[Federal Register Volume 81, Number 150 (Thursday, August 4, 2016)]
[Proposed Rules]
[Pages 51726-51772]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17839]



[[Page 51725]]

Vol. 81

Thursday,

No. 150

August 4, 2016

Part V





 Department of Energy





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Federal Energy Regulatory Commission





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18 CFR Part 35





Data Collection for Analytics and Surveillance and Market-Based Rate 
Purposes; Proposed Rule

  Federal Register / Vol. 81 , No. 150 / Thursday, August 4, 2016 / 
Proposed Rules  

[[Page 51726]]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM16-17-000]


Data Collection for Analytics and Surveillance and Market-Based 
Rate Purposes

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes 
to revise its regulations to collect certain data for analytics and 
surveillance purposes from market-based rate (MBR) sellers and entities 
trading virtual products or holding financial transmission rights and 
to change certain aspects of the substance and format of information 
submitted for MBR purposes. The revisions proposed herein include new 
requirements for those entities to report certain information about 
their legal and financial connections to other entities to assist the 
Commission in its analytics and surveillance efforts. The Commission 
previously proposed to require certain market participants in the 
Commission-jurisdictional organized wholesale electric markets to file 
similar information about their financial and legal connections in the 
Collection of Connected Entity Data from Regional Transmission 
Organizations and Independent System Operators Notice of Proposed 
Rulemaking issued in Docket No. RM15-23-000 (Connected Entity NOPR). 
However, as described herein, this proposal presents substantial 
revisions from what the Commission proposed in the Connected Entity 
NOPR, including, among other things: A different set of filers; a 
reworked and substantially narrowed definition of Connected Entity; and 
a different submission process. With respect to the MBR program, the 
proposals include: Adopting certain changes to reduce and clarify the 
scope of ownership information that MBR sellers must provide, similar 
to the notice of proposed rulemaking issued in Docket No. RM16-3-000 
(Ownership NOPR); reducing the information required in asset 
appendices; and collecting currently-required MBR information and 
certain new information in a consolidated and streamlined manner. The 
Commission proposes all of these changes in order to eliminate 
duplication, ease compliance burdens, modernize its data collections, 
and render information collected through its programs usable and 
accessible for the Commission and its staff. In furtherance of this 
effort, in orders being issued concurrently with the instant NOPR, the 
Commission withdraws the Connected Entity NOPR issued in Docket No. 
RM15-23-000 and the Ownership NOPR issued in Docket No. RM16-3-000.\1\ 
The Commission also proposes to eliminate the requirement that MBR 
sellers submit corporate organizational charts adopted in Order No. 816 
in Docket No. RM14-14-000.
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    \1\ Collection of Connected Entity Data from Regional 
Transmission Organizations and Independent System Operators, 156 
FERC ] 61,046 (2016); Ownership Information in Market-Based Rate 
Filings, 156 FERC ] 61,047 (2016).

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DATES: Comments are due September 19, 2016.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT:
Jamie Marcos, Office of Enforcement, Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426, (202) 502-6628, 
[email protected].
Laura Chipkin, Office of General Counsel, Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426, (202) 502-8615, 
[email protected].
Melissa Lozano, Office of Energy Market Regulation, Federal Energy 
Regulatory Commission, 888 First Street NE., Washington, DC 20426, 
(202) 502-6267, [email protected].
Byron Corum, Office of Energy Market Regulation, Federal Energy 
Regulatory Commission, 888 First Street NE., Washington, DC 20426, 
(202) 502-6555, [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Discussion
    A. Proposals Regarding Connected Entity Information
    B. Proposals Regarding MBR Information
    1. Ownership Information
    2. Asset Appendix Information
    3. Indicative Screen and Other MBR Information
    C. Need and Authority: Analytics and Surveillance
    D. Nature of the Connected Entity Information Submissions
    E. Legal Entity Identifiers
    F. Confidentiality and Due Diligence
    G. Filing Requirement for Existing and New Virtual/FTR 
Participants
    H. Baseline Submission Required of Existing MBR Sellers
    I. Ongoing Connected Entity Information Submission Requirements
    J. Ongoing MBR Seller Filing Requirements
III. Information Collection Statement
IV. Environmental Analysis
V. Regulatory Flexibility Act
VI. Comment Procedures
VII. Document Availability
    1. The Federal Energy Regulatory Commission (Commission) proposes 
in this Notice of Proposed Rulemaking (NOPR) to amend its regulations 
to add Subpart K to Title 18 of the Code of Federal Regulation (CFR), 
which would include data collection requirements for market-based rate 
(MBR) sellers \2\ and certain other participants in the organized 
wholesale electric markets subject to the Commission's jurisdiction 
pursuant to the Federal Power Act (FPA), and revise part 35, subpart H, 
which governs MBR authorization for wholesale sales of electric energy, 
capacity, and ancillary services by public utilities.\3\ Specifically, 
the Commission is proposing to revise its regulations to add new data 
submission requirements for MBR sellers and entities, other than FPA 
section 201(f) entities,\4\ that trade virtual products \5\ or

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hold financial transmission rights (FTR) \6\ in the organized wholesale 
electric markets subject to the Commission's jurisdiction (Virtual/FTR 
Participants). The Commission is also proposing to require Virtual/FTR 
Participants to submit certain information to the Commission within 30 
days of commencing trading of virtual or FTR products.
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    \2\ All references in this NOPR to ``MBR seller'' (or ``MBR 
sellers'') refer to both entities seeking to obtain MBR authority by 
filing applications with the Commission and to MBR sellers seeking 
to retain market-based rate authority and is intended to have the 
same meaning as the defined term ``Seller'' in 18 CFR 35.36(a)(1).
    \3\ The organized wholesale electric markets subject to the 
Commission's jurisdiction refers to the markets operated by Regional 
Transmission Organizations (RTOs) and Independent System Operators 
(ISO) operating in the United States. These RTOs and ISOs include: 
PJM Interconnection, LLC (PJM), New York Independent System 
Operator, Inc. (NYISO), ISO New England Inc. (ISO-NE), California 
Independent System Operator Corporation (CAISO), Midcontinent 
Independent System Operator, Inc. (MISO), and Southwest Power Pool, 
Inc. (SPP).
    \4\ See 18 U.S.C. 824(f) (2012).
    \5\ ``Virtual trading involves sales or purchases in an RTO/ISO 
day-ahead market that do not go to physical delivery. For example, 
virtual bidding allows entities that do not serve load to make 
purchases in the day-ahead market. Such purchases are subsequently 
sold in the real-time spot market. Likewise, entities without 
physical generating assets can make power sales in the day-ahead 
market that are subsequently purchased in the real-time market. By 
making virtual energy sales or purchases in the day-ahead market and 
settling these positions in the real-time, any market participant 
can arbitrage price differences between the two markets.'' Market-
Based Rates for Wholesale Sales of Electric Energy, Capacity and 
Ancillary Services by Public Utilities, Order No. 697, FERC Stats. & 
Regs. ] 31,252 at n.1047, clarified, 121 FERC ] 61,260, at P 921 
n.1047 (2007), order on reh'g, Order No. 697-A, FERC Stats. & Regs. 
] 31,268, clarified, 124 FERC ] 61,055, order on reh'g, Order No. 
697-B, FERC Stats. & Regs. ] 31,285 (2008), order on reh'g, Order 
No. 697-C, FERC Stats. & Regs. ] 31,291 (2009), order on reh'g, 
Order No. 697-D, FERC Stats. & Regs. ] 31,305 (2010), aff'd sub nom. 
Mont. Consumer Counsel v. FERC, 659 F.3d 910 (9th Cir. 2011), cert. 
denied, 133 S. Ct. 26 (2012). Organized wholesale electric markets 
offer various virtual products, including Up-To Congestion products, 
for which no generation is dispatched and no load is served, and 
obligations are met through cash settlement. Coaltrain Energy, L.P., 
et al., 155 FERC ] 61,204 at P 15 (2016). ``While virtual products 
carry no obligation to buy or sell physical power, they serve a 
direct role in day-ahead price formation as reflected in day-ahead 
[Locational Marginal Prices (LMP)]. As such, virtual products can: 
(i) be the price setting marginal factor in determining day-ahead 
LMPs; (ii) affect day-ahead dispatch; and (iii) affect other market 
participant positions.'' Id.
    \6\ The term ``FTR'' as used in this NOPR is intended to cover 
not only Financial Transmission Rights, a term used by PJM, ISO-NE., 
and MISO, but also Transmission Congestion Contracts in NYISO, 
Transmission Congestion Rights in SPP, and Congestion Revenue Rights 
in CAISO.
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    2. The purpose of this new data collection is to assist the 
Commission in understanding the financial and legal connections among 
market participants and other entities and their activities in 
Commission-jurisdictional electric markets. In this NOPR, the 
Commission also proposes to modify its regulations to change certain 
aspects of the substance and format of information submitted for MBR 
purposes. Specifically, we propose to collect currently-filed MBR 
information and the new information proposed to be collected in this 
NOPR in a consolidated and streamlined manner through a relational 
database,\7\ which will eliminate duplication and render information 
collected for its MBR and analytics and surveillance purposes more 
usable and accessible to the Commission and its staff.
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    \7\ A relational database, or RDB, is a database model whereby 
multiple data tables relate to one another via unique identifiers. A 
relational database contains a table for each subject (e.g., 
generation assets) with every row in the table representing 
information regarding a single variable of that subject (e.g., a 
particular generation unit) and each column containing a particular 
quality of that variable (e.g., a generation unit's capacity 
rating). Relational databases are structured to allow for easy data 
retrieval while avoiding inconsistencies and redundancies.
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    3. As reflected in this NOPR, the Commission has reworked and 
substantially narrowed the definitions proposed in the Collection of 
Connected Entity Data from Regional Transmission Organizations and 
Independent System Operators NOPR in Docket No. RM15-23-000 (Connected 
Entity NOPR),\8\ conforming them where possible to existing MBR 
affiliate definitions, and has entirely eliminated large portions of 
the data proposed for collection in that NOPR. In orders being issued 
concurrently with the instant NOPR, the Commission withdraws the 
Connected Entity NOPR \9\ and the Ownership Information in Market-Based 
Rate Filings NOPR in Docket No. RM16-3-000 (Ownership NOPR) \10\ and 
terminates those dockets.\11\ The Commission also proposes to remove 
the existing requirement that MBR sellers submit corporate 
organizational charts adopted in Order No. 816 in Docket No. RM14-14-
000.\12\
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    \8\ Collection of Connected Entity Data from Regional 
Transmission Organizations and Independent System Operators, FERC 
Stats. & Regs. ] 32,711 (2015) (Connected Entity NOPR).
    \9\ Connected Entity NOPR, FERC Stats. & Regs. ] 32,711.
    \10\ Ownership Information in Market-Based Rate Filings, FERC 
Stats & Regs. ] 32,713 (2015) (Ownership NOPR).
    \11\ Collection of Connected Entity Data from Regional 
Transmission Organizations and Independent System Operators, 156 
FERC ] 61,046 (2016); Ownership Information in Market-Based Rate 
Filings, 156 FERC ] 61,047 (2016).
    \12\ The organizational chart requirement was first suspended in 
the order that partially extended the compliance effective date of 
Order No. 816. See Refinements to Policies and Procedures for 
Market-Based Rates for Wholesale Sales of Electric Energy, Capacity 
and Ancillary Services by Public Utilities, Order No. 816, 80 FR 
67,056 (Oct. 30, 2015), FERC Stats. & Regs. ] 31,374 (2015), order 
on reh'g, Order No. 816-A, 81 FR 33,375 (May 26, 2016), FERC Stats. 
& Regs. ] 31,382 (2016). The organizational chart requirement was 
again suspended in Order No. 816-A ``until the Commission issues an 
order at a later date addressing this requirement.'' Order No. 816-
A, FERC Stats. & Regs. ] 31,382 at P 47.
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I. Background

