthen public trust.

3Te public interest is best served when the Commissionoperates in an efficient, responsive and transparentmanner. Te Commission achieves this operational

state by maintaining processes and providing servicesin accordance with governing statutes, authoritativeguidance, and prevailing best practices. Te Commission’sstaff, while serving in different component offices,must work collaboratively and execute processes that

work in concert with each other to produce the high-quality results expected by the American people. Inaccomplishing this state, the Commission will use itsresources efficiently, empower its employees, and earn the

public trust. Tese essential outcomes are indicative o amodel regulatory agency.

Objective 3.1 Manage Commission

resources effectively and efficiently.Te Commission must prioritize resource allocationsand make prudent investments in relation to specific

program activities or challenges. Tese investments should yield returns that directly benefit the agency’s mission.Additionally, ederal statutes require the Commission torecover its operating costs rom the entities it regulates.Te Commission must do this in a manner that avoidsunnecessarily increasing the cost o energy to consumers.Given these considerations, the Commission mustbe steadast in its commitment to use its resources inan efficient manner. In meeting the demands o thiscommitment, the Commission must consistently

develop comprehensive resource plans, execute plannedrequirements through the delivery o compliant services,and monitor resource utilization through establishedcontrol activities.



Core Function 1: Conduct comprehensiveresource planning.

Comprehensive resource planning is a pre-requisiteto efficient resource utilization. Te Commissionestablishes resource plans that align with its strategicocus and provides the related resource levels neededto achieve its mission. Trough resource planning, theCommission identifies its human capital, inormationtechnology, inrastructure and financial needs. It employsa collaborative management approach to develop specific

processes that inorm related investment decisions andstrategies. Te Commission identifies its staffing andcompetency needs through human capital processes.Significant inormation technology and inrastructureinvestments are identified through capital planning andinvestment control processes. Finally, financial needs are

identified through the budget ormulation process. Teseefforts culminate in the development o comprehensiveresource plans that support accomplishment o theagency’s mission. Most importantly, these planningefforts establish an essential oundation or the executiono strategies that maximize the use o the Commission’sresources.

Core Function 2: Execute resource plansthrough the delivery of compliant services tomeet organizational needs.

Comprehensive resource plans provide the rameworkneeded to deliver services that meet organizational

needs. Tese services are delivered through compliant processes which are governed by a vast universe o statutesand regulations that deter raud, waste and abuse. Teseamless execution o agency resource plans coupled withthe agency’s compliance with authoritative guidance

promotes efficient resource utilization. External auditsand reviews have consistently affirmed the compliantnature o the underlying processes utilized to deliver thesemission-support services throughout the Commission.

Te Commission executes its resource plans and deploysmission-support services to meet human capital,inormation technology, and financial management


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requirements. Specifically, these services enable theacquisition and retention o a diverse and skilled workorce; procurement o value-added commodities andcontractor assistance; delivery o a stable, resilient andsecure inrastructure; and the authorization o financialactivities to inorm management decisions.

Core Function 3: Measure and evaluate theeffective use of agency resources throughestablished control programs and reportingrequirements.

Te Commission has deployed measurement andevaluation processes against its comprehensive resource

plans to gauge success toward achieving its strategicgoals. Management tracks the progress o specific agencyactivities and reports status on a continual basis, and takesaction as appropriate to address identified perormancedeficiencies. Tese important activities ensure that theCommission is always cognizant o its perormanceagainst its specific plans and enables the agency to re-direct efforts to maximize the effective use o its resources.

Te Commission has demonstrated an exceptional abilityto airly represent its financial condition via its financialstatements, which have been affirmed by independentauditors or the last 20 years. Finally, it has providedstakeholders with perormance inormation via ederally

mandated accountability reports. Tese key deliverables provide inormation to management officials or effectivedecision making and are essential to managing agencyresources efficiently.


Strategy 1: Direct human capitalmanagement efforts toward addressingexisting staffing vulnerabilities based on

current workforce demographics.Te Commission will implement mitigation strategies toaccount or the potential loss o approximately 30% o itsstaff to retirement within the next five years. Te agency

will ocus its efforts on the competencies and positionsmost affected by attrition o this type. It will aggressivelyrecruit and hire highly skilled people to fill the void lefby separating employees. Te Commission will ocus onthe execution o its hiring processes to ensure it maximizes

allocated financial resources in a timely ashion.Additionally, the agency will develop the workorce tomeet responsibilities vacated by experienced staff.

