“FERC Proposes Expanding Disclosure Requirements for RTO and ISO Market Participants to Cover Broader Array of Information”
On September 17, 2015, the Federal Energy Regulatory Commission (“FERC”) issued a notice of proposed rulemaking inviting comments on new regulations that, if adopted, would require all entities that participate in markets administered by regional transmission organizations (“RTOs”) and independent system operators (“ISOs”) to identify a wider array of business relationships than currently required. The proposed rule is intended to improve FERC’s ability to detect market manipulation.
This Stroock Special Bulletin provides an overview of the proposed rule, which would replace each RTO’s and ISO’s existing affiliate disclosure requirements for its market participants with new tariff provisions requiring the identification of “Connected Entities.” The proposed rule also would require each RTO and ISO market participant to obtain a Legal Entity Identifier (“LEI”), a unique identification assigned to single entities, for itself and its Connected Entities. The proposed rule would require all RTOs and ISOs to provide this information to FERC, and each of these entities would have the authority to audit this data. RTOs, ISOs, and FERC would rely on the information to identify, or rule out, potential market manipulation.