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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Proposed Rules
Issued in Washington, DC, on February 22, 2021.
George Gonzalez, Acting Manager, Rules and Regulations Group.
FR Doc. 202103931 Filed 3121; 8:45 am BILLING CODE 491013P

Table of Contents Paragraph Numbers I. Background3.
II. Discussion9.
III. Environmental Analysis13.
IV. Regulatory Flexibility Act Certification 14.
V. Comment Procedures18.
VI. Document Availability22.

DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission 18 CFR Parts 35 and 284
Docket No. RM207000

Safe Harbor Policy for Data Providers to Price Index Developers Federal Energy Regulatory Commission.
ACTION: Notice of proposed rulemaking.
AGENCY:

The Commission proposes to amend its regulations to codify the Safe Harbor Policy established in the Commissions Policy Statement on Natural Gas and Electric Price Indices.
Under the Safe Harbor Policy, data providers that report transactions to natural gas and electric price index developers consistent with the procedures set forth in the Policy Statement are afforded a rebuttable presumption that their transaction data is accurate, timely, and submitted in good faith. The proposed change does not modify the existing policy and is intended to promote voluntary reporting of wholesale natural gas and electricity transactions to price index developers by alleviating market participant concerns that the Safe Harbor Policy is not binding on the Commission.
DATES: Comments are due June 1, 2021.
ADDRESSES: Comments, identified by Docket No. RM207000, may be filed electronically at http www.ferc.gov in acceptable native applications and print-to-PDF, but not in scanned or picture format. For those unable to file electronically, comments may be filed by mail to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426. Hand-delivered comments must be delivered to: Federal Energy Regulatory Commission, 12225
Wilkins Avenue, Rockville, Maryland 20852. The Comment Procedures Section of this document contains more detailed filing procedures.
FOR FURTHER INFORMATION CONTACT:
Maxwell K. Multer technical issues, Office of Enforcement, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426
202 5026756

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SUMMARY:

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Evan B. Oxhorn legal issues, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426
202 5028183
SUPPLEMENTARY INFORMATION:

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1. Under the Commissions regulations, a data provider a market participant that reports transaction data to price index developers must submit accurate and factual information to price index developers, and not knowingly submit false or misleading information or omit material information.1 Pursuant to the Commissions Safe Harbor Policy, which is currently set forth in the Commissions Policy Statement on Natural Gas and Electric Price Indices,2
if the data provider can demonstrate that it has adopted and followed the standards for reporting set forth in the Commissions Policy Statement, it will benefit from a rebuttable presumption that it has submitted its transactions accurately, timely, and in good faith.
The Commission proposes to codify its Safe Harbor Policy in its regulations.
The proposed change does not modify the existing policy and, together with the proposed Revised Policy Statement that the Commission is issuing concurrently, is intended to promote voluntary reporting of wholesale natural gas and electricity transactions to price index developers.3
2. To codify the Safe Harbor Policy, we specifically propose to amend 18
CFR 35.41c, 284.288a, and 284.403a of the Commissions regulations by adding language to indicate: 1 That there will be a rebuttable presumption of accuracy, timeliness, and good faith for data providers who submit transactions to price index developers in a manner consistent with the Policy 1 This requirement is set forth in three regulations, 18 CFR 35.41c, 284.288a, and 284.403a. Each sets forth the requirement in identical language.
2 Policy Statement on Natural Gas and Electric Price Indices, 104 FERC 61,121, at P 37 Initial Policy Statement, clarified, 105 FERC 61,282
2003 2003 Clarification Order, further clarified, 112 FERC 61,040 2005 2005 Clarification Order collectively, Policy Statement.
3 See Actions Regarding the Commissions Policy on Price Index Formation and Transparency, and Indices Referenced in Natural Gas and Electric Tariffs, 173 FERC 61,237 2020.

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Statement; and 2 that inadvertent reporting errors by such data providers will not constitute violations of those regulations.
I. Background 3. Natural gas indices play a vital role in the energy industry, as they are used to price billions of dollars of natural gas and electricity transactions annually in both the physical and financial markets.
A natural gas index is a weighted average price derived from a set of fixed-price 4 natural gas transactions within distinct geographical boundaries that market participants voluntarily report to a price index developer.5
4. Natural gas indices serve as a proxy for the locational cost of natural gas in the daily and monthly markets, as many market participants reference index prices in their physical and financial transactions. Interstate natural gas pipelines, Independent System Operators ISOs, and Regional Transmission Organizations RTOs reference natural gas indices in their FERC-jurisdictional tariffs for various terms and conditions of service. State commissions also use natural gas indices as benchmarks when reviewing the prudence of natural gas or electricity purchases. Finally, many natural gas financial derivative contracts used in hedging and speculation settle against the natural gas price indices.
5. Given that natural gas price index developers use physical fixed-price natural gas transactions to calculate the price of published natural gas indices, it is important that the market for these transactions be robust, liquid, and transparent. The Commissions investigation into the 20002001
Western Energy Crisis revealed problems in how published natural gas price indices were generated that facilitateed, rather than discouraged, manipulation and collusion. 6 Recognizing the need to restore confidence in natural gas price 4 The term fixed-price refers to a negotiated natural gas contract for next-day or next-month delivery, and physical basis transactions for nextmonth delivery. These transaction types are defined in the FERC Form No. 552: Annual Report of Natural Gas Transactions FERC Form No. 552. The FERC Form No. 552 requires market participants that annually buy or sell more than 2.2 trillion British Thermal Units Btu of physical natural gas to provide aggregated data related to their fixedprice, physical basis, Nymex plus and index-based transactions made in the next-day and next-month bidweek markets.
5 S&P Global Platts Platts, Natural Gas Intelligence NGI, Argus, and Natural Gas Week are examples of price index developers.
6 Initial Report on Company-Specific Separate Proceedings and Generic Reevaluations; Published Natural Gas Price Data; and Enron Trading Strategies, Docket No. PA022000, at 38 Aug. 13, 2002.

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