FERC Enforcement Turns Its Attention To Market Based Rate Entities’ Past Due EQRs
Recently, numerous retail energy marketers have received delinquency notices from FERC Enforcement. As FERC is in the process of transitioning to a new Electric Quarterly Report (“EQR”) submission process, FERC appears to be reviewing its records to identify EQR delinquencies.If any parties have been late with their EQR filings, they should expect a delinquency notice soon, if they have not received one already. Starting in Q3 2013 the old EQR filing system will be gone, and for the new filing requirements (including an upcoming technical conference), see our recent article.
According to Natara Feller, Principal Attorney at the Feller Energy Law Group, Vice Chair of the Energy and Natural Resources Market Regulation Committee of the American Bar Association, and former Secretary of the Energy Committee of the NYC Bar Association, “As the new system is being updated, it appears that FERC is also reviewing all EQR delinquencies and is sending out notices left and right. There seems to be some breathing room right now as FERC concentrates on the transition to the new filing system. I encourage all market-based rate entities to be proactive in getting their EQR filings organized, and up to date.”
Under FERC rules, a company must begin submitting EQRs in the quarter in which its market-based rate tariff became effective. Although many smaller market based rate entities did not realize EQRs were a requirement (even if the company has no sales to report), failure to timely file EQRs is a violation of FERC’s regulations, which may subject a company to civil penalties or revocation of the company’s market-based rate authority altogether, which would likely prove disastrous for any entity balancing their load in a real-time RTO/ISO market. FERC is encouraging delinquent filers to “immediately file the EQR for any other missing quarter(s).” Feller has worked with numerous companies to submit (or correct) past EQRs, and cure compliance gaps.
The EQR is a summary of data on power contracts and wholesale power sales during the reported quarter EQRs are required, even if the company has no activity to report. The purpose of these quarterly reports is to provide data for FERC to fulfill its regulatory functions of monitoring for market manipulation and ensuring fair competition. The EQR reports also create data that the public can use in order to “provide greater price transparency, promote competition, enhance confidence in the fairness of the markets, and provide a better means to detect and discourage discriminatory practices.”