better organize and streamline the information. Specifically, on both
the indicative_pss and the indicative_mss tables we condensed the
individual value fields into a study_parameter field and a
study_parameter_value field in order to reduce the complexity and
length of these tables. We have also added separate reference fields to
allow Sellers to indicate whether the screen they are submitting is
amending or relying on a previously submitted screen, and added a
``scenario_type'' field for Sellers to indicate whether the screen they
are submitting is a base case scenario or a sensitivity analysis.
Additionally, on the indicative_mss table we added the ``mss_group_id''
column to allow Sellers to properly associate the separate parameters
for the four seasons of a market share screen.
    257. While acknowledging GE's preference for the Excel template
currently used, we do not adopt this proposal because we are adopting a
standardized method of data submission that does not utilize Excel. The
risk of error is much greater when each filer submits its own
spreadsheet rather than using a standardized data package that is
vetted through validation routines. The validation routines that are
part of the submission process will verify that the structure of any
filing is accurate and that the simple math that was part of the
spreadsheets is correct. Because such errors, when they occur, will be
identified more quickly and reliably, it should be easier for filers to
correct them. In addition, as noted above, spreadsheet programs
typically now have the capability to convert data entered into a given
spreadsheet into an XML automatically.

J. Entities to Entities Table and Natural Person Affiliates to Entities

    258. The NOPR data dictionary Entities to Entities table and
Natural Person Affiliates to Entities table were designed to
accommodate the reporting of relationship information between and among
reporting and reportable entities. This relationship information is
distinct from information about the entities (or natural persons) found
on the Entities table and the Natural Persons table.
1. Comments
    259. Commenters note that the description and field names do not
adequately capture sibling-type relationships, such as when entities
are commonly held, owned, or controlled. EEI recommends breaking the
table into two tables, one for Connected Entities and one for other
affiliates.\330\ EEI also notes that the focus of this table is on
establishing Ownership/Control relationships, but that control
relationships among entities are not required to be reported per the
regulatory text (though they note that control is reported when
reporting generation assets).\331\ EEI also asks, if only Affiliate
Owners are to be reported as affiliates for purposes of Sec.
35.36(a)(9),

whether the option to report owning and controlling relationships is
necessary because reportable Affiliate Owners will always be
controlling entities.\332\
---------------------------------------------------------------------------

    \330\ EEI at DD Appendix 21; Berkshire at 10-11 also suggests
modifications.
    \331\ EEI at DD Appendix 21.
    \332\ Id.
---------------------------------------------------------------------------

2. Commission Determination
    260. We adopt with revisions the Entities to Entities table and
combine attributes from the ``Natural Person Affiliates to Entities''
table referenced in the NOPR to form a single entities_to_entities
table. This revised single table will capture a Seller's relationship
with its ultimate upstream affiliate.
    261. We have modified field descriptions and names to address
concerns regarding sibling relationships; fields that were identified
with the terms ``Ownership'' or ``Control'' have been changed to
indicate a ``Relationship.'' We have also removed the Ownership
Percentage field from this table. We do not adopt EEI's suggestion to
split the table because doing so would add unnecessary complexity
requiring two separate tables for the same types of data. EEI's
assertion that ``control relationships among entities are not required
to be reported per the regulatory text'' is inaccurate. Under Sec.
35.36(a)(9) of the Commission's regulations, affiliate status can be
based on owning, controlling or holding ``10 percent or more of the
outstanding voting securities.'' Also, we are removing the control flag
field; thus, questions regarding this field are no longer relevant.

K. Entities to Generation Assets Table

    262. The NOPR data dictionary entities_to_genassets table \333\ was
designed to accommodate the reporting of information about how
reporting entities were connected to generation assets. It was intended
to allow analysts to see when multiple entities are related to a single
generation asset and how particular relationships change over time.
---------------------------------------------------------------------------

    \333\ As noted above, we have renamed the ``Entities to
Generation'' table as ``entities_to_genassets.''
---------------------------------------------------------------------------

1. Comments
    263. GE states that the requirement to report connections between
entities and generating assets does not currently exist and was not
part of the NOPR.\334\ GE states that the Commission has not justified
its need for information regarding generation decreases.\335\ It
further notes that, even if the Commission explains its need for
generation decreases, it is unclear why the Commission would only be
interested in the end of ownership rather than events such as
decommissioning of the asset.\336\ EEI states that the ``ownership end
date'' field is a new requirement not discussed in the NOPR.\337\
Designated Companies request clarification on the meaning of
``control'' for generation assets.\338\
---------------------------------------------------------------------------

    \334\ GE at 32.
    \335\ Id.
    \336\ Id.
    \337\ EEI at DD Appendix 27.
    \338\ Designated Companies at 25.
---------------------------------------------------------------------------

2. Commission Determination
    264. We have made adjustments to the entities_genassets table to
better accommodate the reporting of generation assets. As discussed
above in the Asset Appendix section, Sellers will use the
entities_genassets table to provide all of the details specific to its,
or its non-MBR affiliate's, relationship to a generation asset. Through
this table, a Seller will be able to indicate the following information
regarding its relationship to a generation asset: (1) Whether it, or
its non-MBR affiliate, owns or controls the asset; (2) where the asset
is located; (3) the de-rated capacity and methodology it uses to
perform the de-rate; (4) the amount of capacity that should be
attributed to it or its non-MBR affiliate; and (5) any explanatory
notes. The information to be provided in these tables is currently
required in Appendix B to Subpart H of Part 35 of the Commission's
regulations, and therefore the collection of this information falls
within the scope of the NOPR. The NOPR data dictionary essentially
proposed to change the format of the reported information from a
spreadsheet format to the XML format for inclusion in the relational
database. Regarding Designated Companies' request for clarification of
the term ``control,'' we note that there has been no change to the
meaning of ``control'' for the purpose of this final rule.
    265. We disagree with GE's assertion that the Commission has not
explained the need for information on generation decreases. In the
NOPR, the Commission explained that maintaining the accuracy of the
database is not only important to ensure the usefulness of the
relational database for the Commission's analytics and surveillance
program, but is also necessary to generate accurate asset appendices
for Sellers to reference in their filings.
    266. In response to GE, for decommissioned generators, Sellers can
indicate ``zero'' in the amount field and use the explanatory notes
field to indicate that the generator is decommissioned.
    267. While we acknowledge that an end date field is not required in
the current asset appendix, we deem this information necessary in order
to provide the Commission with up-to-date information about generation
asset ownership/control and to permit Sellers to remove generation
assets that they no longer own or control from the asset appendices
generated by the relational database.

L. Vertical Assets Table

    268. The NOPR data dictionary Vertical Assets table was designed to
accommodate the reporting of connections between reporting entities and
various ``vertical assets'' that were necessary for Commission
determinations regarding market-based rate filings.
1. Comments
    269. EEI notes that at the data dictionary workshop, Commission
staff stated that this table must include Vertical Assets of any
affiliates that are not also reporting entities. Also, EEI states that
the Commission should have separate tables for reporting the vertical
assets of the Seller and non-reporting affiliates. EEI requests that a
designated person be able to submit one submission on behalf of
multiple reporting entities with separate LEIs rather than requiring
individual submissions on behalf of each separate entity.\339\
Designated Companies and EEI request clarification on the definition
for the ``region'' and ``other inputs'' fields.\340\
---------------------------------------------------------------------------

    \339\ EEI at DD Asset Appendix 27.
    \340\ Id. at DD Asset Appendix 28; Designated Companies at 26.
---------------------------------------------------------------------------

2. Commission Determination
    270. In this final rule, we simplify the vertical asset
requirements as discussed in the Vertical Assets section, and the MBR
Data Dictionary reflects these new requirements. In response to EEI's
comments and consistent with our determinations with respect to
generation assets and PPAs, we will require Sellers to report the
vertical assets of their non-market-based rate affiliates, as this will
ensure that the asset appendix contains all affiliated assets. Since
this table captures the relationship of an entity to vertical assets,
we are re-naming the table as the entities_to_vertical_assets table.
The entity associated with the vertical asset will be the Seller or the
Seller's non-market-based rate affiliate, as reflected in the new
ref_cid, ref_lei, and ref_fid fields. Where the Seller is reporting its

own vertical asset, it will not separately report any identifier, and
the Commission will assume that the asset is attributable to the
Seller. Where the vertical asset reference is to a non-market-based
rate affiliate, the reporting entity must enter the affiliate's CID,
LEI or FERC generated ID. We will not address the meaning of ``other
inputs,'' as the Commission did not propose, and this final rule does
not adopt, any changes to the definition. Finally, we have renamed the
region field to balancing authority area. As discussed above in the
Asset Appendix section, knowing the balancing authority area will allow
the Commission to determine the region in which an asset is located.

