Final Rule Published

Federal Register / Vol. 77, No. 249 / Friday, December 28, 2012 / Rules and Regulations
respect to protecting the confidentiality and
security of nonpublic personal information.
Sample Clause A–7
We restrict access to nonpublic personal
information about you to [provide an
appropriate description, such as ‘‘those
employees who need to know that
information to provide products or services
to you’’]. We maintain physical, electronic
and procedural safeguards that comply with
federal standards to safeguard your
nonpublic personal information.
[66 FR 21252, Apr. 27, 2001, as amended at
74 FR 62984, Dec. 1, 2009]
[FR Doc. 2012–31273 Filed 12–27–12; 8:45 am]
BILLING CODE 1505–01–D

DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 366
[Docket No. RM11–12–000; Order No. 771]

Availability of E-Tag Information to
Commission Staff
Federal Energy Regulatory
Commission, DOE.
ACTION: Final rule.
AGENCY:

In this Final Rule, the Federal
Energy Regulatory Commission (the
Commission) is amending its
SUMMARY:

regulations, pursuant to sections 222
and 307(a) of the Federal Power Act
(FPA), to grant Commission access, on
a non-public and ongoing basis, to the
complete electronic tags (e-Tags) used to
schedule the transmission of electric
power interchange transactions in
wholesale markets. This Final Rule will
require e-Tag Authors (through their
Agent Service) and Balancing
Authorities (through their Authority
Service) to take appropriate steps to
ensure Commission access to the e-Tags
covered by this Final Rule by
designating the Commission as an
addressee on the e-Tags. After the
Commission is designated as an
addressee, the Commission will access
the e-Tags by contracting with a
commercial vendor. The commercial
vendor will provide data management
services and receive e-Tags addressed to
the Commission. The information made
available under this Final Rule will
bolster the Commission’s market
surveillance and analysis efforts by
helping the Commission to detect and
prevent market manipulation and anticompetitive behavior. This information
will also help the Commission monitor
the efficiency of markets and better
inform Commission policies and
decision-making, thereby helping to
ensure just and reasonable rates. In
addition, this Final Rule will require

76367

that e-Tag information be made
available to regional transmission
organizations and independent system
operators and their Market Monitoring
Units, upon request to e-Tag Authors
and Authority Services, subject to
appropriate confidentiality restrictions.
DATES: Effective Date: This Final Rule
will become effective February 26, 2013.
FOR FURTHER INFORMATION CONTACT:
Maria Vouras (Technical Information),
Office of Enforcement, Federal Energy
Regulatory Commission, 888 First
Street NE., Washington, DC 20426,
Telephone: (202) 502–8062, Email:
[email protected].
William Sauer (Technical Information),
Office of Energy Policy and
Innovation, Federal Energy Regulatory
Commission, 888 First Street NE.,
Washington, DC 20426, Telephone:
(202) 502–6639, Email:
[email protected].
Gary D. Cohen (Legal Information),
Office of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street NE., Washington, DC
20426, Telephone: (202) 502–8321,
Email: [email protected].
SUPPLEMENTARY INFORMATION:
Order No. 771
Final Rule
Table of Contents
Paragraph
No.

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I. Background ............................................................................................................................................................................................
II. Discussion ............................................................................................................................................................................................
A. Legal Authority to Require E-Tag Access ...................................................................................................................................
1. E-Tag NOPR ............................................................................................................................................................................
2. Comments ...............................................................................................................................................................................
3. Commission Determination ...................................................................................................................................................
B. Need for Commission Access to E-Tag Information ...................................................................................................................
1. E-Tag NOPR ............................................................................................................................................................................
2. Comments ...............................................................................................................................................................................
3. Commission Determination ...................................................................................................................................................
C. Implementing the Commission’s E-Tag Access ..........................................................................................................................
1. E-Tag NOPR ............................................................................................................................................................................
2. Comments ...............................................................................................................................................................................
3. Commission Determination ...................................................................................................................................................
D. Providing E-Tag Access to MMUs, RTOs and ISOs ...................................................................................................................
1. E-Tag NOPR ............................................................................................................................................................................
2. Comments ...............................................................................................................................................................................
3. Commission Determination ...................................................................................................................................................
E. Confidentiality of Data .................................................................................................................................................................
1. E-Tag NOPR ............................................................................................................................................................................
2. Comments ...............................................................................................................................................................................
3. Commission Determination ...................................................................................................................................................
III. Information Collection Statement ......................................................................................................................................................
IV. Regulatory Flexibility Act ..................................................................................................................................................................
V. Document Availability ........................................................................................................................................................................
VI. Effective Date and Congressional Notification .................................................................................................................................
Before Commissioners: Jon Wellinghoff,
Chairman; Philip D. Moeller, John R.
Norris, Cheryl A. LaFleur, and Tony T.
Clark. Issued December 20, 2012.

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1. In this Final Rule, the Federal
Energy Regulatory Commission
(Commission) is amending its
regulations, pursuant to sections 222

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Federal Register / Vol. 77, No. 249 / Friday, December 28, 2012 / Rules and Regulations

(FPA),1 to grant the Commission access,
on a non-public and ongoing basis, to
the complete electronic tags (e-Tags) 2
used to schedule the transmission of
electric power interchange transactions
in wholesale markets. This Final Rule
will require e-Tag Authors 3 (through
their Agent Service 4) and Balancing
Authorities 5 (through their Authority
Service 6) to take appropriate steps to
ensure Commission access to the e-Tags
covered by this Final Rule by
designating the Commission as an
addressee on the e-Tags.7 After the
Commission is designated as an
addressee, the Commission will access
the e-Tags by contracting with a
commercial vendor. The commercial
vendor will provide data management
services and receive e-Tags addressed to
the Commission. E-Tag Authors and
Balancing Authorities will be required
to ensure Commission access to e-Tag
data under this Final Rule by no later
than March 15, 2013.
2. In addition, this Final Rule requires
that Regional Transmission
1 16

U.S.C. 824v, 825f (2006).
purposes of this rulemaking, ‘‘complete eTags’’ refers to: (1) e-Tags for interchange
transactions scheduled to flow into, out of, or
within the United States’ portion of the Eastern or
Western Interconnection, or into the Electric
Reliability Council of Texas and from the United
States’ portion of the Eastern or Western
Interconnection, or from the Electric Reliability
Council of Texas into the United States’ portion of
the Eastern or Western Interconnection; and (2)
information on every aspect of each such e-Tag,
including all applicable e-Tag-IDs, transaction
types, market segments, physical segments, profile
sets, transmission reservations, and energy
schedules.
3 E-Tag Authors are typically Purchasing-Selling
Entities. A Purchasing-Selling Entity is the entity
that purchases or sells, and takes title to, energy,
capacity, and Interconnected Operations Services.
Purchasing-Selling Entities may be affiliated or
unaffiliated merchants and may or may not own
generating facilities. See NAESB Electronic Tagging
Functional Specifications, Version 1.8.1.1, at 15.
4 The Agent Service provides the ability for initial
creation of an e-Tag and the electronic transfer of
that information to the appropriate Authority
Service. E-Tag Authors are responsible for
providing this service directly or by arranging with
a third party to provide this service as their agent.
See NAESB Electronic Tagging Functional
Specifications, Version 1.8.1.1, at 24.
5 A Balancing Authority is responsible for
integrating resource plans ahead of time,
maintaining load-interchange-generation balance
within a Balancing Authority Area and supporting
Interconnection frequency in real-time. See NAESB
Electronic Tagging Functional Specifications,
Version 1.8.1.1, at 10. Sink Balancing Authorities,
defined as the Balancing Authority in which the
load (sink) is located for an Interchange
Transaction, use an Authority Service to
electronically validate e-Tags and distribute them
for approval by other entities. See NAESB
Electronic Tagging Functional Specifications,
Version 1.8.1.1, at 17, 24.
6 The Authority Service validates and distributes
e-Tags for approval on behalf of the Sink Balancing
Authority. See NAESB Electronic Tagging
Functional Specifications, Version 1.8.1.1, at 24.
7 These steps are described in more detail below.

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Organizations (RTOs), Independent
System Operators (ISOs) and their
Market Monitoring Units (MMUs) shall
be afforded access to complete e-Tags,
upon request to e-Tag Authors and
Authority Services, subject to their
entering into appropriate confidentiality
agreements.
I. Background
3. E-Tags, also known as Requests for
Interchange, are used to schedule
interchange transactions 8 in wholesale
markets. E-Tags document the
movement of energy across an
interchange over prescribed physical
paths, for a given duration, and for a
given energy profile(s), and include
information about those entities with
financial responsibilities for the receipt
and delivery of the energy. E-Tags may
contain information about the different
types of entities involved in moving
power across interchanges, including
generators, transmission system
operators, energy traders, and Load
Serving Entities. E-Tags are delivered to
the Interchange Distribution Calculator
(IDC) and webSAS, which are used in
the TLR procedure IRO–006–4.1 and
WECC Unscheduled Flow Standard
IRO–STD–006–0 for the Eastern and
Western Interconnection, respectively.
Currently, the North American Electric
Reliability Corporation (NERC) and the
Western Electricity Coordinating
Council (WECC) receive all e-Tag data
in the Eastern and Western
Interconnections, respectively, in near
real-time, to assist Reliability
Coordinators in identifying transactions
that may need to be curtailed to relieve
overloads when transmission
constraints occur. At present, NERC and
WECC contract with OATI, a
commercial vendor, for data
management services related to IDC and
webSAS. E-Tags are also included in the
business practice standards adopted by
the North American Energy Standards
Board (NAESB) 9 and incorporated by
8 NERC’s Glossary of Terms Used in Reliability
Standards (updated November 15, 2012) defines an
interchange transaction as ‘‘[a]n agreement to
transfer energy from a seller to a buyer that crosses
one or more Balancing Authority Area boundaries.’’
See http://www.nerc.com/files/
Glossary_of_Terms.pdf.
9 See, e.g., NAESB Wholesale Electric Quadrant
(WEQ) Business Practice Standards (Coordinate
Interchange) requirement 004–1 (‘‘All requests to
implement bilateral Interchange (excluding
Interchange for emergency energy) between a
Source BA and a Sink BA, where one or both BAs
are located in either the Eastern Interconnection or
Western Interconnection, shall be accomplished by
the submission of a completed and accurate RFI) to
the Sink BA’s registered e-Tag Authority Service’’)
and requirement 004–2 (‘‘Until other means are
adopted by NAESB, the primary method of
submitting the RFI [Request for Interchange] shall
be an e-Tag communicated to and managed by the

