18 Cfr 358

SUBCHAPTER S—STANDARDS OF CONDUCT FOR
TRANSMISSION PROVIDERS
PART 358—STANDARDS OF
CONDUCT
Sec.
358.1 Applicability.
358.2 General principles.
358.3 Definitions.
358.4 Non-discrimination requirements.
358.5 Independent functioning rule.
358.6 No conduit rule.
358.7 Transparency rule.
358.8 Implementation requirements.
AUTHORITY: 15 U.S.C. 717–717w, 3301–3432; 16
U.S.C. 791–825r, 2601–2645; 31 U.S.C. 9701; 42
U.S.C. 7101–7352.
SOURCE: 73 FR 63829, Oct. 27, 2008, unless
otherwise noted.

kpayne on DSK54DXVN1OFR with $$_JOB

§ 358.1 Applicability.
(a) This part applies to any interstate natural gas pipeline that transports gas for others pursuant to subparts B or G of part 284 of this chapter
and conducts transmission transactions with an affiliate that engages
in marketing functions.
(b) This part applies to any public
utility that owns, operates, or controls
facilities used for the transmission of
electric energy in interstate commerce
and conducts transmission transactions with an affiliate that engages
in marketing functions.
(c) This part does not apply to a public utility transmission provider that is
a Commission-approved Independent
System Operator (ISO) or Regional
Transmission Organization (RTO). If a
public utility transmission owner participates in a Commission-approved
ISO or RTO and does not operate or
control its transmission system and
has no access to transmission function
information, it may request a waiver
from this part.
(d) A transmission provider may file
a request for a waiver from all or some
of the requirements of this part for
good cause.
§ 358.2 General principles.
(a) As more fully described and implemented in subsequent sections of
this part, a transmission provider must
treat all transmission customers, af-

filiated and non-affiliated, on a not unduly discriminatory basis, and must
not make or grant any undue preference or advantage to any person or
subject any person to any undue prejudice or disadvantage with respect to
any transportation of natural gas or
transmission of electric energy in
interstate commerce, or with respect
to the wholesale sale of natural gas or
of electric energy in interstate commerce.
(b) As more fully described and implemented in subsequent sections of
this part, a transmission provider’s
transmission function employees must
function independently from its marketing function employees, except as
permitted in this part or otherwise permitted by Commission order.
(c) As more fully described and implemented in subsequent sections of
this part, a transmission provider and
its employees, contractors, consultants
and agents are prohibited from disclosing, or using a conduit to disclose,
non-public transmission function information to the transmission provider’s
marketing function employees.
(d) As more fully described and implemented in subsequent sections of
this part, a transmission provider must
provide equal access to non-public
transmission function information disclosed to marketing function employees to all its transmission customers,
affiliated and non-affiliated, except as
permitted in this part or otherwise permitted by Commission order.
[74 FR 54482, Oct. 22, 2009]

§ 358.3

Definitions.

(a) Affiliate of a specified entity
means:
(1) Another person that controls, is
controlled by or is under common control with, the specified entity. An affiliate includes a division of the specified
entity that operates as a functional
unit.
(2) For any exempt wholesale generator (as defined under § 366.1 of this