M. Posted Changes to the Reference Tables

1. Commission Proposal
    271. The NOPR data dictionary contained descriptions of several
tables that will be available for submitting entities to use for
standard references when reporting information (e.g., RTO/ISO names,
balancing authority areas).
2. Comments
    272. GE states that in the event the Commission makes any changes
to the reference tables, reporting entities should not be required to
include any posted changes in their submissions until 60 days after the
changes and posting notice of the changes. GE also recommends that the
Commission provide notice and opportunity to comment on any
changes.\341\
---------------------------------------------------------------------------

    \341\ GE at 32-33.
---------------------------------------------------------------------------

3. Commission Determination
    273. We decline to require notice and opportunity to comment on any
minor, non-material change(s) to reference tables as for the same
reasons described in the Updates to the Data Dictionary section above.
Minor, non-material changes to the tables will be posted to the
Commission's website. Upon the posting of the changes, submitters will
be able to make submissions that conform to the most recent changes to
the table. However, Sellers will not be required to make submissions
using the revised tables until the next time that the Seller is
required to update its relational database information. In other words,
the Commission's revision of a table alone would not necessitate an
update to the relational database for each Seller.

N. Submission on Behalf of Multiple Entities

1. Commission Proposal
    274. The Commission proposed that reporting entities submit
information in the prescribed format to the Commission.
2. Comments
    275. Commenters request the ability for a reporting entity to
designate a person to make submissions on behalf of the reporting
entity.\342\ In addition, commenters seek allowance for a designated
person to make submissions on behalf of multiple reporting entities. In
particular, commenters seek allowance for a designated person to make
submissions on behalf of multiple reporting entities with only one
submission.\343\
---------------------------------------------------------------------------

    \342\ Designated Companies at 14 (Commission could use
authentication for filings (similar to EQR) to permit filer to
control who can file on its behalf).
    \343\ EEI at 2, 24.
---------------------------------------------------------------------------

3. Commission Determination
    276. With this final rule, we are leveraging the current eFiling
infrastructure. This will allow reporting entities to designate a
person to make submissions into the relational database on their
behalf. The same person may be designated to make submissions on behalf
of multiple reporting entities. However, the submission system for this
database will not be able to accommodate a single submission to be made
on behalf of multiple reporting entities. Stated another way, a
designated person would not be able to submit an XML that updates the
database information of multiple Sellers. Rather the designated person
would need to submit separate XMLs for each Seller.
    277. Nonetheless, certain features of the relational database and
eFiling system are available to minimize any burden on a designated
person making submissions on behalf of multiple, related reporting
entities. In particular, the standardized formatting in the MBR Data
Dictionary of reportable information readily allows such information to
be ``cut and pasted'' into multiple submissions. Furthermore, nothing
in this final rule affects the ability for multiple Sellers to be
docketed on the same filing. Currently, Sellers with a shared reporting
requirement, such as a triennial obligation, will often make a single
filing that is placed into the dockets of all relevant Sellers. Moving
forward, once Sellers have submitted the relevant information into the
database and retrieved the serial numbers, they will still be able to
make a single filing, i.e., their triennial, which goes into the docket
of all relevant Sellers. Further, we note that indicative screens that
will apply to multiple Sellers on the same filing will only need to be
submitted into the database by one of the Sellers.

IX. Confidentiality

A. Commission Proposal

    278. In the NOPR, the Commission explained that information
required to be submitted for market-based rate purposes would be made
public via publication in eLibrary, and potentially through other
means, such as the asset appendix, unless confidential treatment was
requested pursuant to the Commission regulations.\344\ The Commission
stated that to the extent a Seller submits its relationship with an
affiliate owner as privileged under Sec.  388.112 of the Commission's
regulations, the Seller-affiliate owner relationship would remain
confidential if it qualifies for such treatment.
---------------------------------------------------------------------------

    \344\ See 18 CFR 388.112.
---------------------------------------------------------------------------

B. Comments

    279. Independent Generation requests that the Commission provide a
more detailed explanation of how it intends to protect confidential
affiliate ownership information while still providing adequate public
information to facilitate proper reporting by other entities that may
share common relationships--e.g., given the apparent tension between
the proposal to publish a list of affiliate owners and the commitment
to confidentiality of certain affiliate owner relationships.\345\
---------------------------------------------------------------------------

    \345\ Independent Generation at 12.
---------------------------------------------------------------------------

    280. Financial Marketers Coalition requests that the Commission
clarify how much information will be available to the public and
whether filers will have a mechanism to request confidential treatment
on the various parts of their market-based rate XML submissions.
Financial Marketers Coalition also inquires whether the entirety of a
company's XML submission will be available for public view and the
security measures taken to keep sensitive data protected and the
website secure.\346\ Financial Marketers Coalition also requests
clarification as to how passive investor information will be treated,
including to what extent such information will be publicly available,
either through the relational database or the proposed website
interface.\347\
---------------------------------------------------------------------------

    \346\ Financial Marketers Coalition at 29-30.
    \347\ Id. at 16; see NOPR, 156 FERC ] 61,045 at P 26.

---------------------------------------------------------------------------

    281. Several commenters noted that any final rule should address
how confidentiality will be maintained in response to requests under
Freedom of Information Act (FOIA), including the standard the
Commission will apply in considering whether to grant a request for
disclosure under FOIA.
    282. Similarly, EPSA suggests that submitters could request
protection from public disclosure under the FOIA but notes that such
protections are subject to third-party disputes, potentially requiring
filers to participate in disputes about the continued applicability of
the exemption even as the information was confidentially submitted at
the outset. EPSA thus requests that the Commission consider specific
protections which ensure this information is protected when it is being
sought outside of the context of an investigation.\348\
---------------------------------------------------------------------------

    \348\ EPSA at 33.
---------------------------------------------------------------------------

    283. Working Group and others state that Sellers must not be
required to violate foreign privacy laws, employment laws,
confidentiality requirements in contracts, or other regulatory regimes
that are intended to protect information that otherwise would be
reportable.\349\ GE urges the Commission to consider the most limited
means of obtaining the information and to make publicly available its
current privacy protocols or to consider performing a Privacy Impact
Assessment with respect to this data.\350\
---------------------------------------------------------------------------

    \349\ Working Group at 32-33.
    \350\ GE at 19; PTI at 7-8 (``MBR Sellers should not be required
to share/gather information with/from affiliates where standards of
conduct or other legal requirements could limit or preclude them
from sharing such information. Under any final rule, the Commission
should not require MBR Sellers . . . to violate foreign privacy
laws, contractual confidentiality requirements, or other regulation
designed to protect information that would otherwise be reportable
under the Data Collection NOPR.'').
---------------------------------------------------------------------------

C. Commission Determination

    284. Consistent with the proposal in the NOPR, we clarify that
certain aspects of a Seller's market-based rate filing can appear in
eLibrary as either public or non-public. A Seller, like anyone else
submitting information to the Commission, may request privileged
treatment of its filing if it contains information that is claimed to
be exempt from FOIA's mandatory public disclosure requirements.\351\
While aspects of a Seller's filing may qualify for privileged
treatment, we do not expect that the information required to be
submitted into the database will qualify for privileged treatment. As
discussed in the Ownership section of this rule, the Commission has
determined that the relationship between the Seller and its ultimate
upstream affiliate(s) does not qualify for privileged treatment under
the Commission's regulations, particularly given that this affiliate
relationship informs the horizontal and vertical market power
analyses.\352\ Similarly, other information that must be submitted into
the database will not qualify for privileged treatment because it is
either: (1) Already publicized in the Seller's tariff; (2) part of the
Seller's asset portfolio, which informs the Commission's market power
analysis; or (3) part of the indicative screens, which informs the
Commission's market power analysis. Accordingly, we are not
incorporating any confidentiality safeguards to the database.
---------------------------------------------------------------------------

    \351\ For example, a seller may request confidential treatment
of workpapers and other proprietary information in support of its
application.
    \352\ See Ambit, 167 FERC ] 61,237 at PP 26, 30.
---------------------------------------------------------------------------

    285. Financial Marketers Coalition request clarification regarding
the treatment of passive investor information. As discussed in the
Passive Ownership section, the Commission will not be collecting
information on passive owners in the relational database.