Strategy 2: Maintain a stable and secureinformation technology infrastructure whileproviding innovative solutions that yield areturn on investment.

Te Commission’s inormation technology inrastructuresupports many o the agency’s workload demands. Tisinrastructure must be dependable and resilient. TeCommission will invest the necessary resources to supportbaseline operations prospectively. Moreover, it will invest

in modern technologies that provide opportunitiesor lower uture operating costs. For example, theCommission could deploy more cost-effective meansto meet storage needs. Accordingly, the Commission

will devise plans to leverage resilient and secure cloudstorage models to support its current and uture needs.Te Commission will also migrate its resident documentmanagement and email applications to more cost-effectivesolutions that will leverage cloud technologies. Tesemigrations to emerging technologies will yield significantcost savings, given the economies o scale that can berealized with hosted cloud solutions.

Strategy 3: Implement a facilities

modernization plan that will make efficientuse of available office space.

Te Office o Management and Budget (OMB) hasdirected agencies to better utilize space within theacilities that house their operations. Te Commissionis ending a 20-year lease term in September 2015 orits headquarters building and is seeking to exercise anavailable 10-year extension. Te Commission must makemore efficient use o the space within the headquartersbuilding by consolidating its operations withinapproximately 90% o the existing space it is currentlyutilizing. It must also consolidate into the headquartersacility employees rom the Office o Administrative

Litigation that currently occupy space within anotherbuilding. o reach this end, the Commission will developa new housing strategy that will provide or more denseseating configurations. Additionally, it will overseea complex multi-year renovation effort to realize thespace-savings. Te Commission’s consolidation effortis dependent upon Congressional approval o its planand the appropriations necessary to cover the cost orenovations.


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Performance MeasuresTe ollowing measures will be used to indicate FERC’s perormance toward Objective 3.1

Measure 1: Average hiring cycle time.

In order to efficiently use its resources, the Commission must ensure planned staff levels are sufficiently maintained.Te Commission allocates over two-thirds o its budget to employee compensation. Any undue lapse in recruitingand hiring new employees impacts the ability o the agency to recover its annual appropriation as required bystatute. Additionally, the potential staff losses the agency could incur as a result o retirements or normal attritionimpacts the ability o the agency to execute its resource plans. Te Commission will take action to reduce theamount o time it takes to fill vacancies. Accordingly, the average hiring cycle time is a measure o FERC’s

perormance in this regard and serves as an indicator o the Commission’s success in achieving Objective 3.1.

External Factors Affecting the Measure ResultsTe external actors limiting the Commission’s ability to execute timely hiring include the challenges related to the

passage o annual appropriations. Te Commission’s hiring efforts are restricted by delays in the receipt o its ullappropriations. In such instances, resources are re-prioritized to address other expenditures.

Measure 2: Percent reduction in targeted information technology costs.

With the ability to deploy emerging technologies that provide or lower cost I solutions, the Commissionis targeting a reduction in current costs incurred or electronic storage and e-mail. It will also streamline andconsolidate the number o business applications it currently manages. Tis action will result in lower operationaland support costs and the savings derived rom these efforts can be re-programmed to meet other mission-critical I needs. Accordingly, the reduction o these targeted costs over the next 5 years is a measure o FERC’s

perormance in this regard and serves as an indicator o the Commission’s effectiveness in achieving Objective 3.1.


Te market’s ability to support the Commission’s specialized security needs could impact the Commission’s abilityto migrate to these new technologies.

Measure 3: Time and cost of building modernization effort relative to establishedschedule and budget.

