The Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued two orders on July 18, 2019 revising the requirements applicable to market-based rate (“MBR”) sellers. The first, Order No. 861, lightens the regulatory requirements for MBR sellers in certain RTO/ISO-administered markets by eliminating the requirement to submit indicative screens in the horizontal market power analysis in initial MBR applications, triennial updates, and change-in-status notices. The second, Order No. 860, may also lighten regulation by reducing the amount of ownership information MBR sellers must report to the Commission, but also imposes new reporting requirements, including submissions to a relational database that will be maintained by FERC Staff to link MBR sellers and their affiliates.
Order No. 861
Order No. 861 eliminates the requirement that MBR sellers in RTO/ISO-administered energy, ancillary services, and capacity markets subject to FERC-approved RTO/ISO market monitoring and mitigation submit indicative horizontal market power screens. Instead, a seller may include a statement in its filing that it is relying on FERC-approved market monitoring and mitigation to mitigate any potential market power. With the exception of MBR sellers making capacity sales in CAISO and SPP, discussed below, this will lighten regulation on MBR sellers in ISOs/RTOs by eliminating the requirement to submit indicative screens in their initial MBR applications, triennial updates, and change-in-status notices.
The exemption will not apply to MBR sellers making capacity sales in CAISO or SPP, because CAISO and SPP do not have an RTO/ISO-administered capacity market. In addition, the Commission determined that MBR capacity sellers in CAISO and SPP can no longer rely on the rebuttable presumption that FERC-approved RTO/ISO market monitoring and mitigation is sufficient to address horizontal market power concerns for their capacity sales in CAISO and SPP. Therefore, SPP and CAISO capacity sellers must still submit indicative screens and, now, any seller that fails the indicative screens must submit a delivered price test or other evidence that it lacks market power in the capacity markets. CAISO and SPP sellers will be able to rely on Order No. 861’s exemption for their sales of energy and ancillary services.
The order is effective September 24, 2019 and FERC Staff announced that the new rules will be applicable to triennial reviews for the Northeast region due in December 2019 and June 2020.