FERC Filings
Comments of EPSA, Colorado Independent Energy Association, Independent Energy Producers of California, IPPNY and WPTF re: Public Utility Market-Based Rate Authorizations
The 60-Day Time Limitation on Market Participants' Complaints is Necessary and Should Extend to the Commission
A vital improvement in the Commission’s June 26 proposal is the 60-day time limitation for bringing complaints to the Commission; this limitation allows for transactional finality. An open-ended refund obligation, as proposed in the November 20 Order, would have caused unlimited regulatory uncertainty, accounting nightmares and myriad increased costs. The current proposal, under which parties have 60 days after a calendar quarter following a suspect transaction to bring a complaint, is a step in the right direction. This appears reasonable because it creates transactional finality, while at the same time, providing consumers with relief from possible market behavior abuses. This requirement should be waived only if and when the party bringing the complaint could not reasonably have known about the transaction within that time frame.
Further, consistent with its general rules for complaints, the Commission should establish a specific requirement that complaints filed by market participants under these provisions must meet a certain minimum standard to establish a threshold case that the transaction is not just and reasonable; the time limitation should not result in allegations being filed without substantiation or evidence of violation only in order to meet the 60-day filing requirement. Likewise, the Commission should:
• review and act on these challenges quickly, and
• quickly dismiss any challenges it deems frivolous, so that questioned transactions can be considered closed and final on a timely basis for all parties.
This will provide much-needed certainty in the markets.
Notwithstanding these requested clarifications, Competitive Suppliers remain concerned that the time limitations apply only to complaints initiated by market participants and not to those initiated by the Commission. An open-ended risk that the Commission might question any transaction at any time - perhaps in response to a Hotline complaint made by a market participant otherwise precluded from or no longer eligible to file a complaint itself – will have a chilling effect on the market and further calls into question the legal validity of a rule that tests the bounds of the Commission’s ability to order refunds through a retroactive interpretation of market rules that lack sufficient clarity.
Currently, the Commission may, on its own motion, initiate an investigation against any market participant, provide notice of such investigation and establish a refund effective date per FPA Section 206 (which is 60 days after issuance of notice of the investigation). The legal requirement for a prospective refund effective date gives parties notice that certain transactions are subject to refund. Under the Commission’s proposed market behavioral rules, however, the Commission may reopen settled transactions months, or even years, after the fact – based on an evolving interpretation of the market behavioral rules that often lacks specificity – and then possibly order retroactive refunds based on that evolving interpretation. Transaction finality would be at risk until the required time period for record keeping expired. This potential refund risk and lack of transaction finality adds additional uncertainty for market participants and their financial backers. The attendant uncertainty undermines the workings of the competitive market and adds risks for market participants, which ultimately translates into greater costs for consumers.
For these reasons, Competitive Suppliers urge the Commission to clarify that while it might reexamine transactions and provide guidance at any time, it will be bound by the time limitations imposed in the rules with respect to any remedies that might be imposed. In other words, the Commission will not impose remedies such as retroactive refunds for any actionable transactions unless parties are put on notice within 60 days of the close of the quarter in which the transaction occurred that the transaction is being reviewed.