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reference into the Commission’s
regulations and public utility tariffs.
4. E-Tagging was first implemented by
NERC on September 22, 1999, as a
process to improve the speed and
efficiency of the tagging process, which
had previously been accomplished by
email, facsimile, and telephone
exchanges.10 E-Tags require that, prior
to scheduling transactions, one of the
market participants involved in a
transaction must submit certain
transaction-specific information, such as
the source and sink control areas (now
referred to as Balancing Authority
Areas) and control areas along the
contract path, as well as the
transaction’s level of priority and
transmission reservation Open Access
Same-Time Information System (OASIS)
reference numbers, to control area
operators and transmission operators on
the contract path.11
5. Communication, submission,
assessment, and approval of an e-Tag
must be completed before the
interchange transaction is
implemented.12 The Interchange
Scheduling and Coordination (INT)
group of NERC Reliability Standards
sets forth requirements for
implementing interchange transactions
through e-Tags. E-Tags are submitted
pursuant to the business practices set
forth by NAESB. Those business
practices incorporate the protocols
enumerated in the NAESB Electronic
Tagging Functional Specifications for
communicating and processing e-Tags.
NAESB business practice standards for
the wholesale electric industry are
mandatory when they have been
incorporated by reference by the
Commission into its regulations.13
Several of the incorporated business
practice standards require processing eSink BA’s registered e-Tag authority service using
protocols compliant with the Version 1.8.1
Electronic Tagging Functional Specification.’’)
NAESB Wholesale Electric Quadrant (WEQ)
Business Practice Standards (Version 003),
published July 31, 2012.
10 Open-Access Same-Time Information System
and Standards of Conduct, 90 FERC ¶ 61,070, at
61,258–59 (2000).
11 Id.
12 See Mandatory Reliability Standards for the
Bulk-Power System, Order No. 693, FERC Stats. &
Regs. ¶ 31,242, at P 795, order on reh’g, Order No.
693–A, 120 FERC ¶ 61,053 (2007).
13 See Standards for Business Practices and
Communication Protocols for Public Utilities, Order
No. 676, FERC Stats. & Regs. ¶ 31,216, (2006), reh’g
denied, Order No. 676–A, final rule, 116 FERC
¶ 61,255 (2006), final rule, Order No. 676–B, FERC
Stats. & Regs. ¶ 31,246 (2007), final rule, Order No.
676–C, FERC Stats. & Regs. ¶ 31,274 (2008), order
granting clarification and denying reh’g, Order No.
676–D, 124 FERC ¶ 61,317 (2008), final rule, Order
No. 676–E, FERC Stats. & Regs. ¶ 31,299 (2009),
final rule, Order No. 676–F, FERC Stats. & Regs.
¶ 31,309 (2010).

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Federal Register / Vol. 77, No. 249 / Friday, December 28, 2012 / Rules and Regulations
Tags in accordance with these
specifications.14
6. In reviewing the data that currently
are available to the Commission and its
staff and necessary for conducting
effective market surveillance and
analysis, the Commission has
determined that gaining access to the
complete e-Tags used for interchange
transactions will enhance the
Commission’s efforts to detect and
prevent market manipulation and
monitor market developments.
7. The need to gain access to e-Tag
data led the Commission to issue a
Notice of Proposed Rulemaking on April
21, 2011, proposing to require NERC to
make the complete e-Tags used to
schedule the transmission of electric
power in wholesale markets available to
Commission staff on an ongoing, nonpublic basis.15 The E-Tag NOPR also
invited comments on whether the
Commission should require that
complete e-Tags be made available to
MMUs.
8. In response to the E-Tag NOPR,
comments were filed by 14
commenters.16 The comments expressed
a variety of views, some supporting the
Commission’s proposal to require
Commission access to complete e-Tag
information used to schedule
interchange transactions for market
monitoring purposes,17 and others
opposing the Commission’s proposal.18
Some comments focused on whether
NERC is the appropriate entity to
provide access to the e-Tags and
whether their data would serve market
monitoring or reliability purposes. The
Pa Commission points out that ‘‘any
regulatory provision, adopted by the
[Commission], that allows it to better
perform its statutory function of
preventing anti-competitive and/or
market manipulative behavior at the
wholesale level may have beneficial
effects for state commissions, tasked
with protecting their residents from
such practices, at the retail level.’’ 19
NERC commented that it has not owned
or operated an e-Tag system and that it
will not extend its contract with OATI
for IDC operation services (which
includes e-Tag information) after the
current term expires in March 2013.20
14 See

supra note 9.
of E-Tag Information to
Commission Staff, Notice of Proposed Rulemaking,
FERC Stats. & Regs. ¶ 32,675 (2011) (E-Tag NOPR).
16 In an appendix to this Final Rule, we identify
all the commenters along with the abbreviations we
are using in this Final Rule for these commenters.
17 CAISO/DMM, DC Energy, Market Monitors, Pa
Commission, PJM/SPP, Powerex, and SoCal Edison.
18 EPSA, MID, NERC, Southern, Trade
Associations, and WECC.
19 Pa Commission at 4.
20 NERC at 4.

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The commenters were split as to
whether they supported allowing MMUs
for RTOs and ISOs to have access to
complete e-Tag information, including
access to e-Tags for transactions outside
of the markets the MMUs monitor and
whether such access would raise
confidentiality issues.21 Other
commenters urged the Commission to
grant access to e-Tags to the staffs of
ISOs and RTOs.22 Some commenters
emphasized that market monitoring via
e-Tags will be a complex and
challenging enterprise.23 In addition,
some comments stated that, if the
Commission proceeds with the proposal
in the E-Tag NOPR, it would need to
enlist the services of an outside
contractor to provide database services
to accomplish the creation and
collection of e-Tag data as market
participants usually only have access to
data related to their own transactions.24
Trade Associations disagreed with the
burden estimate included in the E-Tag
NOPR, arguing that it is understated.25
Finally, several commenters argued that
it would be helpful for the Commission
to convene a technical conference or
notice of inquiry before taking final
action.26
9. The Commission also invited reply
comments, so that interested persons
would have an opportunity to comment
on the ideas and proposals expressed in
the comments that may not have been
included as part of the proposals in the
E-Tag NOPR.27 Reply comments were
filed by Trade Associations and NAESB.
Trade Associations reiterated many of
the arguments it raised in its initial
comments. In its reply comments,
NAESB stated that it does not take a
position on the E-Tag NOPR, but notes
that existing e-Tag mechanisms with
some modification can support the
distribution of e-Tag information to the
Commission.
II. Discussion
A. Legal Authority To Require E-Tag
Access
1. E-Tag NOPR
10. In the E-Tag NOPR, the
Commission proposed to require NERC
to provide Commission staff with
ongoing access to the e-Tags used to
schedule interchange transactions in
21 MMU access to E-Tags was supported by
CAISO/DMM, DC Energy, Market Monitors, and
PJM/SPP and was opposed by MID, Powerex,
Southern.
22 CAISO/DMM and PJM/SPP.
23 SoCal Edison.
24 EPSA at 3.
25 Trade Associations at 8–9.
26 NERC at 7; EPSA at 6.
27 77 FR 12760 (Mar. 2, 2012).

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wholesale markets on a non-public
basis. The E-Tag NOPR stated that e-Tag
information would help the
Commission in its efforts to monitor
markets, prevent market manipulation,
assure just and reasonable rates, and
ensure compliance with certain
business practice standards adopted by
NAESB and incorporated by reference
into the Commission’s regulations and
the filed tariffs of public utilities.28 In
the E-Tag NOPR, the Commission stated
that it has authority over public utilities
that make wholesale power sales or that
provide wholesale transmission service
to report the details of their
transactions, including complete e-Tag
data.29 The E-Tag NOPR also stated that,
under FPA section 307(a), the
Commission has, among its powers,
authority to investigate any facts,
conditions, practices, or matters it may
deem necessary or proper to determine
whether any person, electric utility,
transmitting utility or other entity may
have violated or might violate the FPA
or the Commission’s regulations, or to
aid in the enforcement of the FPA or the
Commission’s regulations, or to obtain
information about wholesale power
sales or the transmission of power in
interstate commerce.30 Furthermore, the
E-Tag NOPR stated that requiring NERC,
rather than individual market
participants, to provide access to e-Tag
data would avoid burdening market
participants with a requirement to file
the same data with both NERC and the
Commission and avoid burdening the
Commission with developing and
maintaining a new system to capture
such data from individual market
participants.31
2. Comments
11. Many commenters focused on
whether the Commission could use its
reliability-related authority under FPA
section 215 to require NERC to provide
the Commission with access to e-Tags.
In particular, NERC, MID, Trade
Associations, and WECC assert that the
Commission may not use its reliabilityrelated jurisdiction over NERC (derived
from NERC’s status as the Commissionapproved Electric Reliability
Organization (ERO) under FPA section
215) to pursue market oversight matters
that fall outside the scope of section
215.32 NERC questions whether it
should be implicated in subjects and
activities that are outside the confines of
28 E-Tag

NOPR, FERC Stats. & Regs. ¶ 32,675 at

P 1.
29 Id.

P 9.

30 Id.
31 Id.

P 10.
at 6–7, MID at 6–7, Trade Associations
at 3–5, WECC at 3.
32 NERC

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section 215.33 WECC states that it
accesses e-Tag data sought by the
Commission for the Western
Interconnection pursuant to its
authorities and responsibilities as a
Regional Entity under section 215.34
WECC recognizes that NERC and the
Commission may request e-Tag data
from WECC under FPA section 215,
because the WECC Interchange Tool is
an activity funded in accordance with
section 215, but WECC does not support
the Commission’s proposal to require
NERC or WECC to provide e-Tag data
for purposes other than those authorized
in section 215.35
12. NERC states it is not clear that its
involvement will be limited without
additional information about how the
Commission will collect and use e-Tag
data.36 MID contends that the proposal
would allow the ERO to engage in
activities not related to reliability
standards, thereby ‘‘stepping onto a
slippery slope of later being tasked with
other, potential activity outside of the
ERO’s statutory mandate.’’ 37 MID also
indicates concern that the Commission’s
request for data may result in a greater
amount of work on the part of the ERO
than anticipated and distract the ERO
from ensuring reliability of the grid.38
13. In addition, Trade Associations
argue that FPA section 307(a) does not
provide a sufficient basis for the
Commission’s proposal.39 Trade
Associations assert that section 307 is
not a general grant of authority to collect
information that may be interesting or
potentially useful to the Commission.40
Rather, contend Trade Associations,
FPA section 307 pertains to the
collection of information, such as
through subpoenas or other processes,
related to the investigation of particular
matters.41 According to Trade
Associations, unless the Commission
seeks access to e-Tags in the context of
a ‘‘lawfully initiated investigation under
the FPA,’’ 42 section 307 is not a
separate or independent grant of
information collection authority that
may be used for general market
oversight purposes by the Commission.
33 NERC

at 7.
at 4.
35 Id. at 4–5.
36 NERC at 7.
37 MID at 6.
38 Id. at 8.
39 Trade Associations at 4.
40 Id. at 6 (citing Federal Power Commission v.
Metropolitan Edison Co., et al., 304 U.S. 375 (1938)
(FPC v. Metropolitan Edison); Mississippi Power &
Light Co. v. Federal Power Commission, 131 F.2d
148 (5th Cir. 1942) (Mississippi Power & Light v.
FPC); Survey on Operator Training Practices, 110
FERC ¶ 61,050 n.3 (2005)).
41 Trade Associations at 6.
42 Id. (citing 18 CFR Part 1b).