X. Due Diligence

A. Commission Proposal

    286. In the NOPR, the Commission explained that with respect to any
inadvertent errors in the data submission process, it would accept
corrected submittals and would not impose sanctions where due diligence
had been exercised.\353\ However, the Commission also stated that the
intentional or reckless submittal of incorrect or misleading
information could result in the imposition of sanctions, including
civil penalties, as has occurred in other contexts.\354\ The Commission
stated that an entity can protect itself against such a result by
applying due diligence to the retrieval and submission of the required
information.\355\
---------------------------------------------------------------------------

    \353\ NOPR 156 FERC ] 61,045 at P 58.
    \354\ Id.
    \355\ Id.
---------------------------------------------------------------------------

B. Comments

    287. Several commenters argue that the Commission should grant a
special ``safe harbor'' for good faith mistakes in the information
reported by Sellers. Commenters are concerned that legitimate, good-
faith mistakes in market-based rate submissions will be subject to
penalties for reporting erroneous information under a strict liability
standard and request a ``safe harbor,'' \356\ including a safe harbor
for when other laws or regulations, such as under foreign privacy laws
or the Commission's Standards of Conduct, would prevent disclosing the
data to the Commission.\357\
---------------------------------------------------------------------------

    \356\ Designated Companies at 7 (Commission should establish a
safe harbor specifying what will constitute sufficient due diligence
for reporting Connected Entity data, with explicit parameters
similar to the Commission's safe harbor presumption in price
reporting); FIEG at 13 (``[T]he Commission should provide an
explicit safe harbor in its regulations for instances where there is
a demonstration of good faith effort to comply with the
regulations--even if a report contains omissions or mistakes.'');
PTI at 7; Working Group at 28-29 (requesting good faith mistake safe
harbor and citing safe harbor to entities that make legitimate,
good-faith mistakes or errors in index price reporting).
    \357\ Working Group at 30-31.
---------------------------------------------------------------------------

    288. For example, AVANGRID requests that the Commission establish
an express safe harbor for the submission of market-based rate
information to: (1) Establish a presumption of good faith on the party
of entities submitting market-based rate Information; and (2) expressly
provide that the Commission will not bring an enforcement action
against any entity for the accuracy of such data absent evidence
demonstrating that the entity intentionally submitted inaccurate or
misleading information to the Commission.\358\ EPSA requests that the
Commission clearly state in the final rule that errors discovered in
good faith by a reporting entity may be corrected in its next
submission upon discovery post-submission either by the reporting
entity, its affiliate, or Commission staff, without incurring penalty
for not having reported these minor errors to the Commission at an
earlier date.\359\
---------------------------------------------------------------------------

    \358\ AVANGRID at 21-22.
    \359\ EPSA at 32-33.
---------------------------------------------------------------------------

    289. While the Commission stated in the NOPR that it expects
affiliates ``to work together to have the correct information submitted
into the relational database,'' \360\ commenters further assert that
the reporting entity should not have a duty to verify the data
collected from its affiliates, when the information is outside its
control and cannot be verified; rather, such reporting entity should be
permitted to rely upon representations from their affiliates that such
information is accurate absent any reasonable basis suggesting
otherwise. Working Group questions how a Seller would be able to verify
market-based rate data that was submitted by an affiliate as
confidential and asserts that a Seller cannot be responsible for the
accuracy of its affiliates' or any other third-party data submissions
that are incorporated by

reference based on data in the Commission's relational database.\361\
---------------------------------------------------------------------------

    \360\ NOPR, 156 FERC ] 61,045 at n.40.
    \361\ Working Group at 28-29 (asserting ``data outside of a
reporting entity's control cannot be attributed to it''); see also
FIEG at 14 (``an entity providing Connected Entity data would need
to rely upon information from multiple sources within a market
participant's corporate family'').
---------------------------------------------------------------------------

    290. Some commenters recommend that the Commission confirm that a
Seller has a duty only to notify the affiliate of a perceived error in
data submitted by the affiliate if the Seller should discover one, and
the affiliate, only if it agrees with the Seller, has a duty to submit
corrected information within 30 days, while no such duty would apply if
the Seller does not know the source of the data.\362\ Working Group
further asserts that the Seller's market-based rate authority should
not be conditioned upon or rescinded if the Commission suspects or
determines the Seller's data submissions are incorrect and that
requiring corrected submissions would be more appropriate.\363\ EEI
requests that the Commission clarify that self-reports to Office of
Enforcement for minor errors do not need to be made, and that the next
quarterly submission should be used to correct these types of errors
once discovered.\364\
---------------------------------------------------------------------------

    \362\ Working Group at 29-30; PTI at 7 (recommending that
Sellers have a duty only to notify the affiliate of a perceived
error, and the affiliate have 30 days to submit the corrected
information to the Commission only if it agrees).
    \363\ Working Group at 30.
    \364\ EEI at 6.
---------------------------------------------------------------------------

C. Commission Determination

    291. We provide the following clarifications as to how the
Commission will apply the due diligence standard included in Sec.
35.41(b) with respect to inadvertent errors, misstatements, or
omissions in the data submission process. The Commission generally will
not seek to impose sanctions for inadvertent errors, misstatements, or
omissions in the data submission process. We expect that Sellers will
apply due diligence to the retrieval and reporting of the required
information by establishing reasonable practices and procedures to help
ensure the accuracy of their filings and submissions, which should
minimize the occurrence of any such inadvertent errors, misstatements,
or omissions. However, the intentional or reckless submittal of
incorrect or misleading information could result in the imposition of
sanctions, including civil penalties.
    292. Accuracy and candor by Sellers in their respective filings and
submissions under the final rule are essential to the Commission's
mandate of ensuring just and reasonable rates and its ability to
monitor for anomalous activity in the wholesale energy markets.
    293. We appreciate that when extensive data must be submitted to a
regulatory agency some data may, occasionally, despite an entity's best
efforts to achieve accuracy, turn out to be incomplete or incorrect. In
the case of inadvertent errors, the Commission's usual practice is
simply to require that a corrected submittal be made without sanctions
of any kind. Likewise, any necessary corrections to a submission under
the final rule should be submitted on a timely basis, as soon as
practicable after the discovery of the inadvertent error or omission,
and should not be delayed until the next periodic reporting
requirement. However, under certain circumstances, the submittal of
incorrect, incomplete, or misleading information could result in a
violation and the imposition of sanctions, including civil penalties.
These circumstances might include, for example, systemic or repeated
failures to provide accurate information and a consistent failure to
exercise due diligence to ensure the accuracy of the information
submitted. Any entity can protect itself against such a result by
adopting and following timely practices and procedures to prevent and
remedy any such failures in the retrieval and submission of accurate
and complete information.
    294. We decline to adopt a ``safe harbor'' or a ``presumption of
good faith'' or ``good faith reliance on others defense,'' nor do we
limit bringing enforcement actions to only when there is evidence
demonstrating that an entity intentionally submitted inaccurate or
misleading information to the Commission, as urged by some commenters.
Section 35.41(b) does not have a scienter requirement, and we decline
to adopt one in this final rule. Rather, the Commission will continue
to evaluate the circumstances surrounding the submission of erroneous
information to determine whether the entity submitting information
exercised due diligence. While we expect that most inadvertently
erroneous or incomplete submissions will be promptly corrected by
reporting entities without the imposition of any penalty, the
Commission will continue to exercise its discretion based on the
particular circumstances to determine whether erroneous or incomplete
submissions warrant a sanction.
    295. As the Commission has stated, a due diligence standard
provides the Commission with sufficient latitude to consider all facts
and circumstances related to the submission of inaccurate or misleading
information (or omission of relevant information) in determining
whether such submission is excusable and whether any additional remedy
beyond correcting the submission is warranted.\365\
---------------------------------------------------------------------------

    \365\ Investigation of Terms and Conditions of Public Utility
Market-Based Authorizations, 107 FERC ] 61,175, at P 96 (2004)
(order denying reh'g and granting, in part, clarification of
Investigation of Terms and Conditions of Public Utility Market-Based
Rate Authorizations, 105 FERC ] 61,218 (2003)) (``While we agree
that a false or misleading communication (or omission of relevant
information) may, in a given case, be excusable based on the facts
and circumstances presented, we are not convinced that our due
diligence standard would be inadequate for the purpose of
considering such a defense.'').
---------------------------------------------------------------------------

    296. Therefore, establishing adequate due diligence practices and
procedures ultimately depends on the totality of facts and
circumstances, and can vary case to case, depending upon the evidence
presented and whether, for example, reliance on third-parties or
affiliates is justified under the specific circumstances. For example,
most Sellers necessarily have knowledge of their affiliates' generation
portfolios because they must submit this information for purposes of
generating the indicative screens. To the extent the auto-generated
asset appendix is clearly incongruous with the screens, presumably due
to an incorrect submission by the Seller's affiliate, we expect that
the Seller will make note of the perceived error in the transmittal
letter.
    297. However, if a Seller does not have accurate or complete
knowledge of its affiliates' market-based rate information, in most
cases it should be able to rely on the information provided by its
affiliates about such information, unless there is some indication or
red flag that the information the affiliate supplies is inaccurate or
incomplete. In response to Working Group's concern about the difficulty
in verifying confidential information, we note that most of the
information that a Seller would need to rely upon from its affiliate
(e.g., ownership and asset information) generally should not be
submitted as non-public. In the event that it is, a Seller should
contact the affiliate for additional information.
    298. While Sellers should not ignore obvious inaccuracies or
omissions, relying on information from affiliates should be sufficient
to satisfy the due diligence standard, provided there is reasonable
basis to believe that such information obtained from affiliates (or
other third-parties) is reliable, accurate, and complete.