    4. Recently, the Commission sought to improve its analytics and 
surveillance of the electric markets by issuing the Connected Entity 
NOPR, which proposed collecting information from participants in 
Commission-jurisdictional organized wholesale electric markets 
concerning their ownership, employee, debt, and contractual 
connections. This information was to be submitted to the RTOs and ISOs, 
which in turn would provide the necessary information to the 
Commission. In some cases, the information sought under the Connected 
Entity NOPR was similar to, but somewhat different from, the 
information to be provided by MBR sellers.
    5. The desirability of consolidating MBR and Connected Entity data 
under one reporting regime was advocated to the Commission by members 
of the industry in comments responding to the Connected Entity NOPR. In 
the Connected Entity NOPR, the Commission proposed that each RTO and 
ISO be required to electronically deliver to the Commission, on an 
ongoing basis, data from its market participants \13\ that would: (i) 
Identify the market participants by means of a common alpha-numerical 
identifier, specifically, a Legal Entity Identifier (LEI); \14\ (ii) 
list their ``Connected Entities,'' which would include entities that 
have certain ownership, employment, debt, or contractual relationships 
with market participants; and (iii) describe in brief the nature of the 
relationship of each Connected Entity. The Commission observed that 
there is a risk that a market participant may take actions to benefit 
another entity that bears a financial or legal relationship to it, and 
that entities under common control may collude to manipulate the 
market. Given the potential for such conduct, the Commission found it 
needed to understand the relationships and corresponding incentives 
between entities to help determine whether they might be engaging in 
acts of market manipulation. The Commission also described the 
deficiencies in scope, format, and timing of the existing data sources 
for the requisite information.\15\
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    \13\ The Connected Entity NOPR proposed to require all RTO/ISO 
market participants, including MBR sellers and entities that solely 
participate in the RTO/ISO virtual and/or FTR markets, to report 
Connected Entity information.
    \14\ An LEI is a unique 20-digit alpha-numeric code assigned to 
a single entity. They are issued by the Local Operating Units of the 
Global LEI System.
    \15\ See Connected Entity NOPR, FERC Stats. & Regs. ] 32,711 at 
PP 6-14.
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    6. Many commenters objected to the proposed data submissions on the 
grounds that the information would be largely duplicative of other 
Commission reporting requirements, especially that of its MBR program. 
Several commenters objected to the Connected Entity NOPR on the grounds 
that the information to be submitted was based on a Connected Entity 
definition that was similar to, yet different from, the affiliate 
definition currently used in the MBR program. A common theme in the 
comments was the desirability of

[[Page 51728]]

reconciling reporting requirements to accommodate the needs of both the 
MBR and analytics and surveillance programs, thus eliminating the 
necessity of maintaining disparate, but partially overlapping, 
reporting regimes.
    7. In the Connected Entity NOPR, the Commission also proposed that 
the Connected Entity information be submitted to the RTOs and ISOs, who 
would then pass it on to the Commission. A number of commenters 
objected to this mechanism as unwieldy and unnecessarily burdensome.
    8. Over the last two years, the Commission has also sought to 
modify, clarify, and streamline the Commission's MBR requirements to, 
among other things, ease burdens on industry and the Commission. This 
initiative involved eliminating or refining some existing MBR 
requirements. The resulting reforms were set forth in Order Nos. 816 
and 816-A,\16\ and in the Ownership NOPR. In the Ownership NOPR, the 
Commission proposed to reduce and clarify the scope of ownership 
information that MBR sellers must provide, specifically to eliminate 
reporting of comprehensive ownership information required under Order 
No. 697-A that is not necessary for the Commission's assessment of 
horizontal or vertical market power. Specifically, the Commission 
proposed that an MBR seller be required to identify and describe only 
two categories of ``affiliate owners'' (i.e., certain owners that meet 
the definition of ``affiliate'' in 18 CFR 35.36(a)(9)).\17\ These two 
categories are: (1) ``Ultimate affiliate owner(s),'' defined as the 
furthest upstream affiliate owner(s) in the ownership chain; and (2) 
affiliate owners that have a franchised service area or MBR authority, 
or that directly own or control generation; transmission; intrastate 
natural gas transportation, storage or distribution facilities; or 
physical coal supply sources or ownership of or control over who may 
access transportation of coal supplies.\18\
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    \16\ Order No. 816, FERC Stats. & Regs. ] 31,374, order on 
reh'g, Order No. 816-A, FERC Stats. & Regs. ] 31,382.
    \17\ As specified in the Commission's regulations, ``affiliate'' 
of a specified company means: (i) Any person that directly or 
indirectly owns, controls, or holds with power to vote 10 percent of 
more of the outstanding voting securities of the specified company; 
(ii) Any company 10 percent or more of whose outstanding voting 
securities are owned, controlled, or held with power to vote, 
directly or indirectly, by the specified company; (iii) Any person 
or class or persons that the Commission determines, after 
appropriate notice and opportunity for hearing, to stand in such 
relation to the specified company that there is liable to be an 
absence of arm's-length bargaining in transactions between them as 
to make it necessary or appropriate in the public interest or for 
the protection of investors or consumers that the person be treated 
as an affiliate; and (iv) Any person that is under common control 
with the specified company. For purposes of the affiliate definition 
in Sec.  35.36(a)(9), owning, controlling or holding with the power 
to vote, less than 10 percent of the outstanding voting securities 
of a specified company creates a rebuttable presumption of lack of 
control. 18 CFR 35.36(a)(9)(v) (2015).
    \18\ Ownership NOPR, FERC Stats. & Regs. ] 32,713 at P 9.
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    9. The information proposed to be collected under the two separate 
NOPRs was different in scope. Commenters to the Connected Entity NOPR 
suggested that this incongruity be removed and that the information 
proposed in the Ownership NOPR and Connected Entity NOPR be collected 
contemporaneously to eliminate the burden of submitting duplicative 
information to the Commission.

II. Discussion

    10. The Commission appreciates these comments and agrees that 
compliance burdens should be minimized where possible. In response, the 
Commission considered whether the various reporting requirements needed 
for MBR and analytics and surveillance purposes could be combined in 
such a way as to eliminate duplication and unnecessary differences, 
with the aim of providing the Commission with the information it needs 
in the least burdensome manner possible.
    11. The result of these efforts is embodied in the instant NOPR. In 
this NOPR, we propose to collect certain data for analytics and 
surveillance purposes and to change certain aspects of the substance 
and format of information submitted for MBR purposes. Specifically, 
this NOPR sets out two categories of information submission 
requirements: requirements applicable only to MBR sellers (MBR 
Information); and requirements applicable to MBR sellers and Virtual/
FTR Participants (Connected Entity Information). Connected Entity 
Information would be submitted both by MBR sellers (although not 
pursuant to the MBR program), and Virtual/FTR Participants. MBR 
Information would be submitted only by MBR sellers. As discussed below, 
we propose certain changes to the types of information currently 
required for MBR purposes and to the electronic format in which certain 
data will be submitted.
    12. In this NOPR, we first describe the revised proposals regarding 
Connected Entity Information and proposals regarding MBR Information. 
Next, we discuss the need and authority for the collection of the 
Connected Entity Information as well as the nature of that information. 
We then discuss the proposed use of LEIs and discuss confidentiality 
and due diligence relating to the submission of Connected Entity 
Information. We next propose certain submission requirements for 
existing and new Virtual/FTR Participants and a baseline submission 
required of existing MBR sellers. Lastly, we propose ongoing Connected 
Entity Information submission requirements and ongoing MBR seller 
filing requirements.
    13. Like the Connected Entity NOPR, this NOPR does not impose any 
filing requirements on entities that only sell natural gas.\19\ Also, 
like the Connected Entity NOPR, this NOPR proposes that entities that 
submit the required data to the Commission obtain and submit an LEI; 
however, it does not propose requiring reported Connected Entities or 
affiliate owners to obtain LEIs. Additionally, this NOPR proposes that 
all Connected Entity Information and most of the MBR Information be 
consolidated and submitted electronically into a relational database.
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    \19\ Entities that only sell natural gas may, however, be 
reported by an MBR seller or Virtual/FTR Participant if they qualify 
as Connected Entities under the proposed definition of Connected 
Entity.
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    14. Specifically, we propose to consolidate the Commission's 
collection of certain information for MBR and analytics and 
surveillance purposes in a relational database. We propose that the 
relational database information be submitted using an extensible markup 
language (XML) schema,\20\ which will permit filers to assemble an XML 
filing package that includes all of the necessary attachments, 
including the cover letter and any related MBR tariffs.

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Upon the receipt of the filing, the XML schema will enable the 
Commission to parse \21\ the filed package into its component parts, 
place the filed documents into its eLibrary system where appropriate 
and provide the metadata \22\ that will permit automated organization 
of the filing and permit the Commission to search the relational 
database. The mechanics of and formatting for data submission by filers 
would be provided on the Commission's Web site.
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    \20\ As the Commission previously explained, XML schemas 
facilitate the sharing of data across different information systems, 
particularly via the Internet, by structuring the data using tags to 
identify particular data elements. For example, each filed tariff 
change will include tags for the relevant information. The tagged 
information can be extracted and separately searched. See Electronic 
Tariff Filings, Order No. 714, FERC Stats. & Regs. ] 31,276, at P 12 
& n.8 (2008). The Commission currently collects other data, 
including Electric Quarterly Reports (EQR) and eTariffs using XML. 
See Order No. 714, FERC Stats. & Regs. ] 31,276 (using XML for 
eTariff filings); see also Revised Public Utility Filing 
Requirements, Order No. 2001, FERC Stats. & Regs. ] 31,127, reh'g 
denied, Order No. 2001-A, 100 FERC ] 61,074, reh'g denied, Order No. 
2001-B, 100 FERC ] 61,342, order directing filing, Order No. 2001-C, 
101 FERC ] 61,314 (2002), order directing filings, Order No. 2001-D, 
102 FERC ] 61,334 (2003), order refining filing requirements, Order 
No. 2001-E, 105 FERC ] 61,352 (2003), clarification order, Order No. 
2001-F, 106 FERC ] 61,060 (2004), order revising filing 
requirements, Order No. 2001-G, 120 FERC ] 61,270, order on reh'g 
and clarification, Order No. 2001-H, 121 FERC ] 61,289 (2007), Order 
revising filing requirements, Order No. 2001-I, FERC Stats. & Regs. 
] 31,282 (2008) (using XML for EQRs).
    \21\ Parse means to capture the hierarchy of the text in the XML 
file and transform it into a form suitable for further processing. 
Order No. 714, FERC Stats. & Regs. ] 31,276 at n.9.
    \22\ Metadata is data or information beyond or about other data. 
For example, in the XML schema for eTariff, one required element is 
a proposed effective date and another element is the text of the 
tariff provision. The proposed effective date is considered to be 
metadata relative to the tariff text. See Order No. 714, FERC Stats. 
& Regs. ] 31,276 at P 12 & n.10.
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    15. A data dictionary posted on the Commission's Web site would 
define the framework, i.e., terms and values, to be followed by users 
in submitting MBR and Connected Entity Information for inclusion in the 
relational database. The Commission would also post to its Web site any 
minor and non-material changes to the data dictionary as necessary and 
alert relational database users via email of any changes.\23\ The 
current draft of this data dictionary is attached in Attachment D. We 
seek comment on the specific content for the relational database as set 
forth in the current draft of the data dictionary that is attached. In 
addition, Commission staff has been and will continue to conduct 
substantial outreach with the industry, including meetings and 
technical workshops on the data dictionary and the submittal process. A 
notice for the first workshop, which will focus on the draft data 
dictionary included as Attachment D, is being issued contemporaneously 
with this NOPR.\24\
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    \23\ The Commission proposes to utilize the same procedures set 
forth in the recently issued order addressing, among other things, 
revisions to the EQR Data Dictionary. See Filing Requirements for 
Electric Utility Service Agreements, 155 FERC ] 61,280, at P 3 
(2016) (``Going forward, consistent with [Sec.  ] 35.10b of the 
Commission's regulations, future minor or non-material changes to 
the reporting requirements and EQR Data Dictionary will be posted 
directly to the Commission's Web site, and EQR users will be alerted 
via email. This process will enable the Commission to make necessary 
minor or non-material changes in a more timely manner. Conversely, 
significant changes to the EQR reporting requirements and the EQR 
Data Dictionary will be proposed in a Commission order or 
rulemaking, which would provide an opportunity for comment.'').
    \24\ Notice of Technical Workshop on the Draft Data Dictionary 
Attached to the Data Collection for Analytics and Surveillance and 
Market-Based Rate Purposes Notice of Proposed Rulemaking, 156 FERC ] 
61,045 (2016).
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    16. We anticipate that the data dictionary, the XML schema 
definition with appropriate validations, and a temporary test 
environment will be posted on the Commission Web site upon issuance of 
a final rule in this proceeding. In addition, we would also provide an 
email portal and other points of contact on the Commission Web site for 
filers to seek guidance from Commission staff on the final rule and 
technical aspects of making the required submissions.

