Refinements to Horizontal Market Power Analysis for Sellers in Certain Regional Transmission Organization and Independent System Operator Markets

The Federal Energy Regulatory Commission (Commission) is modifying its regulations regarding the horizontal market power analysis required for market-based rate sellers that study certain Regional Transmission Organization (RTO) or Independent System Operator (ISO) markets and submarkets therein. This modification relieves such sellers of the obligation to submit indicative screens to the Commission in order to obtain or retain authority to sell energy, ancillary services and capacity at market-based rates. The Commission's regulations continue to require market-based rate sellers that study an RTO, ISO, or submarket therein, to submit indicative screens for authorization to make capacity sales at market-based rates in any RTO/ ISO market that lacks an RTO/ISO-administered capacity market subject to Commission-approved RTO/ISO monitoring and mitigation. For those RTOs and ISOs that do not have an RTO/ISO-administered capacity market, Commission-approved RTO/ISO monitoring and mitigation is no longer presumed sufficient to address any horizontal market power concerns for capacity sales where there are indicative screen failures. Sellers studying RTO/ISO markets that do not have an RTO/ISO-administered capacity market would be relieved of the requirement to submit indicative screens to the Commission if they sought market-based rate authority limited to sales of energy and/or ancillary services in those markets.