The establishment of a collegial, independent regulatory body within an executive branch agency may prove appropriate in other instances as well where regulatory functions plays a vital role in implementing a comprehensive national policy. It was done in this instance to assure timeliness in the implementation of programs, and to assure that the regulatory fnctions of the Department were in tune with the non-regulatory aspects of the Department activities. An examination of the responsibilities of the Commission and how these responsibilities relate to those of the Secretary will serve to demonstrate the way the Secretary and FERC will coordinate their activities. This coordination, which would not have been possible had the economic regulatory agencies not been merged into the Department, is central to the establishment of an integrated energy policy.

In the area of natural gas and electric rate setting, the Commission is given exclusive jurisdiction over certain functions transferred from the FPC. This list of functions includes the issuance and renewal of hydroelectric licenses, determinations on how to treat for rate base purposes the cost to utilities of construction work in progress, the regulation of mergers and securities acquisition, natural gas curtailments (other than the establishment and review of priorities), and electrical interconnections, the establishment of wholesale electricity rates or charges, natural gas rates and charges, and the issuance of certificates of public convenience and necessity for natural gas pipelines. The Commission will also have authority to hear appeals from remedial orders and exceptions issued by the Secretary in regulating the use of oil.

The Secretary's responsibilities for other matters transferred from FPC, is derived from two sources. First, the Secetary has all authority transferred from the FPC which is not specifically vested in the Commission. This includes the collection and analysis of energy information, the regulation of interlocking directorates, and the establishment of regional districts or other coordination and interconnection of electrical facilities. Second, the Secretary has authority over matters which are specifically exempted from the Commission such as exports and imports of natural gas, exports and imports of electricity, emergency interconnections and the establishment of curtailment priorities. In carrying out functions transferred to him from the FPC, the Secretary, as well as the Commission, may utilize the incidental power contained in the Federal Power Act or the Natural Gas Act.

Because of the need to coordinate between the Secretary's and the Commission's functions, provisions were designed to assure the Secretary an opportunity to participate actively in the Commission's decision-making process and to assure expeditious Commission consideration of important regulatory matters. Thus, either the Secretary or the Commission may propose or initiate a rule to carry out the functions within the Board's exclusive jurisdiction. The Secretary is authorized to intervene in any proceeding before the Commission, whether adjudicatory or rulemaking in nature. Further, the Secretary is authorized to set reasonable time limits for the completion of any rulemaking proceeding that he proposes before the Commission. It is precisely those types of coordinating mechanisms which the Congress saw as necessary to assure integrated policy-making in the area of energy regulation.

Coordination is also the hallmark of the division of responsibilities between the Commission and the Secretary in the area of oil pricing regulations. The Commission will have the responsibility for any of the major changes in oil pricing policy known as energy actions. This includes amendments to provide adjustments for the composite price for domestic crude oil at a rate in excess of 10 percent per year; any amendments to remove up to 1 million barrels a day of crude oil transported through the trans-Alaska pipeline from the composite price limitation and to specify the price for such crude oil; and any amendments to exempt, with respect to a class of persons or class of transactions, crude oil, residual fuel oil, or any refined petroleum product or product category from allocation regulations, or from price regulation. The Secretary will have the responsibility for all other pricing, enforcement, and allocation programs under the Emergency Petroleum Allocation Act.

The DOE Act provided that the Secretary shall be the only one who may propose to take any energy action. When he does so, however, the matter shall be immediately referred to the Commission, who shall, pursuant to the procedures established in the Emergency Petroleum Allocation Act of 1973, have the responsibility to consider the proposal. The Commission will be the body responsible for holding oral hearings. The Commission after studying the proposal, may either 1) concur in the proposed energy action as proposed by the Secretary or 2) concur in the adoption of the proposed rule only if certain amendments are made in it, or 3) recommend that the rule not be adopted. The Secretary may then take one of the following actions, each of which constitute final departmental action. Where the Commission has concurred in adoption of the rule, without any changes, the Secretary may issue the proposed rule in the form proposed. Where the Commission has concurred in adoption of the rule only with certain changes, the Secretary may issue the rule provided that it is amended to conform in all respects to the amendments proposed by the Commission. Where the Commission has disapproved the rule, the Secretary may not issue the rule in any form. Or he may decide to issue no rule, regardless of the Commission's conclusion.

Further, the DOE act recognized that many actions proposed by the Secretary in order to carry out the functions vested in him may significantly affect the exercise by the Committee of the separate functions vested in it. In the case of such overlap, the Commission is given an opportunity to consider the Secretary's proposal. Whenever the Secretary is contemplating publishing notice of a proposed rule he must notify the Commission, and give the Commission a reasonable length of time to conclude whether the rule is one which will significantly affect any function within the Commission's jurisdiction. Where the Commission finds the Secretary's proposal will significantly affect matters under its jurisdiction, the proposal will be referred at the outset of the proceeding so that the Commission may consider the matter. As is the case of energy actions referred to it, the Commission may either concur in the proposal, concur with an amendment, or recommend against adopting the rule. The Secretary, where the Commission has recommended concurrence, may then promulgate the rule in the form recommended by the Commission. The rule may not be

promulgated by the Secretary either where the Commission's conclusion is that no such rule be issued, or where the Secretary, in his discretion, declines to do so. Any decisions taken by the Secretary will then constitute final agency action reviewable in court in accordance with law.