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In reply comments, Trade Associations
state that, if the Commission decides to
collect or access e-Tag data, the
Commission should do so selectively,
on an as-needed basis for particular
power flows, where the Commission has
questions that only e-Tag data may help
answer. Similarly, Southern contends
that, if the Commission seeks e-Tag
data, it should submit targeted requests
to appropriate entities.43
3. Commission Determination
14. At the outset, the Commission
notes that neither the E-Tag NOPR nor
the Final Rule in this proceeding relies
on the Commission’s reliability
authority under FPA section 215 to gain
access to e-Tags. Therefore, any
comments founded on concerns about
the Commission’s authority (or lack of
authority) under FPA section 215 are off
point. Rather, as discussed below, the
Commission’s anti-manipulation
authority under FPA section 222, taken
together with its investigative authority
under FPA section 307(a), provides the
basis for accessing e-Tag information
related to wholesale electricity market
transactions.
15. As part of the Energy Policy Act
of 2005 (EPAct 2005),44 Congress
granted the Commission authority over
the prohibition of market manipulation
in connection with the purchase or sale
of electric energy and transmission
subject to the Commission’s jurisdiction
in FPA section 222. In addition, FPA
section 222 prohibits energy market
manipulation by ‘‘any entity,’’ including
entities exempted from the
Commission’s rate-related jurisdiction
by FPA section 201(f).45 The application
of this provision to ‘‘any entity’’ and not
solely to public utilities is further
evidenced by section 201(b)(2) of the
FPA, which explicitly states that certain
provisions, including section 222, shall
apply to entities that fall within the
scope of FPA section 201(f).46
Commission access to the information
contained in e-Tags will help the
Commission determine whether market
manipulation is taking place and, absent
these data, the Commission will be more
43 Southern
44 EPAct

at 2.
2005, Public Law 109–58, 119 Stat. 594

(2005).
45 16 U.S.C. 824(f).
46 In particular, FPA section 201(b)(2) provides:
‘‘Notwithstanding section 201(f), the provisions of
section[] * * * 222 shall apply to the entities
described in such provisions, and such entities
shall be subject to the jurisdiction of the
Commission for purposes of carrying out such
provisions and for purposes of applying the
enforcement authorities of this Act with respect to
such provisions.’’ 16 U.S.C. 824(b)(2).

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limited in its ability to perform this
function.
16. In turn, FPA section 307(a) grants
the Commission authority to ‘‘obtain[]
information about the sale of electric
energy at wholesale in interstate
commerce and the transmission of
electric energy in interstate commerce.’’
E-Tag data unquestionably provides
‘‘information about the sale of electric
energy at wholesale in interstate
commerce and the transmission of
electric energy in interstate commerce.’’
Moreover, as discussed below with
regard to the Commission’s need for eTag data, this information will help the
Commission ascertain whether ‘‘any
person, electric utility, transmitting
utility, or other entity has violated or is
about to violate any provisions of this
Act or any rule, regulation, or order
thereunder.’’ Thus, we conclude that
obtaining e-Tag data from market
participants or other entities is within
the Commission’s authority under FPA
section 307(a). And the Commission’s
surveillance efforts are encompassed
within its broad investigative authority
as they are precisely what section 307
is designed to permit—i.e., ‘‘to
determine whether any person [or
entity] * * * has violated or is about to
violate any provisions of the [FPA]
* * * or in obtaining information about
the sale of electric energy at wholesale
in interstate commerce and the
transmission of electric energy in
interstate commerce.’’
17. Contrary to Trade Associations’
assertion that the Commission’s
investigative authority under FPA
section 307 is limited solely to
investigations of particular matters, FPA
section 307(a) allows the Commission to
investigate more broadly, i.e., to obtain
information about the activities of
entities participating in wholesale
energy markets.47 Moreover, the cases
47 Indeed, the Commission has previously relied
on its authority under FPA section 307(a) to collect
data not linked to an investigation of a specific
entity. See, e.g., Enhancement of Electricity Market
Surveillance and Analysis through Ongoing
Electronic Delivery from Regional Transmission
Organizations and Independent System Operators,
Order No. 760, FERC Stats. & Regs. ¶ 31,330 (2012)
(where the Commission relied on FPA sections
301(b) and 307(a) for ongoing collections of data
from RTOs and ISOs for use in its surveillance of
those markets); New Reporting Requirements
Implementing Section 213(b) of the Federal Power
Act and Supporting Expanded Regulatory
Responsibilities under the Energy Policy Act of
1992, and Conforming and Other Changes to Form
No. FERC–714, Order No. 558, FERC Stats. & Regs.
¶ 30,980 (1993), reh’g denied, Order No. 558–A, 65
FERC ¶ 61,324 (1993), final rule, Order No. 558–B,
FERC Stats. & Regs. ¶ 30,993 (1994) (where the
Commission relied on its ‘‘general information
collection authorities’’ under FPA section 307(a),
among other provisions, to require the collection of
certain data from transmitting utilities in Form Nos.
714 and 715).

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cited by the Trade Associations do not
support their contention that section
307 only pertains to collecting
information, such as through subpoenas
or other process, in connection with
investigating particular matters.
Specifically, in FPC v. Metropolitan
Edison and Mississippi Power & Light v.
FPC, the issue before the courts was
whether the courts could review orders
issued by the Federal Power
Commission, pursuant to its authority
under FPA section 307 to institute
investigations that required the
production of company records and the
examination of witnesses. In both cases,
the courts allowed the Commission’s
investigations to go forward.48 Trade
Associations also cite to an order in
which the Commission noted that
compliance with a survey may be
compelled by subpoenas issued under
FPA section 307.49 Although FPA
section 307(b) enables the Commission
to use subpoenas (or other formal
processes) when necessary in
connection with an investigation, it
does not follow that all Commission
investigations initiated under section
307(a) are limited to particular matters
and cannot be used to collect
information more broadly.
18. The Supreme Court has also
recognized that an administrative
agency’s investigative authority is not
limited to a particular case. For
example, in referring to investigations
conducted by the Federal Trade
Commission (FTC), the Court held in
Morton Salt that, when an
administrative agency is given
investigative duties by Congress, the
agency has the power to obtain
information not only within the context
of a particular case or controversy, but
to ‘‘investigate merely on suspicion that
the law is being violated, or even just
because it wants assurance that it is
not.’’ 50 The same principle applies here
with respect to the investigative powers
that Congress has given the Commission
under FPA section 307.
19. Furthermore, we disagree with
Trade Associations’ suggestion that an
investigation initiated by the
48 See FPC v. Metropolitan Edison Co., 304 U.S.
at 385–86; Mississippi Power & Light Co. v. FPC,
131 F.2d at 149 (citing FPC v. Metropolitan Edison
Co., 304 U.S. 375 (1938)).
49 Trade Associations at 6 (citing Survey on
Operator Training Practices, 110 FERC ¶ 61,050, at
n.3 (2005)). The Commission stated in this footnote:
‘‘If necessary, compliance with the survey may be
compelled pursuant to section 307 of the FPA, 16
U.S.C. 825f (2000), which authorizes the
Commission to issues subpoenas in support of the
Commission obtaining information to serve as a
basis for recommending legislation.’’).
50 United States v. Morton Salt, 338 U.S. 632, 642
(1950) (Morton Salt).

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Commission under FPA section 307(a)
must follow the procedures set forth in
Part 1b of the Commission’s
regulations 51 in order to be considered
‘‘lawful.’’ FPA section 307(a) permits
the Commission to investigate to obtain
information about the wholesale sale
and transmission of electric energy, but
this provision does not prescribe the
manner in which the Commission must
obtain such information, and the
Commission has not previously applied
its Part 1b regulations to every
proceeding instituted under FPA section
307(a).52 Furthermore, we note that
section 307(a) of the FPA was initially
enacted in 1935, well before the
enactment of Part 1b of the
Commission’s regulations, and section
307(a) makes no reference to Part 1b. In
response to Trade Associations’
comment that the Commission should
limit its e-Tag access to particular power
flows, we note that limiting Commission
access in such a way will not provide
the Commission with sufficient data to
properly understand the transactional
activity taking place in wholesale
electric markets and will impede its
efforts to perform effective market
surveillance and analysis.
20. Finally, in the Order No. 676
series of orders,53 the Commission
incorporated by reference into its
regulations, at 18 CFR 38.2, business
practice standards applicable to public
utilities and certain non-public utilities.
By incorporating these business practice
standards by reference, the Commission
made these standards mandatory and
enforceable. Given that the use and
format of e-Tags is governed by the
NAESB business practice standards and
by e-Tag protocols and specifications
referenced in those standards,
Commission access to this information
is necessary to determine whether these
requirements are being met.54
B. Need for Commission Access to E-Tag
Information
1. E-Tag NOPR
21. In the E-Tag NOPR, the
Commission stated that obtaining access
to complete e-Tag data will help the
Commission to detect anti-competitive
or manipulative behavior or ineffective
51 18

CFR part 1b.
e.g., Reporting on North American Energy
Standards Board Public Key Infrastructure
Standards, 140 FERC ¶ 61,066 (2012) (where the
Commission instituted a proceeding under FPA
section 307(a) to investigate the facts and practices
surrounding the implementation of certain NAESB
standards by requiring entities, including those not
otherwise subject to the Commission’s jurisdiction
as a public utility, to submit a report).
53 See supra note 13.
54 See supra note 9.
52 See,

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market rules, monitor the efficiency of
the markets, and better inform
Commission policies and decisionmaking.55 The E-Tag NOPR explained
that, by using e-Tag data in coordination
with other data, the Commission will be
better able to identify interchange
schedules that appear anomalous or
inconsistent with rational economic
behavior.56 The E-Tag NOPR stated that
access to e-Tag data would allow the
Commission’s staff to examine more
effectively situations where interchange
schedules are absent, even when
transmission capacity is available and
pricing differences between the two
locations ought to be sufficient to
encourage transactions between those
locations, thereby signaling a market
issue or other problem.57 The E-Tag
NOPR also noted that, in cases where eTags are relevant, access to e-Tags
would provide the Commission with
more complete information for use in
conducting audits or investigations.58
2. Comments
22. Some commenters support the
Commission’s proposal to require
Commission access to complete e-Tag
information used to schedule
interchange transactions for market
monitoring purposes.59 Other
commenters oppose the Commission’s
proposal.60 Trade Associations argue
that it is unclear why the Commission
believes e-Tag information would
enhance the Commission’s efforts to
monitor market developments and
prevent market manipulation, assure
just and reasonable rates, and monitor
compliance with certain NAESB
business practices.61 Trade Associations
argue that the data collected cannot be
translated into useful information
without detailed explanations of each
transaction that an e-Tag relates to and
that providing these explanations would
be burdensome.62 In particular, Trade
Associations state that many power
sales do not have e-Tags; e-Tags often
include multiple transactions; power
sales are often recorded across multiple
e-Tags; e-Tags get revised and replaced
on a regular basis; and a single e-Tag
can represent multiple transactions
among numerous parties.
55 E-Tag NOPR, FERC Stats. & Regs. ¶ 32,675 at
P 15.
56 Id.
57 Id.
58 Id.
59 CAISO/DMM, DC Energy, Market Monitors,
PJM/SPP, Powerex, and SoCal Edison.
60 EPSA, MID, NERC, Southern, Trade
Associations, and WECC.
61 Trade Associations at 6.
62 Id. at 7.