1003

VerDate Sep<11>2014

17:49 May 23, 2018

Jkt 244061

PO 00000

Frm 01013

Fmt 8010

Sfmt 8010

Q:\18\18V1.TXT

31

kpayne on DSK54DXVN1OFR with $$_JOB

§ 358.3

18 CFR Ch. I (4–1–18 Edition)

chapter), affiliate shall have the meaning set forth in § 366.1 of this chapter,
or any successor provision.
(3) ‘‘Control’’ as used in this definition means the direct or indirect authority, whether acting alone or in
conjunction with others, to direct or
cause to direct the management policies of an entity. A voting interest of
10 percent or more creates a rebuttable
presumption of control.
(b) Internet Web site refers to the
Internet location where an interstate
natural gas pipeline or a public utility
posts the information, by electronic
means, required under this part 358.
(c) Marketing functions means:
(1) in the case of public utilities and
their affiliates, the sale for resale in
interstate commerce, or the submission of offers to sell in interstate commerce, of electric energy or capacity,
demand response, virtual transactions,
or financial or physical transmission
rights, all as subject to an exclusion
for bundled retail sales, including sales
of electric energy made by providers of
last resort (POLRs) acting in their
POLR capacity; and
(2) in the case of interstate pipelines
and their affiliates, the sale for resale
in interstate commerce, or the submission of offers to sell in interstate commerce, natural gas, subject to the following exclusions:
(i) Bundled retail sales,
(ii) Incidental purchases or sales of
natural gas to operate interstate natural gas pipeline transmission facilities,
(iii) Sales of natural gas solely from
a seller’s own production,
(iv) Sales of natural gas solely from a
seller’s own gathering or processing facilities, and
(v) On-system sales by an intrastate
natural gas pipeline, by a Hinshaw
interstate pipeline exempt from the
Natural Gas Act, by a local distribution company, or by a local distribution company operating under section
7(f) of the Natural Gas Act.
(d) Marketing function employee means
an employee, contractor, consultant or
agent of a transmission provider or of
an affiliate of a transmission provider
who actively and personally engages on
a day-to-day basis in marketing functions.

(e) Open Access Same Time Information
System or OASIS refers to the Internet
location where a public utility posts
the information required by part 37 of
this chapter, and where it may also
post the information required to be
posted on its Internet Web site by this
part 358.
(f) Transmission means electric transmission, network or point-to-point
service, ancillary services or other
methods of electric transmission, or
the interconnection with jurisdictional
transmission facilities, under part 35 of
this chapter; and natural gas transportation, storage, exchange, backhaul, or
displacement service provided pursuant
to subparts B or G of part 284 of this
chapter.
(g) Transmission customer means any
eligible customer, shipper or designated agent that can or does execute
a transmission service agreement or
can or does receive transmission service, including all persons who have
pending requests for transmission service or for information regarding transmission.
(h) Transmission functions means the
planning, directing, organizing or carrying out of day-to-day transmission
operations, including the granting and
denying of transmission service requests.
(i) Transmission function employee
means an employee, contractor, consultant or agent of a transmission provider who actively and personally engages on a day-to-day basis in transmission functions.
(j) Transmission function information
means information relating to transmission functions.
(k) Transmission provider means:
(1) Any public utility that owns, operates or controls facilities used for the
transmission of electric energy in
interstate commerce; or
(2) Any interstate natural gas pipeline that transports gas for others pursuant to subparts B or G of part 284 of
this chapter.
(3) A transmission provider does not
include a natural gas storage provider
authorized to charge market-based
rates.
(l) Transmission service means the provision of any transmission as defined in
§ 358.3(f).

1004

VerDate Sep<11>2014

17:49 May 23, 2018

Jkt 244061

PO 00000

Frm 01014

Fmt 8010

Sfmt 8010

Q:\18\18V1.TXT

31

Federal Energy Regulatory Commission
(m) Waiver means the determination
by a transmission provider, if authorized by its tariff, to waive any provisions of its tariff for a given entity.
[73 FR 63829, Oct. 27, 2008, as amended at 74
FR 54482, Oct. 22, 2009]

§ 358.4 Non-discrimination
ments.

require-

(a) A transmission provider must
strictly enforce all tariff provisions relating to the sale or purchase of open
access transmission service, if the tariff provisions do not permit the use of
discretion.
(b) A transmission provider must
apply all tariff provisions relating to
the sale or purchase of open access
transmission service in a fair and impartial manner that treats all transmission customers in a not unduly discriminatory manner, if the tariff provisions permit the use of discretion.
(c) A transmission provider may not,
through its tariffs or otherwise, give
undue preference to any person in matters relating to the sale or purchase of
transmission service (including, but
not limited to, issues of price, curtailments, scheduling, priority, ancillary
services, or balancing).
(d) A transmission provider must
process all similar requests for transmission in the same manner and within
the same period of time.

kpayne on DSK54DXVN1OFR with $$_JOB

§ 358.5

Independent functioning rule.