XI. Implementation and Timing

A. Commission Proposal

    299. In the NOPR, the Commission proposed that, within 90 days of
the date of the publication of a final rule in the Federal Register,
existing Sellers submit an informational baseline submission to the
relational database that includes certain information in order to
establish a baseline of information in the relational database to be
used for purposes of future filings.\366\
---------------------------------------------------------------------------

    \366\ NOPR, 156 FERC ] 61,045 at PP 60-62. The Commission
proposed that it would not act on these baseline submissions. Id. P
62.
---------------------------------------------------------------------------

B. Comments

    300. Numerous commenters state that the Commission's proposal to
have baseline filings submitted 90 days after publication of the final
rule in the Federal Register is unrealistic.\367\ Duke states that
there are ``fairly significant substantive issues that must be resolved
and clarified'' before a data dictionary and User Guide can be prepared
and recommends that the Commission issue a guidance order and conduct
collaborative meetings with industry prior to finalizing the MBR Data
Dictionary and User Guide.\368\ Duke references EEI's comments
regarding conflicts between the NOPR data dictionary and the NOPR text
and for issues regarding need for certain data.\369\ Brookfield states
that filing format and structure issues will need to be resolved before
filers and software vendors can begin to take the steps necessary to
implement the relational database submission requirements.\370\
Similarly, FMP states that there are ``fundamental questions about
filing contents, timing, processes, and even about the identification
of inapplicable disclosure requirements'' that were not addressed in
the NOPR and recommends that the Commission treat the NOPR as an
advanced notice of rulemaking or non-rulemaking notice of inquiry.\371\
FMP states that even if the Commission can resolve all of the issues in
the final rule that ``the answers would constitute amendments to the
NOPR, and affected parties would have no clear, final NOPR proposal to
address.'' \372\ EPSA also notes that absent resolution of pending
issues, filers would have to build a system without knowing precisely
to what they are building.\373\
---------------------------------------------------------------------------

    \367\ See, e.g., AVANGRID at 23-24; Brookfield at 10-11; Duke at
4-5; EEI at 25-27; EPSA at 6-7; MISO TOs at 9-10.
    \368\ Duke at 3-4.
    \369\ Id. at 3.
    \370\ Brookfield at 11.
    \371\ FMP at 3-4 (stating that the NOPR ``is nowhere near ready
for adoption as a final rule'').
    \372\ Id. at 4.
    \373\ EPSA at 7-8.
---------------------------------------------------------------------------

    301. Numerous commenters allege that the NOPR did not take into
account the time needed to develop and test software needed to
implement the relational database and, where necessary, to purchase
such software.\374\ EEI notes that filers often need to budget for new
software a year before such expenditures.\375\ Commenters also note the
need for employees to be trained to use the software.\376\
---------------------------------------------------------------------------

    \374\ See, e.g., AVANGRID at 23-24; EEI at 25-26 (``[o]nce the
data dictionary is finalized and the XML schema is developed for
submitting data to the relational database, software will need to be
developed in consultation with the industry and tested by the
software producers which will likely take one to two years''), EPSA
at 34 (``need for adequate time to develop internal software
capability should account for the fact that companies may need well
over 180 days from the date of a finalized XXL format's publication,
to develop cost-effective, internal-facing software tools to capture
the necessary information, rather than relying solely on a series of
vendor solutions.'').
    \375\ EEI at 27.
    \376\ See, e.g., AVANGRID at 23-24; Duke at 5; EEI at 25-26;
Independent Generation at 16; MISO TOs at 9-10; NRG at 7.
---------------------------------------------------------------------------

    302. Commenters also note the need to adjust and/or develop
internal processes and train staff regarding how to capture and report
the required information.\377\ EEI notes that business practices will
need to be developed to get relevant information from a variety of
business units to the persons trained to use the software.\378\
Designated Companies note the need to establish new controls,
coordination, and to allow for due diligence review of initial
submission by internal legal, risk management and compliance
departments, which they estimate will take at least 45 days.\379\ IECA
states that the NOPR requirements could cause structural changes to
commodities trading to ensure that trading or hedging processes are re-
aligned with the NOPR and may require revisions to trading strategies
to prevent inadvertent violations.\380\ NextEra estimates that, given
the Commission's estimate of 40-100 hours to collect and provide the
relational database information, it would take NextEra's portfolio of
over 125 Sellers between 5,000-12,500 hours to prepare and submit their
filings.\381\
---------------------------------------------------------------------------

    \377\ AVANGRID at 23-24; Brookfield at 10-11; Duke at 5; EEI at
25-26; MISO TOs at 9-10; NextEra at 14-15.
    \378\ EEI at 26.
    \379\ Designated Companies at 9-10.
    \380\ IECA at 21-22.
    \381\ NextEra at 14.
---------------------------------------------------------------------------

    303. In addition, commenters note the need to provide adequate time
and an opportunity for filers to test the software to ensure that
submissions can be made on a timely basis.\382\ EEI states that once
the test period has ended the Commission should provide sufficient time
for final implementation.\383\
---------------------------------------------------------------------------

    \382\ EEI at 28.
    \383\ Id.
---------------------------------------------------------------------------

    304. Many commenters propose timelines tied to particular
milestones to ensure realistic and reasonable compliance deadlines.
Commenters also identify the need for technical conferences prior to
implementation and recommend that the Commission extend the deadline
for baseline filings, proposing deadlines ranging generally from 12
months to 24 months after issuance or publication of the final
rule.\384\ GE states that the Commission's implementation plan should
include a detailed technical review of the MBR Data Dictionary by
stakeholders led by Commission staff.\385\ EEI states that the
Commission needs to take into account discussions at technical
workshops when preparing the XML schema and draft guidance/user
documents.\386\ EPSA states that the Commission needs to provide the
opportunity for filers to share concerns about nomenclature and the
need for clarity regarding various prongs of Connected Entity
definition.\387\ EPSA also recommends that the Commission explore
implementation possibilities in a technical workshop focusing on
submission issues prior to issuance of the final rule.\388\
---------------------------------------------------------------------------

    \384\ See, e.g., Brookfield at 11 (18 to 24 months after
issuance of final rule); GE at 11 (12-18 months after final rule
effective date); EEI at 26 (two-years to implement), EPSA at 6-7 (at
least one year after the Commission releases final XML format); FIEG
at 15 (at least 180 days after finalization of data dictionary and
completion of technical conferences); Independent Generation at 16
(minimum of 180 days); NRG at 8 (minimum of 18 months after issuance
of final rule); Working Group at 19-20 (at least 18 months).
    \385\ GE at 3-4.
    \386\ EEI at 28; see also MISO TOs at 7.
    \387\ EPSA at 9.
    \388\ Id. at 10-11; see also Designated Companies at 10
(adequate time for technical conferences and workshops is necessary
before finalizing the requirements and deadline for submission of
baseline filings in order to maximize data quality and usefulness);
PTI at 9 (requesting workshops on the scope of regulatory
definitions and on enforcement).
---------------------------------------------------------------------------

    305. Designated Companies, EEI and GE all recommend some form of
staggered implementation.\389\ ``EPSA proposes a 180-day initial period
to prepare [market-based rate] baseline filings subsequent to the date
that XML format and MBR Data Dictionary terms

have been finalized, with a subsequent 180-days to prepare and submit
the new Connected Entity data. The second compliance period deadline
should also be the due date for filers to replace their FERC-issued
unique identifiers with [LEIs].'' \390\ Some commenters recommend
phasing in relational database submission either based on geographic
regions or by type of information, with several commenters recommending
requiring market-based rate information be submitted to the relational
database before requiring any Connected Entity Information because most
of the market-based rate information is already being collected and
reported.\391\
---------------------------------------------------------------------------

    \389\ Designated Companies at 9-10 (stagger implementation with
first compliance date (Sellers' baseline submissions) due at 180
days with deadline of an additional 180 days for all submitters to
submit Connected Entity Information); EEI at 27; GE at 11-12
(recommend baselines submissions be submitted on a regional basis).
    \390\ EPSA at 5.
    \391\ See, e.g., id. at 9 (proposing requiring ``known'' market-
based rate requirements as part of the relational database before
migrating ``unknown'' Connected Entity requirements); Working Group
at 19-20 (recommending market-based rate relational database
submissions occur six months prior to initial Connected Entity
submissions).
---------------------------------------------------------------------------