Te Commission must establish a design plan and budget or an extensive consolidation effort within itsheadquarters acility. Tis budget unds a multi-million dollar renovation effort that will span the next 5-6 years.Te Commission has requested adequate resources to cover the cost o the effort. Te Commission will partner

with the General Services Administration, private contractors and the acility owner to execute the required work. It is imperative that management closely monitors project perormance relative to schedule and resourcesgiven the significant investment at play and the numerous entities involved. Accordingly, the extent to which the

modernization effort is completed within schedule and budget is a measure o FERC’s perormance in managingthe project and serves as an indication o its effectiveness in achieving Objective 3.1.

External factors affecting the Measure Results

Te external actors impacting the Commission’s ability to meet the requirements associated with this scheduleinclude the availability o resources and vendors’ abilities to meet planned deadlines. Te effort is contingent uponthe Commission receiving Congressional approval o its plan and sufficient appropriations to cover the cost orenovations. I the agency does not receive the requested unding, it cannot absorb such substantial costs within itsnormal operating budget. Moreover, poor execution on the part o the many vendors that will contribute to thiseffort could result in unoreseen delays and additional costs.


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Objective 3.2 Empower Commissionemployees to drive success.

Commission employees are directly responsible orachieving FERC’s mission. On an annual basis, theCommission allocates over two-thirds o its budget todirectly cover the compensation costs o its employees.Given this significant investment, the Commission placesextremely high value on its employees and is ocused onensuring their success. Te Commission seeks to becomean employer o choice or individuals who can contributea diverse set o needed skills. With this objective in mind,the Commission recognizes that a model regulatory

organization must ensure that its employees are equipped with the requisite tools and services they need toaccomplish the mission.



Core Function 1: Communicatemanagement’s expectations through theperformance management system, whichaligns employee performance with the

Commission’s strategic goals and objectives.

Tis capability is vital in empowering employees tomeet the Commission’s goals and objectives. Troughthis process, management conveys to employees theirindividual responsibilities relative to the agency’s missionand provides employees with a line o sight rom theirresponsibilities to the successul achievement o thatmission. Tis direct communication establishes employeeaccountability or expected results and empowersthe workorce to advance agency goals. Managementcontinually engages staff through this communicationchannel to ensure employees have a clear ocus on

perormance expectations and that sufficient resources

are at their disposal to meet these expectations. Based onannual eedback rom the Federal Employee ViewpointSurvey (FEVS), Commission employees have indicatedthat they are ully aware o their role in meeting agencygoals.

Core Function 2: Deliver tools, products andservices to meet employees’ needs.

Te Commission provides a host o services whichdirectly support employees’ needs. It has deployed theseservices to attract and retain the highly skilled workorceneeded to meet the agency’s mission. Te Commission hasimplemented effective training programs which developemployees’ leadership and proessional capabilities.Te agency also provides a sae and secure workingenvironment or its employees to thrive. With regard toinormation technology, the agency provides moderntools and services that streamline assigned work processesand acilitate telework. Lastly, the Commission providesits employees with an array o financial services to include

their personal compensation, reimbursement or travel,and subsidies or commuting expenses. FEVS resultshave demonstrated the Commission’s ability to provideemployees with the necessary resources to drive agencysuccess.


Strategy 1: Deliver a competency-

based training program and a corporateknowledge management approach using theCommission’s automated tools.

Te Commission will heavily invest in succession andknowledge management activities to ensure the agencyequips employees with the requisite knowledge tomeet strategic demands going orward. It will developa competency-based training program to mitigateknowledge management risks associated with 30% othe agency’s workorce being eligible or retirement inthe next 5 years. Te agency will assess training needsassociated with its most populous occupations anddevelop associated curriculums. Upon developing thesespecialized courses, the Commission will deliver this

instruction through its automated Learning ManagementSystem and other collaborative tools. With regard toknowledge management activities, the Commission willdevelop a uniorm approach which will seek to preservecorporate inormation and make it accessible to all


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Commission employees. Tese delivery mechanisms can provide training to Commission employees in a cost-effective and easily repeatable ashion. Such a strategy

will ensure employees possess the specialized skills andknowledge required to successully support the agency’smission.

Strategy 2: Analyze results from the FederalEmployee Viewpoint Survey (FEVS) and otheremployee outreach activities to continuallygauge employee perceptions on performancemanagement and the adequacy of missionsupport tools, products and services.