A. Proposals Regarding Connected Entity Information

    17. The Commission received many comments objecting to the scope of 
the Connected Entity NOPR. The Commission carefully considered those 
comments and substantially clarified and narrowed the definitions 
proposed in this NOPR from those proposed in the Connected Entity NOPR. 
In addition, the definitions proposed in this NOPR reflect, where 
possible, the affiliate definitions found in the MBR regulations. To 
better align the Connected Entity Information requirements with the MBR 
Information requirements, we propose that the definition of Connected 
Entity ownership information be limited to ``affiliates,'' as defined 
for purposes of MBR requirements in section 35.36(a)(9) of the 
Commission's regulations, that are either: (i) An ``ultimate affiliate 
owner'' of the entity, as defined for purposes of MBR requirements in 
section 35.37(a)(2); (ii) an entity that participates in Commission-
jurisdictional organized wholesale electric markets; or (iii) an entity 
that purchases or sells financial natural gas or electric energy 
derivative products that settle off of the price of physical electric 
or natural gas energy products. We also propose to replace the category 
of ``employees'' proposed in the Connected Entity NOPR with a much 
narrower category of ``Trader,'' which we propose to define as ``a 
person who makes, or participates in, decisions and/or devises 
strategies for buying and selling physical or financial electric or 
natural gas energy products.'' In addition, we propose to eliminate 
entirely the reporting of debt instruments. We also propose to narrow 
and rework the category of contractual Connected Entities reported from 
that originally proposed in the Connected Entity NOPR. As narrowed, the 
category will refer only to entities that have entered into an 
agreement with a submitting entity that ``confers control over an 
electric generation asset that is used in, or offered into, wholesale 
electric markets.''
    18. We also propose a reporting process that would permit, where 
possible, unified submissions of both MBR and Connected Entity 
Information. Additionally, we propose that, as discussed below, all the 
required data be submitted directly to the Commission rather than to 
the RTOs and ISOs. This will obviate the need for RTOs and ISOs to act 
as middlemen in the collection process, as proposed in the Connected 
Entity NOPR, and eliminate the need for multiple RTO/ISO filings for 
entities that participate in more than one Commission-jurisdictional 
organized wholesale electric market.
    19. Because there are separate legal justifications and regulations 
for the various data submissions proposed in this NOPR, it is useful to 
think of the requirements in two parts: those pertaining to the MBR 
program, and those pertaining to analytics and surveillance. As 
discussed below, we propose that all MBR sellers largely continue to 
submit data under the existing MBR regulations, with certain 
modifications proposed in this NOPR.\25\ We further propose that MBR 
sellers be required to submit data under the Connected Entity 
regulations proposed in this NOPR. We propose that Virtual/FTR 
Participants that do not require MBR authority would submit data only 
under the Connected Entity regulations proposed in this NOPR. We 
propose to require that the XML filing indicate whether a particular 
piece of information is submitted for MBR purposes. Undesignated 
information would, therefore, be considered as provided pursuant to the 
Connected Entity requirements. These indications are necessary to allow 
an entity seeking to obtain or retain MBR authority to identify the 
specific information necessary to support its requested authorization 
consistent with our regulations. Entities that trade solely virtual 
instruments and/or FTRs are not required to obtain MBR authority, and 
therefore would not be required to submit MBR Information. Therefore, 
the only information such entities would need to submit to the 
Commission would be that needed for analytics and surveillance 
purposes.
---------------------------------------------------------------------------

    \25\ For a short-hand comparison of the Ownership NOPR and the 
Existing MBR Requirements with the current NOPR proposal, see 
Attachment A: Comparison of Ownership NOPR and Existing MBR 
Requirements with the Current NOPR Proposal.
---------------------------------------------------------------------------

    20. The Commission believes that entities submitting only Connected 
Entity data should be subject to the same candor requirements of 
section

[[Page 51730]]

35.41(b) of the Commission's regulations as are MBR sellers. This 
regulation requires MBR ``sellers,'' as defined in section 35.36(a)(1) 
of the Commission's regulations, to submit accurate, factual, and 
complete information in any communication with the Commission, 
Commission-approved market monitors, RTOs, and ISOs. Therefore, we 
propose to add a new section 35.50(d) that would require the same 
candor from Virtual/FTR Participants in any of their communications 
with the Commission, Commission-approved market monitors, RTOs, and 
ISOs, and jurisdictional transmission providers.\26\
---------------------------------------------------------------------------

    \26\ In the Connected Entity NOPR, the Commission proposed to 
require market participants to certify, on a yearly basis, that 
their Connected Entity data is comprehensive and accurate. Connected 
Entity NOPR, FERC Stats. & Regs. ] 32,711 at P 30. This NOPR does 
not propose to include that requirement.
---------------------------------------------------------------------------

B. Proposals Regarding MBR Information

    21. The Commission uses a two-part approach when assessing whether 
a seller should be granted MBR authority: (1) Whether the seller and 
its affiliates lack, or have adequately mitigated, market power in 
generation (i.e., horizontal market power); and (2) whether the seller 
and its affiliates lack, or have adequately mitigated, market power in 
transmission and whether the seller or its affiliates can erect other 
barriers to entry (i.e., vertical market power).\27\ In Order No. 697, 
the Commission adopted two indicative screens for assessing horizontal 
market power: the pivotal supplier screen and the wholesale market 
share screen.\28\ The pivotal supplier screen evaluates the MBR 
seller's potential to exercise market power based on the seller's 
uncommitted capacity at the time of annual peak demand in the relevant 
market. The wholesale market share screen measures whether a seller has 
a dominant position in the market by analyzing the number of megawatts 
(MW) of uncommitted capacity it owns or controls, relative to the 
uncommitted capacity of the relevant market.
---------------------------------------------------------------------------

    \27\ See Order No. 816, FERC Stats. & Regs. ] 31,374 at P 4; 
Order No. 697, FERC Stats. & Regs. ] 31,252 at P 399.
    \28\ Order No. 697, FERC Stats. & Regs. ] 31,252 at PP 62-63.
---------------------------------------------------------------------------

    22. With respect to the vertical market power analysis, in cases 
where a public utility or its affiliates owns, operates, or controls 
transmission facilities, the Commission requires that there be a 
Commission-approved Open Access Transmission Tariff (OATT) on file or 
that the seller or its applicable affiliate qualifies for waiver of the 
OATT requirement.\29\ The Commission also considers an MBR seller's 
ability to erect other barriers to entry as part of the vertical market 
power analysis.\30\ As such, the Commission requires a seller to 
provide a description of its ownership or control of, or affiliation 
with an entity that owns or controls, intrastate natural gas 
transportation, storage or distribution facilities; and physical coal 
supply sources and ownership of or control over who may access 
transportation of coal supplies.\31\
---------------------------------------------------------------------------

    \29\ Id. P 408. See also Kingfisher Wind, LLC, 151 FERC ] 
61,276, at PP 26-27 (2015) (providing guidance on how qualified 
sellers can claim blanket OATT waiver under Order No. 807 and 
demonstrate lack of vertical market power).
    \30\ Order No. 697, FERC Stats. & Regs. ] 31,252 at PP 440-451.
    \31\ Id. P 447; 18 CFR 35.37(e) (2015). The Commission 
previously had also required MBR sellers to describe sites for 
generation capacity, but eliminated this requirement in Order No. 
816. See Order No. 816, FERC Stats. & Regs. ] 31,274.
---------------------------------------------------------------------------

    23. MBR sellers currently are required to submit an asset appendix 
in an electronic spreadsheet format listing all generation assets owned 
or controlled by the MBR seller and its affiliates, broken out by 
balancing authority and geographic region and including, among other 
things, the in-service date and certain capacity rating information. 
The asset appendix also must reflect all electric transmission and 
natural gas intrastate pipelines and/or gas storage facilities owned or 
controlled by the MBR seller and its affiliates and the location of 
such facilities and include the size of the facility. Finally, in Order 
No. 816, the Commission instituted a requirement that the asset 
appendix include certain information regarding long-term power purchase 
agreements and, in Order No. 816-A, the Commission modified certain 
asset appendix reporting requirements.\32\
---------------------------------------------------------------------------

    \32\ See Order No. 816, FERC Stats. & Regs. ] 31,374 at PP 139-
145, app. B, Asset Appendix; Order No. 816-A, FERC Stats. & Regs. ] 
31,382 at PP 58, 61, 63, app. B, Asset Appendix.
---------------------------------------------------------------------------

1. Ownership Information
    24. In Order No. 697-A, the Commission set forth a requirement that 
an MBR seller seeking to obtain or retain MBR authority must identify 
all of its upstream owners as well as describe the business activity of 
its owners and whether they are involved in the energy industry. 
Specifically, footnote 258 of Order No. 697-A states:

    A seller seeking market-based rate authority must provide 
information regarding its affiliates and its corporate structure or 
upstream ownership. To the extent that a seller's owners are 
themselves owned by others, the seller seeking to obtain or retain 
market-based rate authority must identify those upstream owners. 
Sellers must trace upstream ownership until all upstream owners are 
identified. Sellers must also identify all affiliates. Finally, an 
entity seeking market-based rate authority must describe the 
business activities of its owners, stating whether they are in any 
way involved in the energy industry.\33\

    \33\ Order No. 697-A, FERC Stats. & Regs. ] 31,268 at n.258.
---------------------------------------------------------------------------

    25. As noted above, a seller seeking MBR authority must show that 
it and its affiliates do not have, or have adequately mitigated, 
horizontal and vertical market power. Given that information about 
owners that do not meet the definition of affiliates under section 
35.36(a)(9) is not necessary to evaluate horizontal or vertical market 
power, continuing to require information on unaffiliated owners may 
create a burden that is unrelated to the Commission's determination 
whether a MBR seller qualifies for MBR authority. Thus, the instant 
NOPR proposes to revise the requirements of Order No. 697-A such that 
MBR sellers would only be required to provide information on certain 
``affiliate owners'' (i.e., owners that meet the definition of 
``affiliate'' provided in 18 CFR 35.36(a)(9)).\34\ That is, consistent 
with the proposal in the Ownership NOPR, we propose that MBR sellers 
need to identify only those affiliate owners that either: (1) Are an 
``ultimate affiliate owner,'' defined as the furthest upstream 
affiliate owner(s) in the ownership chain; or (2) have a franchised 
service area or MBR authority, or directly own or control generation; 
transmission; intrastate natural gas transportation, storage or 
distribution facilities; physical coal supply sources or ownership of 
or control over who may access transportation of coal supplies.\35\
---------------------------------------------------------------------------

