FERC regulates wholesale electricity and natural gas markets.  “So what” said the retail energy marketer “I sell power on the retail market.  I have a license from the state, what do I need FERC authority for?”

Well . . . in order to meet customer demand, as a risk management tool, or perhaps because of some other change in business or market conditions, a retail energy marketer may buy more power than their customers need.  This excess power is typically sold off in an ISO/RTO’s “real time market.” This sale is a wholesale sale, and requires Federal Energy Regulatory Commission market based-rate authorization (FERC Authority).  Possessing the flexibility to sell off excess power in the real-time market is a central risk-management tool, and hey, it might even be required by your energy supplier.

Congratulations, You Have FERC Authority, Now What?

Below is a list of the top five FERC compliance requirements energy marketers need to know to stay of FERC’s naughty list.  In addition to the compliance requirements stated here, depending where you are, becoming a member of the applicable regional organized market, known as Regional Transmission Organizations or Independent System Operators (RTO/ISOs), is likely required.

1. File FERC Form 566 (20 Largest Retail Purchasers List) Annually By January 31

• This is a list of an entity’s 20 largest purchasers of retail energy over the last three years. The purchasers on this list need to be notified of their status.

2. File Electric Quarterly Reports (EQRs)

• EQRs summarize the terms and conditions of every effective service agreement for wholesale sales and provide transaction information on short term and long term wholesale power sales over the last quarter. Starting with the quarter an entity receives FERC Authority, EQRs need to be filed every quarter even if an entity does not have any sales to report.

• Due to technical problems related to changes in FERC’s EQR submission process, the EQR filing schedule is currently out of whack, with EQRs from 2013 Q3 due April 1-30, 2014. More on that next week.

3. Tell FERC About Any Material Changes

• All entities with FERC Authority must, within 30 days of a material change to a fact that FERC relied on when granting Authority, report the change. A financial restructure, sell off of 10% or more of the company, or acquisition of a generator are examples of activities that could trigger this requirement.

4. File Interlock Application Before Holding Management Positions With Multiple FERC Entities

• Individuals cannot hold multiple management positions, including officer and director positions, across multiple entities with FERC Authority without prior authorization. After getting authorization, these officers and directors must file annual reports thereafter.

5. Get Authorization Before Buying and Selling FERC Jurisdictional Entities and Assets

• Entities with FERC Authority need to get approval before: acquiring another entity with FERC Authority; acquiring other FERC jurisdictional assets; or selling an interest in the company that would change control (say, 10% or more).  This filing, made under Section 203 of the Federal Power Act is called a “203 Filing” amongst us FERC folk.

Click here or below for a handy printable guide: