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Power & Pipes

FERC, CFTC, and State Energy Law Developments

On April 21, 2011, the Federal Energy Regulatory Commission (FERC or Commission) issued a pair of Notices of Proposed Rulemaking (NOPR) designed to facilitate price transparency in markets for the sale and transmission of electric energy in interstate commerce and to enhance market monitoring capabilities.

In the Proposed Rule on Electricity Market Transparency Provision of Section 220 of the Federal Power Act, FERC proposes to require market participants that are excluded from the Commission’s jurisdiction under section 205 of the Federal Power Act (FPA) and have more than a de minimis market presence to file Electric Quarterly Reports (EQRs) with the Commission. The Commission intends to act pursuant to its authority under section 220 of the FPA, as adopted in the Energy Policy Act of 2005. FERC stated that its proposal would allow both the Commission and the public to gain a better picture of the wholesale power and transmission markets, and would strengthen the Commission’s ability to identify potential exercises of market power or manipulation and to better evaluate the competitiveness of the interstate wholesale markets.

FERC also proposes to refine the existing EQR filing requirements so that all EQR filers must do the following:

  1. Report the transaction date and time, as well as the type of rate By which the price in the transaction was set (i.e., fixed price, formula, index, regional transmission organization/independent system operator (RTO/ISO) price, or index)
  2. Indicate whether the transaction was reported to an index publishers
  3. Identify the broker or exchange used for a transaction, if applicable
  4. Report electronic tag (e-Tag) ID data in the EQRs

The Commission’s Proposed Rule also seeks to (a) standardize the unit for reporting energy and capacity transactions, (b) omit the time zones from the contract section, and (c) eliminate the Data Universal Numbering System (DUNS) data requirement. FERC explained that these refinements reflect the evolving nature of electricity markets and would increase market transparency and allow market participants to file information more efficiently.

FERC issued an Errata Notice on April 26, 2011 to correct the Table of Contents in the Proposed Rule.

Comments will be due sixty (60) days after publication of the NOPR in the Federal Register.

In the Commission’s other NOPR, regarding the Availability of E-Tag Information to Commission Staff, the Commission proposed to revise its regulations to require the Commission-certified Electric Reliability Organization (ERO) to make available to Commission staff, on an ongoing basis, access to complete electronic tagging data (e-Tags) used to schedule the transmission of electric power in wholesale markets. FERC proposes to require the ERO, rather than the individual market participants, to provide access to e-Tags, so as to avoid imposing the burden on market participants. The Commission stated that this information will aid the Commission in market monitoring and preventing market manipulation, help ensure that entities charge rates that are just and reasonable, and aid in monitoring compliance with certain business practices adopted By the North American Energy Standards Board and incorporated By reference into its regulations and public utility tariffs.

Comments will be due sixty (60) days after publication of the NOPR in the Federal Register.