(a) General rule. Except as permitted
in this part or otherwise permitted by
Commission order, a transmission provider’s transmission function employees must function independently of its
marketing function employees.
(b) Separation of functions. (1) A transmission provider is prohibited from
permitting its marketing function employees to:
(i) Conduct transmission functions;
or
(ii) Have access to the system control
center or similar facilities used for
transmission operations that differs in
any way from the access available to
other transmission customers.
(2) A transmission provider is prohibited from permitting its transmission
function employees to conduct marketing functions.

§ 358.7
§ 358.6

No conduit rule.

(a) A transmission provider is prohibited from using anyone as a conduit for
the disclosure of non-public transmission function information to its
marketing function employees.
(b) An employee, contractor, consultant or agent of a transmission provider, and an employee, contractor,
consultant or agent of an affiliate of a
transmission provider that is engaged
in marketing functions, is prohibited
from disclosing non-public transmission function information to any of
the transmission provider’s marketing
function employees.
§ 358.7

Transparency rule.

(a) Contemporaneous disclosure. (1) If a
transmission provider discloses nonpublic transmission function information, other than information identified
in paragraph (a)(2) of this section, in a
manner contrary to the requirements
of § 358.6, the transmission provider
must immediately post the information that was disclosed on its Internet
Web site.
(2) If a transmission provider discloses, in a manner contrary to the requirements of § 358.6, non-public transmission customer information, critical
energy
infrastructure
information
(CEII) as defined in § 388.113(c)(1) of this
chapter or any successor provision, or
any other information that the Commission by law has determined is to be
subject to limited dissemination, the
transmission provider must immediately post notice on its Web site that
the information was disclosed.
(b) Exclusion for specific transaction information. A transmission provider’s
transmission function employee may
discuss with its marketing function
employee a specific request for transmission service submitted by the marketing function employee. The transmission provider is not required to contemporaneously disclose information
otherwise covered by § 358.6 if the information relates solely to a marketing
function employee’s specific request
for transmission service.
(c) Voluntary consent provision. A
transmission customer may voluntarily consent, in writing, to allow the
transmission provider to disclose the

1005

VerDate Sep<11>2014

17:49 May 23, 2018

Jkt 244061

PO 00000

Frm 01015

Fmt 8010

Sfmt 8010

Q:\18\18V1.TXT

31

kpayne on DSK54DXVN1OFR with $$_JOB

§ 358.7

18 CFR Ch. I (4–1–18 Edition)

transmission customer’s non-public information to the transmission provider’s marketing function employees.
If the transmission customer authorizes the transmission provider to disclose its information to marketing
function employees, the transmission
provider must post notice on its Internet Web site of that consent along with
a statement that it did not provide any
preferences, either operational or raterelated, in exchange for that voluntary
consent.
(d) Posting written procedures on the
public Internet. A transmission provider
must post on its Internet Web site current written procedures implementing
the standards of conduct.
(e) Identification of affiliate information on the public Internet. (1) A transmission provider must post on its
Internet Web site the names and addresses of all its affiliates that employ
or retain marketing function employees.
(2) A transmission provider must post
on its Internet Web site a complete list
of
the
employee-staffed
facilities
shared by any of the transmission provider’s transmission function employees and marketing function employees.
The list must include the types of facilities shared and the addresses of the
facilities.
(3) The transmission provider must
post information concerning potential
merger partners as affiliates that may
employ or retain marketing function
employees, within seven days after the
potential merger is announced.
(f) Identification of employee information on the public Internet. (1) A transmission provider must post on its
Internet Web site the job titles and job
descriptions of its transmission function employees.
(2) A transmission provider must post
a notice on its Internet Web site of any
transfer of a transmission function employee to a position as a marketing
function employee, or any transfer of a
marketing function employee to a position as a transmission function employee. The information posted under
this section must remain on its Internet Web site for 90 days. No such job
transfer may be used as a means to circumvent any provision of this part.

