FERC Filings
EPSA's Protest On the OMS Offer of Proof
Fundamental Requirements for All Confidentiality Rules
The Offer fails to specifically address why the PJM protections would hinder state commissions from performing their regulatory responsibilities. The Offer erroneously concludes that states will need to have access to confidential wholesale market information to "assess whether their retail markets are accessing wholesale markets economically" and that "data on the quality of competition in the wholesale market are essential to the state regulatory role." The PJM procedures, however, allow state commissions to access confidential information for specific regulatory purposes, such as prudence reviews or regional planning activities, while protecting the disclosure of confidential information for other than a specific state regulatory purpose.
The OMS dismisses the PJM protections by suggesting that the Midwest ISO expressed no need for protection in its original tariff filing. On the contrary, the Midwest ISO's Informational Filing evidences a continuing concern with the inappropriate release of confidential information. The OMS also asserts that there is no requirement to have similar confidentiality procedures in PJM and the Midwest ISO "because little about the two RTOs is identical". This view ignores the Midwest ISO’s and PJM’s ongoing effort to establish joint and common markets, a prominent consideration in FERC’s review of proposed confidentiality rules.
Further, Midwest ISO market participants have an interest in ensuring that highly sensitive market information is not easily available because, as the Commission determined with respect to PJM, easy access to this information "could pose considerable harm to a PJM member and the PJM marketplace.” The concern raised by the Midwest ISO market participants is no less compelling. Finally, both PJM and the Midwest ISO are similar in that both have access to highly sensitive market information that must be protected. While providing the appropriate level of protection, PJM’s procedures do not prevent state commissions from carrying out their specific regulatory responsibilities.
EPSA believes that there exists a compelling and legally sufficient regulatory rationale for requiring the Midwest ISO’s confidentiality proposal to align with PJM’s and urges the Commission to maintain this central objective. Indeed, among other positive features, PJM’s confidentiality rules contain procedures that are essential to ensuring that fundamental rights and expectations of market participants are adequately protected. While an RTO may present unique circumstances justifying some customization of its confidentiality rules, certain fundamental features are essential and must be maintained. It is clearly within the Commission’s statutory authority to include this factor in its consideration of what approach is “just and reasonable."
The Commission should order the Midwest ISO to include certain key provisions essential to protect the legitimate interests of all parties in whatever confidentiality rules the Midwest RTO ultimately files. Numerous parties have devoted substantial time and effort to ensuring that these critical protections were included in other confidentiality rules, and urge the Commission not to retreat from or weaken these fundamental components. For instance, the Commission should require that MISO make the following changes to its tariff and its form non-disclosure agreement ("NDA"):
• Include § 38.9.4.5(e) of the MISO tariff, which is currently only inserted for discussion purposes, regarding the right to object to an information request;
• Include provisions regarding the exact type of relief, such as a FERC order or injunctive relief, and the proper forum in which to seek relief, such as FERC or a court of competent jurisdiction (See PJM § 18.17.4(d)(iii) and § 18.17.4(d)(v) for model provisions);
• Insert provisions strictly limiting the use of confidential information by requiring that an authorized person use the information only to assist a state commission "in discharging its legal responsibility to monitor the wholesale and retail electricity markets, operations, transmission planning and siting and generation planning and siting materially affecting retail customers in the State, and for no other purpose." (See PJM § 2.5.4 of NDA);
• Insert the requirement from the PJM tariff that an Authorized Agency must be one "that regulates the distribution or supply of electricity to retail customers and is legally charged with monitoring the operation of wholesale or retail markets serving retail suppliers or customers within its State") (See PJM § 1.2 of NDA);
• Clarify that any confidential information discussed or shared among the requestors must first have been provided by MISO or the market monitor to such requestors (See MISO § 2.3 and PJM § 18.17.4(a))
• Delete phrases such as "except when inconsistent with state or federal law" that gut the protections under the NDA (See MISO § 2.4.2);
The Commission addressed all of these issues when reviewing and approving PJM’s confidentiality rules. The FERC-approved procedures in PJM allow state commissions to obtain confidential information concerning PJM markets, enabling them to fulfill certain specific and carefully defined responsibilities. When approving the PJM confidentiality rules, the Commission accommodated the states’ interest, stating “the purpose of PJM's proposal is to provide access to non-public or confidential market data to state commissions to enable them [state commissions] to carry out their regulatory functions."
At the same time, PJM’s procedures carefully balance the opportunity to seek information disclosure needed to perform specific regulatory functions against the need to protect highly sensitive commercial information. Those protections include:
• limiting the disclosure of information to those entities with the regulatory and legal authority to monitor retail electric markets within the state;
• requiring state commissions to provide an explanation of the purpose of the information request;
• allowing PJM or PJM market participants to object to a specific request for confidential information; and
• requiring state commissions to engage in legal processes to defend against third party requests for the confidential information .
The Commission has covered this ground before in assessing the PJM confidentiality provisions and has fairly balanced competing concerns and objectives in approving the PJM tariff. There is no fundamental reason why the concerns raised by the Offer are any more compelling than the interests of the parties in PJM such that the Commission should tip that balance in the Midwest ISO tariff.