Federal agencies’ information collection activities are subject to the  Paperwork Reduction Act. The North American Electric Reliability Council (NERC) is one of the  most important nonfederal entities that collect data from the electricity  industry. Agencies Collect, Use, and Share Electricity-Related Information to Meet Missions

Federal agencies collect three types of electricity-related information  for widely varying purposes in accordance with their different  missions. As a result, the information usually does not reflect current market  conditions. To meet their missions, agencies collect a wide  variety of electricity-related information. In addition, EIA collects end-user information such as residential,  commercial, and industrial usage. Restructuring Has Exposed Gaps in Agencies’ Electricity Information and Has Affected How This Information Is Shared

Of the eight federal agencies included in our review, we found that  restructuring has significantly affected FERC while other agencies  were affected to a lesser extent. However, FERC is limited in the information it is  allowed to collect, primarily because of limitations in its authority. Price and transaction information, as  well as operational information, is important in order for FERC to be  able to detect changes in the market, determine the legitimacy of market  outcomes, and if needed, take corrective action. This authority does not generally extend to  nonjurisdictional entities such as the power marketing administrations,  other nonutilities, and NERC. FERC plans to use  the market monitors, created as part of ISOs, to perform up-to-the-minute  market monitoring activities and routinely collect information on their  electricity markets. FERC and Other Nonfederal Sources of Information Face Challenges that Affect Both Information Collection and Sharing

FERC recognizes the need of utilities to compete in the electric market  and understands their desire to keep confidential some of the information  it collects through its forms. Consequently, FERC is currently missing  some of these key pieces of information or is relying on third parties  such as energy news services for related information to assist in meeting  its market monitoring and oversight responsibilities. Recommendations for Executive Action

Given that effective oversight of evolving electricity markets requires the  acquisition of and access to timely, reliable, and complete information,  we recommend that the Chairman, FERC (1) demonstrate what  information FERC needs, (2) describe the limitations resulting from not  having this information, and (3) ask the Congress for sufficient authority  to meet its information collection needs and responsibilities. The complete text of DOE’s written comments is included in  appendix V.

	Objectives, Scope, and Methodology

To determine what electricity information is collected, used, and shared  by key federal agencies in meeting their primary responsibilities, we first  identified federal agencies using specific forms and form-like surveys for  collecting electricity information. To determine the effect of restructuring on federal agencies’ collection,  use, and sharing of this information, we focused primarily on FERC  because it bears the main responsibility for monitoring electricity markets,  is undergoing major organizational changes caused by restructuring, and  has shown serious deficiencies in responding to restructuring. To understand how  restructuring has affected the way in which federal agencies share this  information, we examined concerns about confidentiality, particularly as  they related to EIA’s development of its current confidentiality policy and  FERC’s lack of access to NERC information because of NERC’s concerns  about the potential sensitivity of the information. These sections authorized the Federal Energy Regulatory Commission (FERC):

Used to monitor markets to ensure  that rates are just and reasonable,  and services are offered in a  nondiscriminatory manner. (DOE) Energy Information  Administration publishes  Form 1 data in aggregate  form. Publicly  available,  excluding  information  on stocks  at end of  reporting  period.
Why GAO Did This Study

The ongoing transition (or restructuring) of electricity markets from regulated monopolies to competitive markets is one of the largest single industrial reorganizations in the history of the world. While information is becoming more critical for understanding how well restructuring is working, there are troubling indications that some market participants deliberately misreported information to manipulate prices. GAO was asked to describe (1) the electricity information collected, used, and shared by key federal agencies in meeting their primary responsibilities and (2) the effect of restructuring on these federal agencies' collection, use, and sharing of this information.

What GAO Found

Federal agencies collect, use, and share a wide variety of electricity-related information to carry out their respective missions. Federal agencies have three principal sources of information: (1) routine formal data collection instruments sent to industry participants to report on operations and other industry-related activities, (2) third parties such as energy news services that package federally collected information as well as collect original information some of which reflects current market conditions, and (3) individual companies under investigation. Agencies use the information that they collect to carry out their respective missions--ranging from Federal Energy Regulatory Commission's (FERC) monitoring of electricity markets to Energy Information Administration's dissemination of information about the electricity sector and Environmental Protection Agency's pollution monitoring. Agencies share electricity-related information through a variety of means, such as using the Internet to distribute published reports and access their databases, interagency meetings, and other means. In addition, most federally collected information is made publicly available, although it is sometimes subject to delayed release or released in aggregated form in order to protect business-sensitive information. Restructuring has substantially changed the collection, use, and sharing of electricity information at some agencies and has exposed gaps in the federal government's collection of this information. Restructuring has affected FERC dramatically by changing how FERC performs its mission of assuring just and reasonable prices and by shifting its focus from periodic review of cost information to monitoring current market conditions. To monitor these conditions, FERC needs to access market information on wholesale transactions; however, no federal agency, including FERC, has access to complete and timely information on electricity markets and market participants, exposing gaps in key information. Such information gaps exist primarily because FERC is limited in its authority to collect information for full and effective market oversight and it lacks specific authority to collect current information which may lead to market participants challenging these collection activities. For example, FERC authority does not generally extend to non-jurisdictional entities such as the power marketing administrations, other non-utilities, and North American Electric Reliability Council. As long as these information gaps persist, FERC will be unable to oversee electricity markets in a comprehensive manner. Restructuring's effects on the sharing of electricity information, coupled with recent national security concerns, have highlighted the sensitive nature of some information that federal agencies collect or need. Because of the importance of having timely, reliable, and complete information, we are recommending that FERC take action to resolve its information gaps. As part of this action, we are recommending that FERC present its findings to the Congress because information-related issues--raised by restructuring--may require Congressional action to ultimately resolve.