The information to be posted must include:
(i) The name of the transferring employee,
(ii) The respective titles held while
performing each function (i.e., as a
transmission function employee and as
a marketing function employee), and
(iii) The effective date of the transfer.
(g) Timing and general requirements of
postings on the public Internet. (1) A
transmission provider must update on
its Internet Web site the information
required by this part 358 within seven
business days of any change, and post
the date on which the information was
updated. A public utility may also post
the information required to be posted
under part 358 on its OASIS, but is not
required to do so.
(2) In the event an emergency, such
as an earthquake, flood, fire or hurricane, severely disrupts a transmission
provider’s normal business operations,
the posting requirements in this part
may be suspended by the transmission
provider. If the disruption lasts longer
than one month, the transmission provider must so notify the Commission
and may seek a further exemption from
the posting requirements.
(3) All Internet Web site postings required by this part must be sufficiently
prominent as to be readily accessible.
(h) Exclusion for and recordation of certain information exchanges. (1) Notwithstanding the requirements of §§ 358.5(a)
and 358.6, a transmission provider’s
transmission function employees and
marketing function employees may exchange certain non-public transmission
function information, as delineated in
§ 358.7(h)(2), in which case the transmission provider must make and retain
a contemporaneous record of all such
exchanges except in emergency circumstances, in which case a record
must be made of the exchange as soon
as practicable after the fact. The transmission provider shall make the record
available to the Commission upon request. The record may consist of handwritten or typed notes, electronic
records such as e-mails and text messages, recorded telephone exchanges,
and the like, and must be retained for
a period of five years.

1006

VerDate Sep<11>2014

17:49 May 23, 2018

Jkt 244061

PO 00000

Frm 01016

Fmt 8010

Sfmt 8010

Q:\18\18V1.TXT

31

Federal Energy Regulatory Commission
(2) The non-public information subject to the exclusion in § 358.7(h)(1) is as
follows:
(i) Information pertaining to compliance with Reliability Standards approved by the Commission, and
(ii) Information necessary to maintain or restore operation of the transmission system or generating units, or
that may affect the dispatch of generating units.
(i) Posting of waivers. A transmission
provider must post on its Internet Web
site notice of each waiver of a tariff
provision that it grants in favor of an
affiliate, unless such waiver has been
approved by the Commission. The posting must be made within one business
day of the act of a waiver. The transmission provider must also maintain a
log of the acts of waiver, and must
make it available to the Commission
upon request. The records must be kept
for a period of five years from the date
of each act of waiver.
§ 358.8 Implementation requirements.
(a) Effective date. A transmission provider must be in full compliance with
the standards of conduct on the date it
commences transmission transactions
with an affiliate that engages in marketing functions.
(b) Compliance measures and written
procedures. (1) A transmission provider
must implement measures to ensure
that the requirements of §§ 358.5 and
358.6 are observed by its employees and
by the employees of its affiliates.

§ 358.8
(2) A transmission provider must distribute the written procedures referred
to in § 358.7(d) to all its transmission
function employees, marketing function employees, officers, directors, supervisory employees, and any other
employees likely to become privy to
transmission function information.
(c) Training and compliance personnel.
(1) A transmission provider must provide annual training on the standards
of conduct to all the employees listed
in paragraph (b)(2) of this section. The
transmission provider must provide
training on the standards of conduct to
new employees in the categories listed
in paragraph (b)(2) of this section,
within the first 30 days of their employment. The transmission provider
must require each employee who has
taken the training to certify electronically or in writing that s/he has completed the training.
(2) A transmission provider must designate a chief compliance officer who
will be responsible for standards of conduct compliance. The transmission provider must post the name of the chief
compliance officer and provide his or
her contact information on its Internet
Web site.
(d) Books and records. A transmission
provider must maintain its books of account and records (as prescribed under
parts 101, 125, 201 and 225 of this chapter) separately from those of its affiliates that employ or retain marketing
function employees, and these must be
available for Commission inspections.

kpayne on DSK54DXVN1OFR with $$_JOB

SUBCHAPTER T [RESERVED]

1007

VerDate Sep<11>2014

17:49 May 23, 2018

Jkt 244061

PO 00000

Frm 01017

Fmt 8010

Sfmt 8010

Q:\18\18V1.TXT

31