A recent pair of related orders provide caution to public utilities with captive customers who also have affiliates with market-based rate authority: Employees who determine the timing of scheduled outages, or who engage in economic dispatch, fuel procurement, or resource planning, may not be shared absent a company-specific waiver. In the orders, FERC denied rehearing of an April 15, 2010 order clarifying market-based rate affiliate restrictions and withdrew a notice of proposed rulemaking (NOPR) that would have amended FERC's regulations on affiliate restrictions.

In Order No. 697, FERC adopted affiliate restrictions between franchised public utilities with captive customers and their power sales affiliates with market-based rate authority. Order No. 697 required that the employees of power sales affiliates must operate separately from employees of the affiliated franchised utility, with exceptions for certain categories of employees who may be shared, and governed the sharing of market information, sales of non-power goods or services, and power brokering. These restrictions apply as a condition of receiving market-based rate authority unless explicitly granted a waiver by FERC.

The April 15 order responded to a request for clarification of the market-based affiliate restrictions. In that the order, FERC found that employees who determine the timing of scheduled outages, or who engage in economic dispatch, fuel procurement, or resource planning, may not be shared. In denying the EEI's request for rehearing, FERC affirmed that its finding was not a departure from FERC precedent. FERC stated that EEI was seeking to relitigate FERC's findings in Order No. 697 and 697-A regarding the sharing of employees. FERC emphasized that only those employees included in the specific categories of shared support employees (such as legal, accounting, and field and maintenance employees) could be shared by a market-based affiliate and a franchised public utility with captive customers. FERC retained its authority to review on a case-by-case basis circumstances in which affiliates seek to share employees or market information. Only those entities that apply for, and are granted, waivers may share employees. The order requires seller to comply with the guidance in the April 15 order within 90 days.

In an order issued concurrently, FERC withdrew an NOPR that proposed to amend regulations covering market-based rate affiliate restrictions. The proposed regulatory language stated that employees who determine the timing of scheduled outages or who engage in economic dispatch, fuel procurement, or resource planning may not be shared under the market-based rate affiliate restrictions codified in Order No. 697. FERC stated that it was withdrawing the NOPR because the current regulations are sufficient as they require employees of a market-regulated power sales affiliate to operate separately from the employees of any affiliated franchised public utility with captive customers, to the maximum extent practical.