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23. Powerex comments that it agrees
with the Commission’s goals, but
suggests that the Commission should
obtain e-Tag and EQR information
concerning all market participants,
including utilities typically outside
Commission jurisdiction, and must
ensure that the data obtained are
consistent and unambiguous.63 Powerex
also argues that the Commission should
direct NERC and NAESB to adopt
standardized generation product codes
under the e-Tagging protocols and
develop a method to ensure these
standards are used consistently and
enforced.64 Powerex urges the
Commission to consider requiring all
transmission providers to post
additional e-Tag scheduling information
on their OASIS sites, including the
generation product code and the entity
that is responsible for holding the
necessary reserves for each schedule
and relevant information associated
with curtailing an e-Tag.65 Powerex also
asks the Commission to review and
perhaps reconsider the waivers it has
granted to some transmission providers
exempting them from posting
scheduling information on OASIS.66
24. SoCal Edison supports requiring
the ERO to provide access to the e-Tag
data but emphasizes that market
monitoring via e-Tags will be a complex
and challenging enterprise because eTags are not designed as market
monitoring tools.67 SoCal Edison states
that a thorough understanding of the
energy markets and expertise in
analyzing such data is often required to
distinguish between a legitimate
business transaction and an illegitimate
business transaction that could
potentially look the same or very
similar.68 EPSA states that third party
vendors, such as OATI, provide services
to accomplish the creation and
collection of e-Tag data and market
participants usually do not have the
data. EPSA argues that to ask for the
data from either NERC or market
participants would require a massive
overhaul of data collection systems.
25. NERC and EPSA suggest that the
Commission should convene a technical
conference to discuss the issues raised
by the E-Tag NOPR. Southern urges the
Commission to withdraw the E-Tag
NOPR and supports Trade Associations’
63 Powerex

at 4.
at 7–9.
65 Id. at 5, 12.
66 For example, Powerex suggests that the
Commission may want to consider whether to
require e-Tag data regarding schedules on interties
into organized markets, such as those into CAISO,
to be posted on OASIS. Powerex at 12.
67 SoCal Edison at 2.
68 Id.

recommendation that the Commission
initiate a new rulemaking proceeding if
it decides to collect e-Tag data through
any means other than NERC.
26. Mr. Ronald Rattey states that the
Commission’s access to complete e-Tags
should allow the data to be accessed on
a real-time basis and should include
adding additional data elements, such
as generation and transmission contract
IDs, to ensure that it can be linked to
EQR transaction data and transmission
rights.69 Mr. Rattey states his belief that
the proposals in the E-Tag NOPR and
the NOPR on Electricity Market
Transparency 70 are unlikely to give the
Commission the capability to prevent,
monitor, or stop market abuses that have
occurred since the late 1990s.71
3. Commission Determination
27. Access to e-Tag data will help the
Commission in its efforts to detect
market manipulation and anticompetitive behavior, monitor the
efficiency of markets, and better inform
Commission policies and decisionmaking. The Commission needs e-Tag
data covering all the transactions
involving the interconnected entities
listed on the e-Tag because the
information is necessary to understand
the use of the interconnected electricity
grid, and particularly those transactions
occurring at interchanges. Due to the
nature of the electricity grid, an
individual transaction’s impact on an
interchange cannot be assessed
adequately in all cases without
information from all connected systems,
which is included in the e-Tags. Having
available the details of the physical path
of a transaction included in the e-Tags
will help the Commission monitor, in
particular, interchange transactions
effectively, prevent price manipulation
over interchanges, and ensure the
efficient and orderly use of the
transmission grid. At this time, no
entity, including NERC, is monitoring
all interchange transactions.
28. Regular access to e-Tags for power
flows across interchanges will make it
possible for the Commission to identify
or analyze various behaviors by market
participants to determine if they are part
of a potentially manipulative scheme(s).
For example, e-Tag information can
enable the Commission to investigate
whether entities may be engaging in
manipulative schemes involving the

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64 Id.

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69 Ronald

Rattey at 14–16.
Electricity Market Transparency Provisions
of Section 220 of the Federal Power Act, Notice of
Proposed Rulemaking, FERC Stats. & Regs. ¶ 32,676
(2011). A Final Rule in that proceeding was issued
on October 11, 2012. See Order No. 768, FERC
Stats. & Regs. 31,336 (2012).
71 Ronald Rattey at 3.
70 See

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circular scheduling of imports and
exports into a market to benefit other
positions held by these entities, as
demonstrated by recent investigations
by the Commission’s Office of
Enforcement.72 Without access to the eTags, it is more difficult, and, at times,
the Commission may even be unable to
assess whether manipulative schemes
are taking place.
29. In addition, e-Tag access will help
the Commission to understand, identify
and address instances where
interchange pricing methodologies or
scheduling rules result in inefficiencies
and increased costs to market
participants collectively. As an
example, Staff identified one cause of
increased Lake Erie loop flows to be
changes made by the New York
Independent System Operator (NYISO)
in 2007 in its pricing methodology for
the proxy bus between NYISO and
PJM.73 Following these pricing changes,
market participants modified their
transmission service scheduling
practices and thus increased loop flows,
and transmission service schedules and
loop flows that do not follow pricing
signals increase costs to markets and
decrease efficiencies. Using e-Tag data,
the Commission would be in a better
position to identify and understand, and
when necessary, to address, instances
when market pricing methodologies and
rules become unjust and unreasonable
as a result of inefficient transmission
service scheduling. Moreover, access to
e-Tag information will allow the
Commission to determine whether the
requirements of the mandatory business
practice standards related to e-Tags have
been met.
30. Trade Associations express
concern that e-Tag data cannot be
translated into useful information
without detailed explanations of each
transaction related to the e-Tag.
Although we recognize that e-Tag data
are complex, the Commission has
expertise and may be able to use the eTag data without the need for detailed
explanations of each transaction
associated with an e-Tag. Furthermore,
the Commission has undertaken efforts
72 See, e.g., Gila River Power, LLC, 141 FERC
¶ 61,136 (2012) (where the Commission approved a
settlement with Gila River Power related to its
violations of the Commission’s Anti-Manipulation
Rule, the Commission’s regulation prohibiting
submission of inaccurate information, and similar
provisions in the CAISO tariff by submitting
transactions designated as wheel-through
transactions).
73 See New York Indep. Sys. Operator, Inc., 128
FERC ¶ 61,049 (2009) and attached Office of
Enforcement Staff Report on the Non-Public
Investigation into Allegations of Market
Manipulation in Connection with Lake Erie Loop
Flows at 4–7.

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to obtain interchange transaction data
from other sources that, when used in
conjunction with the e-Tag data
obtained under this Final Rule, will
provide additional information for
understanding the transactional context
related to e-Tags.74
31. The Commission agrees with
certain commenters that using e-Tag
data for market monitoring purposes
will require expertise in analyzing such
data, and we believe that we have such
expertise. In addition, as discussed
below,75 the Commission will not
require NERC or individual market
participants to provide complete e-Tag
data directly to the Commission. The
Commission will instead require that eTag Authors, through their Agent
Service, and Balancing Authorities,
through their Authority Service, ensure
that the Commission is included as an
entity on an e-Tag with view-only rights
on the e-Tags. This approach minimizes
any burden on market participants,
because they already have the capability
to designate entities with view-only
rights on the e-Tags, and will not
require any further changes in their data
collection systems. Moreover, this
approach places no burden on NERC.
Finally, as recognized in the E-Tag
NOPR, the Commission will directly
access e-Tag data that is currently being
collected and stored in databases.76
32. The Commission finds that there
is sufficient information on the record
in this proceeding to make the
determinations in this Final Rule and,
therefore, we reject the requests for a
technical conference. Additionally, we
reject those comments suggesting that
the Commission should initiate a new
rulemaking proceeding if it decides not
to access e-Tag data through NERC. The
Commission has provided interested
parties with sufficient notice and
opportunity for comment on the matters
addressed in this rulemaking
proceeding, including the Final Rule’s
determination to not involve NERC in
the Commission’s access to e-Tag data.
In particular, comments filed in
response to the E-Tag NOPR suggested
an alternative method for the
Commission to obtain e-Tag information
consistent with the approach taken in
this Final Rule.77 In addition, on
February 23, 2012, the Commission
issued a notice providing interested
parties the opportunity to file reply
comments on the E-Tag NOPR. In that
74 See Order No. 760, FERC Stats. & Regs.
¶ 31,330; Order No. 768, FERC Stats. & Regs.
¶ 31,336.
75 See infra P 39.
76 See E-Tag NOPR, FERC Stats. & Regs. ¶ 32,675
at P 7 note 9.
77 See Market Monitors at 10.