    \34\ The Ownership NOPR similarly proposed to limit the 
ownership information requirements to information regarding 
affiliate owners. See Ownership NOPR, FERC Stats. & Regs. ] 32,713 
at P 9.
    \35\ See id.
---------------------------------------------------------------------------

    26. In addition, consistent with the Commission's proposal in the 
Ownership NOPR, we propose that, where an MBR seller is directly or 
indirectly owned or controlled by a foreign government or any political 
subdivision of a foreign government or any corporation which is owned 
in whole or in part by such entity, the MBR seller identify such 
foreign government, political subdivision, or corporation as part of 
its ownership narrative.\36\ This information is useful in protecting 
public utility customers against inappropriate cross-subsidization and 
affiliate abuse

[[Page 51731]]

concerns possible when controlling interests in a public utility are 
held by a foreign government, any political subdivision of a foreign 
government, or any corporation which is owned in whole or in part by 
such entity. Finally, we also propose, as the Commission did in the 
Ownership NOPR, that with respect to any owners that an MBR seller 
represents to be passive, the MBR seller affirm in its ownership 
narrative that its passive owner(s) own a separate class of securities, 
have limited consent rights, do not exercise day-to-day control over 
the company, and cannot remove the manager without cause.\37\
---------------------------------------------------------------------------

    \36\ See Ownership NOPR, FERC Stats. & Regs. ] 32,713 at P 11.
    \37\ See Ownership NOPR, FERC Stats. & Regs. ] 32,713 at P 13 
(citing AES Creative Resources, LP, 129 FERC ] 61,239 (2009) 
(distinguishing between controlling interests and passive investment 
interests)).
---------------------------------------------------------------------------

    27. We believe that limiting the category of owners for which MBR 
sellers have to provide information will be less burdensome for the 
industry and more useful to the Commission for purposes of determining 
whether a seller qualifies for MBR authority. We propose changes to the 
regulatory text in section 35.37(a)(2) to implement the changes to the 
level of ownership information required and to require that certain 
ownership information be provided in a format specified on the 
Commission's Web site, so that it can be included in the relational 
database.
    28. We propose that the first time an entity is identified as an 
affiliate owner by an MBR seller in an XML submission, the relational 
database will create a unique identifier for that entity. A list of all 
of these entities and their associated unique identifiers, along with 
limited identifying information (e.g., business address) would be 
published on the Commission's Web site. Once a unique identifier is 
assigned to an entity, all MBR sellers would be responsible for using 
this unique identifier when identifying their affiliate owners in 
future XML submissions.\38\ To the extent an MBR seller submits its 
relationship with an affiliate owner as privileged under Sec.  388.112 
of the Commission's regulations, the MBR seller-affiliate owner 
relationship would remain confidential if it qualifies for such 
treatment. However, the identity of the affiliate owner and its unique 
identifier or LEI (without an indication of its affiliations) would be 
included in the public list on the Commission's Web site. We seek 
comment on this proposal.
---------------------------------------------------------------------------

    \38\ If the affiliate owner has an LEI, the MBR seller should 
use the LEI as the unique identifier, which would take the place of 
a Commission-generated identifier on the published list.
---------------------------------------------------------------------------

    29. Once the MBR seller submits all the required affiliate owner 
information to the relational database through the XML filing, the 
database would be able to generate a corporate organizational chart. 
Thus, we also propose to amend Sec.  35.37(a)(2) to remove the 
requirement for MBR sellers to submit corporate organizational charts 
adopted in Order No. 816.
    30. While there will be some increased burden in the short-term 
associated with providing ownership information in the relational 
database, the reduction of ownership information required to be 
reported and the elimination of the corporate organizational chart 
requirement represent a net decrease in burden for MBR sellers. We seek 
comment on these proposals.
2. Asset Appendix Information
    31. Currently, MBR sellers submit in an electronic spreadsheet 
format an asset appendix that contains information about long-term firm 
purchases and assets that they and all of their affiliates own or 
control. We propose to amend this requirement such that, for purposes 
of the asset appendix requirement: (i) Information be submitted in XML 
format as specified on the Commission's Web site so that it can be 
included in the relational database; and (ii) each MBR seller would no 
longer report assets owned by its affiliates with MBR authority.\39\ 
Once an MBR seller identifies its ultimate affiliate owner(s), the 
relational database would be able to identify all the affiliates (i.e., 
those with a common upstream owner) with MBR authority (that have each 
filed an asset appendix with its own assets) and create an asset 
appendix for the MBR seller that includes all of the assets of its 
affiliates with MBR authority. That asset appendix would be placed into 
eLibrary as part of the MBR seller's filing. For example, Company F's 
filing identifies two ultimate affiliate owners, Company A and Company 
B. The relational database would recognize that two other MBR sellers, 
Company C and Company D, also identify Company A as an ultimate 
affiliate owner (making those two companies also affiliates of Company 
F) and that Company E has identified Company B as an ultimate affiliate 
owner (making Company E another affiliate of Company F). The relational 
database would then be able to construct a complete asset appendix for 
Company F, which would reflect any and all assets reported by Companies 
A, B, C, D, and E, which are all affiliates of Company F. Given the 
proposed requirement discussed below that existing MBR sellers make a 
baseline informational submission including asset appendix information, 
we expect that whenever an MBR seller would need to submit a filing on 
which the Commission has to act (e.g., an initial application, 
triennial submission, or change in status filing), all of the 
information necessary for the relational database to create a complete 
asset appendix (i.e., information on affiliates' assets) would exist in 
the relational database.
---------------------------------------------------------------------------

    \39\ This proposal is specific to the relational database 
requirement to provide asset appendix information. This does not 
relieve MBR sellers from the requirements to consider and discuss 
affiliate assets as part of their horizontal and vertical market 
power analyses.
---------------------------------------------------------------------------

    32. We believe that this proposed approach would reduce the burden 
on MBR sellers given that they would no longer have to submit detailed 
information on all of their affiliates' assets. However, we recognize 
that an MBR seller's current asset appendix could include assets that 
are owned or controlled by an entity that does not have MBR authority, 
such as a generating plant owned by an affiliate that only makes sales 
under cost-based rates. If that MBR seller does not have a requirement 
to submit the information related to the affiliated generating plant 
into the relational database, that information could be ``lost.'' 
Accordingly, for purposes of completeness, we propose to require that 
the MBR seller include in its relational database filing any assets 
that are owned or controlled by an affiliate that does not have MBR 
authority. In that way, these assets would be included in the asset 
appendix that the relational database generates for the MBR seller.
    33. A potential issue with this proposed approach is that the 
filing MBR seller would not be directly responsible for all the 
information that is included in its asset appendix; some of the 
information that will be used to generate the complete asset appendix 
will have been reported by its affiliates. We propose that a filing MBR 
seller incorporate by reference its affiliates' most recent relational 
database submittals or otherwise acknowledge that the information from 
its affiliates' relational database submittals will be included as part 
of the MBR seller's asset appendix. We anticipate that MBR sellers (and 
the public) will be able to access reports from the relational 
database's up-to-date asset information through a Commission-
established interface. Thus, the filing MBR seller would have prior 
notice of the asset appendix the relational database would generate and 
would be able to note any perceived errors when making its filing.

[[Page 51732]]

In addition, once the relational database generates and reports the MBR 
seller's full asset appendix to eLibrary (including information on the 
affiliates' assets), the MBR seller could file to amend the asset 
appendix posted to eLibrary if the MBR seller believes that the asset 
appendix generated by the relational database contains errors.\40\
---------------------------------------------------------------------------

    \40\ To the extent that an MBR seller believes that its 
affiliate has submitted incorrect data, we expect them to work 
together to have the correct information submitted into the 
relational database. We note that each MBR seller is responsible for 
submitting accurate, factual, and complete information to the 
Commission.
---------------------------------------------------------------------------

    34. As noted above, we believe that the approach proposed above in 
which an MBR seller reports only its own assets (and those of any 
affiliate without MBR authority) would represent an overall decrease in 
burden on MBR sellers. However, the Commission is also considering an 
alternative approach whereby MBR sellers continue to provide 
information on all of their affiliates' assets when submitting asset 
appendix information for the relational database. An advantage to this 
approach would be that the filer would be submitting all of the 
information itself and not having to rely on information submitted by 
its affiliates. One disadvantage to this approach is that, to the 
extent more than one MBR seller submits information about an asset, the 
more recently submitted data would overwrite the earlier-submitted data 
in the relational database such that the database would reflect only 
the most recently filed information. Thus, if Company A submits a 
triennial filing and reports that it sold a 150 MW generating plant 
(Plant 1), it would delete that plant from its asset appendix. The 
following day, if Company B, an affiliate of Company A, submits a 
triennial filing and is unaware of the sale of Plant 1 by Company A, 
and it includes Plant 1 in the asset appendix, because the more 
recently added information by Company B would ``overwrite'' the 
deletion made by Company A, it would appear in the relational database 
that Company A still owns Plant 1. While this ``overwrite'' would not 
impact the content of MBR sellers' filings, it would be problematic for 
the accuracy of the database given that more recently added information 
may not always represent the most current or accurate information. For 
this reason, we propose the option detailed above whereby each MBR 
seller does not report to the relational database the assets owned by 
its affiliates with MBR authority. As noted above, the owner of the 
facility generally should be the best source for information regarding 
its own facility. We seek comment on the proposed approach as well as 
the alternative approach.
    35. In addition to these proposed changes in the submission of 
asset appendix information, we propose four additional discrete changes 
to the information required to be reported regarding assets. First, MBR 
sellers currently are free to report their generation in the asset 
appendix on a facility-wide basis, i.e., they are not required to 
report on a unit-specific basis. We propose instead to require that 
each generation unit be reported separately for purposes of the 
relational database and that MBR sellers report the Plant Name, Plant 
Code, Generator ID and Unit Code (if applicable) information from the 
Energy Information Agency (EIA) Form EIA-860 database.\41\ The use of 
this Form EIA-860 information will ensure that each unit is uniquely 
identified, which will enable the relational database to identify when 
information is being provided about a generating unit that is already 
part of the relational database and reduce duplication of data. While 
there may be an initial small increase in burden associated with 
transitioning to reporting generation-related information on a unit-
specific basis, we believe that better tracking of which MBR seller 
owns or controls each specific unit will improve the Commission's 
ability to assess sellers' market power, particularly in cases where 
various units at a single facility may be owned or controlled by more 
than one seller. This also aligns the Commission's required unit 
identifying information with the EIA identifying information, 
essentially adopting the EIA nomenclature, which should simplify 
regulatory requirements for the industry.
---------------------------------------------------------------------------

    \41\ The Form EIA-860 data is available on the Internet at 
https://www.eia.gov/electricity/data/eia860/.
---------------------------------------------------------------------------

    36. Second, we propose that MBR sellers be required to report in 
the relational database the ``Telemetered Location: Market/Balancing 
Authority Area'' and ``Telemetered Location: Geographic Region'' in 
which the unit should be considered for market power purposes when that 
location differs from the reported physical location.\42\ Currently, 
the asset appendix has columns entitled ``Location: Market/Balancing 
Authority Area'' and ``Location: Geographic Region'' where MBR sellers 
are expected to provide the physical location of their generation 
units. These columns help the Commission match the information in the 
asset appendix to the MBR seller's market power analysis. However, some 
generation units are considered to be in a different market/balancing 
authority area and geographic region for market power purposes than the 
market/balancing authority area and geographic region in which they are 
physically located (e.g., generation units that are pseudo-tied into a 
different balancing authority area). Requiring MBR sellers to report in 
the relational database the ``Telemetered Location: Market/Balancing 
Authority Area'' and ``Telemetered Location: Geographic Region'' will 
ensure that the Commission is able to properly match identified 
generation units with the markets/balancing authority areas and 
geographic regions in which they are studied in an MBR seller's market 
power analysis.
---------------------------------------------------------------------------