    306. Similarly, some commenters recommend that the Commission have
a parallel system whereby market-based rate filers continue to submit
certain information, e.g., ownership information, as part of the old
style filing and simultaneously submit the same information to the
relational database.\392\ Specifically, APPA states that it would be
prudent to temporarily continue elements of existing filing
requirements after the new requirements are rolled out, and that once
the new filing regime is working as intended, the Commission can
discontinue the old filing requirements.\393\
---------------------------------------------------------------------------

    \392\ See, e.g., APPA at 12.
    \393\ Id.
---------------------------------------------------------------------------

    307. Finally, Financial Markets Coalition requests that the
Commission provide a process for requesting an extension to the initial
submission deadlines and the ongoing reporting deadlines.\394\
---------------------------------------------------------------------------

    \394\ Financial Marketers Coalition at 26.
---------------------------------------------------------------------------

C. Commission Determination

    308. The submitted comments, feedback received at the August 2016
workshop, and other outreach with the industry and software vendors,
indicate a clear concern with regard to the implementation schedule as
set forth in the NOPR. In light of these concerns, after further
consideration, we are revising the implementation schedule as set forth
below. At the outset, we revise the NOPR proposal, such that baseline
submissions will be due February 1, 2021, as discussed below.
    309. After issuance of this final rule, documentation for the
relational database will be posted to the Commission's website,
including XML, XSD, the MBR Data Dictionary, and a test environment
user guide. Additionally, after issuance of this final rule, a basic
relational database test environment will be available to submitters
and software developers. The Commission intends to add to the new test
environment features on a prioritized, scheduled basis until complete.
We note that the Commission will inform the public of when releases
will be made publicly available. This will allow internal and external
development to occur contemporaneously as new features are made
available for outside testing.
    310. During this development/testing phase, we encourage feedback
from outside testers. To facilitate such feedback, we anticipate that
staff will conduct outreach with submitters and external software
developers, and make any necessary corrections to available
requirements and/or documentation, thereby allowing for the relational
database to be fine-tuned prior to the submission of baseline
submittals. By so doing, we expect that when the relational database is
launched, it will be well-vetted and robust enough to handle the
submission of the required data and to appropriately generate reports
and respond to queries as needed. Therefore, contrary to commenters'
suggestions, once the relational database is launched, existing filing
procedures will be altered to require all applicable data to be
submitted into the database.
    311. In spring 2020,\395\ the Commission will make available on its
website a User Guide and a list of Frequently Asked Questions regarding
the process for preparing and submitting information into the
relational database.
---------------------------------------------------------------------------

    \395\ The dates provided with respect to implementation are the
expected dates for such milestones. However, in the event that
unforeseen issues develop, the Commission may extend any such dates
as necessary.
---------------------------------------------------------------------------

    312. Lastly, although the effective date of this part of the final
rule will be October 1, 2020, submitters will have until close of
business on February 1, 2021 to make their initial baseline
submissions.
    313. In fall 2020, submitters will be required to obtain FERC
generated IDs for reportable entities that do not have CIDs or LEIs, as
well as Asset IDs for reportable generation assets without an EIA code.
Specifically, submitters will need to ensure that every ultimate
upstream affiliate or other reportable entity has a CID, LEI, or FERC
generated ID and that all reportable generation assets have an EIA code
or Asset ID. More information on discovering or obtaining these IDs
will be published on the Commission's website. Subsequent to the
receipt of all necessary IDs, submitters must then submit their
baseline submissions into the relational database.
    314. Sellers that have received market-based rate authority by
December 31, 2020, must make a baseline submission into the relational
database by close of business on February 1, 2021. Sellers that have
filed for market-based rate authority, but have not received an order
granting market-based rate authority as of January 1, 2021, must make a
baseline submission into the relational database by close of business
on February 1, 2021. The information requirements for these submissions
are described above. We note that although Sellers with market-based
rate applications filed between the October 1, 2020 effective date of
the final rule and February 1, 2021 are required to submit their
information into the relational database during this interim period,
this information will not be used to process their filings.\396\ Thus,
such Sellers are also required to submit their indicative screens and
asset appendices as attachments to their filings through the eFiling
system.
---------------------------------------------------------------------------

    \396\ Sellers are required to submit this information by
February 1, 2021 so that their affiliates' asset appendices will be
correct and complete.
---------------------------------------------------------------------------

    315. As of February 1, 2021, prior to filing an initial market-
based rate application, a new Seller will be required to make a
submission into the relational database. This will allow the relational
database to create the asset appendices and indicative screens and
provide the Seller with the serial numbers that it needs to reference
in its transmittal letter as discussed above. We affirm that after
January 31, 2021, no asset appendices or indicative screens are to be
submitted as attachments to filings through the eFiling system.
    316. Additionally, in light of this implementation schedule, any
changes to the facts and circumstances upon which the Commission relied
when granting a Seller market-based rate authorization that take place
between October 1, 2020 and December 31, 2020, will need to be filed as
a notice of change in status by February 28, 2021, rather than February
1, 2021, thereby allowing for the relational database to be fully
populated prior to the filing of such notices of changes in status.
Thereafter, future notice of change in status obligations will align
with the timeline used for EQRs as described in Ongoing Reporting
Requirements section.

    317. With regard to recommendations that we explore implementation
possibilities in a technical workshop focusing on submission issues
prior to issuance of the final rule, we note that staff hosted two
technical workshops in 2016 and will conduct regular outreach as the
database is developed. Thus, we do not find there is a need to hold
additional workshops prior to issuance of this final rule. To the
extent that the Commission finds that workshops would be helpful after
publication of the final rule, it will provide for such workshops.
    318. With regard to Financial Marketers Coalition's request that
the Commission provide a process for requesting an extension to the
initial submission deadlines and the ongoing reporting deadlines, we
note that such a request can be submitted similar to the way in which a
current request for extension of time would be submitted to the
Commission for consideration.\397\
---------------------------------------------------------------------------

    \397\ 18 CFR 385.212.
---------------------------------------------------------------------------

XII. Information Collection Statement

    319. OMB regulations require that OMB approve certain reporting and
recordkeeping (collections of information) imposed by an agency.\398\
Upon approval of a collection(s) of information, OMB will assign an OMB
control number and expiration date. Respondents subject to the filing
requirements of this 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.
---------------------------------------------------------------------------

    \398\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    320. The Commission is submitting these reporting and recordkeeping
requirements to OMB for its review and approval under section 3507(d)
of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507(d). The NOPR
solicited comments on the Commission's need for this information,
whether the information will have practical utility, the accuracy of
the provided burden estimate, ways to enhance the quality, utility, and
clarity of the information to be collected, and any suggested methods
for minimizing the respondent's burden, including the use of automated
information techniques. Comments received were addressed in their
respective sections of this final rule. The final rule adopts data
collection requirements that will affect Sellers. The reporting
requirements will be included in the FERC-919A information
collection.\399\ Burden and cost estimates are provided for the
information collection.\400\ The total number of Sellers has increased
since the NOPR was issued; this increase is reflected in the estimates
for FERC-919A in the burden chart below.
---------------------------------------------------------------------------

    \399\ The new reporting requirements and burden that would
normally be submitted to OMB under FERC-919 (OMB Control No 1902-
0234) will be submitted under a ``placeholder'' information
collection number (FERC-919A). FERC-919 is currently under OMB
review for an unrelated FERC activity.
    \400\ The estimated hourly cost (salary plus benefits) provided
in this section are based on the figures for May 2018 posted by the
Bureau of Labor Statistics for the Utilities sector (available at
http://www.bls.gov/oes/current/naics2_22.htm) and updated March 2019
for benefits information (at http://www.bls.gov/news.release/ecec.nr0.htm). The hourly estimates for salary plus benefits are:
    Legal (code 23-0000), $142.86
    Computer and Information Systems Managers (code 11-3021), $98.81
    Computer and Mathematical (code 15-0000), $62.89
    Information Security Analysts (code 15-1122), $63.54
    Information and Record Clerks, All Other (referred to as
administrative work in the body) (code 43-4199), $40.84
    The following weights were applied to estimate the average
hourly costs:
    $46 [(.05 * $142.86) + (.95 * $40.84)]
    $82 [(.16 * $142.86) + (.16 * $98.81) + (.33 * $62.89) + (.33 *
$63.54)
---------------------------------------------------------------------------