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notice, the Commission specified that
these reply comments may also address
whether the Commission should require
entities that create e-Tags or distribute
them for approval to provide the
Commission with viewing rights to the
e-Tags. Furthermore, the Commission
finds the Final Rule’s approach for
implementing the E-Tag NOPR’s
objective of allowing access to e-Tags to
the Commission satisfies the notice
requirement under the Administrative
Procedure Act 78 because the content of
this Final Rule is a ‘‘logical outgrowth’’
of the proposal in the E-Tag NOPR.79
C. Implementing the Commission’s ETag Access
1. E-Tag NOPR
33. In the E-Tag NOPR, the
Commission proposed to require NERC
rather than individual market
participants to provide access to e-Tag
data to avoid burdening market
participants with submitting the same
data to both NERC and the
Commission.80 The E-Tag NOPR also
noted that this proposal would avoid
burdening the Commission with
developing and maintaining a new
system to capture such data from
individual market participants.81
2. Comments
34. NERC states that it has not owned
or operated an e-Tag system, but instead
has facilitated the creation of the e-Tag
specifications and schema used by
software vendors to develop e-Tagging
tools.82 NERC adds that it transferred
responsibility for the e-Tag
specifications and schema to NAESB
effective October 27, 2009.83 Further,
NERC states that it gave OATI formal
notice on April 29, 2011 that it will no
longer be a party to the IDC Extension
Agreement after March 2013.84
According to NERC and Trade
Associations, the e-Tag data provided to
the IDC is jointly owned by NERC and
the Operating Reliability Entities (i.e.,
Balancing Authorities, Reliability
Coordinators and Transmission Service
Providers), so NERC alone cannot grant
rights to the data without prior
78 5

U.S.C. 553(b)(3).
Aeronautical Radio, Inc. v. FCC, 928 F.2d
428, 446 (D.C. Cir. 1991) (referencing United Steel
Workers of Am. v. Marshall, 647 F.2d 1189, 1221
(D.C. Cir. 1980)).
80 E-Tag NOPR, FERC Stats. & Regs. ¶ 32,675 at
P 10. Under the proposal, the Commission’s staff
would gain access to the e-Tag data that is currently
being collected and stored in databases by private
vendors under contract with NERC. E-Tag NOPR,
FERC Stats. & Regs. ¶ 32,675 at P 7, note 10.
81 Id.
82 NERC at 4.
83 Id.
84 Id.
79 See

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76373

authorization from the Operating
Reliability Entities.85 Therefore, argues
NERC, the Commission must seek
approval from the Operating Reliability
Entities to have access to the e-Tag data
and then work directly with OATI to
determine how to access the data and
pay any related costs.86
35. NERC asserts that it does not have
access to e-Tag data in the Western
Interconnection, except to the extent it
can request e-Tag information as it
performs its compliance-related duties
as to Reliability Standards, or to the
extent that data is shared with the
Eastern Interconnection, as may be the
case for transactions scheduled between
Interconnections.87 NERC comments
that WECC contracts directly with OATI
for its WECC Interchange Tool as the
Tagging Authority Service for the
Western Interconnection.88 WECC
recommends that the Commission seek
e-Tag data from individual market
participants under statutory authorities
other than FPA section 215.89
36. By contrast, Market Monitors
contend that obtaining such data from
individual market participants, rather
than NERC, would be extremely
burdensome and infeasible.90 PJM/SPP
assert that the Commission should have
access to complete information about
wholesale energy market transactions
that the Commission may find useful in
discharging its responsibilities under
the FPA. They also argue that the
Commission should be given access to
information (such as e-Tag data) that
supports transparency in wholesale
energy market transactions.91
37. PJM/SPP and CAISO/CAISO’s
Department of Market Monitoring
(CAISO/DMM) contend that creating
and maintaining any new system to
capture and access the e-Tag
information that market participants are
already providing to NERC would be
costly, redundant, and inefficient.92
SoCal Edison asserts that there may be
some jurisdictional issues that prevent
the Commission from requesting e-Tag
data directly from NERC, but urges the
Commission to review other legal
options for doing so because NERC is
already the repository of such
information.93
38. EPSA argues that e-Tag
information is collected by a third-party
85 Id.

at 5, Trade Associations at 8.
at 5.
87 Id. at 6.
88 Id. at 5.
89 WECC at 3.
90 Market Monitors at 9.
91 PJM/SPP at 3–4 (citing 16 U.S.C. 824, 824d,
824e, 824o).
92 PJM/SPP at 4, CAISO/DMM at 2.
93 SoCal Edison at 3.
86 NERC

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vendor who works with NERC to
provide inputs to NERC’s congestion
management tools.94 EPSA states that no
single Commission-jurisdictional entity
collects the information en masse for a
complete market snapshot.95
3. Commission Determination
39. Based on NERC’s statement that it
is not extending its IDC Extension
Agreement beyond March 2013,96 this
Final Rule is modifying the E-Tag NOPR
proposal, as suggested in comments
outlining an alternative method for the
Commission to obtain e-Tag
information,97 to adopt a means for the
Commission to access complete e-Tag
data that does not entail any
involvement by NERC or WECC.98 This
Final Rule will require that e-Tag
Authors, through their Agent Service,
and Balancing Authorities, through their
Authority Service, take appropriate
steps to ensure that the Commission is
included as an addressee on the e-Tags
covered by this Final Rule.99
40. Currently, when an e-Tag Author
creates an e-Tag through its Agent
Service, it can designate entities on the
e-Tag with view-only rights to the eTag.100 The Agent Service electronically
transfers the e-Tag to the Authority
Service used by the Sink Balancing
Authority to validate the e-Tag data
elements.101 In addition to this
validation function, the Authority
Service compiles a distribution list for
each e-Tag that includes the entities
specified by the e-Tag Author as having
view-only rights along with entities
identified by the Authority Service as
94 EPSA

at 4.
at 5.
NERC at 5.
97 See Market Monitors at 10 (‘‘An additional
method for FERC and market monitors to obtain tag
information is to require that all tags contain the
registered FERC and MMUs within the market path
of all tags. By doing so, all tags would automatically
be forwarded to the FERC and the MMUs, but
would not grant the Commission or the MMUs
approval rights.’’).
98 We note that the Commission provided public
notice and an opportunity to comment on this
alternative method for the Commission to obtain
access to e-Tags when we invited reply comments.
77 FR 12760 (Mar. 2, 2012).
99 As noted above, these e-Tags are e-Tags for
interchange transactions scheduled to flow into, out
of, or within the United States’ portion of the
Eastern or Western Interconnection, or into the
Electric Reliability Council of Texas from the
United States’ portion of the Eastern or Western
Interconnection; or from the Electric Reliability
Council of Texas into the United States’ portion of
the Eastern or Western Interconnection.
100 E-Tag Authors may include a ‘‘Carbon Copy
List’’ (CC list) on their e-Tags specifying the entities
that will be provided with a copy of the e-Tag
without being given approval rights. See NAESB
Electronic Tagging Functional Specifications,
Version 1.8.1.1, section 1.4.11, at p. 37.
101 See NAESB Electronic Tagging Functional
Specifications, Version 1.8.1.1, section 3.5, at 64.
95 Id.

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having approval rights in connection
with the interchange schedule outlined
in the e-Tag.102 The Authority Service
then electronically delivers
comprehensive e-Tag data to the
addresses registered by the entities
included on the distribution list. After
the e-Tag data is delivered to the
registered address, the addressee can
access the data directly or by
contracting with a commercial vendor
that provides data management services.
41. The Commission anticipates that
existing procedures for processing and
communicating e-Tags, which are
largely automated, will be used to
facilitate Commission access to e-Tags.
The Commission will require that the
Agent Service used by e-Tag Authors
include the Commission on the CC list
of entities with view-only rights to the
e-Tags covered by this Final Rule.103 In
addition, the Commission will require
that the Authority Service used by the
Sink Balancing Authority (located
within the United States) validate the
inclusion of the Commission on the CC
list of the e-Tags before those e-Tags are
electronically delivered to an address
specified by the Commission. After the
e-Tags are delivered to that registered
address, the Commission will gain
electronic access by contracting with a
commercial vendor that provides data
management services.104 Because
existing procedures can allow for
Commission access to e-Tags, the
Commission expects that any burden on
e-Tag Authors and Balancing
Authorities associated with this Final
Rule will be minimal. E-Tag Authors
and Balancing Authorities are required
to ensure Commission access to e-Tag
data under this Final Rule by no later
than March 15, 2013.
D. Providing E-Tag Access to MMUs,
RTOs and ISOs
1. E-Tag NOPR
42. The E-Tag NOPR invited comment
on whether e-Tag information should be
made available to MMUs.105 The E-Tag
NOPR also asked whether making the
102 The Authority Service must determine the
distribution list for an e-Tag, which includes all
entities contained in the CC list created by the eTag Author. Entities with approval rights include
the Transmission Service Providers, Balancing
Authorities and Reliability Coordinators associated
with that interchange schedule. See NAESB
Electronic Tagging Functional Specifications,
Version 1.8.1.1, section 3.6.1.1.1, at 66.
103 Following issuance of this Final Rule and the
Commission’s registration in the OATI webRegistry,
the Commission will issue a notice specifying
which entity code should be used to ensure that the
Commission is an addressee on the e-Tags.
104 The Commission reserves the right to arrange
for direct electronic delivery at some future date.
105 E-Tag NOPR, FERC Stats. & Regs. ¶ 32,675 at
P 18.

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data available to MMUs would raise
confidentiality concerns or require
specific confidentiality provisions.106
2. Comments
43. Some commenters express support
for allowing MMUs to gain access to
complete e-Tag information, including
data about transactions outside of the
markets they monitor,107 while other
commenters oppose allowing such
access.108 Certain commenters also
submitted comments in support of
allowing RTOs and ISOs and/or
Reliability Coordinators to gain access
to complete e-Tag information.109
44. SoCal Edison expresses support
for MMUs having access to complete eTag data on a non-public basis, as long
as this access does not impose excessive
costs on market participants, the ERO,
or any other entity involved in
providing such information to the
MMUs.110 DC Energy states that the
quicker the MMUs have access to e-Tag
data, the quicker they can react to
prevent the potential for market
manipulation and/or abuse.111
45. CAISO/DMM states that MMUs
play a key role in market analysis,
design and monitoring and therefore
should have access to the data.112
CAISO/DMM states that it currently has
access to e-Tag information for all
schedules with a source, sink, or
contract path through the CAISO system
and the E-Tag NOPR would expand data
available to DMM to include complete
e-Tag information on any e-Tag
associated with these transactions.113
46. Market Monitors urge the
Commission to require that e-Tag
information be made available to
MMUs.114 Market Monitors state that
they need access to information that is
as complete as possible and in a form
that allows efficient assessment and
analysis to effectively identify and refer
instances of market manipulation to the
Commission.115 In particular, Market
Monitors argue that loop flows (i.e., the
difference between actual and
scheduled power flows at one or more
specific interfaces) cannot be
understood without complete data
covering all scheduled and actual
paths.116 Market Monitors explain that
106 Id.

P 18.

107 CAISO/DMM,

DC Energy, Market Monitors,
and PJM/SPP.
108 MID, Powerex, and Southern.
109 CAISO/DMM, Market Monitors and PJM/SPP.
110 SoCal Edison at 5.
111 DC Energy at 3.
112 CAISO/DMM at 2.
113 Id.
114 Market Monitors at 1.
115 Id. at 2.
116 Id. at 4.

