Press Release for RM19-2-000 NOPR (12-20-2018)

December 20, 2018
News Media Contact
Craig Cano | 202-502-8680
Docket No. RM19-2-000
Agenda Item E-1

FERC Proposes to Ease Regulatory Burden for Certain Market-Based Rate Sellers
The Federal Energy Regulatory Commission (FERC) today proposed to revise the horizontal market power analysis
required for electric power sellers seeking to obtain or retain market-based rate authority in certain organized
wholesale power markets. But while this action would ease the regulatory burden for certain market-based rate
sellers, today’s Notice of Proposed Rulemaking (NOPR) safeguards the Commission’s ability to prevent the potential
exercise of market power by leaving in place other important protections to ensure just and reasonable rates.
Today’s NOPR has its origins in Order No. 697, in which FERC codified two indicative screens for assessing horizontal
market power for market-based rate sellers: the pivotal supplier screen and the wholesale market share screen. Each
serves as a cross-check on the other to determine whether sellers may have market power and should be examined
further when seeking market-based rates.
Today’s NOPR would relieve sellers of the requirement to submit those indicative screens in any organized wholesale
power market that administers energy, ancillary services and capacity markets subject to Commission-approved
monitoring and mitigation. Market-based rate sellers in organized wholesale power markets that do not administer
these types of capacity markets – currently, that is the Southwest Power Pool and California Independent System
Operator – would be obliged to submit those indicative screens if they wish to sell capacity.
The NOPR also proposes that indicative screen failures in organized wholesale power markets where the grid operator
does not administer a capacity market no longer would be presumed to be adequately addressed by the market
monitoring and mitigation in those markets. In cases of screen failures, market-based sellers in those markets may
submit a delivered-price test or other evidence or propose other mitigation for capacity sales in these markets.
All market-based rate sellers would still be required to file a vertical market power analysis as well as an asset
appendix, which provides comprehensive information relevant to determine a seller’s market power, including:
generators owned or controlled by the seller and its affiliates; long-term firm power purchase agreements of the seller
and its affiliates; and electric transmission assets, natural gas intrastate pipelines and intrastate natural gas storage
facilities owned or controlled by the seller and its affiliates.
Comments on the NOPR are due 45 days after publication in the Federal Register.
R-19-07

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