On March 7, 1991, Stephen A. Wakefield, General Counsel,
testified before your committee on Title X of S. 341.

Following the hearing, you submitted written questions on behalf of Senators Bingaman, Wirth, Wallop and Domenici to supplement the record. Enclosed are the answers. The remaining answer to question 8 (Wirth) is still in the clearing process and will be forwarded to you as expeditiously as possible.

If we can be of further assistance to you or your staff, please
contact our Congressional Hearing Coordinator, Renee Wilhite,
on (202) 586-4277.

Sincerely,

&

Jacqueline Kňox Brown
Assistant Secretary
congressional and Intergovernmental

Affairs

Enclosures

On March 7, 1991, Stephen A. Wakefield, General Counsel, testified before your committee on Title X of s. 341.

At the time of my last letter to you dated April 17, 1991, we explained that the remaining question for the record was not available and that it would be forwarded to you. Enclosed is the answer to that question.

If we can be of further assistance to you or your staff, please contact our Congressional Hearing Coordinator, Renee Wilhite, on (202) 586-4277.

Question 1:

QUESTIONS FROM SENATOR BINGAMAN Please provide greater details on how the proposed Natural Gas and Electric Administration within the Department of Energy would be organized and how it would function. In particular, how would the NGEA differ from the Federal Energy Regulatory Commission in the performance of the functions now performed by the Commission? Under this proposal, FERC, similar to the existing

Answer:

Energy Information Administration, would become an

administration within DOB. This new

administration would be headed by an

Administrator, who would report to the Secretary and participate in key policy decisions made through DOE's existing policy-making framework.

However, responsibility for that policy would

reside in the Secretary.

The proposal for natural gas regulatory and

structural reform contained in the NES is intended

to promote competition and streamline and improve the overall efficiency of the construction and

rate authorization process.

The proposal to

change FERC's status from an independent

regulatory commission, located within the

Department of Energy, to an Administration, still situated within the Department of Energy, is complementary to the overall strategy for natural gas reform. The principal advantages of the

proposed structure are as follows:

a. Establishment of a coordinated Energy Policy

Policy should be developed and implemented within the context of considerations of the full range of governmental interest in all relevant areas. In

the case of FERC, it is cloar that the existing

bifurcated structure for dealing with natural gas

problems does not lend itself to the fulfillment

of sound anergy policy.

The lack of effective coordination over the

development of all aspects of natural gas policy implementation prevents the execution of a

coherent energy strategy by DOE. Whilo certain portions of natural gas and electricity policy

result from decisions at DOB and elsewhere in the Executive Branch, these policies are implemented

in individual proceedings at the FERC which cannot be discussed with officials from the Executive

Under the current PERC structure policy must be implemented through individual proceedings or settlements. However, under the concept of "saparation of functions" as practiced by FERC, the ability of the policymakers to communicate their objectives in the implementation of that policy

with that portion of the FERC staff responsible

for the proceedings is extremely limited. This may result in positions being taken by FERC staff which are totally inconsistent with the views of the Commission; proceedings adjudicated on faulty premises; and decisions which do not reflect the

Since FERC is a multiheaded agency, its procedures are unwieldy and time-consuming. Decisions cannot

be made after due consideration by a single

responsible executive. Instead, they require concurrence by a majority of the Commissioners.

Since the Government in the Sunshine Act requires

that all meetings of more than two commissioners be subject to notice and open to the public, timely action and a free and full exchange of

views is inhibitad.

The necessity to obtain the

votes of three Commissioners prior to the issuance

of any order frequently results in delays and the

necessity to achieve compromises which may do