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loop flows can have negative impacts on
the efficiency of markets with explicit
locational pricing, including impacts on
locational prices, revenue adequacy of
financial transmission rights, and
system operations.117
47. According to Market Monitors,
loop flows can also provide evidence of
attempts to game such markets. They
note that the explicit choice of a
scheduled path that is profitable only on
the scheduled path and not on the
actual path is a trading strategy that
reduces efficiency and is difficult for
market monitors or the Commission to
evaluate without adequate
information.118 Market Monitors state
that the inconsistency between
electricity schedules and actual flows
can allow participants to engage in acts
that may constitute market rule
violations but that cannot be detected
without more detailed and accurate
information on the schedules that are
contained in e-Tag data.119
Market Monitors state that they
currently obtain some e-Tag data via a
set of ‘‘Tag Dump’’ files, but that these
files exclude key data items, including
complete market path and loss
provision information.120 They argue
that access to e-Tag data should exceed
the basic Tag Dump files, and include
all e-Tag data, to provide the means to
monitor transactions in real time from
the initial submission of the requests
through implementation.121 In addition,
Market Monitors state that access to the
data should be provided at reasonable
cost in a manner that can be imported
into databases for easy querying and
analysis.122 Market Monitors state that
the Commission should provide them
with access to additional data from
Balancing Authorities in the Eastern
Interconnection to enable complete loop
flow analysis, including Area Control
Error data, market flow impact data, and
generation and load data.123
48. PJM/SPP and CAISO/DMM also
support access to e-Tags for MMUs.
Southern cautions that the e-Tag data
will not readily translate into
information that can be used to monitor
markets and, therefore, it would not
improve an MMU’s ability to monitor
loop flows and corresponding market
impacts.124 Southern also argues that to
the extent MMUs need this information
they should get it through individual

requests on a case-by-case basis from the
market participants who hold the
information and have the authority to
disclose it.125
49. CAISO/DMM and PJM/SPP also
support making complete e-Tag
information available to RTOs and ISOs.
CAISO/DMM states that the
comprehensive e-Tag information
should be made available to the ISO or
RTO staff for use in the analysis and
design of its markets, as well as in
enforcement of applicable market
rules.126 CAISO/DMM also states that
complete e-Tag information, including
ultimate physical locational specific
source and sink information for
transactions outside of a Balancing
Authority, can be critical for assessing
the impact of loop flows and more
effectively incorporating these impacts
into market modeling assumptions,
design features and scheduling rules.127
According to CAISO/DMM, any Final
Rule should require that e-Tag
information be provided to RTOs and
ISOs in the same manner as provided to
the Commission and the MMUs of RTOs
and ISOs.128 CAISO/DMM also
recommends that the Commission
consider a method for RTOs and ISOs to
identify the geographic scope of the eTags the RTO or ISO in question would
require to serve these purposes.129
50. PJM/SPP state that, under the ETag NOPR, the Commission would gain
a greater degree of ready access to e-Tag
information than the system operators
who could utilize this data to enhance
system operations and market
efficiency.130 According to PJM/SPP,
Reliability Coordinators, including
RTOs and ISOs, receive limited e-Tag
information that only covers
interchange transactions into, out of, or
through their operating footprints.131
PJM/SPP assert that access to e-Tag data
for external transactions would allow
them to better visualize and analyze the
remote sources of the energy flows that
may impact the area of the system they
have responsibility to maintain
reliably.132 PJM/SPP state that ISOs,
RTOs and Reliability Coordinators
could use this information to better
predict and react to situations when
system conditions result in transmission
limitations impacted by flows to and
from areas of the interconnection
125 Id.

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126 CAISO/DMM
117 Id.

127 Id.

118 Id.

128 Id.

119 Id.

at 5.
120 Id. at 7.
121 Id. at 8.
122 Id.
123 Id. at 6.
124 Southern at 2.

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at 3.

129 In this regard, CAISO/DMM states it is not
advocating that it receive e-Tag information from
the Eastern Interconnection. CAISO/DMM at 3.
130 PJM/SPP at 1–2.
131 Id. at 4.
132 Id. at 5.

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outside of their Control Areas.133 PJM/
SPP also contend that the current
limitations on the ability of RTOs, ISOs
and Reliability Coordinators to analyze
and address big picture considerations
is the type of problem that the
Commission identified in its analysis of
the April 14, 2003 electricity
blackout.134
51. PJM/SPP assert that providing eTag data to RTOs, ISOs and Reliability
Coordinators is consistent with
Congress’ and the Commission’s
directives under FPA section 215
because it would help Reliability
Coordinators to discharge their
responsibilities to ensure reliable
operation of their areas.135 Furthermore,
PJM/SPP argue that granting RTOs and
ISOs access to complete e-Tags would
allow RTOs and ISOs to better fulfill
their Order No. 2000 obligations by
enabling them to better evaluate the
availability of transmission service
through a more accurate determination
of the impacts of transactions occurring
elsewhere in the interconnection.136 In
addition, PJM/SPP note that access to
complete e-Tags will allow RTOs and
ISOs to more effectively manage
transmission congestion by providing
greater visibility into the dispatch and
transactions in other surrounding
systems.137 Additionally, PJM/SPP
comment that such access would allow
RTOs and ISOs to more efficiently and
effectively identify market design flaws,
monitor the behavior of market
participants, and ensure the integration
of reliability practices within an
interconnection.138 Finally, PJM/SPP
argue that access to complete e-Tags
would allow RTOs and ISOs to deal
more effectively with intraregional and
interregional parallel path flows, or loop
flows, which could potentially
jeopardize the reliability of the bulk
power system.139
3. Commission Determination
52. The Commission will require eTag Authors and Balancing Authorities
to make available to an RTO, ISO or
MMU access to complete e-Tags, upon
request to the e-Tag Author and
Balancing Authority. Currently, RTOs
133 Id.
134 Id.

at 6.
at 9.
136 Id. at 12. Order No. 2000 set forth minimum
characteristics and functions that RTOs are required
to satisfy. Regional Transmission Organizations,
Order No. 2000, FERC Stats. & Regs. ¶ 31,089, at
30,993–94 (1999), order on reh’g, Order No. 2000–
A, FERC Stats. & Regs. ¶ 31,092 (2000), aff’d sub
nom. Pub. Util. Dist. No. 1 v. FERC, 272 F.3d 607
(DC Cir. 2001).
137 PJM/SPP at 14.
138 Id. at 16.
139 Id. at 16–18.
135 Id.

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and ISOs receive e-Tag information only
for those interchange transactions that
flow into, out of, or across their
operating footprints. However,
transactions scheduled outside of these
entities’ footprints can physically flow
into their footprints and result in loop
flows that impact both the reliability of
their systems and the markets that they
administer. And, due to congestion and
other market impacts caused by loop
flows, such transactions can have
significant financial consequences.
Thus, providing e-Tag information to
RTOs and ISOs can assist them in more
efficiently operating their systems and
their markets.
53. Moreover, as discussed above,
when market participants engage in
conduct that constitutes market
violations that cannot be detected
without e-Tag information, access to the
data shown on e-Tags can assist MMUs
in identifying behavior that may
constitute market manipulation under
FPA section 222 and allow them to refer
instances of such conduct to the
Commission. Sharing e-Tag information
with MMUs that monitor markets
within the United States can aid the
Commission with its own market
surveillance activities because the
MMUs may provide additional insights
to the Commission about potential
market violations and market issues.
Similarly, providing complete e-Tag
data to RTOs and ISOs may also assist
them in identifying and referring to the
Commission behavior that may
constitute market manipulation under
section 222 and aid the Commission in
its market surveillance activities. As the
Commission has previously recognized,
effective market monitoring is enhanced
by close collaboration between the
MMUs, RTOs/ISOs, and the
Commission’s Office of Enforcement
during the referral process and during
investigations.140 Currently, as part of
such collaboration, the Office of
Enforcement may elect to share
investigative information with MMUs,
RTOs and ISOs, including information
from third parties, as long as
appropriate measures are taken to
ensure that such information is not
further disclosed and remains nonpublic.141 Consistent with the
Commission’s ability to share
investigative information with MMUs,
RTOs, and ISOs, this Final Rule requires
that MMUs, RTOs, and ISOs be
provided with access to complete e-Tag
140 See Southwest Power Pool, Inc., 129 FERC
¶ 61,163 (2009), order on reh’g, 137 FERC ¶ 61,046,
at P 20 (2011).
141 See Southwest Power Pool, Inc., 137 FERC
¶ 61,046 at P 20.

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data, upon request to e-Tag Authors and
Authority Services, subject to
appropriate confidentiality restrictions.
54. Market Monitors argue that access
to e-Tag data should exceed the basic
‘‘Tag Dump’’ files. We note that the
access to complete e-Tag data that we
are requiring in this Final Rule will
exceed the information contained in
basic ‘‘Tag Dump’’ files and must
contain information on every aspect of
the e-Tag, including all applicable e-Tag
IDs, transaction types, market segments,
physical segments, profile sets,
transmission reservations, and energy
schedules. We decline the Market
Monitors’ suggestions to prescribe the
cost or format for e-Tag data because
price and formatting can vary
depending on the commercial data
management services provided to users
of e-Tag data. Market Monitors also
suggest that the Commission should
require Balancing Authorities to make
other information available to them
apart from e-Tags to allow for complete
loop flow analysis. Although we
recognize that there may be data in
addition to e-Tag data that may be
useful for performing complete loop
flow analyses, the focus of this
proceeding is on e-Tag data and we find
that requiring access to other data is
beyond the scope of this proceeding.
E. Confidentiality of Data
1. E-Tag NOPR
55. In the E-Tag NOPR, the
Commission proposed to keep the e-Tag
information confidential and not make
it publicly available, except as directed
by the Commission, or by a court with
appropriate jurisdiction.142 The E-Tag
NOPR also sought comment on whether
making data available to MMUs would
raise confidentiality issues or require
specific confidentiality provisions.143
2. Comments
56. Southern argues that the e-Tag
data should not be provided to MMUs
or other entities because the data
includes proprietary, confidential
information that, if disclosed to third
parties, could result in irreparable harm
to Southern Companies and other
market participants.144 Conversely,
Market Monitors assert that making e-

Tag data available to MMUs would not
raise confidentiality issues or require
any specific confidentiality provisions
beyond those that already exist.145
Market Monitors explain that the NERC
Tag Dump Data is published on the
Reliability Coordinator Information
System (RCIS) page of the NERC Web
site and to access such data, entities
must sign a confidentiality agreement
with NERC to obtain access to this
secure portion of the NERC Web site.146
Market Monitors state affording them
with access to NERC Tag Dump Data
would help them study market impacts
and work to improve market efficiency.
To ensure that the market monitors have
access to this needed information,
Market Monitors advocate that the
Commission issue a clear policy
directive finding that MMU access to
NERC’s Tag Dump Data is needed to
improve market efficiency,
competitiveness, operations and
design.147 EPSA states that vendors
have confidentiality contracts with
market participants and, thus, if the
Commission finds e-Tag data necessary
to its market monitoring and
enforcement efforts, it will be necessary
to explore the legal proprietary issues
associated with getting the information
from third party vendors like OATI.148
57. DC Energy states that additional
confidentiality provisions are not
necessary and that e-Tag data should be
made available to the public in a
manner similar to Electric Quarterly
Report (EQR) data.149 SoCal Edison
comments that, if the Commission
decides to make e-Tag information
available to the public, there should be
at least a three-month delay.150 SoCal
Edison states that the general public
may not have the requisite knowledge to
analyze and understand e-Tag data and
not publicly disclosing e-Tags would
avoid misinterpretations of the data.151
3. Commission Determination
58. The Commission recognizes that
some of the information contained in
the e-Tags is likely commercially
sensitive.152 Disclosure of such data as
directed in this Final Rule could result
in competitive harm to market
participants and the market as a whole
145 Market

142 The

Commission noted its view that this data
would be covered by exemption 4 of the Freedom
of Information Act (FOIA), which protects ‘‘trade
secrets and commercial or financial information
obtained from a person [that is] privileged or
confidential.’’ E-Tag NOPR, FERC Stats. & Regs.
¶ 32,675 at P 16 (citing 5 U.S.C. 552(b)(4) (2006),
amended by OPEN Government Act of 2007, Public
Law 110–175, 121 Stat. 2524 (2007)).
143 E-Tag NOPR, FERC Stats. & Regs. ¶ 32,675 at
P 18.
144 Southern at 2.