    \42\ MBR sellers currently are required to report the market/
balancing authority area and region where generation is located. We 
propose that such information continue to be reported for purposes 
of the relational database.
---------------------------------------------------------------------------

    37. Third, we propose to require MBR sellers to include information 
on long-term firm sales (i.e., those one year or longer) in their 
relational database submissions. This would correspond with the 
requirement added in Order No. 816 that MBR sellers provide information 
in the asset appendix regarding long-term firm purchases. This 
requirement to report sales in addition to purchases will help ensure 
that purchasers and sellers report and treat transactions in a 
consistent and accurate manner. To the extent that an MBR seller 
believes there are any unique qualities of the contract that would not 
otherwise be captured by the relational database, the seller is free to 
explain this as part of its horizontal market power discussion.
    38. Finally, similar to the requirement for reporting generating 
units, we propose that, for unit-specific power purchase agreements, 
MBR sellers provide the associated Plant Code and Generator ID from the 
Form EIA-860 database, which will provide the unique identifier for 
that unit.
    39. We also propose to eliminate some of the asset information 
requirements currently reported in the asset appendix. For example, we 
propose that, for purposes of the relational database, MBR sellers no 
longer be required to report the size (kV and length) of transmission 
facilities and no longer be required to identify specific transmission 
facilities. Instead, we propose that MBR sellers only report in the 
relational database whether they have transmission facilities covered 
by an OATT in a particular balancing authority area and region. With 
respect to the natural gas pipeline information currently required to 
be reported in the

[[Page 51733]]

list of transmission assets and natural gas intrastate pipelines and 
gas storage facilities (transmission list) portion of the asset 
appendix, we propose to revise the requirements so that the MBR seller 
will only be required to indicate for purposes of the relational 
database whether they own natural gas pipelines and storage facilities, 
and if so, to identify in which balancing authority area and region 
those assets are located. We expect that these proposed changes would 
reduce the burden on MBR sellers associated with the transmission list 
of the current asset appendix.\43\ We seek comments on these proposals.
---------------------------------------------------------------------------

    \43\ We note that although these proposals would reduce the 
level of detail currently required to be provided in the asset 
appendix about electric transmission and natural gas assets, they do 
not affect the descriptive information and representations that MBR 
sellers are required to provide for purposes of the vertical market 
power analysis under 18 CFR 35.37(d), (e).
---------------------------------------------------------------------------

3. Indicative Screen and Other MBR Information
    40. As noted above, current Commission regulations at Sec.  
35.37(c)(4) require that MBR sellers submit their indicative screens in 
an electronic spreadsheet format. We propose to amend that regulation 
to require that the indicative screen information instead be submitted 
in XML format as specified on the Commission's Web site, which will 
enable the information to be included in the relational database. We 
anticipate that once an MBR seller submits the required screen 
information to the relational database through the XML filing, the 
database will format the indicative screens for inclusion in the record 
in eLibrary. In this way, the generated indicative screens will be 
available for public comment, as part of the MBR seller's filing, and 
also be available to the Commission and staff in the relational 
database for ease of access and analysis. MBR sellers would still be 
required to submit to the Commission all work papers underlying their 
indicative screens. Such work papers would be included as an attachment 
to the relevant filing. We seek comments on these proposals.
    41. The proposed information to be collected from MBR sellers via 
the new XML format is detailed in the attached draft data dictionary. 
As discussed above, most of this information is already part of a 
market-based rate filing, but some of it is new information. The types 
of existing MBR information that we propose to require an MBR seller to 
submit in XML for inclusion in the relational database include: (i) MBR 
seller category status for each region in which the MBR seller has MBR 
authority; (ii) markets in which the MBR seller is authorized to sell 
ancillary services; (iii) Commission-ordered seller-specific 
mitigation, if any; and (iv) whether the MBR seller's MBR authority is 
limited to certain balancing authority areas. In addition, we propose 
to require MBR sellers to submit two new categories of information in 
XML for inclusion in the relational database: (i) The effective date of 
the initial grant of market-based rate authority to the MBR seller and 
(ii) Connected Entity Information, as explained elsewhere in this NOPR.
    42. As discussed above, we propose to amend the Commission's 
regulations at Sec.  35.37 to include this additional information being 
reported for MBR purposes and to add a new Sec.  35.51 to include a 
requirement for MBR sellers to provide Connected Entity Information in 
the relational database. We seek comment on these proposed changes.

C. Need and Authority: Analytics and Surveillance

    43. In the Connected Entity NOPR, the Commission discussed the 
importance to its analytics and surveillance of understanding the 
financial and legal connections among market participants and other 
entities. The Commission pointed out that screening market activity for 
anomalies must include understanding the circumstances surrounding a 
given pattern of trading, including the possible motivations for that 
behavior, which can sometimes be found in the legal or contractual 
relationships entities bear to one another. However, as the Commission 
also found, the few existing sources of such relationship information 
are inadequate because of scope, format, or timing reasons.\44\ The 
Commission therefore believed that it was necessary to obtain such data 
from the market participants themselves.
---------------------------------------------------------------------------

    \44\ Connected Entity NOPR, FERC Stats. & Regs. ] 32,711 at PP 
12-14.
---------------------------------------------------------------------------

    44. In the instant NOPR, we propose to require the direct 
submission of Connected Entity Information not only from MBR sellers 
but also from entities that trade solely in virtuals and FTRs. The 
Commission has the authority under FPA section 205 to regulate the 
practices in which these entities engage insofar as those practices 
affect jurisdictional rates. Consequently, as discussed more fully 
below, we propose to now require that such entities submit Connected 
Entity Information and their LEIs within 30 days of commencing trading 
of virtual products or holding FTRs in Commission-jurisdictional 
organized markets and then provide ongoing updates to their Connected 
Entity Information to the Commission through the relational database.
    45. The authority for obtaining Connected Entity data is found, as 
described in the Connected Entity NOPR, in the Commission's anti-
manipulation authority under section 222 of the FPA, its investigative 
authority under section 307(a) of the FPA, its administrative powers 
under section 309 of the FPA, and its inspection and examination 
authority under section 301(b) of the FPA, as well as in sections 205 
and 206 of the FPA.\45\ Section 205 of the FPA provides that ``[a]ll 
rates and charges made, demanded, or received by any public utility for 
or in connection with the transmission or sale of electric energy 
subject to the jurisdiction of the Commission, and all rules and 
regulations affecting or pertaining to such rates or charges, shall be 
just and reasonable. . . .'' \46\
---------------------------------------------------------------------------

    \45\ 16 U.S.C. 824d, 824e, 824v, 825(b), 825f(a), 825h.
    \46\ 16 U.S.C. 824d.
---------------------------------------------------------------------------

    46. The U.S. Supreme Court recently concluded that sections 205(a) 
and 206(a) grant the Commission the authority and the duty to ensure 
that the practices directly affecting the rates charged by public 
utilities for the sale of electric energy for resale, and the 
transmission of electric energy in interstate commerce, are just and 
reasonable.\47\ In the organized markets, the locational marginal price 
(LMP) for sales of energy, capacity, and ancillary services are 
established through markets administered by the RTOs and ISOs, which 
are public utilities. Virtual trades directly affect those LMPs, since 
they are submitted in the same way and at the same time as all other 
bids and offers in the day-ahead market, and are cleared along with 
other bids and offers, thus affecting the outcome of the day-ahead 
market.\48\ In addition, market participants that hold FTRs may be 
incentivized to use physical or virtual transactions to directly affect 
LMPs in such a way as to benefit their FTR holdings.\49\ All these 
prices must be just

[[Page 51734]]

and reasonable under the Commission's mandate.
---------------------------------------------------------------------------

    \47\ FERC v. Elec. Power Supply Ass'n, 136 S. Ct. 760 (2016).
    \48\ See Cal. Indep. Sys. Operator Corp., 110 FERC ] 61,041, at 
P 30 n. 21 (2005).
    \49\ See ETRACOM LLC, 155 FERC ] 61,284 (2016) (in which the 
Commission found that ETRACOM engaged in a scheme to submit virtual 
supply transactions in order to affect power prices and economically 
benefit its Congestion Revenue Rights); see also Black Oak Energy, 
LLC v. FERC, 725 F.3d 230, 240 (D.C. Cir. 2013) (Black Oak) (``Since 
their business interests are purely speculative, FERC explained, the 
virtual marketers pose a threat as potential market 
manipulators.'').
---------------------------------------------------------------------------

    47. The Commission has confirmed its jurisdiction to regulate FTRs 
under FPA sections 205 and 206 as charges or contracts ``in connection 
with'' jurisdictional transmission service and ``affecting'' such 
service,\50\ and, in Order No. 697, made note of its monitoring 
authority over the RTO/ISO market rules addressing virtual and FTR 
transactions and over the market participants engaged in those 
transactions.\51\ Moreover, the U.S. Court of Appeals for the District 
of Columbia Circuit (D.C. Circuit) has upheld the Commission's 
authority to regulate virtual traders as participants in Commission-
regulated wholesale energy markets.\52\ The Commission has held that 
virtual trades that affect the price of jurisdictional electricity fall 
within its jurisdiction.\53\
---------------------------------------------------------------------------

    \50\ See, e.g., Cal. Indep. Sys. Operator Corp., 89 FERC ] 
61,153 (1999), order on reh'g, 94 FERC ] 61,343 (2001).
    \51\ See Order No. 697, FERC Stats. & Regs. ] 31,252 at P 921.
    \52\ Black Oak, 725 F.3d 230 at 238-41.
    \53\ See, e.g., Coaltrain Energy, L.P., 155 FERC ] 61,204, at PP 
247-249 (2016).
---------------------------------------------------------------------------

    48. Accordingly, the Commission's authority to require the 
submission of Connected Entity Information is unrelated to whether a 
given participant in the energy markets is a public utility or not, or 
whether it is seeking MBR authority or not. Consequently, the 
Commission has the authority to impose reasonable requirements on 
entities that solely trade virtuals and hold FTRs as a condition of 
participation in those product markets. These requirements include 
candor and the disclosure of Connected Entity Information.
    49. MBR sellers would also be subject to Connected Entity 
reporting. The Commission proposes that FPA section 201(f) entities, 
which in the main consist of municipalities and certain cooperatives 
(as well as their associated joint action agencies), would not be 
included in the reporting requirements. These entities are not subject 
to FPA sections 205 and 206; furthermore, due to their financial 
structures, they have substantially reduced incentives to commit market 
manipulation.\54\
---------------------------------------------------------------------------

    \54\ See Dairyland Power Cooperative, 37 FPC 12 (1967) 
(discussing the characteristics of certain section 201(f) entities 
that distinguish them from privately-owned companies).
---------------------------------------------------------------------------

D. Nature of the Connected Entity Information Submissions

    50. Data proposed for submission by entities for the purpose of 
analytics and surveillance would be greatly streamlined from that 
proposed under the Connected Entity NOPR.\55\ This information would be 
submitted both by MBR sellers (although not pursuant to the MBR 
program), and Virtual/FTR Participants. The proposed regulatory text 
pertaining to the Connected Entity Information, as well as the proposed 
regulatory text pertaining to revised MBR requirements, is set out at 
the end of this NOPR.
---------------------------------------------------------------------------

