FERC sets “rules of the road” for energy markets

Nov. 17, 2003 — The Federal Energy Regulatory Commission moved Nov. 13 to issue a set of market behavior rules designed to help prevent market abuse, provide a more stable marketplace and create an environment that will attract needed investment capital in the electric and natural gas industries.

The market behavior rules are intended to alert sellers to various types of prohibited behavior. In addition, the rules contain the breadth and flexibility to address new and unanticipated activities as they may arise.

The electric and gas rules contain provisions relating to: market manipulation, reporting, and record retention. The electric rule also contains provisions related to unit operations, communications and related tariffs.

If a seller is found to have engaged in prohibited behavior, the seller would be subject to disgorgement of unjust profits and non-monetary remedies such as revocation of the seller’s market-based rate authority or blanket certificate authority.

The new rules are designed to provide more effective remedies on behalf of customers and to provide those entities with market-based rates or blanket gas certificates appropriate rules respecting market conduct with a time-limited third-party complaint window.

The market rules are effective 30 days after publication in the Federal Register.