Energy Markets: Concerted Actions Needed by FERC To Confront Challenges That Impede Effective Oversight

In September 2003, FERC updated its strategic plan to cover fiscal years 2003 through 2008. The updated plan contains several outcome-oriented performance measures and more specific strategies for achieving its goals and objectives. In addition, FERC has developed benchmarks to measure market performance, and begun to report on them with issuance of its State of the Markets report in January 2004. FERC has stated its commitment to continue to work on improving its performance measures and benchmarks. The updated plan also more clearly defines the regional transmission organizations' role and FERC's expectations for them in monitoring electricity markets. FERC has not given final approval to any new regional transmission organizations, but proposals for additional regional organizations are in varying stages of development. FERC has established strong market monitoring requirements that these organizations must meet to be approved.

FERC established a new Office of Market Oversight and Investigations (OMOI) in August 2003, to develop and implement an action plan for overseeing electricity and natural gas markets. This action plan has been set out in the agency's strategic and annual performance plans under FERC's market oversight goal and in the delineation of OMOI's and its divisions' roles and responsibilities. These documents describe how OMOI will work with market monitoring units in areas where regional transmission organizations exist and how it will use its Enforcement Hotline, Market Monitoring Center, and focused audits to oversee markets in areas where regional transmission organizations do not exist. Monitoring the informal markets in areas without transmission organizations is still a challenge. However, FERC has put more emphasis on its Enforcement Hotline, expanded the commercially-available market data available in its Market Monitoring Center, and is conducting more audits.

FERC has expanded its use of existing personnel flexibilities and continues to make broader human capital program changes. For example, it has implemented a student loan repayment program and has identified additional flexibilities that could prove useful in attracting and retaining quality employees, including making distinctions between employee performance by using a pay-for-performance system. Performance incentive awards have increased to as much as 17 percent of pay in order to retain individuals with needed expertise. Further, OPM has "certified" that FERC is providing meaningful distinctions in its performance appraisal system and is asking for additional improvements. According to FERC officials, the goal for FERC's human capital program is similar to GAO's human capital efforts--that is, to be exempted from Title V resource regulation in order to more fully implement a pay-for-performance system with broad banding. With regard to identifying and targeting additional training, FERC has implemented an agency-wide markets-oriented training program which is being taught by experts from the different offices. FERC's Division of Human Resources Services and the program offices are analyzing participant feedback and making necessary improvements.

In February 2003, the Chairman of FERC approved the agency's first strategic human capital management plan that lays the foundation for the agency to strategically manage its workforce. For each FERC office, the plan identifies the current and future skills it needs to achieve FERC's strategic goals. Where gaps existed between current and future skill needs, the offices have developed human capital initiatives to close the gaps.

In February 2003, the Chairman of FERC approved the agency's first strategic human capital management plan. This plan lays the foundation for the agency to strategically manage its workforce. Concerning recruitment and retention, the plan establishes attracting and retaining talented, diverse employees capable of maintaining excellence as a human resource goal. To accomplish this goal, the plan identifies various objectives, including implementing recruiting and retention strategies based on the results of a workforce planning process and the offices' hiring plans. The plan also identifies a number of other recruitment and retention initiatives, including an exit interview process to track and document why employees leave. This information will be used to support or modify agency personnel practices in order to improve employee retention.

In February 2003, the Chairman of FERC approved the agency's first strategic human capital management plan. With respect to training, the plan establishes development opportunities to expand individual and organizational capabilities as a goal. An objective under this goal is to upgrade the effectiveness of the central and individual office training programs. The plan recognizes that FERC needs to implement a revamped energy markets curriculum to ensure that staff, such as those in the Office of Market Oversight and Investigations, have current, market-oriented skills and expertise. One of the next steps in the plan is that the human resources staff will coordinate the offices' efforts to design and offer training for managers and to develop a markets-oriented curriculum to build organizational and staff expertise. FERC is already starting to develop the curriculum called for in the plan.

In February 2003, the Chairman of FERC approved the agency's first strategic human capital management plan. The plan identifies succession planning as a challenge and points out that over half of FERC's workforce will be eligible to retire by 2007. It also sets out the establishment of a leadership succession planning program as an objective under its building leadership goal. To further address this challenge, many of FERC's offices intend to develop their own succession planning strategies.