FERC Filings
EPSA's Protest On the OMS Offer of Proof
Background and Introduction
The effort to develop a consensus for a confidentiality proposal governing state access to commercially sensitive wholesale market information in the Midwest ISO has proven to be extremely challenging. One reason for this impasse may be the challenges presented by the transition from cost-based to value-based markets. Unlike traditional vertically integrated monopoly utility markets, whose central characteristic is that consumer prices are derived from producer costs, competitive markets focus on value determinations reflecting supply and demand.
Accordingly, rather than a strict view of producers’ costs, consumer prices are derived from the actual value placed on the product by wholesale and/or retail customers. All parties desire an end-state whereby open and transparent markets work to price wholesale electricity products and services that reflect the value placed on them by customers. Achieving this end-state in the Midwest ISO in a timely manner will go a long way toward reconciling the competing interests on data access.
In its August 6, 2004 order, the Commission rejected the Midwest ISO’s proposed provisions concerning state access to confidential market information, and directed the Midwest ISO to submit a revised consensus proposal. Among other factors, the Commission’s determination was expressly based upon a preference for PJM’s confidentiality rules, and the Commission’s belief that “the two ISOs should have comparable rules as they move toward a joint and common market...[t]he revised proposal should include the type of non-disclosure agreement recently approved for PJM. Such an agreement will harmonize Authorized Requestors’ individual obligations to protect data.”
Subsequently, the Commission issued a related order that granted the OMS an opportunity to submit its offer of proof, and that unequivocally reaffirmed the Commission’s intention for the Midwest ISO “to more closely align its confidentiality proposal with PJM’s.” The Commission noted certain deficiencies in the prior proposals, including “why OMS and the states seek access to data that is comparable to the Commission’s access, how they will keep that data confidential, or for what purpose they will use the data.” Additionally, in a concurring opinion, Commissioner Kelliher stated that prior to states being given access to confidential information, it must be demonstrated that such data “is necessary for the state entities to discharge their legal responsibilities” and is otherwise unobtainable under state law. As explained in the Midwest ISO’s February 17 Informational Filing, extensive stakeholder discussions were conducted throughout the fall and into January 2005. EPSA appreciates the time and effort that many well-intentioned people on all sides of this debate have devoted to this effort. Indeed, as the Informational Filing indicates, substantial progress has been made, and the Midwest ISO is to be commended for engaging in “an effort to find middle ground between divergent positions of the parties on certain issues.”
However, in its Offer, the OMS fails to provide direct and clear responses to the questions posed in the Commission’s prior orders. As a result, the Offer has failed to provide compelling reasons why the Commission should diverge from its clearly stated preference for PJM-type data confidentiality provisions in reviewing the proposals set forth by the Midwest ISO. As explained more fully below, EPSA believes the OMS’ substantive and legal arguments provide an insufficient explanation of the need for two fundamentally different sets of confidentiality rules for RTOs that will be operating joint and common markets.