    \55\ For a short-hand comparison of the Connected Entity NOPR 
proposals and the the current NOPR proposal, see Attachment B: 
Comparison of Connected Entity NOPR Proposal and Current NOPR 
Proposal.
---------------------------------------------------------------------------

    51. The Connected Entity Information requirements would be 
applicable to MBR sellers and Virtual/FTR Participants. We propose 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. Organized wholesale electric markets would 
include ISOs and RTOs as those terms are defined in Sec.  35.46 of the 
Commission's regulations. In addition, we propose to use the same 
definition for ``Seller'' as in the MBR context and defined in Sec.  
35.36(a)(1) of the Commission's regulations. We seek comments on these 
proposed definitions. The Commission is also not proposing to require 
entities that hold only Auction Revenue Rights to submit Connected 
Entity Information, but seeks comment on this aspect of the 
proposal.\56\
---------------------------------------------------------------------------

    \56\ Auction Revenue Rights are entitlements to FTR auction 
revenues that are allocated based on historical transmission usage 
or the funding of transmission upgrades.
---------------------------------------------------------------------------

    52. We still propose to use the term ``Connected Entity'' under the 
proposed regulations, but the categories of entities included and their 
definitions are reduced and narrowed from that proposed in the 
Connected Entity NOPR, as described below.
    (a) Ownership and control: The proposed regulation would limit 
upstream, downstream, and common ownership/control relationship 
reporting, to affiliates, as defined in 18 CFR 35.36(a)(9), that are 
either: (1) Ultimate affiliate owners of the entity, as defined in 18 
CFR 35.37(a)(2), (2) participants in Commission-jurisdictional 
organized wholesale electric markets, or (3) entities that purchase or 
sell financial natural gas or electric energy derivative products that 
settle off of the price of physical electric or natural gas energy 
products.
    (b) Employees: The proposed regulation would limit reportable 
employees or contractors to include only traders, defined as a person 
who makes, or participates in, decisions and/or devises strategies for 
buying or selling physical or financial Commission-jurisdictional 
electric products or physical natural gas.
    (c) Debt: The proposed regulation would eliminate the debt 
instruments and structured transactions reporting requirement proposed 
in the Connected Entity NOPR.
    (d) Contracts: The proposed regulation would refine the definition 
in the Connected Entity NOPR to require reporting by the filing entity 
only of those entities that have entered into an agreement with it that 
``confers control over an electric generation asset that is used in, or 
offered into, wholesale electric markets.'' Agreements that confer 
control are those that grant one of the parties the right to make 
trading decisions for an electric generation asset of another party or 
to offer an electric generation asset into the wholesale electric 
markets.
    We seek comment on this proposed definition of Connected Entity. In 
particular, we seek comment on the proposed definition of ``trader'' as 
used in the Connected Entity definition.
    53. We recognize that the agreements that would fall into the 
Contracts category of this proposed definition of Connected Entity are 
already reported to the Commission in EQR. However, for the Commission 
to be able to efficiently use EQR data in lieu of including the 
Contracts category of the Connected Entity definition, we would have to 
implement changes to how EQRs are filed that would allow staff to 
easily pair EQR data with Connected Entity Information. Therefore, as 
an alternative to including the Contracts category of the Connected 
Entity definition, we are also considering the option of requiring MBR 
sellers to include their LEIs in their EQR submissions, which would 
facilitate coordination between the two datasets. We request comment 
on: (1) The feasibility of this alternative approach; (2) whether this 
alternative approach is preferable to inclusion of the Contracts 
category of Connected Entity Information; and (3) the burden such a 
requirement would impose on MBR sellers.
    54. We also propose to require MBR sellers and Virtual/FTR 
Participants to provide their Purchaser Seller Entity (PSE) NAESB/OATI 
webRegistry Entity Code(s) (PSE ID), if available, as part of their 
Connected Entity Information submission. The PSE ID is the entity 
identifier that appears in the contract/market paths field of an e-Tag. 
The PSE ID would assist the Commission in

[[Page 51735]]

pairing the information submitted pursuant to this NOPR with other 
datasets, such as e-Tags.\57\ We are proposing that MBR sellers and 
Virtual/FTR Participants who have a PSE ID report that identifier as 
part of their Connected Entity Information submissions. However, we are 
not proposing that those entities that do not have a PSE ID obtain one. 
We seek comment on this proposal.
---------------------------------------------------------------------------

    \57\ Availability of E-Tag Information to Commission Staff, 
Order No. 771, 77 FR 76367 (Dec. 28, 2012), FERC Stats. & Regs. ] 
31,339 (2012), order on reh'g and clarification, 142 FERC ] 61,181 
(2013), order on reh'g and clarification, 153FERC ] 61,177 (2015).
---------------------------------------------------------------------------

    55. As mentioned above, certain information specified in this NOPR 
is sought for the purpose of determining whether MBR authority is to be 
granted or retained, while other information is sought for the 
Commission's analytics and surveillance. For that reason, the 
regulations pertaining to these data submissions are set out in 
different regulatory text sections, with the MBR-specific requirements 
set out in subpart H of part 35 and the regulatory text for the 
Connected Entity Information set out in a new subpart K of part 35. 
However, this NOPR proposes coordinating the deadlines for reporting 
the two types of data wherever possible, thereby allowing entities that 
must submit data under both categories (MBR and Connected Entity) to 
combine it in a single submission. As noted above, instructions on the 
specific formatting and other technical requirements for these 
submissions will be set out on the Commission's Web site. The 
Commission will hold substantial outreach meetings with members of the 
industry, to determine the most effective, expeditious, and cost-
effective method of structuring these submissions.

E. Legal Entity Identifiers

    56. In the Connected Entity NOPR, the Commission discussed its past 
dissatisfaction with the available methods for identifying entities 
that must make filings with the Commission.\58\ The Commission found 
that the information available was often imprecise and out of date and 
proposed to require market participants to obtain an LEI, which is 
unique to the acquirer. This proposal generally was met with favor in 
the comments to the Connected Entity NOPR. In this NOPR, the Commission 
proposes requiring that all entities that must make either MBR or 
Connected Entity Information filings, obtain and maintain an LEI, and 
report it to the Commission in its XML submission for inclusion in the 
relational database.
---------------------------------------------------------------------------

    \58\ Connected Entity NOPR, FERC Stats. & Regs. ] 32,711 at P 
24.
---------------------------------------------------------------------------

F. Confidentiality and Due Diligence

    57. As was the case with data to be collected under the Connected 
Entity NOPR, the information received under this proposal for analytics 
and surveillance would be treated as non-public and confidential. The 
Commission has long experience with maintaining the non-public status 
of information used for investigative purposes, and this applies 
equally to its analytics and surveillance program. Information 
submitted for MBR purposes will be made public via publication in 
eLibrary, and potentially through other means, such as the asset 
appendix interface discussed above unless confidential treatment is 
requested pursuant to the Commission regulations.\59\ Connected Entity 
Information would be kept non-public unless the Commission authorized 
its release under the provisions of Part 1b of its regulations.\60\
---------------------------------------------------------------------------

    \59\ See 18 CFR 388.112.
    \60\ 18 CFR pt. 1b. The protected nature of the collected 
information would not, however, prohibit the Commission from sharing 
it on a confidential basis, with market monitors, RTOs and ISOs. 
Such sharing was explicitly authorized in Southwest Power Pool, 
Inc., 137 FERC ] 61,046, at P 20 (2011).
---------------------------------------------------------------------------

    58. The Commission appreciates that when extensive data must be 
submitted to a regulatory entity, occasionally some data may, despite 
an entity's best efforts to achieve accuracy, turn out to be incomplete 
or incorrect. In the case of such inadvertent errors, the Commission's 
practice is simply to require that a corrected submittal be made 
without sanctions of any kind. The intentional or reckless submittal of 
incorrect or misleading information could, however, result in the 
imposition of sanctions, including civil penalties, as has occurred in 
other contexts.\61\ An entity can protect itself against such a result 
by applying due diligence to the retrieval and submission of the 
required information.
---------------------------------------------------------------------------

    \61\ See, e.g., Berkshire Power Company LLC and Power Plant 
Management Services LLC, 154 FERC ] 61,259, at PP 15-16 (2016); 
Coaltrain Energy, L.P, 155 FERC ] 61,204, at PP 274-287 (2016); City 
Power Marketing, LLC and K. Stephen Tsingas, 152 FERC ] 61,012, at P 
216 (2015); Constellation Energy Commodities Group, Inc. 145 FERC ] 
61,062, at P 5 (2013); Gila River Power, LLC, 141 FERC ] 61,136, at 
P 12 (2012).
---------------------------------------------------------------------------

G. Filing Requirement for Existing and New Virtual/FTR Participants 
\62\
---------------------------------------------------------------------------

    \62\ For a short-hand summary of the proposed submission process 
for both MBR sellers and Virtual/FTR Participants, see Attachment C: 
Proposed Submission Processes for MBR Sellers and Virtual/FTR 
Participants.
---------------------------------------------------------------------------

    59. We propose to require Virtual/FTR Participants to submit an 
Initial Connected Entity Submission, as defined in section 35.50(b), to 
engage, or continue to engage, in the virtual and/or FTR markets within 
the organized wholesale electric markets. The Initial Connected Entity 
Submission would: (i) Contain the ownership, trader, and contract 
information set forth in the regulation regarding Connected Entity 
Information; and (ii) report its LEI. The Commission would not issue an 
order approving the Initial Connected Entity Submission. We propose 
that any current Virtual/FTR Participant submit the Initial Connected 
Entity Submission within 90 days of the publication of a Final Rule in 
the Federal Register. We further propose that, thereafter, any new 
Virtual/FTR Participant submit an Initial Connected Entity Submission 
within 30 days of commencing trading of virtual or FTR products. For 
new Virtual/FTR Participants that commence trading of virtual or FTR 
products during the initial 90-day period after publication of the 
Final Rule in the Federal Register, the 30-day timeline for submission 
of Connected Entity Information would begin to run after the 90 days 
has elapsed. To the extent an entity is both an MBR seller and a 
Virtual/FTR Participant, we propose that entity follow the submission 
deadlines and requirements applicable to MBR sellers. We request 
comments on this proposed submission process.

H. Baseline Submission Required of Existing MBR Sellers \63\
---------------------------------------------------------------------------

    \63\ For a short-hand summary of the proposed submission process 
for both MBR sellers and Virtual/FTR Participants, see Attachment C: 
Proposed Submission Processes for MBR sellers and Virtual/FTR 
Participants.
---------------------------------------------------------------------------

    60. In the case of existing MBR sellers, we propose to require each 
MBR seller to make a baseline submission that will include both 
Connected Entity and MBR Information in order to establish the 
relational database.
    61. The baseline submission would be due within 90 days of the 
publication of a Final Rule in the Federal Register and include:
    (i) The Connected Entity Ownership information set forth in the 
regulation regarding Connected Entity Information (i.e., affiliates, as 
defined in section 35.36(a)(9) of the Commission's regulations, that: 
(a) Are ultimate affiliate owners; (b) participate in organized 
wholesale electric markets; or (c) purchase or sell financial natural 
gas or electric energy derivative products that settle off the price of 
electric or natural gas energy products);
    (ii) its LEI;

[[Page 51736]]

    (iii) the MBR information as set forth in the data dictionary 
(i.e., (a) MBR seller category status for each region in which the MBR 
seller has MBR authority, (b) markets in which the MBR seller is 
authorized ancillary services, (c) mitigation, if any, and (d) whether 
the MBR seller has limited the regions in which it has MBR authority);
    (iv) MBR Ownership information (i.e., affiliate owners that are: 
(a) Ultimate affiliate owners \64\ and (b) affiliate owner that have a 
franchised service area or MBR authority or directly own or control 
generation; transmission intrastate natural gas transportation, storage 
or distribution facilities; physical coal supply sources or ownership 
of or control over who may access transportation of coal supplies;
---------------------------------------------------------------------------

    \64\ When information, such as ultimate affiliate owner, is 
required to be submitted for both MBR and analytics and surveillance 
purposes, it should be designated as MBR Information and will be 
treated as public information unless the filer specifically requests 
non-public treatment in accordance with 18 CFR 388.112.
---------------------------------------------------------------------------

    (v) Connected Entity Trader and Contracts information; and
    (vi) Asset Appendix information as set forth in the data 
dictionary.
    MBR sellers should submit current information, even if different 
from information included in their most recent MBR filing with the 
Commission.
    62. This submission is intended to establish a baseline of 
information in the relational database, not to evaluate an MBR seller's 
MBR authority. Thus, the Commission would not act on the baseline 
filing. The information in this baseline submission would not be deemed 
accepted or approved by the Commission.

