FERC on Thursday rescinded two "redundant" market behavior rules and adopted a final rule that would codify four other existing market behavior rules, which currently are included in individual electric tariffs.
Specifically, the Federal Energy Regulatory Commission eliminated market behavior Rules 2 and 6 for the electric market, which include a general prohibition against market manipulation and require regulated companies to comply with the agency's standards of conduct. On the gas side, the Commission rescinded the market behavior rule prohibiting market manipulation.
Both market rules, which were adopted in November 2003, were deemed to be "redundant" in the wake of FERC's approval in late January of a broader anti-manipulation rule (Order 670) for the natural gas and electric power markets (see Daily GPI, Jan. 20). The Commission sought industry comments on repealing the November 2003 rules to make way for the new anti-manipulation rule.
The four orders issued Thursday complete the process of revamping the electric and natural gas market behavior rules in light of the new anti-market manipulation rule, according to staff [EL06-16, RM06-13, RM06-14, RM06-5]. The more expansive anti-market manipulation authority was mandated under the Energy Policy Act of 2005, and gives FERC oversight over any entity in the energy market that is involved in a jurisdictional transaction.
On the electric side, the Commission also rescinded all the market behavior rules included in electric tariffs, and instead codified the rules in the agency's regulations. The behavior rules (1,3,4 and 5) require sellers to do the following:
As for natural gas, the behavior rules (1,3,4 and 5) already are part of the Commission's regulations and required no adjustments, according to FERC. The agency also proposed a rule to extend the record-retention requirements for jurisdictional wholesale sellers of natural gas and electricity to five years from the current three years.
"[These] actions will go a long way toward protecting consumers from unscrupulous behavior while providing clarity to the industry as to what is expected from them. This simplifies the Commission's rules and regulations, avoids confusion and provides greater regulatory certainty," said Chairman Joseph Kelliher.
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