FERC ordinance n ° 860 Mandates for sellers of electrical energy

On July 18, 2019, the Federal Energy Regulatory Commission issued Order No. 860. The Order requires entities having or seeking market-based tariff authority (sellers) to submit certain data related to market power analyzes of FERC, including its indicative screens and appendices on assets. , in a “relational database” maintained by FERC. The order also requires the presentation of information associated with long-term firm sales. When changes occur to previously submitted data, the relational database should be updated monthly by sellers. The database will be used, among other things, to develop asset schedules and indicative screens for FERC filings that require market power analysis. Finally, Ordinance No. 860 modified the deadline for filing “changes of status”. As of January 1, 2021, sellers will be required to comply with the order by submitting a referral request and using the “relational database” to make future market-based applications.

Background

Entities may apply for FERC authorization under Section 205 of the Federal Power Act to engage in sales for the resale of electrical power, capacity, or ancillary services. FERC grants authorization when such vendors demonstrate, among other things, that they and their affiliates have not or have sufficiently mitigated their horizontal and vertical market power through market power analysis. Horizontal market power is assessed on the basis of two indicative screens: hub supplier screens and wholesale market shares. Both screens use the capacity owned or controlled by the seller and its affiliates to assess the seller’s position in the market. Sellers must provide information regarding the capacity that they and their affiliates own and control in an asset schedule in their market-based rate requests. If the seller passes the two indicative screens, there is a rebuttable presumption that the seller does not have horizontal market power.

Updated market power analyzes and indicative screens are also required for triennial market power updates and certain “status change” filings.

Order No. 860

Ordinance No. 860 requires sellers to complete a new ‘relational database’ with information about previously reportable assets in the schedule of assets they own or control (including a new information requirement). on long-term firm sales), the assets of their non-market subsidiaries the tariff authority (excluding eligible exempt installations and downstream generation of the meter) and their “ultimate upstream affiliates” as defined by the Council. Notably, sellers are not required to submit the assets of their affiliates as long as those affiliates have market-based pricing authority. According to FERC, once the “relational database” is populated, the database will be able to create asset schedules for sellers submitting market power analyzes to the Commission, as the sellers will be bound by the ‘intermediary of “upstream ultimate affiliates”.

Implementation

The rules promulgated by Ordinance 860 come into effect on October 1, 2020, but the FERC has provided for an implementation period. First, sellers who received market-based pricing authorization before December 31, 2020 must submit a reference request in the “relational database” before the close of business on February 1, 2021. Second, sellers who filed an application for market-based tariff authorization, but have not received an order granting market-based tariff authorization by January 1, 2021, must submit a reference submission in the “relational database” before closing offices on February 1, 2021. Finally, as of February 1, 2021, any new applicant who wishes to obtain a market-based tariff authority will have to make a request in the “relational database” before submitting an initial request for pricing market-based.

Market-based rate requests effective February 1, 2021

In order to submit a market-based rate request, a seller will need to adhere to a three-step process. First, the seller must obtain and collect the information necessary to enter information into the “relational database” such as a FERC Business Identifier (CID), asset identifiers for all generators that it owns or controls that are not included in the EIA-860. database and a FERC-generated ID for any ultimate upstream affiliate that does not have a CID or Legal Entity Identifier (LEI). Second, the seller must submit relevant asset information, identify the ultimate upstream subsidiary (s) and provide other required data in the “relational database”. The seller will have the opportunity to consult his associated asset annex and, if necessary, to submit a submission to the “relational database” to correct any errors. Third, the seller must submit their market-based rate filing through eFiling and use the serial number associated with their corresponding asset schedule in the filing. The heritage annex must be created less than 15 days before the deposit. The seller may point out in his covering letter any error in the declarations of his affiliates affecting his patrimonial annexes.

Updates to the “Relational database” and “Status change” files

Order # 860 requires sellers to update the “relational database” with any changes to their own assets or previously submitted information (not changes from each of its market-based pricing affiliates) by the 15e day of the month following the change. This update requirement is necessary even when the update does not involve the authorization of a seller to sell at market rates and would not reach the level of a “change of status” filing.

Prior to Order 860, the FERC required sellers to file a “change of status” within 30 days of a change in the facts or circumstances on which the FERC relied to grant tariff authority based. in the seller’s market. Under Order 860, sellers will be required to submit “change of status” declarations on a quarterly basis. For example, if a seller acquires a 150 MW generator on February 18e and that there is no compensatory decrease in production which brings the net increase below 100 MW, then the seller must make a “change of status” deposit no later than April 15e.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.Revue nationale de droit, volume IX, number 221


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