I. Ongoing Connected Entity Information Submission Requirements

    63. Thereafter, in the case of both MBR sellers and Virtual/FTR 
Participants, changes in connection would be required to be submitted 
within 30 days of the change. We propose to define a change in 
connection for purposes of updating Connected Entity Information as 
occurring when: (i) An entity becomes a Connected Entity of a Seller or 
Virtual/FTR Participant; or (ii) an entity ceases to be a Connected 
Entity of a Seller or Virtual/FTR Participant. With regard to the 
Contracts category of Connected Entity relationships, we propose to 
include a de minimis threshold of 100 MW for reporting changes in 
connection. Thus, a change in connection related to connections that 
are created by an agreement would occur when a Seller or Virtual/FTR 
Participant enters into, terminates, or amends an agreement that 
results in the parties conferring control of 100 MW or more of the 
output of an electric generation asset. We seek comments on this 
proposed definition of change in connection and our proposal to include 
a 100 MW de minimis threshold for reporting changes of connection 
related to the Contracts category.
    64. The 30-day time period for submitting changes in connection 
corresponds to the time period to report MBR-required changes in 
status, thus permitting a single combined filing. For any submissions 
required under this NOPR, entities subject to both MBR and Connected 
Entity requirements may include both the MBR and Connected Entity 
Information in the same format, so long as the time periods for 
submission applicable to each category are met.

J. Ongoing MBR Seller Filing Requirements

    65. We further propose to revise our regulations to add a new Sec.  
35.51 requiring that new MBR sellers, within 30 days of the date of the 
issuance of the order granting MBR authority, make a submission of 
their: (i) Connected Entity Ownership information, as defined in Sec.  
35.49(c)(1); (ii) Trader information, as defined in Sec.  35.49(d)(2); 
and (iii) Contract information, as defined in Sec.  35.49(d)(3). 
Thereafter, Sellers shall make filings updating this information within 
30 days of a change in connection, as defined in section 35.49(e). We 
also note that MBR sellers would still be required to make change in 
status filings pursuant to Sec.  35.42(a), and would be required to 
update other information quarterly, as set forth in the proposed Sec.  
35.42(d).
    66. We also propose a new Sec.  35.42(d) to require MBR sellers to 
update the relational database on a quarterly basis to reflect any 
changes to previously-submitted information that did not trigger a 
change in status filing under Sec.  35.42(a), a change in connection 
submission under the proposed Sec.  35.49(e), or any other MBR-related 
filing such as a notice of cancellation of or revision to an MBR tariff 
to change an MBR seller's category status.\65\ For example, updates 
that would be required include: (1) Retirement of a generation asset; 
(2) capacity rating changes to an existing generation asset; \66\ (3) 
acquisition of a generation asset that is a reportable asset \67\ but 
not required to be reported in a change in status filing; (4) loss of 
affiliation with an affiliate owner that has a franchised service area 
or MBR authority, or directly owns or controls generation, 
transmission, interstate natural gas transportation, storage or 
distribution facilities, physical coal supply sources, or ownership of 
or control over who may access transportation of coal supplies that 
does not trigger a change in connection submission; and (5) changes to 
business card information of the Seller or its affiliate owner(s) 
(e.g., name of legal entity name, headquarters address, address of 
legal formation, Web site, business registry, and business registry 
reference number) that will be used as a way to distinguish entities 
with similar names and characteristics from one another. In this way, 
information in the relational database would be fully updated on a 
regular basis while avoiding duplication of other reporting 
requirements. To the extent that a Seller needs to make a change in 
status filing, change in connection submission, and/or a quarterly 
update, it may do so in a single filing to the extent the Commission's 
rules on timing of change in status filings and change in connection 
are met. That is, a quarterly submission could include the requisite 
change in status filing and/or the requisite change in connection 
submission so long as it is not made more than 30 days after the 
relevant change in status or change in connection event.
---------------------------------------------------------------------------

    \65\ When making any filing that affects information captured in 
the relational database, including a notice of cancellation, MBR 
sellers would be required to include an XML file to update the 
relational database. See P [65], infra.
    \66\ The Commission's change in status regulation regarding 
generation-related assets is limited to cumulative net increases of 
100 MW or more; thus, not all changes in generation assets create a 
change in status filing obligation. See 18 CFR 35.42(a).
    \67\ As the Commission clarified in Order No. 816, behind-the-
meter generation and certain qualifying facilities would not be 
reportable assets. Order No. 816 FERC Stats. & Regs. ] 31,374 at PP 
23, 44 (sellers are not required to include behind-the-meter 
generation in their asset appendices, indicative screens, or for 
purposes of calculating the change in status threshold; qualifying 
facilities that are exempt from FPA section 205 and facilities that 
are behind-the-meter facilities do not need to be reported in the 
asset appendix or indicative screens).
---------------------------------------------------------------------------

    67. 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 inclusion in an MBR seller's 
MBR filings and organizational charts for use by the Commission. As 
described above, the relational database will generate an asset 
appendix for the MBR seller based on information that is provided by 
its affiliates. The quarterly update requirement will ensure that

[[Page 51737]]

when an MBR seller makes a filing requiring an asset appendix, the 
asset appendix generated by the relational database would reflect 
current information on its affiliates' assets.\68\ We propose that the 
quarterly updates be treated as informational.
---------------------------------------------------------------------------

    \68\ Currently, asset appendix information is only provided as 
part of initial MBR applications, triennial updated market power 
filings, and some notice of change in status filings.
---------------------------------------------------------------------------

    68. Other than the changes identified herein, we propose that the 
substantive requirements for MBR-related filings (i.e., initial 
applications for MBR authority, triennial filings, and change in status 
updates) remain the same as that currently in effect. However, such 
filings would be made as an XML filing package that includes all of the 
necessary attachments, as described above. Similarly, MBR sellers' 
notices of cancellation of, or amendments to, their MBR tariffs would 
include an XML file to update relevant relational database information, 
if any. As noted elsewhere in this NOPR, instructions on the specific 
formats and mechanics of such submissions will be included on the 
Commission's Web site.

III. Information Collection Statement

    69. The collections of information contained in this proposed rule 
are being submitted to the Office of Management and Budget (OMB) for 
review under section 3507(d) of the Paperwork Reduction Act of 1995, 44 
U.S.C. 3507(d). We solicit comments on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of the provided burden estimates, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing respondents' burden, including the use 
of automated information techniques. Respondents subject to the filing 
requirements of this proposed 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.
    70. The proposed rule will affect MBR sellers and Virtual/FTR 
Participants. Burden estimates are provided for each category.\69\
---------------------------------------------------------------------------

    \69\ The estimated hourly cost (salary plus benefits) provided 
in this section are based on the figures for May 2015 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 2016 
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)--$128.94; Computer and mathematical (code 15-
0000)--$60.54; Information systems manager (code 11-3021)--$91.63; 
IT security analyst (code 15-1122)--$58.00; Auditing and accounting 
(code 13-2011)--$53.78; Information and record clerk (referred to as 
administrative work in the body) (code 43-4199)--$37.69.
---------------------------------------------------------------------------

    71. The Commission recognizes that there will be an initial 
implementation burden associated with providing the Commission the 
requested data. For example, MBR sellers and Virtual/FTR Participants 
will be required to obtain an LEI if they do not already have one.\70\ 
LEI acquisition is largely administrative with some optional legal 
review. We estimate one hour of person-time to acquire an LEI 
($42.25),\71\ added to the estimated $250 cost of obtaining the LEI 
itself totaling $292.25 in year one. There is also an estimated $150 
annual fee for maintaining the LEI, plus the associated one burden hour 
for an ongoing annual cost of $192.25. The LEI information may also be 
submitted in the FERC-920 (Electric Quarterly Report).
---------------------------------------------------------------------------

    \70\ While some other regulators already require that certain 
entities obtain an LEI, for the purposes of these estimates, we 
assume that no MBR seller or Virtual/FTR Participant already has an 
LEI.
    \71\ Using the average hourly cost of salary plus benefits 
provided above, the following weights were applied to estimate the 
average hourly cost of $42.25: ninety-five percent information and 
record clerk, five percent legal.
---------------------------------------------------------------------------

    72. MBR sellers already submit most of the requested information to 
the Commission as part of their applications, notices of change in 
status and triennial updated market power analyses. For MBR sellers, 
the proposed rule enlarges the scope of information to be collected 
while also reducing requirements for some existing collections. In year 
one, we estimate that the average MBR seller will spend forty to one-
hundred hours collecting and providing this additional information, 
with an ongoing burden in subsequent years of thirteen hours.
    73. Under the proposed rule, Virtual/FTR Participants will be 
required to submit a subset of the information MBR sellers are required 
to submit. Because exclusively Virtual/FTR Participants tend to be 
smaller than MBR sellers and because the information collected is not 
as extensive, we estimate that Virtual/FTR Participants, on average, 
will spend twenty hours collecting and providing this information in 
year one, with an ongoing burden in subsequent years of eight hours.
    74. Some of the ongoing, incremental costs will be incurred by MBR 
sellers and Virtual/FTR Participants when they are required to submit 
information about certain changes within thirty days of the change. 
Based on the current average of change in status filings submitted by 
MBR sellers each year, we estimate that ten percent of affected 
entities will submit changes on an annual basis.
    75. All MBR sellers will incur the cost associated with submitting 
quarterly updates to information previously submitted into the 
relational database to the extent such changes did not trigger a change 
in status or change in connection submission. We estimate that during a 
given year, approximately half of the 2,100 MBR sellers will be 
required to submit the quarterly report.
    The following table summarizes the estimated burden and cost 
changes due to the proposed rule: \72\

    \72\ Note that the Commission is also proposing decreases in 
certain requirements (such as providing organizational charts and a 
reduction in the scope of ownership information). Any associated 
burden decreases are not included in the table at this time because 
the Commission is seeking comment on these changes. However, the EQR 
changes we are currently seeking comment on are included in the 
table.

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[[Page 51738]]

[GRAPHIC] [TIFF OMITTED] TP04AU16.007

BILLING CODE 6717-01-P
    76. The table above contains estimates of the number of MBR sellers 
and Virtual/FTR Participants. We estimate that there are 2,100 MBR 
sellers based on the number of MBR filings; of those approximately half 
are Category 1 in all regions and half are Category 2 in one or more 
regions. We estimate 2,000 Virtual/FTR Participants using data 
submitted by the RTO/ISOs in accordance with Order No. 760.
    Titles: Refinements to Policies and Procedures for Market-Based 
Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary 
Services by Public Utilities; and Requirements for Sellers and Virtual/
FTR Participants for Analytics and Surveillance Purposes (FERC-919), 
and Electric Quarterly Report (FERC-920).
    Action: Proposed revisions to existing information collections.
    OMB Control Nos.: 1902-0234 (FERC-919) and 1902-0255 (FERC-920).
    Respondents for This Rulemaking: MBR sellers and Virtual/FTR 
Participants.
    Frequency of Information: Initial implementation, compliance 
filing, and periodic updates (annually and quarterly).
    77. 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 NOPR 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

[[Page 51739]]

accessible to the Commission and its staff in the least burdensome 
manner possible.
    78. Internal Review: The Commission has made a preliminary 
determination that the proposed 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.
    79. 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 protected], phone: 
(202) 502-8663, fax: (202) 273-0873].
    80. Comments concerning the information collections proposed in 
this NOPR, and the associated burden estimates, should be sent to the 
Commission in this docket and may also be sent to the Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy 
Regulatory Commission]. For security reasons, comments should be sent 
by email to OMB at the following email address: 
[email protected]. Please reference FERC-919 and FERC-920 and 
OMB Control Nos. 1902-0234 (FERC-919) and 1902-0255 (FERC-920) in your 
submission.