    321. As proposed in the NOPR and adopted in the final rule, the
Commission recognizes that there will be an initial implementation
burden associated with providing the Commission with the required data.
While Sellers already submit most of the requested information to the
Commission as part of their initial applications, notices of change in
status, and triennial updated market power analyses, we acknowledge
that there will be an initial increase in burden associated with
providing this information in the new format for submission into the
database. Thus, we estimate that the average Seller will spend 35 to 78
hours collecting and providing this information in the first year,
mostly as part of the baseline submission requirement. After the
initial baseline submission, Sellers will generally only need to make
submissions to the database to correct errors in their submissions,
update previously submitted information, or submit the indicative
screens, submissions that are significantly less burdensome than the
baseline submission. Further, we expect that many Sellers will not need
to make any submissions to the database after their baseline
submissions because they will not have any updates to report and will
not need to provide indicative screens. Thus, we estimate that the
average Seller will experience an ongoing yearly burden of
approximately 1.5 to 6 hours.
    322. In contrast to the NOPR, the final rule adopts the requirement
that Sellers are required to report changes in status quarterly. This
will reduce burden from current change in status filing requirements
because Sellers are no longer required to file each change as it
occurs, but are required to file the net change that has occurred at
the end of the quarter. This reduction in burden is not large enough to
properly quantify in the burden chart included below, so we
conservatively exclude this reduction from the calculations.
Additionally, the reduction in burden from reporting less ownership
information than currently required in market-based rate applications
is not reflected quantitatively in the calculations below. We estimate
that Category 1 sellers will spend close to half of the hours that
Category 2 sellers will spend on first year incremental and ongoing
burden incurred from this final rule according to comments received
about burden to Sellers. Additionally, because Category 1 sellers are
not typically affiliated with much generation, we estimate that about
one-third of Category 1 sellers will report ongoing monthly and
quarterly information.
    323. The following table summarizes the estimated burden and cost
changes due to the final rule:
BILLING CODE 6717-01-P

[GRAPHIC] [TIFF OMITTED] TR26JY19.001

BILLING CODE 6717-01-C
    324. We estimate that there are 2,500 Sellers based on the number
of market-based rate filings; of those approximately 1,000 are Category
1 in all regions and 1,500 are Category 2 in one or more regions. The
total Paperwork Reduction Act related cost for Year 1 implementation is
$11,852,000 and ongoing cost (starting Year 2) is $475,272.
    325. Titles: Refinements to Policies and Procedures for Market-
Based Rates for Wholesale Sales of Electric Energy, Capacity, and
Ancillary Services by Public Utilities (FERC-919A)
    326. Action: Revisions to existing information collection.
    327. OMB Control No.: 1902-TBD.
    328. Respondents for this Rulemaking: Market-based rate sellers.
    329. Frequency of Responses: Initial implementation, compliance
filing, and periodic updates (monthly and quarterly).
    330. Necessity of Information: The Commission's data collection
requirements and processes must keep pace with market developments and
technological advancements. Collecting and formatting data as discussed
in this final rule will provide the Commission with the necessary
information to identify and address potential manipulative behavior,
better inform Commission policies and regulations, and generate asset
appendices and organizational charts, all while eliminating duplicative
reporting requirements. The new process will also make the information
more usable and accessible to the Commission in the least burdensome
manner possible.
    331. Internal Review: The Commission has made a determination that
the adopted revisions are necessary in light of technological advances
in data collection processes. The Commission has assured itself, by
means of its internal review, that there is specific, objective support
for the burden estimate associated with the information requirements.
    332. Interested persons may obtain information on the reporting
requirements by contacting the Federal Energy Regulatory Commission,
Office of the Executive Director, 888 First Street NE, Washington, DC
20426 [Attention: Ellen Brown, email<EMAIL_ADDRESS>phone:
(202) 502-8663, fax:<PHONE_NUMBER>].
    333. For submitting comments concerning the collection(s) of
information and the associated burden estimate(s), please send your
comments to the Commission, and to the Office of Management and Budget,
Office of Information and Regulatory Affairs, 725 17th Street NW,
Washington, DC 20503, [Attention: Desk Officer for the Federal Energy
Regulatory Commission, phone:<PHONE_NUMBER>, fax:<PHONE_NUMBER>].
    334. For security reasons, comments should be sent by email to OMB
at the following email address<EMAIL_ADDRESS>Comments
submitted to OMB should include Docket Number RM16-17-000 and/or, FERC-
919A.

XIII. Environmental Analysis

    335. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\401\ The
Commission has categorically excluded certain actions from these
requirements as not having a significant effect on the human
environment.\402\ The actions proposed here fall within a categorical
exclusion

in the Commission's regulations because they involve information
gathering, analysis, and dissemination.\403\ Therefore, neither an
Environmental Assessment nor an Environmental Impact Statement is
required for this final rule and has not been performed.
---------------------------------------------------------------------------

    \401\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 41 FERC ] 61,284 (1987).
    \402\ Order No. 486, 41 FERC ] 61,284.
    \403\ 18 CFR 380.4.
---------------------------------------------------------------------------

XIV. Regulatory Flexibility Act

    336. The Regulatory Flexibility Act of 1980 (RFA) generally
requires a description and analysis of proposed 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 minimize any
significant economic impact on a substantial number of small entities.
In lieu of preparing a regulatory flexibility analysis, an agency may
certify that a proposed rule will not have a significant economic
impact on a substantial number of small entities.
    337. Sellers. The Small Business Administration's (SBA) Office of
Size Standards develops the numerical definition of a small
business.\404\ The SBA size standard for electric utilities is based on
the number of employees, including affiliates.\405\ Under SBA's current
size standards, an electric utility (one that falls under NAICS codes
221122 [electric power distribution], 221121 [electric bulk power
transmission and control], or 221118 [other electric power generation])
\406\ are small if it, including its affiliates, employs 1,000 or fewer
people.\407\
---------------------------------------------------------------------------

    \404\ 13 CFR 121.101.
    \405\ 13 CFR 121.201.
    \406\ The North American Industry Classification System (NAICS)
is an industry classification system that Federal statistical
agencies use to categorize businesses for the purpose of collecting,
analyzing, and publishing statistical data related to the U.S.
economy. United States Census Bureau, North American Industry
Classification System, https://www.census.gov/eos/www/naics/.
    \407\ 13 CFR 121.201 (Sector 22--Utilities).
---------------------------------------------------------------------------

    338. Of the 2,500 affected entities discussed above, we estimate
that approximately 74 percent of the affected entities (or
approximately 1,850) are small entities. We estimate that each of the
1,850 small entities to whom the proposed modifications apply will
incur one-time costs of approximately $4,741 per entity to implement
the approved revisions, as well as the ongoing paperwork burden
reflected in the Information Collection Statement (approximately $190
per year per entity). We do not consider the estimated costs for these
1,850 small entities to be a significant economic impact. Accordingly,
we propose to certify that the final rule will not have a significant
economic impact on a substantial number of small entities.

XV. Document Availability

    339. 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.
    340. 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.
    341. User assistance is available for eLibrary and the Commission's
website during normal business hours from FERC Online Support at (202)
502-6652 (Toll free at 1-866-208-3676) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
XVI. Effective Dates and Congressional Notification

    342. These regulations are effective October 1, 2020. 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. This final rule is being
submitted to the Senate, House, Government Accountability Office, and
Small Business Administration.

List of Subjects in 18 CFR Part 35

    Electric power rates, Electric utilities, Reporting and
recordkeeping requirements.

    Issued: July 18, 2019.
Kimberly D. Bose,
Secretary.

    In consideration of the foregoing, the Commission proposes to amend
part 35 chapter I, title 18, Code of Federal Regulations, as follows.

PART 35--FILING OF RATE SCHEDULES AND TARIFFS

0
1. The authority citation for part 35 continues to read as follows:

     Authority:  16 U.S.C. 791a-825r; 2601-2645; 31 U.S.C. 9701; 42
U.S.C. 7101-7352.

0
2. Amend Sec.  35.36 by adding paragraph (a)(10) to read as follows:

Sec.  35.36  Generally.

    (a) * * *
    (10) Ultimate upstream affiliate means the furthest upstream
affiliate(s) in the ownership chain. The term ``upstream affiliate''
means any entity described in Sec.  35.36(a)(9)(i).
* * * * *

0
3. Amend Sec.  35.37 by:
0
a. Revising paragraphs (a);
0
 b. Removing paragraph (c)(4); and
    c. Redesignating paragraph (c)(5) through (7) as paragraphs (c)(4)
through (6), respectively.
    The revision reads as follows:

Sec.  35.37   Market power analysis required.

