This updates our September 28, 2015 report on FERC’s NOPR to require “market participants” in RTO and ISO organized electricity markets to obtain a Legal Entity Identifier (LEI), an alpha-numeric identifier issued through the Global LEI System, and to provide information regarding their “Connected Entities” to the RTO/ISO in which they operate.

Our September 28 report contains a detailed description of the NOPR.  To briefly recapitulate, the NOPR defines a market participant as any seller or buyer of services offered in those markets.  The “Connected Entity” definition includes:

  • Any entity with a 10 percent active or passive ownership interest in the market participant or under common control with the market participant;
  • Persons having a governing position in or acting as traders on behalf of the market participant;
  • Lenders to the market participant who meet certain criteria specified in the NOPR; and
  • Providers of certain services to the market participant such as asset managers or fuel suppliers.

The NOPR contemplates submission of Connected Entity information by market participants to ISO/RTOs who collect, collate and tender the information to FERC which will use it for market surveillance purposes to help detect instances of market manipulation or abuse.  Comments on the NOPR were originally due December 8, 2015.

On October 28, 2015, several parties jointly filed a motion seeking a technical conference and an extension of the deadline for submitting comments on the NOPR.  The joint motion expressed general support for the NOPR’s objectives but also concern about ambiguities in the NOPR, its extensive scope, and the inclusion in the Connected Entity definition of entities who do not provide services within ISO/RTO markets and are not otherwise subject to FERC jurisdiction.  The motion asserted that the NOPR’s reporting burdens could exceed the NOPR’s potential benefits.  According to the motion, which was supported by separate filings by several industry trade groups, a technical conference would serve to iron out the NOPR’s ambiguities and lead to the development of an alternative rule that would satisfy FERC’s market surveillance needs while reducing burdens on reporting parties.

On November 8, 2015 FERC issued an order granting the motion, convening a technical conference to be held with FERC Staff on December 8, 2015, and extending the date for submitting comments on the NOPR to January 22, 2016.  FERC will shortly issue a notice setting out details of the conference including “exact times and an agenda.”