FERC Revises Market-Based Rate Procedures

Public Utilities Fortnightly, March 2016

The Federal Energy Regulatory Commission (FERC) requires that energy suppliers desiring to make wholesale sales of electric power at market-based rates (MBR) meet certain criteria. On October 16, 2015, the FERC issued Order No. 816, which at once refined, clarified, and revised various aspects of the existing rules.

In “FERC Revises Market-Based Rate Procedures” (Public Utilities Fortnightly, March 2016), Analysis Group Principal Eric Korman and Morgan Lewis partner Mark Williams explore the order's effects on energy suppliers filing to obtain or keep MBR authority. Some qualification requirements have become more rigorous, they explain, while others have been slightly loosened – for example, with this order, “[t]he commission has … removed the requirement to file quarterly land acquisition reports, reducing the burden on filers.”

On the whole, while the “modifications … may take existing MBR entities some time to digest and implement,” in the authors' view, “most of the changes are straightforward.” The authors continue, “The detailed recommendations and clarifications in Order No. 816 indicate that the commission is scrutinizing the underlying calculations of market power analyses. In order to reduce the likelihood of a follow-up request by commission staff, filers should be sure that all assumptions in the analyses are well-founded and explained, and that the workpapers provided with the filing are organized and clear.”

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Williams M, Korman E