On July 21, 2016, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (July NOPR) to require certain participants in wholesale electric markets to submit “relational databases” to report information about their financial and legal affiliations to other entities. The proposed rule changes will apply to market-based rate (MBR) sellers as well as entities trading virtual products or holding financial transmission rights (FTR). This alert describes the July NOPR and identifies some important implications for electricity market participants.

The July NOPR rescinds and replaces a much more expansive FERC Connected Entity NOPR issued on September 17, 2015, which would have required each Regional Transmission Organization and Independent System Operator to electronically deliver to the Commission, on an ongoing basis, data required from its market participants that would: (i) identify the market participants by means of a common alphanumeric identifier; (ii) list their “Connected Entities,” as defined quite broadly; and (iii) describe the nature of the employment, debt, and contractual relationships to each Connected Entity. MoFo published a Client Alert on the Connected Entity NOPR.