The FERC structure, or modifications thereof, may be useful where coordination between executive branch agencies and independent regulatory agencies is essential. We believe, as we discuss in some detail in our Chapter on Independence, that aspects of the FERC model may be utilized to assure this coordination without consolidation of independent commissions into executive departments. For example, in other areas where national policy is established it would be possible to permit the coordination of that policy with the regulatory agencies by the President, without jeopardizing the agencies' independent status. The President would be empowered to submit proposed rulemakings, set and enforce action deadlines without infringing on the agencies' ability to make "independent" decisions. This could also have the added benefit of making the President more accountable for actions of the regulatory agency in areas which have an impact on national policy.

H. SUMMARY, AND SOME QUESTIONS FOR THE FUTURE

The creation of the Department of Energy was the result of merging the principal regulatory and non-regulatory energy functions of the Federal Government into a single administrative unit. The principal rationale for the consolidation was to eliminate problems caused by the existing inefficient structure and to assure more effective management. The Department of Energy should provide a comprehensive overview of, and national perspective on energy matters, provide a clear focus on energy policy and programs, and the necessary staff to provide adequate analysis.

Our recommendations in this Chapter are quite different from those in other substantive areas in this volume since Congress has just completed a major reorganization of the energy area. What follows, in a sense, are less recommendations and more "sign posts" for future actions.

Perhaps the best way to examine these sign posts is to look at potential problems which may be caused by or may be inherent in an organizational scheme which centralizes responsibilities.

First, we believe that there are some problems which are inherent in the centralization of responsibilities. The Department of Energy, as example, will have a single person accountable for program implementation (certainly a necessary change) who will also have the primary access to the President on most energy questions. It is likely the multiplicity of views which was present under the past structure will no longer be heard at the highest levels. This could have the effect of obscuring from the President differing viewpoints on such important matters as tradeoffs between competing fuels sources, funding for different types of research projects, and future long-range alternatives. To avert this danger, we believe it is essential that a multilpicity of views from a wide range of officials and people outside Government be consulted when significant energy decisions are to be made.

It is possible that because of the vast size of the bureaucracy that internal lack of accountability will be a difficult problem. The hierarchial structure is large and complex. In order to eliminate this, the Secretary will have to be a strong manager. He will have to be sure to encourage a flexible organizational structure and the representation of a diversity of views when decisions are made.

Similarly, the Department of Energy gives energy a cabinet-level voice in forming domestic policy as it should. The competing forces to the old FEA and ERDA-the Environmental Protection Agency and sections of the Department of the Interior-have become outweighed by a $10.6 billion agency. This makes more imperative questions about the need for consolidation and reassessment of national environmental policy and natural resources. Should policies pertaining to land management, environmental protection, development of public lands, and oceans be consolidated into a counterpart agency to the Department of Energy? We encourage consideration of these issues by both the Congress and the executive branch, in the near future.

Continuing questions will also arise from the fact that not all of the government's programs have been consolidated into the new Department. Coordination will continue to be necessary in a number of different areas. Congress and the Executive Branch will have to monitor carefully the extent coordination is achieved, and ponder what may be done if the coordination is not adequate.

In some areas, the Department of Energy Organization Act recognized the need for continued coordination and established procedures to assure it.

The arrangement between the Department of the Interior and the Department of Energy concerns one of the most critical areas of domestic energy policy-leasing of energy sources on public lands. The Department of Energy Act left the implementation of the leasing program with the agency most familiar with the program, the Department of the Interior. It gave responsibility for setting goals and overall policy to the Department of Energy. The leasing program, by its nature, involve tradeoffs between naturally competitive values of environmental protection and development. The Congress believed that having these responsibilities in two different agencies would increase the likelihood of thorough consideration of the decisions and tradeoffs. Of equal concern to the Congress was establishing a process to expedite decision-making, in order to most efficiently use existing federallyowned resources. The Congress created a Liaison Committee to coordinate responsibilities of the two agencies.

The Act also established a permanent liaison between the Department of Energy and the Department of Transportation with respect to the Fuel Efficiency Standards Program. The Act provided that while the development and promulgation of the standards was to remain with the Department of Transportation, the Secretary of the Department of Transportation would be required to consult with the Energy Secretary in their development and promulgation. The Department of Transportation must give the Department of Energy an opportunity to comment on a proposal before it is published for general comment. Where the Department of Transportation fails to adopt the comments of the Energy Department, such comments must be

included in the public notice of the proposal. Before taking final action on the proposal, the Transportation Department must give the Energy Department another opportunity to comment.

This mandated coordination should have the result of assuring that the Department of Transportation standards will be in accord with, or complement, the other conservation goals and targets established by the Secretary of Energy.

Only experience will tell whether either or both of these procedures assure adequate coordination while allowing the different viewpoints of all the agencies concerned taken into account.

In a number of other energy areas Congress did not specifically provide procedures to assure adequate coordination between agencies.

The Department of Energy will have to coordinate with the Department of Housing and Urban Development when the Department of Energy develops energy conservation standards for buildings and residences.

In order to assure the separation of promotional and safety and enforcement responsibilities, nuclear licensing of functions and environmental programs affecting the supply or use of energy were not assimilated into the Department of Energy. However, these responsibilities relate directly to those responsibilities of the Energy Department and national energy policy in general. Coordination will be necessary here as well.

It is important to recognize that there are limits to the extent reorganization can resolve all regulatory problems where the subject is, like energy, such an all pervasive issue that it involves so many parts of the government. Complete centralization of energy-related responsibilities would be unworkable and undesirable, especially where such responsibilities lie with agencies whose mandates primarily concern other matters. No reorganization will ever be able to eliminate the continuing need for coordination between agencies on energy policy.

Furthermore, Congress has found that some decisions are frequently better made by competing agencies with competing interests. As is noted elsewhere in this volume, some overlap can have beneficial effects. Only time can tell us whether the most suitable choices have been made in drawing the organizational lines.