With the current limitation on unding and impactsto employee-related services, it is imperative that theCommission is ully aware o employees’ most criticalneeds. Tis knowledge will acilitate the agency inensuring employees are adequately empowered tomeet their mission responsibilities. o this end, theCommission will utilize results rom the annual FEVSto assess employee perceptions relative to perormancemanagement. Te Commission will also conduct otheremployee outreach activities to gauge the effectiveness oits employee-related processes and services. Te agency

will develop action plans to address any areas not avorablyrated and take corrective action to improve processes andservices which impact related employee perceptions.


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Performance MeasuresTe ollowing measures will be used to indicate FERC’s perormance toward Objective 3.2

Measure 1: Percent of milestones that are met in the deployment of a competency-based training program using automated tools.

Te deployment o this program addresses critical developmental needs the agency will be required to addressdue to the probability o 30% o the current workorce retiring within the next 5 years. Te Commission mustmaintain a highly skilled workorce to address its regulatory responsibilities. A competency-based training

program will ensure employees will be equipped with the pre-requisite knowledge to perorm their jobexpectations. Upon development o the specialized curriculum, the Commission will deploy automated solutionsto streamline the training process. Te entire deployment o the competency-based training program will betracked against pre-established milestones. Te percent o those milestones that are met is a measure o FERC’s

perormance in deploying the program and an indication o its accomplishment o Objective 3.2.


Tere are no significant external actors.

Measure 2: Favorability ratings regarding employee satisfaction with performancemanagement and the adequacy of mission support resources.

o maintain organizational excellence in support o Goals 1 and 2, the Commission provides its employees witha host o tools and services to meet their needs and equip them or mission accomplishment. Tese tools andservices include, among other things, inormation technology to streamline assigned work processes and acilitatetelework, competency-based training, knowledge management, and a sae and secure working environment. Sincethese tools and services are designed to meet employee needs and enable perormance, they should have a positive

impact on employee satisaction. Te Commission analyzes data generated rom the Federal Employee ViewpointSurvey (FEVS) in order to assess employee satisaction with perormance management and the adequacy oemployee-related services. In addition, the Commission uses this eedback to ormulate corrective actions andimprove the tools and services provided to employees. Accordingly, increases in avorability ratings on the FEVS

provide a measure o FERC’s perormance in this regard and serve as an indication o its effectiveness in achievingObjective 3.2.


Tere are no significant external actors.


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Objective 3.3 Facilitate public trustand understanding of Commission

activities by promoting transparency,

open communication, and a high

standard of ethics.

Facilitating understanding o how the Commission carriesout its responsibilities and maintaining public trustin the Commission are important components o theCommission’s commitment to organizational excellence.rust and understanding increase acceptance o FERCdecisions and reduce the potential or contentiousness

toward FERC rules and regulations, thus enabling thecreation and enorcement o policy. Te Commissionadvances this objective by promoting transparency andopen communication with respect to conduct o theCommission’s business, thereby increasing awarenessand understanding o the Commission’s activities.

Te Commission urthers this objective by cultivatingrelationships with sister government agencies andstakeholder groups, which supports understanding oCommission procedures and actions. Te Commissionalso promotes a high standard o ethics, which encourages

public confidence in the Commission’s activities andability to ulfill its responsibilities.



Core Function 1: Maintain processes andpublic information services in accordancewith the principles of transparency and opencommunication.

Promoting transparency and open communication withrespect to conduct o the Commission’s business acilitates


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both understanding o how the Commission carries outits responsibilities and public trust in the Commission.Indeed, transparency and open communication are the

primary means by which the Commission ensures thatregulated entities and other interested stakeholdershave access in a timely manner to accurate inormationabout the Commission’s activities. Te Commissiondemonstrates its commitment to transparency and opencommunication in many ways.

As discussed above, the Commission bases its decisionson the evidentiary record in a given proceeding. oensure due process in the development o the evidentiaryrecord, highly trained Commission staff prepares

notices that promptly announce incoming filings andestablish a deadline or other interested stakeholders tosubmit comments or protests to those filings. o urther

promote transparency, such filings are inputted into theCommission’s document repository and are availableonline or public v

Ferc Plan Estrategico

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