    (a)(1) In addition to other requirements in subparts A and B, a
Seller must submit a market power analysis in the following
circumstances: When seeking market-based rate authority; for Category 2
Sellers, every three years, according to the schedule posted on the
Commission's website; or any other time the Commission directs a Seller
to submit one. Failure to timely file an updated market power analysis
will constitute a violation of Seller's market-based rate tariff. The
market power analysis must be preceded by a submission of information
into a relational database that will include a list of the Seller's own
assets, the assets of its non-market-based rate affiliate(s) and
identification of its ultimate upstream affiliate(s). The relational
database submission will also include information necessary to generate
the indicative screens, if necessary, as discussed in paragraph (c)(1)
of this section. When seeking market-based rate authority, the
relational database submission must also include other market-based
information concerning category status, operating reserves
authorization, mitigation, and other limitations.
    (2) When submitting a market power analysis, whether as part of an
initial application or an update, a Seller must include a description
of its ownership structure that identifies all ultimate upstream
affiliate(s). With respect to any investors or owners that a Seller
represents to be passive, the Seller must affirm in its narrative that
the ownership interests consist solely of passive rights that are
necessary to protect the passive investors' or owners' investments and
do not confer control. The Seller must also include an appendix of
assets and, if necessary, indicative screens as discussed in

paragraph (c)(1) of this section. A Seller must include all supporting
materials referenced in the indicative screens. The appendix of assets
and indicative screens are derived from the information submitted by a
Seller and its affiliates into the relational database and retrievable
in conformance with the instructions posted on the Commission's
website.
* * * * *

0
3. Amend Sec.  35.42 by:
0
a. Revising paragraphs (a)(2)(iii) and (iv);
0
b. Adding (a)(2)(v);
0
d. Revising paragraphs (b) and (c); and
0
e. Adding paragraph (d).
    The revisions and additions read as follows:

Sec.  35.42   Change in status reporting requirement.

    (a) * * *
    (2) * * *
    (iii) Owns, operates or controls transmission facilities;
    (iv) Has a franchised service area; or
    (v) Is an ultimate upstream affiliate.
    (b) Any change in status subject to paragraph (a) of this section
must be filed quarterly. Power sales contracts with future delivery are
reportable once the physical delivery has begun. Sellers shall file
change in status in accordance with the following schedule: For the
period from January 1 through March 31, file by April 30; for the
period from April 1 through June 30, file by July 31; for the period
July 1 through September 30, file by October 31; and for the period
October 1 through December 31, file by January 31. Failure to timely
file a change in status constitutes a tariff violation.
    (c) Changes in status must be prepared in conformance with the
instructions posted on the Commission's website.
    (d) A Seller must report on a monthly basis changes to its
previously-submitted relational database information, excluding updates
to the horizontal market power screens. These submissions must be made
by the 15th day of the month following the change. The submission must
be prepared in conformance with the instructions posted on the
Commission's website.

Appendix A to Subpart H of Part 35 [Removed]

0
4. Remove appendix A to subpart H of part 35.

Appendix B to Subpart H of Part 35 [Removed]

0
5. Remove appendix B to subpart H of part 35.

    Note: The following appendix will not appear in the Code of
Federal Regulations.

Appendix
---------------------------------------------------------------------------

    \408\ FIEG is comprised of financial institutions that provide a
broad range of services to all segments of the U.S. and global
economy. Its members and their affiliates play a number of roles in
the wholesale power markets, including acting as power marketers
(with market-based rate authority), lenders, underwriters of debt
and equity securities, and providers of investment capital.)
    \409\ Financial Marketers Coalition include financial market
participants who trade a variety of physical and/or financial
products in the organized wholesale electric markets.
    \410\ FMP includes Ares EIF Management, LLC Monolith Energy
Trading LLC and its public utility affiliates,
    \411\ Working Group includes commercial firms in the energy
industry whose primary business activity is the physical delivery of
one or more energy commodities to others, including industrial,
commercial, and residential consumers. Members of Working Group are
producers, processors, merchandisers, and owners of energy
commodities.

                     List of Commenters and Acronyms
------------------------------------------------------------------------
                 Commenter                        Short name/acronym
------------------------------------------------------------------------
American Public Power Association..........  APPA.
AVANGRID, Inc..............................  AVANGRID.
Berkshire Hathaway Energy Company..........  Berkshire.
Designated Companies (Macquarie Energy LLC,  Designated Companies.
 DC Energy, LLC and Emera Energy Services,
 Inc.).
Duke Energy Corporation....................  Duke.
EDF Renewable Energy, Inc..................  EDF.
Edison Electric Institute..................  EEI.
Electricity Consumers Resource Council       ELCON and AFPA.
 (ELCON) and The American Forest and Paper
 Association (AFPA).
Energy Ottawa, Inc.........................  Energy Ottawa.
Financial Institutions Energy Group........  FIEG.\408\
Financial Marketers Coalition..............  Financial Marketers
                                              Coalition.\409\
Fund Management Parties....................  FMP.\410\
Futures Industry Association...............  FIA.
GE Energy Financial Services, Inc..........  GE.
Independent Generation Owners &              Independent Generation.
 Representatives.
International Energy Credit Association....  IECA.
Manitoba Hydro.............................  Manitoba Hydro.
MISO Transmission Owners...................  MISO TOs.
New Jersey Board of Public Utilities and     New Jersey and Maryland
 the Maryland Public Service Commission.      Commissions.
NextEra Energy, Inc........................  NextEra.

Old Dominion Electric Cooperative; The       Joint Cooperatives.
 National Rural Electric Cooperative
 Association; East Kentucky Power
 Cooperative, Inc.
Southern California Edison Company.........  SoCal Edison.
Starwood Energy Group Global, L.L.C........  Starwood.
The Brookfield Companies...................  Brookfield.
The Cities of Anaheim, Azusa, Banning,       CA Cities.
 Colton, Pasadena, and Riverside,
 California.
The Commercial Energy Working Group........  Working Group.\411\
The Electric Power Supply Association,       EPSA.
 Independent Power Producers of New York,
 Inc., and PJM Power Providers Group.
The Independent Market Monitor for PJM.....  PJM Monitor.
The NRG Companies..........................  NRG.
The Power Trading Institute................  PTI.
Transmission Access Policy Group...........  TAPS.
------------------------------------------------------------------------

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Docket No. RM16-17-000

Data Collection for Analytics and Surveillance and Market-Based Rate
Purposes
(Issued July 18, 2019)
GLICK, Commissioner, dissenting in part:

    1. I support the aspects of today's final rule that streamline
collection of the data needed to regulate market-based rates by
creating a relational database and revising certain information
requirements. I dissent in part, however, because the Commission is
declining to finalize a critical aspect of the underlying notice of
proposed rulemaking \1\ (NOPR) that would have required Sellers \2\ and
entities that trade virtual products or that hold financial
transmission rights (Virtual/FTR Participants) \3\ to report
information regarding their legal and financial connections to various
other entities (Connected Entity Information). That information is
critical to combatting market manipulation \4\ and the Commission's
retreat from the NOPR proposal will hinder our efforts to detect and
deter such manipulation.
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    \1\ Data Collection for Analytics and Surveillance and Market-
Based Rate Purposes, 156 FERC ] 61,045 (2016) (NOPR).
    \2\ ``Seller means any person that has authorization to or seeks
authorization to engage in sales for resale of electric energy,
capacity or ancillary services at market-based rates under section
205 of the Federal Power Act.'' 18 CFR 35.36(a)(1) (2018).
    \3\ As explained in the final rule, the Commission proposed to
define the term ``Virtual/FTR Participants'' as entities that buy,
sell, or bid for virtual instruments or financial transmission or
congestion rights or contracts, or hold such rights or contracts in
organized wholesale electric markets, not including entities defined
in section 201(f) of the FPA. Data Collection for Analytics and
Surveillance and Market-Based Rate Purposes, 168 FERC ] 61,039, at P
182 (2019) (Final Rule).
    \4\ See, e.g., Cal. ex rel. Lockyer v. FERC, 383 F.3d 1006, 1013
(9th Cir. 2004) (recognizing the role that ``strict reporting
requirements'' play in ensuring that rates are just and reasonable
and that the markets are not subject to manipulation).
---------------------------------------------------------------------------

    2. When it comes to policing market manipulation, context matters.
A transaction that seems benign when viewed in isolation may raise
serious concerns when viewed with an understanding of the relationships
between the transacting parties and/or other market participants.\5\
Unfortunately, information regarding the legal and contractual
relationships between market participants is not widely available and
may, in some cases, be impossible to ascertain without the cooperation
of the participants themselves. That lack of information can leave the
Commission in the dark and unable to fully monitor wholesale market
trading activity for potentially manipulative acts.
---------------------------------------------------------------------------

    \5\ See NOPR, 156 FERC ] 61,045 at P 43.
---------------------------------------------------------------------------

    3. That problem is particularly acute when it comes to market
participants that transact only in virtual or FTR products. Virtual/FTR
Participants are very active in RTO/ISO markets and surveilling their
activity for potentially manipulative acts consumes a significant share
of the Office of Enforcement's time and resources. It may, therefore,
be surprising that the Commission collects only limited information
about Virtual/FTR Participants and often cannot paint a complete
picture of their relationships with other market participants.
Similarly, the Commission has no mechanism for tracking recidivist
fraudsters who deal in these products and perpetuate their fraud by
moving to different companies or participating in more than one RTO or
ISO. And, perhaps most egregiously, the Commission's current
regulations do not impose a duty of candor on Virtual/FTR Participants,
meaning that bad actors can lie with impunity, at least insofar as the
Commission is concerned.\6\ The abandoned aspects of the NOPR would
have addressed all three deficiencies, among others.
---------------------------------------------------------------------------