IV. Environmental Analysis

    81. 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.\73\ The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.\74\ The actions proposed here fall within a categorical 
exclusion in the Commission's regulations, i.e., they involve 
information gathering, analysis, and dissemination.\75\ Therefore, 
environmental analysis is unnecessary and has not been performed.
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    \73\ Regulations Implementing the National Environmental Policy 
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. 
Regulations Preambles 1986-1990 ] 30,783 (1987).
    \74\ Order No. 486, FERC Stats & Regs. ] 30,783.
    \75\ 18 CFR 380.4 (2015).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    82. The Regulatory Flexibility Act of 1980 (RFA) \76\ 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 rule so as to minimize any 
significant economic impact on a substantial number of small entities. 
The Small Business Administration's (SBA) Office of Size Standards 
develops the numerical definition of a small business.\77\ The SBA 
revised its size standard for electric utilities (effective January 22, 
2014) to a standard based on the number of employees, including 
affiliates (from a standard based on megawatt hours).\78\ Under SBA's 
current size standards, MBR sellers likely come under one of the 
following categories and associated size thresholds: \79\
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    \76\ 5 U.S.C. 601-612.
    \77\ 13 CFR 121.101.
    \78\ SBA Final Rule on ``Small Business Size Standards: 
Utilities,'' 78 FR 77343 (Dec. 23, 2013).
    \79\ 13 CFR 121.201, Sector 22, Utilities.
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     Hydroelectric power generation, at 500 employees
     Fossil fuel electric power generation, at 750 employees
     Nuclear electric power generation, at 750 employees
     Other electric power generation (e.g., solar, wind, 
geothermal, biomass, and other), at 250 employees
     Electric bulk power transmission and control, at 500 
employees
     Electric power distribution, at 1,000 employees
     Wholesale Trade Agents and Brokers,\80\ at 100 employees
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    \80\ The NAICS category 425120 (Wholesale Electronic Markets and 
Agents and Brokers, within Subsector 425) covers Power Marketers.
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    83. Based on available data, the percentage of small firms affected 
by the NOPR is estimated to be at least 78 percent.\81\ We recognize 
that the rule will impact small electric utilities, electric power 
distribution, electric bulk power transmission and control, and power 
marketers and estimate the economic impact below. The economic impact 
of this proposed rule is directly related to the size and complexity of 
the organization, that is, the more entities to which a company is 
related, the more generation assets it owns or controls, the more 
traders it employs, and the more market activities in which it 
participates, the more information must be reported. Therefore, it is 
reasonable to assume that the cost of complying for small entities will 
be significantly less than the cost for large ones, and the amount of 
information that a small entity will be required to collect, maintain, 
and transmit is likely to be small.
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    \81\ For the analysis in this NOPR, we are using a conservative 
number of 1000 employee threshold to conduct a comprehensive 
analysis.
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    84. We estimate the cost in year one (including burden hours, plus 
cost of acquiring the LEI) for small companies to be $1,273-$6,644. The 
annual cost starting in Year 2 (including burden hours, plus cost of 
maintaining the LEI) is estimated to be $488-$826. According to SBA 
guidance, the determination of significance of impact ``should be seen 
as relative to the size of the business, the size of the competitor's 
business, and the impact the regulation has on larger competitors.'' 
\82\ Based on the above analysis, the reporting requirements proposed 
in this NOPR should not have a significant economic impact on a 
substantial number of small entities.
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    \82\ U.S. Small Business Administration, A Guide for Government 
Agencies How to Comply with the Regulatory Flexibility Act, May 
2012, https://www.sba.gov/sites/default/files/advocacy/rfaguide_0512_0.pdf, p. 18.
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VI. Comment Procedures

    85. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due September 19, 2016. Comments must refer to 
Docket No. RM16-17-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    86. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    87. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    88. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

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VII. Document Availability

    89. 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.
    90. 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.
    91. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].

List of Subjects in 18 CFR Part 35

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

    By direction of the Commission.

    Dated: July 21, 2016.
Nathaniel J. Davis, Sr.,
Deputy 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.  35.37 by revising paragraph (a)(2) and (c)(4)to read as 
follows:


Sec.  35.37  Market power analysis required.

    (a) * * *
    (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 affiliate 
owner(s), i.e., the furthest upstream affiliate(s) in the ownership 
chain. A Seller must also identify all affiliate owners that have a 
franchised service area or market-based rate authority, and all 
affiliate owners that directly own or control: generation; 
transmission; intrastate natural gas transportation, storage or 
distribution facilities; physical coal supply sources or ownership of 
or control over who may access transportation of coal supplies. The 
term ``affiliate owner'' means any owner of the Seller that is an 
affiliate of the Seller as defined in Sec.  35.36(a)(9). The Seller 
must also provide a list of assets, certain specified information 
regarding affiliate owners, and other required market-based rate 
information in an XML schema for input into a relational database 
prepared in conformance with the instructions posted on the 
Commission's Web site.
* * * * *
    (c) * * *
    (4) A Seller must provide its horizontal market power screens in an 
XML schema for input into the relational database, prepared in 
conformance with the instructions posted on the Commission's Web site.
* * * * *
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 paragraph (c).
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 affiliate owner, defined as the furthest 
upstream affiliate(s) in the ownership chain.
* * * * *
    (c) Changes in status must be prepared in conformance with the 
instructions posted on the Commission's Web site.
    (d) A Seller must report on a quarterly basis any changes to its 
previously-submitted relational database information. These submissions 
will be made for each of the four calendar quarters of each year, in 
accordance with the following schedule: for the period from January 1 
through March 31, submit by April 30; for the period from April 1 
through June 30, submit by July 31; for the period July 1 through 
September 30, submit by October 31; and for the period October 1 
through December 31, submit by January 31. The submission must be 
prepared in conformance with the instructions posted on the 
Commission's Web site.

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.
0
6. Add subpart K to read as follows:

Subpart K--Data Collection Requirements for Sellers and 
Participants in Organized Wholesale Electric Markets

Sec.
35.48 Applicability.
35.49 Definitions.
35.50 Requirements for Virtual/FTR Participant.
35.51 Requirements for new Sellers.


Sec.  35.48  Applicability.

    This subpart establishes the requirements for Sellers and Virtual/
FTR Participants for the purpose of providing information to the 
Commission to conduct surveillance and analysis of the wholesale 
electric markets.


Sec.  35.49  Definitions.

    As used in this subpart:
    (a) Virtual/FTR Participant means an entity that buys, sells, or 
bids for virtual instruments or financial transmission or congestion 
rights or contracts, or holds such rights or contracts in organized 
wholesale electric markets, not including entities defined in section 
201(f) of the Federal Power Act.
    (b) Seller refers to a Seller as defined in Sec.  35.36(a)(1).
    (c) Organized wholesale electric market includes an independent 
system operator and a regional transmission organization as those terms 
are defined in Sec.  35.46.
    (d) Connected Entity is defined as follows:
    (1) Ownership. An entity that is an affiliate of a Seller or 
Virtual/FTR Participant pursuant to Sec.  35.36(a)(9), and meets one or 
more of the following criteria:
    (i) Is an ultimate affiliate owner of the Seller or Virtual/FTR 
Participant, as defined in Sec.  35.37(a)(2);
    (ii) Participates in organized wholesale electric markets; or
    (iii) Purchases or sells financial natural gas or electric energy 
derivative products that settle off the price of physical electric or 
natural gas energy products.

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    (2) Traders. Traders employed or engaged by the Seller or Virtual/
FTR Participant. Trader means a person who makes, or participates in, 
decisions and/or devises strategies for buying or selling physical or 
financial Commission-jurisdictional electric products or physical 
natural gas.
    (3) Contracts. An entity that has entered into an agreement with a 
Seller or Virtual/FTR Participant that confers control over an electric 
generation asset that is used in, or offered into, wholesale electric 
markets. Agreements that confer control are those that grant one of the 
parties the right to make trading decisions for an electric generation 
asset of another party or to offer an electric generation asset into 
the wholesale electric markets.
    (e) Change in connection occurs when:
    (1) An entity becomes a Connected Entity of a Seller or Virtual/FTR 
Participant as defined in Sec.  35.49(d); or
    (2) An entity ceases to be a Connected Entity of a Seller or 
Virtual/FTR Participant as defined in Sec.  35.49(d). With regard to 
the Contracts category of Connected Entity relationships as described 
in Sec.  35.49(d)(3), a change in connection occurs when a Seller or 
Virtual/FTR Participant enters into, terminates, or amends an agreement 
that results in the parties conferring control of 100 MW or more of the 
output of an electric generation asset.


Sec.  35.50  Requirements for Virtual/FTR Participant

    (a) Reporting requirement. Virtual/FTR Participant shall acquire a 
Legal Entity Identifier designation, obtainable through the Global LEI 
System, and identify their Connected Entities to the Commission through 
the submission of an XML schema for input into a relational database, 
consistent with the instructions posted on the Commission's Web site.
    (b) Initial connected entity submission. Virtual/FTR Participants 
that do not have market-based rate authority shall make an initial 
submission, defined herein as an initial connected entity submission, 
within 30 days of commencing participation in an organized wholesale 
electric market. The initial connected entity submission shall contain 
the Virtual/FTR Participant's ownership information, as defined in 
Sec.  35.49(d)(1); trader information, as defined in Sec.  35.49(d)(2); 
contract information, as defined in Sec.  35.49(d)(3); and Legal Entity 
Identifier designation, obtainable through the Global LEI System.
    (c) Ongoing reporting requirement. Virtual/FTR Participants shall 
make submissions updating their information within 30 days of a change 
of connection, as defined in Sec.  35.49(e).
    (d) Communications. Consistent with the requirements imposed on 
Sellers in Sec.  35.41(b), Virtual/FTR Participants must provide 
accurate and factual information and not submit false or misleading 
information, or omit material information, in any communication with 
the Commission, Commission-approved market monitors, Commission-
approved regional transmission organizations, Commission-approved 
independent system operators, or jurisdictional transmission providers, 
unless the Virtual/FTR Participant exercises due diligence to prevent 
such occurrences.


Sec.  35.51  Requirements for new Sellers.

    Reporting requirement. Within 30 days of the order granting initial 
market-based rate authority, Sellers shall provide, through the 
submission of an XML schema for input into a relational database 
consistent with the instructions posted on the Commission's Web site: 
Ownership information, as defined in Sec.  35.49(d)(1); trader 
information, as defined in Sec.  35.49(d)(2); and contract information, 
as defined in Sec.  35.49(d)(3). Thereafter, Sellers shall make filings 
updating their information within 30 days of a change of connection, as 
defined in Sec.  35.49(e).

BILLING CODE 6717-01-P

    Note: The following attachments A through D will not appear in 
the Code of Federal Regulations.


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[FR Doc. 2016-17839 Filed 8-3-16; 8:45 am]
BILLING CODE 6717-01-C