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Monitors Comments at 9.

146 Id.
147 Id.
148 EPSA

at 6.
Energy at 3.
150 SoCal Edison at 3.
151 Id. at 4.
152 Market participants currently treat e-Tags as
confidential because they contain potentially
commercially sensitive information. See NAESB
Electronic Tagging Functional Specifications,
section 1.4.2.1, Version 1.8.1.1, at 26.
149 DC

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if disclosed without reasonable
confidentiality restrictions.153
Accordingly, the Commission will not
make complete e-Tags publicly
available, as suggested by certain
commenters. Furthermore, to the extent
persons file requests to obtain data from
the Commission under the Freedom of
Information Act (FOIA), we expect that
any commercially-sensitive data would
be protected from disclosure if it
satisfies the requirements of FOIA’s
exemption 4.154 In response to EPSA,
we note that, after the e-Tag Authors
and Balancing Authorities designate the
Commission as an addressee, the
Commission will access the e-Tags by
contract with a commercial vendor,
subject to confidentiality restrictions.
59. While the Commission finds that
e-Tag data should be made available to
RTOs, ISOs, and MMUs, this should be
done subject to appropriate
confidentiality restrictions.
Furthermore, the Commission notes that
such information may be shared among
RTOs, ISOs and MMUs as part of an
investigation of possible market
violations or market design flaws as
long as reasonable measures are taken to
ensure that the information remains
non-public.155

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152 Market participants currently treat e-Tags as
confidential because they contain potentially
commercially sensitive information. See NAESB
Electronic Tagging Functional Specifications,
section 1.4.2.1, Version 1.8.1.1, at 26.
153 The Commission has granted requests for
privileged or confidential treatment of similar nonpublic data. See, e.g., New York Indep. Sys.
Operator, Inc., 131 FERC ¶ 61,169, at P 15 (2010)
(granting such treatment for data relating to specific
generator or other equipment details, transmission
system information, bidding strategies, generator
reference levels, generator costs, guarantee
payments, and the associated relevant time
periods); see also S. Cal. Edison Co., 135 FERC
¶ 61,201, at P 20 (2011); Hydrogen Energy Cal. LLC,
135 FERC ¶ 61,068, at P 25 (2011); New York Indep.
Sys. Operator, Inc., 130 FERC ¶ 61,029, at P 3
(2010).
154 FOIA exemption 4 protects ‘‘trade secrets and
commercial or financial information obtained from
a person [that is] privileged or confidential.’’ 5
U.S.C. 552(b)(4) (2006), amended by Open
Government Act of 2007, Pub. L. No. 110–175, 121
Stat. 2524 (2007); accord 18 CFR 338.107(d).

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III. Information Collection Statement
60. The Office of Management and
Budget’s (OMB) regulations require
approval of certain information
collection requirements imposed by
agency rules.156 Upon approval of a
collection of information, OMB will
assign an OMB control number and an
expiration date. Respondents subject to
the filing requirements of a rule will not
be penalized for failing to respond to
these collections of information unless
the collections of information display a
valid OMB control number.
61. The Commission is submitting
these reporting requirements to OMB for
its review and approval under section
3507(d) of the Paperwork Reduction Act
of 1995.157 The Commission solicited
comments in the E-Tag NOPR on the
need for and purposes of the
information and the corresponding
burden on the public. Several
commenters filed comments related to
the need for and purposes of the
information. These comments are
addressed in the body of this rule. Trade
Associations filed the sole comment
challenging the burden estimate in the
E-Tag NOPR, arguing that the burden
estimate was understated.
62. The Commission has modified
burden estimates in this Final Rule,
relative to the E-Tag NOPR, to reflect
that now e-Tag Authors and Balancing
Authorities, rather than NERC, will
provide Commission access to e-Tags.
63. The Commission expects that eTag Authors and Balancing Authorities
will use existing, largely automated
procedures 158 to provide Commission
access to e-Tags. Commission access to
e-Tag data can be accomplished by the
Agent Service simply including the
Commission on the list of entities with
view-only rights to the e-Tags and the
Authority Service validating the
156 5

CFR 1320.11.
U.S.C. 3507(d).
158 Existing e-Tag procedures are designed to be
largely automated. For example, the specifications
state that the Authority Service ‘‘is primarily an
automated manager of data that should require little
manual intervention.’’ See NAESB Electronic
Tagging Functional Specifications, Version 1.8.1,
section 3.3, at 62.
157 44

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inclusion of the Commission on the eTags before they are delivered to a
Commission-designated address. Thus,
existing procedures can allow for ready
Commission access to e-Tags.
64. We have provided burden
estimate calculations that assume a
manual process for the e-Tag Author to
list the Commission as an addressee on
applicable e-Tags. These burden
estimate calculations consider how long
it would take for each e-Tag Author to
manually select the Commission, as an
addressee and the Balancing Authority
to similarly validate the inclusion of the
Commission, as an addressee. We have
estimated these tasks would take four
seconds and one second for each new eTag request, respectively.
65. But we believe the burden
estimates we have provided, in fact,
overstate the total burden associated
with this rule. Rather than relying on a
process in which e-Tag Authors
manually select the Commission as an
addressee, we anticipate the limited
number of e-Tag service providers will
in practice opt to incorporate a one-time
change to existing e-Tag software,
enabling the Commission, to be
included automatically. However, we
will use the estimates provided below in
our submittal to OMB for approval. We
will consider whether to modify the
burden estimates to reflect automation
when the information collection is
reviewed again to extend OMB
approval.
Public Reporting Burden: Our
estimate below regarding the number of
respondents is based on data from the
NERC TSIN registry.159 The TSIN
registry was used to list entities eligible
be listed on an e-Tag as well as specify
a delivery address for these possible
addressees. Using the TSIN registry,
Commission staff identified 1,540
possible e-Tag Authors and 163
Balancing Authorities. The Commission
estimates the number of new e-Tag
submission requests to be around six
million per year.
159 The NERC TSIN Registry was recently
replaced by the OATI webRegistry.

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Total Net Annual Cost: The
Commission has assumed that e-Tag
Authors and Balancing Authorities rely
on a mix of operations managers,
computer information systems
managers, compliance officers, and
other operations specialists who are
involved in creating and validating eTags.160 Based on this personnel
assumption, we used data from the U.S.
Bureau of Labor Statistics and
calculated an hourly compliance cost
for this Final Rule. The hourly figure we
arrived at was $59.76/hour, placing total
annual compliance around $498,000 per
year for all e-Tag Authors and Balancing
Authorities.161 Again, this estimate
assumes a manual process, which leads
to a larger burden than would likely
occur in practice.
Title: FERC–740, Availability of E-Tag
Information to Commission Staff.
Action: New collection.
OMB Control No.: 1902–0254.
Respondents: Businesses or other forprofit institutions, not-for-profit
institutions.
Frequency of Responses: On occasion.
Necessity of the Information: This
Final Rule will provide the
Commission, MMUs, RTOs, and ISOs
with information that will allow them to
perform market surveillance and
analysis more effectively. This
160 Only occupation data from May 2011 under
NAICS code 221100 (Electric Power Generation,
Transmission and Distribution) was relied upon.
We looked at the following occupations, which are
followed, in parenthesis, by their Standard
Occupational Classification code, hourly mean
wage, and our assigned weighting: General and
Operations Managers (111021, $59.15, 1⁄6);
Computer and Information Systems Managers
(113021, $54.18, 1⁄6), Compliance Officers (131041,
$35.76, 1⁄3); and, Business Operations Specialist All
Other (131199, $33.79, 1⁄3).
161 We also adjust hourly wage information to
reflect employer costs not related to wages and
salaries. That adjustment is based on BLS data,
citing that wages represent 70.4 percent of employer
costs for the private industry, see http://
www.bls.gov/news.release/ecec.nr0.htm.

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information is necessary to understand
the use of the interconnected electricity
grid, particularly transactions occurring
at interchanges. Due to the nature of the
electricity grid, an individual
transaction’s impact on an interchange
cannot be assessed adequately in all
cases without information from all
connected systems, which is included
in the e-Tags. The details of the physical
path of a transaction included in the eTags will help the Commission to
monitor, in particular, interchange
transactions effectively, detect and
prevent price manipulation over
interchanges, and ensure the efficient
and orderly use of the transmission grid.
Moreover, access to e-Tag data will
allow MMUs, RTOs and ISOs to better
identify behavior that may constitute
market manipulation under FPA section
222 and allow them to refer instances of
such conduct to the Commission.
Sharing e-Tag information with MMUs,
RTOs and ISOs also can aid the
Commission in its own market
surveillance, by bringing to the
Commission’s attention problems
identified by these entities.
Internal Review: The Commission has
reviewed the information collection
requirements and has determined, as
discussed above, that its action in this
proceeding is necessary to implement
the Commission’s responsibilities under
the Federal Power Act.
66. Interested persons may obtain
information on the reporting
requirements by contacting the
following: Federal Energy Regulatory
Commission, 888 First Street NE.,
Washington, DC 20426 [Attention: Ellen
Brown, Office of the Executive Director,
email: [email protected], phone:
(202) 502–8663, fax: (202) 273–0873].
67. For submitting comments
concerning the collection of information
and the associated burden estimate,
please send your comments to the Office
of Management and Budget, Office of

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Information and Regulatory Affairs,
Washington, DC 20503 [Attention: Desk
Officer for the Federal Energy
Regulatory Commission, phone: (202)
395–4718, fax: (202) 395–7285]. For
security reasons, comments to OMB
should be submitted by email to:
[email protected].
Comments submitted to OMB should
include Docket Number RM11–12 and
OMB Control Number 1902–0254.
IV. Regulatory Flexibility Act
68. The Regulatory Flexibility Act of
1980 (RFA) 162 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. The RFA mandates
consideration of regulatory alternatives
that accomplish the stated objectives of
a proposed rule and that minimize any
significant economic impact on a
substantial number of small entities.
The Small Business Administration’s
(SBA) Office of Size Standards develops
the numerical definition of a small
business.163 The SBA has established a
size standard for electric utilities,
stating that a firm is small if, including
its affiliates, it is primarily engaged in
the transmission, generation and/or
distribution of electric energy for sale
and its total electric output for the
preceding twelve months did not exceed
four million megawatt hours.164 Trade
Associations argue that any burden
estimate must also consider the burden
on entities submitting the data, a
number of which may be considered
small entities for purposes of the
Regulatory Flexibility Act of 1980.
69. The Final Rule provides the
Commission with access to e-Tag data.
It will be applicable to e-Tag Authors
and Balancing Authorities. The
162 5

