In order to encourage further transparency in energy prices, the Federal Energy Regulatory Commission, in an order issued Thursday, granted clarifications that extended its safe harbor assurances against prosecution for inadvertent mistakes.
The Commission also reminded market participants that they need to report any change in reporting status within 15 days of the change. This applies to all market-based sellers subject to the Market behavior Rules and all blanket certificate holders subject to Order No. 644. For those who may have forgotten to report changes, FERC has granted a waiver of the time limit until Aug. 1, 2005.
The Commission order grants a request from the Committee of Chief Risk Officers (CCRO) for safe harbor status for data providers contributing to its data hub, as long as they conform to the policy statement standards for price reporting, and to entities participating in the experimental stage of its data hub project. As for the data hub itself, it may apply for safe harbor status when it is providing data to others and can demonstrate it is following policy statement standards. The Commission noted that besides the established price publications, it has "also made clear that other innovations that bring price transparency and better confidence in the accuracy and reliability of wholesale prices are welcome."
"Therefore, we clarify that the safe harbor provisions of the policy statement apply to any entity that follows the standards in the policy statement and reports energy transaction data to another entity, whether it be a price index developer or a data hub of some sort, or another structure not yet proposed."
Also, if a company wants to use a data product produced by a data hub in a jurisdictional tariff, for instance, that company would have to show the data hub meets FERC's policy statement standards.
Regarding the CCRO's request that it "not be used as a target for investigations by the Commission into transactions data by participating companies," the FERC order said it did not intend to use any data hub or other new market structure as a "target, but any such entity may receive investigatory requests from the Commission." In its guidelines the Commission has made clear that requests for confidential information from price developers would be "in the context of a targeted investigation of possible false price reporting or market manipulation or other inquiry within the scope of our statutory responsibilities." Any new price collecting entity would be treated in the same manner as the approved price developers in that regard.
The Commission also clarified for National Fuel Gas Distribution Corp. that the safe harbor provisions continue to apply to its data submissions even though it has surrendered its blanket marketing certificate and is no longer subject to market behavior rules. National Fuel had suspended reporting, awaiting the clarification. FERC noted the purpose of the safe harbor is to encourage participation in price surveys and it would extend the safe harbor for companies complying with the policy statement rules even if they are not subject to the market behavior rules.
On the subject of notifications when a company changed its status from reporting to non-reporting or vice versa, the Commission noted it had received initial notifications from 756 market participants in December 2003 and January 2004. Since then it has received only 26 notifications of change from electric market participants in EL01-118 and 24 notifications in RM03-10 for the gas market. Some of these are duplicative. Since price index developers have reported increases in the numbers of companies reporting and volumes reported, "it is possible that some market participants have overlooked the requirement to notify the Commission of changes in their reporting status." Forgetful companies get a free pass to report by Aug. 1.
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