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FERC Order No. 860 Mandates New Market-Based Rate Filing and Reporting Requirements for Sellers of Electric Energy

On July 18, 2019, the Federal Energy Regulatory Commission issued Order No. 860.  The order requires entities with or seeking market-based rate authority (sellers) to submit certain data related to FERC’s market power analyses, including its indicative screens and asset appendices, into a “relational database” maintained by FERC.  The order also requires the submission of information associated with long-term firm sales.  When changes occur to data previously submitted, the relational database must be updated monthly by sellers.  The database will be used to, among other things, develop asset appendices and indicative screens for FERC filings that require a market power analysis.  Finally, Order No. 860 altered the deadline for “change in status” filings.  Beginning on January 1, 2021, sellers will need to comply with the order by making a baseline submission and using the “relational database” to make future market-based applications.


Entities may seek FERC authorization under Section 205 of the Federal Power Act to engage in sales for resale of electric energy, capacity or ancillary services.  FERC grants authorization when such sellers demonstrate, among other things, that they and their affiliates lack or have adequately mitigated horizontal and vertical market power through a market power analysis.  Horizontal market power is assessed based on two indicative screens: the pivotal supplier and wholesale market share screens.  Both screens utilize capacity owned or controlled by the seller and its affiliates to assess the seller’s position in the market.  Sellers must provide information regarding the capacity that they and their affiliates own and control in an asset appendix in their market based rate applications.  If the seller passes both indicative screens, then there is a rebuttable presumption that the seller does not possess horizontal market power.

Updated market power analyses and indicative screens are also required for triennial market power updates and certain “change in status” filings.

Order No. 860

Order No. 860 requires sellers to populate a new “relational database” with information regarding the assets previously reportable in the asset appendix that they own or control (including a new requirement for information on long term firm sales), assets of their affiliates without market-based rate authority (excluding exempt Qualifying Facilities and behind-the-meter generation), and their “ultimate upstream affiliate(s)” as defined by the Commission.  Notably, sellers are not responsible for submitting the assets of their affiliates so long as such affiliates have market based rate authority.  According to FERC, once the “relational database” is populated, the database will be able to create asset appendices for sellers submitting market power analyses to the Commission because sellers will be linked through common “ultimate upstream affiliate(s)”.


The rules promulgated by Order No. 860 become effective on October 1, 2020, but FERC provided an implementation period.  First, sellers that have received market based rate authorization by December 31, 2020, must make a baseline submission into the “relational database” by close of business on February 1, 2021.  Second, sellers that have filed for market-based rate authority, but have not received an order granting market-based rate authority as of January 1, 2021, must make a baseline submission into the “relational database” by close of business on February 1, 2021.  Finally, beginning February 1, 2021, any new applicant seeking market-based rate authority will be required to make a submission into the “relational database” prior to filing an initial market-based rate application.

Market Based Rate Applications Beginning February 1, 2021

In order to submit an application for market based rates, a seller will need to adhere to a three step process.  First, the seller must obtain and collect information necessary to input information into the “relational database,” such as a Company Identifier (CID) from FERC, Asset IDs for any generators that they own or control that are not included in the EIA-860 database, and a FERC generated ID for any ultimate upstream affiliate(s) that do not have a CID or Legal Entity Identifier (LEI).  Second, the seller must submit relevant asset information, identify ultimate upstream affiliate(s), and provide other required data into the “relational database.”  The seller will have the opportunity to review its associated asset appendix and, if necessary, make a submission to the “relational database” to address any errors.  Third, the seller must submit its market-based rate filing through eFiling and use the serial number associated with its corresponding asset appendix in the filing.  The asset appendix must be created fewer than 15 days before the filing.  The seller may report in its transmittal letter any errors in its affiliates’ submissions that affect its asset appendices.

Updates to the “Relational Database” and “Change in Status” Filings

Order No. 860 requires sellers to update the “relational database” with any changes to its own assets or information previously submitted (not changes of each of its market-based rate affiliates) by the 15th day of the month following the change.  This update requirement is necessary even when the update does not implicate a seller’s authorization to sell at market-based rates and would not rise to the level of a “change in status” filing.

Prior to Order No. 860, FERC required sellers to make a “change in status” filing within 30 days of a change in the facts or circumstances that FERC relied upon in granting a seller market-based rate authority.  Under Order No. 860, sellers will be required to submit “change in status” filings on a quarterly basis.  For example, if a seller acquires a 150 MW generator on February 18th and there are no offsetting decreases in generation that bring the net increase below 100 MW, then the seller must make a “change in status” filing no later than April 15th.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.


About this Author

Winnie Weil, Corporate lawyer Sheppard Mullin

Winnie Weil is an associate in the Corporate Practice Group in the firm's San Diego (Del Mar) office. She is a member of the firm’s Energy, Infrastructure and Project Finance industry team, as well as the Healthcare industry team.

Areas of Practice

Winnie advises on mergers & acquisitions, renewable energy project finance, healthcare transactions, emerging company transactions, technology transactions, corporate governance, and other general corporate transactional matters.

Prior to joining Sheppard Mullin, Winnie was a...

William M. Rappolt Real Estate Lawyer Sheppard Mullin Law Firm

Bill Rappolt is an associate in the Real Estate, Land Use and Environmental Practice Group and a member of the Energy Industry Team in the firm's Washington, D.C. office.

Areas of Practice

Bill has worked in the field of energy regulation since 2003 and has been a practicing attorney in the field since 2010. Bill’s practice includes representing participants in the natural gas, electric and oil/liquids industries before federal agencies, state utility commissions and appellate courts. Bill has represented natural gas pipelines and storage providers, electric generators, power marketing and trading companies, commercial class electric customers, electric utilities, independent electric transmission providers and oil/liquids pipelines and storage providers. Bill has aided clients with rate making issues invloving cost of service, return on equity and rate design. 

Katarzyna Levecke Partner Sheppard Mullin Chicago Real Estate and Land Use Wetlands and Endangered Species Litigation Environmental Litigation Commercial Lending and Financial Transactions Asset Based Lending

Katarzyna Levecke is a partner in the Real Estate, Land Use and Environmental Practice Group in the firm's Chicago office.

Areas of Practice

Katarzyna concentrates her practice on commercial lending transactions, leasing and tax credit transactions, in each case, primarily in the renewable energy sector. Katarzyna has represented numerous developers, debt and equity investors, lessors, and lessees in financing and leasing matters.  Her experience includes negotiation and due diligence of key project documents and structuring and negotiation of debt and equity...