FERC Order 717 (2008) — Standards of Conduct for Transmission Providers (18 CFR Part 358)

Order No. 717, issued in October 2008 in Docket RM07-1-000, adopted revised Standards of Conduct for transmission providers codified in 18 CFR Part 358. FERC found that earlier conduct rules, including those in Order 889, needed strengthening to address persistent concerns that vertically integrated utilities gave their generation and marketing affiliates preferential access to transmission information, scheduling, and service.

The order moved to a functional employee-based approach for separating transmission functions from marketing functions. Transmission function employees are defined by their job responsibilities rather than corporate titles, and they must operate independently from marketing function employees who work for affiliated generators or power marketers. The independent functioning requirement means transmission personnel cannot be subject to marketing supervision or incentives that could compromise open access.

Order 717 established strict limits on conduit communications—the transmission of non-public transmission information between transmission and marketing employees. Information available to transmission function employees must be posted on OASIS before affiliates can use it for commercial decisions, preserving the transparency goals of Order 889. The order also required transmission providers to implement compliance programs, training, and annual compliance reports so that Commission staff and market participants can verify adherence.

Orders 717-A and 717-B addressed rehearing requests and refined implementation guidance. The Part 358 regulations remain the governing Standards of Conduct framework, enforced through FERC audits and enforcement actions. Order 717 complements the structural open-access requirements of Orders 888 and 890 by addressing the behavioral and informational dimensions of undue discrimination.

Part 358 defines marketing function employees, transmission function employees, and senior managerial employees with distinct communication boundaries. Transmission providers must post compliance procedures on their websites, maintain training records, and submit annual reports describing affiliate relationships and known violations. FERC may audit compliance and impose penalties for conduit communications or preferential scheduling. The order recognized that even with functional unbundling under Order 888, shared corporate structures required ongoing behavioral regulation to keep wholesale markets competitive.

Order 717 superseded earlier conduct rules with clearer functional employee categories and explicit prohibition on using transmission personnel as conduits for merchant intelligence. The Commission tied compliance to open access enforcement, treating Standards of Conduct violations as potential evidence of undue preference in transmission service and scheduling. Utilities filed compliance tariffs and training programs to satisfy Part 358, and the order continues to underpin affiliate oversight in open access markets. FERC has cited Part 358 repeatedly in enforcement actions involving utility merchant affiliates.