    \6\ In contrast, section 35.41(b) of the Commission's
regulations requires a Seller to ``provide accurate and factual
information and not submit false or misleading information, or omit
material information, in any communication with the Commission,''
market monitors, RTOs/ISOs, or jurisdictional transmission
providers, unless the ``Seller exercises due diligence to prevent
such occurrences. Virtual/FTR Participants are not subject to this
duty of candor. The Connected Entity portion of the NOPR proposed to
add a new section 35.50(d) to the Commission's regulations that
would require the same candor from Virtual/FTR Participants in all
of their communications with the Commission, Commission-approved
market monitors, RTOs, ISOs, and jurisdictional transmission
providers. Id. at P 20.
---------------------------------------------------------------------------

    4. Those deficiencies have real-world consequences. Consider a
recent example from a Commission order of how an individual involved in
one manipulative scheme was able to move, rather seamlessly, to
allegedly perpetuate a similar scheme at another entity. On July 10,
2019, the Commission issued an Order to Show Cause with an accompanying
report and recommendation from the Office of Enforcement that detailed
how Federico Corteggiano allegedly engaged in a cross-product market
manipulation scheme in the California Independent System Operator's
(CAISO).\7\ As described in that order, this alleged scheme used
techniques that were similar to another manipulative scheme involving
Corteggiano while he was employed at Deutsche Bank.\8\ Without

the Connected Entity reporting requirements contemplated in the NOPR,
the Commission lacks any effective means of tracking individuals who
perpetrate a manipulative scheme at one entity and then move locations
and engage in similar conduct elsewhere, as Corteggiano is alleged to
have done. That makes no sense. We should not be leaving the Office of
Enforcement to play ``whack-a-mole,'' addressing recidivist fraudsters
only when evidence of their latest fraud comes to light.
---------------------------------------------------------------------------

    \7\ Vitol Inc. and Federico Corteggiano, 168 FERC ] 61,013, at
App. A (2019) (Enforcement Staff Report and Recommendation at 1).
    \8\ Enforcement investigated Corteggiano's conduct at Deutsche
Bank, which resulted in the settlement of manipulation allegations
with Deutsche Bank for a civil penalty of $1.5 million and
disgorgement of $172,645, plus interest, in January 2013. See
Deutsche Bank Energy Trading, LLC, 142 FERC ] 61,056 (2013)
(approving a settlement agreement in which Deutsche Bank neither
admitted nor denied alleged violations). Although Corteggiano was
not identified by name in the Order to Show Cause in the Deutsche
Bank enforcement matter, the public Enforcement Staff Report
attached to the order explained his central role in the trading
scheme and referred to him by name. Deutsche Bank Energy Trading,
LLC, 140 FERC ] 61,178, at App. A (2012).
---------------------------------------------------------------------------

    5. Alternatively, consider the recent example of GreenHat Energy,
LLC's (GreenHat) default on its FTRs in PJM Interconnection, L.L.C.
(PJM), at least as it is described in an independent report prepared
for PJM's Board.\9\ That report alleges that GreenHat told PJM it had
bilateral contracts that would provide a future revenue stream,
alleviating the need for additional collateral.\10\ The report further
contends that PJM mistakenly relied on GreenHat's representations and
the contracts in question did not provide the promised revenue stream,
significantly exacerbating GreenHat's collateral shortfall.\11\ Under
the Commission's current regulations, no duty of candor attached to
GreenHat's allegedly misleading statements. It is, of course,
impossible to know how a duty of candor for Virtual/FTR Participants
would affect potential misstatements. But, if there were a duty of
candor for Virtual/FTR Participants, it would give the Commission a
basis for investigating potentially misleading statements and, if
appropriate, sanctioning that conduct.\12\
---------------------------------------------------------------------------

    \9\ I take no position on the accuracy of the events as
discussed in that report or whether, even if true, the actions
described therein would be improper. I use this report only as an
illustrative example of what could occur in the absence of a duty of
candor.
    \10\ Robert Anderson & Neal Wolkoff, Report of the Independent
Consultants on the GreenHat Default 23-25 (Mar. 26, 2019), available
at https://www.pjm.com/-/media/library/reports-notices/special-reports/2019/report-of-the-independent-consultants-on-the-greenhat-default.pdf.
    \11\ Id. (the report refers to this as ``a seductive but
problematic pledge'').
    \12\ There is an open Office of Enforcement investigation into
GreenHat's alleged misconduct. PJM Interconnection, L.L.C., 166 FERC
] 61,072, at P 36 (2019) (noting that ``the Commission's Office of
Enforcement began a non-public investigation under Part 1b of the
Commission's regulations into whether Green Hat engaged in market
manipulation or other potential violations of Commission orders,
rules, and regulations'').
---------------------------------------------------------------------------

    6. Although the Commission does not dispute the benefits that the
Connected Entities Information would provide, it ``declines to adopt''
this aspect of the NOPR without any real analysis or explanation and
based only on its ``appreciat[ion]'' of the ``difficulties of and
burdens imposed by this aspect of the NOPR.'' \13\ Nothing in the
record suggests that any burdens associated with this reporting
obligation would outweigh its considerable benefits. As an initial
matter, the NOPR already paired back the scope of Connected Entity
Information compared to the previous NOPR addressing this issue.\14\
The Commission could have further explored ways to limit the impact of
this rule if it were truly concerned about that burden by, for example,
eliminating the inclusion of contracts for defining connected entities,
which received strong pushback from industry. Alternatively, the
Commission could have established a phased-in implementation schedule
to provide industry time to adjust to the new reporting requirements.
---------------------------------------------------------------------------

    \13\ Final Rule, 168 FERC ] 61,039 at P 184. The Commission also
notes that the creation of the relational database for market-based
rate purposes will provide value for the Commission's analytics and
surveillance program. While true, that will not provide the distinct
and critical Connected Entity Information needed to aid the
Commission in detecting and deterring market manipulation. Without
this information, the Commission continues to have little visibility
into Sellers' and Virtual/FTR Participants' affiliates with solely
financial market participants.
    \14\ For example, in the initial proposal, the Commission
proposed to collect information concerning ownership, employee,
debt, and contractual connections, while this proposal replaced
``employee'' with the much narrower ``trader'' definition and
eliminated the reporting of debt instruments. Compare Collection of
Connected Entity Data from Regional Transmission Organizations and
Independent System Operators, 152 FERC ] 61,219, at P 23 (2015)
(defining ``Connected Entity'') with NOPR, 156 FERC ] 61,045 at P 17
(explaining changes from the 2015 proposal to the 2016 proposal);
see also Collection of Connected Entity Data from Regional
Transmission Organizations and Independent System Operators, 156
FERC ] 61,046 (2016) (withdrawing and terminating the proposed 2015
notice of proposed rulemaking).
---------------------------------------------------------------------------

    7. Instead, the Commission makes only a conclusory statement based
on an unspecified burden to industry. It makes no effort to explain why
that burden outweighs the benefits that Connected Entities Information
would provide to the Commission's ability to carry out its enforcement
responsibilities. Without such information, the predictable result of
today's order is that market participants are more likely to find
themselves subject to a manipulative scheme than if we had proceeded to
a final rule on these aspects of the NOPR.
* * * * *
    8. Identifying, eliminating, and punishing market manipulation must
remain one of the Commission's chief priorities, as it has been since
Congress vested the Commission with that responsibility when it enacted
the 2005 amendments to the FPA in the wake of the Western Energy
Crisis.\15\ In addition to the financial losses directly attributable
to a particular instance of fraud, market manipulation erodes
participants' confidence in wholesale electricity markets--a dynamic
that has serious deleterious consequences for the long-term health and
viability of those markets. Although I appreciate the importance of
avoiding unnecessary regulatory burdens, the record in this proceeding
indicates that the Connected Entity Information is necessary and would,
in the long-term, benefit all market participants, including those
subject to the regulations, by helping to ensure confidence in the
integrity of wholesale electricity markets.
---------------------------------------------------------------------------

    \15\ Energy Policy Act of 2005, Public Law 109-58, Sec.  1283,
119 Stat. 979.
---------------------------------------------------------------------------

    For these reasons, I respectfully dissent in part.
-----------------------------------------------------------------------

Richard Glick,
Commissioner.

[FR Doc. 2019-15714 Filed 7-25-19; 8:45 am]
BILLING CODE 6717-01-P