U.S.C. 601–612.
CFR 121.101.
164 13 CFR 121.201, Sector 22, Utilities & n.1.
163 13

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Federal Register / Vol. 77, No. 249 / Friday, December 28, 2012 / Rules and Regulations
Information Collection Statement above
provides information about the number
of registered e-Tag Authors and
Balancing Authorities. However, a given
company, and indeed a given holding
company, may have multiple e-Tag
Author registrations. Likewise, e-Tag
registration data do not contain
company size information and are not
readily comparable to other data that do.
That said, using 2011 data submitted to
the Energy Information Administration
on Form EIA–861, the Commission
estimates that there are 503 holding
companies that could have one or more
registered e-Tag Authors. Of those 503
holding companies, the Commission
estimates that perhaps as many as 353
are small entities because their total
annual sales are less than 4,000,000
MWh. Comparison of the NERC
compliance registry with data submitted
to the Energy Information
Administration on Form EIA–861
indicates that perhaps as many as 18
small entities are registered as Balancing
Authorities. As estimated above, total
annual compliance costs, which we
believe are overstated, amount to about
$498,000 per year for all e-Tag Authors
and Balancing Authorities. When
spreading those costs across many
entities, both small and otherwise, the
Commission does not anticipate that
significant costs will be borne by any
small entity. Accordingly, the
Commission certifies that the Final Rule
will not have a significant economic
impact on a substantial number of small
entities.
V. Document Availability
70. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and/or print the contents of this
document via the Internet through the
Commission’s Home Page (http://
www.ferc.gov) and in the Commission’s
Public Reference Room during normal
business hours (8:30 a.m. to 5:00 p.m.
Eastern time) at 888 First Street NE.,
Room 2A, Washington, DC 20426.
71. From the Commission’s Home
Page on the Internet, this information is

available on eLibrary. The full text of
this document is available on eLibrary
in PDF and Microsoft Word format for
viewing, printing, and/or downloading.
To access this document in eLibrary,
type the docket number excluding the
last three digits of this document in the
docket number field.
72. User assistance is available for
eLibrary and the Commission’s Web site
during normal business hours from
FERC Online Support at 202–502–6652
(toll free at 1–866–208–3676) or email at
[email protected], or the
Public Reference Room at (202) 502–
8371, TTY (202) 502–8659. Email the
Public Reference Room at
[email protected].
VI. Effective Date and Congressional
Notification
73. These regulations are effective
February 26, 2013. The Commission has
determined, with the concurrence of the
Administrator of the Office of
Information and Regulatory Affairs of
OMB that this rule is not a ‘‘major rule’’
as defined in section 351 of the Small
Business Regulatory Enforcement
Fairness Act of 1996.
List of Subjects in 18 CFR Part 366
Electric power, and reporting and
recordkeeping requirements.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

In consideration of the foregoing, the
Commission amends Part I, Title 18,
Part 366 of the Code of Federal
Regulations, as follows:
PART 366—BOOKS AND RECORDS
1. The authority citation for part 366
continues to read as follows:

■

Authority: 15 U.S.C. 717 et seq., 16 U.S.C.
791a et seq., and 42 U.S.C. 16451–16463.

2. In § 366.2, redesignate paragraph
(d) as paragraph (e), and add new
paragraph (d), to read as follows:

■

§ 366.2 Commission access to books and
records.

*

*

*

*

*

76379

(d) E-Tag Authors and Balancing
Authorities. E-Tag Authors and
Balancing Authorities must take
appropriate steps to ensure Commission
view-only access to complete electronic
tags (e-Tags), or any successor to e-Tags,
used to schedule the transmission of
electric power in wholesale markets, by
designating the Commission as an
addressee on the e-Tags. E-Tag Authors
must include the Commission on the list
of entities with view-only rights to the
e-Tags. Balancing Authorities located
within the United States must validate
the inclusion of the Commission on the
e-Tag before those e-Tags are
electronically delivered to an address
specified by the Commission. The
complete e-Tag data to be made
available under this section shall consist
of:
(1) e-Tags for interchange transactions
scheduled to flow into, out of or within
the United States’ portion of the Eastern
or Western Interconnections, or into the
Electric Reliability Council of Texas
from the United States’ portion of the
Eastern or Western Interconnection; or
from the Electric Reliability Council of
Texas into the United States’ portion of
the Eastern or Western Interconnection;
and
(2) Information on every aspect of the
e-Tag, including all applicable e-Tag
IDs, transaction types, market segments,
physical segments, profile sets,
transmission reservations, and energy
schedules. In addition, e-Tag Authors
and Balancing Authorities must also
make available, upon request to the eTag Authors and Balancing Authorities,
access to the complete e-Tags, or any
successor to e-Tags, used to schedule
the transmission of electric power in
wholesale markets, to Regional
Transmission Organizations,
Independent System Operators, and
their Market Monitoring Units, on an
ongoing basis, subject to appropriate
confidentiality restrictions.
*
*
*
*
*
Note: Appendix will not be published in
the Code of Federal Regulations.

Appendix

LIST OF COMMENTERS*

srobinson on DSK4SPTVN1PROD with

Commenter

Short name or acronym

1 American Public Power Association, Edison Electric Institute, Large Public Power Council, National Rural Electric Cooperative Association.
2 California Independent System Operator Corporation and California Independent System Operator Corporate
Department of Market Monitoring.
3 DC Energy, LLC .........................................................................................................................................................
4 Electric Power Supply Association .............................................................................................................................
5 Modesto Irrigation District ...........................................................................................................................................
6 North American Reliability Corporation ......................................................................................................................

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Trade Associations
CAISO/DMM
DC Energy
EPSA
MID
NERC

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Federal Register / Vol. 77, No. 249 / Friday, December 28, 2012 / Rules and Regulations
LIST OF COMMENTERS*—Continued
Commenter

Short name or acronym

7 Monitoring Analytics, LLC, Potomac Economics, Ltd, Internal Market Monitor for ISO—New England, Market
Monitoring and Analysis for Southwest Power Pool, Inc., Market Assessment and Compliance for Independent
Electricity System Operator, Market Surveillance Administrator.
8 PJM Interconnection, L.L.C. and Southwest Power Pool, Inc ...................................................................................
9 Pennsylvania Public Utility Commission .....................................................................................................................
10 Powerex Corp ...........................................................................................................................................................
11 Ronald Rattey ...........................................................................................................................................................
12 Southern California Edison Company ......................................................................................................................
13 Southern Company Services, Inc .............................................................................................................................
14 Western Electricity Coordinating Council .................................................................................................................

Market Monitors**
PJM/SPP
Pa Commission
Powerex
Ronald Rattey
SoCal Edison
Southern
WECC

* In addition, Public Service Electric and Gas Company and PSEG Energy Resources & Trade LLC filed a motion to intervene without comments.
** Market Monitors filed motion for leave to file reply comments and reply comments in support of access to e-Tags by Reliability Coordinators
comparable to that for Commission and MMUs. Reply comments were also filed by the North American Energy Standards Board.

[FR Doc. 2012–31087 Filed 12–27–12; 8:45 am]
BILLING CODE 6717–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9607]
RIN 1545–BJ37

Partner’s Distributive Share
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.

srobinson on DSK4SPTVN1PROD with

AGENCY:

SUMMARY: This document contains final
regulations regarding the application of
the substantiality de minimis rule. In
the interest of sound tax administration,
this rule is being made inapplicable.
These final regulations affect
partnerships and their partners.
DATES: Effective Date: The final
regulations are effective on December
28, 2012.
Applicability Date: The final
regulations under § 1.704–
1(b)(2)(iii)(e)(1) are applicable for
partnership taxable years beginning
after May 19, 2008 and beginning before
December 28, 2012. The final
regulations under § 1.704–
1(b)(2)(iii)(e)(2)(i) are applicable
beginning on or after December 28,
2012, and the final regulations under
§ 1.704–1(b)(2)(iii)(e)(2)(ii) are
applicable for partnership taxable years
beginning on or after December 28,
2012.
FOR FURTHER INFORMATION CONTACT:

Rebecca Kahanel, at (202) 622–3050 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:

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Background
These final regulations contain
amendments to the Income Tax
Regulations (26 CFR Part 1) under
section 704 of the Internal Revenue
Code (Code). On October 25, 2011, the
Treasury Department and the IRS
published a notice of proposed
rulemaking (REG–109564–10) (the
proposed regulations) in the Federal
Register to remove the de minimis rule
in § 1.704–1(b)(2)(iii)(e) (the de minimis
partner rule). The proposed regulations
provide that the final regulations are
effective on the date they are published
in the Federal Register.
The Treasury Department and the IRS
did not hold a public hearing because
there were no requests to speak at a
hearing. However, the Treasury
Department and the IRS received
comments in response to the proposed
regulations.

rules provide.’’ In response to this
request, some of the commenters
requested that future guidance in
regulations amend the current de
minimis partner rule, and other
commenters suggested alternative
approaches for de minimis partners and
look-through partners. These alternative
approaches are discussed in Part 2.a
through 2.e of this preamble.

Explanation of Provisions and
Summary of Comments
After consideration of the comments,
the final regulations adopt the proposed
regulations as modified by this Treasury
decision. The comments are discussed
in this preamble.

One commenter suggested adopting a
‘‘reasonable assumptions rule’’ for de
minimis partners and indirect partners.
This commenter noted that a
partnership must know the tax
attributes of its partners in order to
determine whether a partnership’s
allocations are substantial. However,
this commenter also explained that
many partnerships are comprised of
partners that are passthrough entities
and it is difficult for these partnerships
to obtain information about the tax
attributes of their ultimate partners.
Thus, this commenter recommended
that the Treasury Department and the
IRS permit a partnership to make
reasonable assumptions about: (1) The
tax attributes of any partner that owns
(directly, indirectly, and through
attribution) not more than a 5 percent
interest in the capital or profits of the
partnership (each, a de minimis
partner); and (2) the identity and tax
attributes of any person that owns an
interest in the partnership indirectly

1. Elimination of the Current De
Minimis Partner Rule
Commenters generally agreed that the
current de minimis partner rule is too
broad, is easily abused, and/or is
inconsistent with sound tax policy. The
Treasury Department and the IRS agree
with these commenters that the current
de minimis partner rule should no
longer be applicable.
2. Alternative Approaches
The preamble to the proposed
regulations requests comments on ‘‘how
to reduce the burden of complying with
the substantial economic effect rules,
with respect to look-through partners,
without diminishing the safeguards the

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a. Modification of Current De Minimis
Partner Rule
A commenter suggested amending the
current de minimis partner rule by
providing that the de minimis partner
rule applies only if: (i) de minimis
partners own less than a specified
aggregate percentage (for example, 25
percent, 50 percent, or 80 percent) of the
partnership; and (ii) the partnership has
at least two non-de minimis partners.
b. Reasonable Assumptions Approach

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