Docket Nos. RM22-20-000
Item M-1

Good morning Mr. Chairman and Commissioners.  I am Gabe Sterling and with me is Andrea Cerbin.  We are with the Office of Enforcement.  Item M-1 is a Notice of Proposed Rulemaking proposing a new duty of candor for entities that communicate with the Commission or organizations upon which the Commission relies to carry out its statutory obligations in the Commission-jurisdictional electric, natural gas, and oil industries and markets.

In the past, different duties of candor have been adopted by the Commission governing specific types of communications from certain organizations and persons and related to discrete areas of the Commission’s jurisdiction.  This existing patchwork of requirements is insufficient to encompass all of the situations in which the Commission must be assured that it is receiving accurate communications that are necessary for it to adequately conduct its regulatory oversight and fulfill its statutory obligations.

The proposed rule is a broad duty of candor intended to capture many communications that have not been explicitly included in these existing requirements, but nonetheless are important to the effective execution of the Commission’s statutory obligations.  The proposed rule is based on 18 C.F.R. § 35.41(b), which governs communications by Sellers of electricity with market-based rate authority to: the Commission, regional transmission organizations, independent system operators, and their market monitors, and jurisdictional transmission providers.  That regulation has been in force, in different forms, for nearly 20 years.

The proposed rule broadens the application of the requirement of accurate and truthful communications by providing that all entities communicating with the Commission or other specified organizations related to a matter subject to the jurisdiction of the Commission submit accurate and factual information and not submit false or misleading information or omit material information.  As with section 35.41(b), an entity is shielded from violation of the proposed regulation if it exercises due diligence to prevent such occurrences. 

Communications to the following organizations would be covered by the proposed rule: the Commission (including Commission staff), Commission-approved market monitors, Commission-approved regional transmission organizations, Commission-approved independent system operators, jurisdictional transmission or transportation providers, and the Electric Reliability Organization and its associated Regional Entities.

Comments on the proposed rule are to be submitted within 60 days of publication of the Notice of Proposed Rulemaking in the Federal Register.

That concludes our presentation.  We would be pleased to respond to questions.

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This page was last updated on July 28, 2022