On January 21, 2010, FERC issued a Notice of Inquiry (“NOI”) to look at whether or not to expand its Electric Quarterly Report (“EQR”) filing requirements to those entities excluded from FERC jurisdiction under section 205 of the Federal Power Act (“FPA”).  The NOI will aid FERC in deciding if changes should be made to section 220 of the FPA, as adopted in the Energy Policy Act of 2005(“EPAct 2005”).

The EPAct 2005 gave FERC the authority to “protect consumers” by gathering information about pricing and availability of natural gas and electricity sold in interstate commerce.  FERC-regulated utility companies are required to file quarterly reports of transaction information. Pursuant to the NOI, FERC is seeking to determine whether or not to extend these filing requirements to publicly owned utilities, municipal utilities, public utility districts, rural cooperatives and federal entities.  The U.S. Energy Information Administration said in 2007 that these types of entities, excluded from filing requirements under section 205, made up 29 percent of electric sales in 2007. 

One of the goals of the EQR is to make sure that FERC has the information it needs to highlight areas of market power where further inquiry might be necessary.  By extending the EQR filing requirement to those currently excluded under section 205 of the FPA, FERC believes it would be able to more effectively monitor market presence.  Additionally, FERC would be able to compare price formulation, number of sales and market concentration from all sources, not just those market participants subject to its jurisdiction under section 205.

The information gathered regarding market power and concentration through EQR greatly informs FERC’s decisions whether or not to grant market-based rate.  FERC believes that extending EQR filing requirements to previously-excluded market participants would bolster its regulatory scheme and enhance oversight. 

A copy of FERC’s Notice of Inquiry is available at www.ferc.gov under Docket No. RM10-12-000.