In a recent Notice of Proposed Rulemaking (NOPR) the Federal Energy Regulatory Commission (FERC) proposes new data collection and filing requirements for market-based rate sellers (MBR) and entities trading virtual products or holding financial transmission rights (Virtual/FTR Participants). The new requirements purport to improve the Commission’s surveillance of wholesale power markets through disclosure of financial and legal connections among market participants and other entities in Commission-jurisdictional electric markets. According to FERC, the requirements will facilitate both the sharing of data across different information systems and reporting into FERC’s eLibrary system.

This new rulemaking takes the place of two prior NOPRs, the Connected Entity NOPR and the Ownership NOPR, that FERC withdrew after a slew of protests were filed from industry groups opposed to the broad reach of those proposals.”

Notably, the Commission continues to propose requiring MBR sellers and Virtual/FTR Participants to make a baseline submission with Connected Entity information and update the submission within 30 days of a change, but has substantially narrowed the definition of “Connected Entities” on which reporting is required. Under the current proposal, Connected Entities are limited to “affiliates” that are either: (i) an “ultimate affiliate owner,” (ii) an entity that participates in FERC-jurisdictional organized wholesale electric markets, or (iii) an entity that purchases or sells gas or electric financial derivative products that settle off of the price of physical electric or gas products.

In addition, FERC now proposes submission directly to the Commission rather than the regional transmission organizations/independent system operators (RTOs/ISOs). FERC’s prior proposal to report information to RTOs/ISOs drew extensive criticism from industry participants that would be faced with having to comply with multiple sets of compliance obligations that would vary from region to region.

Also, FERC proposes that MBR sellers would be required to provide information only on “affiliate owners” that either: (i) are an “ultimate affiliate owner,” defined as the furthest upstream affiliate owner in the ownership chain, or (ii) have a franchised service area or MBR authority, or directly own or control generation; transmission; intrastate natural gas transportation, storage or distribution facilities; physical coal supply sources or ownership of or control over who may access transportation of coal supplies. This is also a scaled down requirement from the withdrawn Connected Entity NOPR, which also required information on unaffiliated owners that FERC now notes “may create a burden that is unrelated to the Commission’s determination whether a MBR seller qualifies for MBR authority.”

Finally, FERC proposes various changes to the asset reporting requirements, limiting the scope of information required in light of FERC’s ability to access the broader data base information that will be established in the new rule.

These proposed changes will impose new requirements on industry participants, but will impose significantly fewer burdens than FERC’s prior Connected Entity NOPR and Ownership NOPR would have imposed were they adopted as proposed. If you’d like to voice your support for the new NOPR or comment on any of its specific requirements, FERC is accepting comments on through September 19th, 2016.