Electric Cooperatives Face Increased Reporting Requirements

Many non-jurisdictional electric cooperatives must begin filing Electric Quarterly Reports (EQRs) with the Federal Energy Regulatory Commission (FERC), according to an April 21, 2011 proposal by FERC. The new reporting requirement would apply to electric cooperatives with more than 4 million megawatt-hours (MWh) of annual wholesale power sales, as well as balancing authorities with more than 1 million MWh of sales. Municipal utilities and other governmental utilities also would be subject to the new requirement. The new requirement would not go into effect until after FERC issues a final rule on the proposal, and it is not known what kind of a transition period FERC will provide to new filers.

In addition to extending the EQR filing requirement to non-jurisdictional sellers, FERC also proposed to revise the current EQR filing requirements to require all EQR filers to submit: (1) transaction dates and times and types of rates; (2) information on whether a transaction was reported to an index publisher; (3) data identifying any broker or exchange platform used in arranging a transaction; and (4) electronic tag (e-Tag) identification data. In a separate proposal, FERC would require the North American Electric Reliability Corporation (NERC) to provide FERC with the complete e-Tag information currently reported to NERC by electric utilities and other market participants that schedule transmission. Together, these proposals are intended to increase transparency of market prices and enhance FERC’s ability to police the markets for manipulation and other anti-competitive conduct.

Background

FERC’s EQR filing requirement currently applies only to regulated public utilities such as traditional investor-owned utilities, merchant generators and power marketers. The EQR filings collect, and make publicly available, information on jurisdictional sellers’ bulk power sales contracts and transactions, including counterparties, products, prices, quantities, and locations, all pursuant to a highly detailed, FERC-specified format. Last year, FERC initiated an inquiry into whether the EQR filing requirement should be extended to non-jurisdictional entities, such as electric cooperatives that are small or receive financing through the Rural Utilities Service (RUS), municipal utilities, and other governmental utilities such as the federal power marketing administrations (BPA, WAPA, etc.). Following comments on its inquiry, FERC issued the April 21, 2011 Notice of Proposed Rulemaking (NOPR) (Docket No. RM10-12-000).

FERC’s proposal is based on its authority under Federal Power Act Section 220, adopted by the Energy Policy Act of 2005. Section 220 authorizes FERC to require all market participants to report information on transmission and power market transactions. Section 220 is intended to promote price transparency in the wholesale power markets. Because Section 220 applies to “market participants,” FERC’s authority is not limited to rate-regulated public utilities, and thus Section 220 authorizes FERC to impose reporting requirements on entities that are not otherwise subject to FERC’s jurisdiction. Entities with only a “de minimis market presence” and transactions within the Electric Reliability Council of Texas (ERCOT) region are exempt from the Section 220 price transparency reporting requirements.