FERC Electric Quarterly Reporting (EQR): You Can Expect Audits, So Be Prepared
by Mickey Bellard – Director, Power Market Compliance Services, NAES Corporation
Electric Quarterly Reporting (EQR) is the online reporting platform used by the Federal Energy Regulatory Commission (FERC) to collect contract and transactional data from public utilities – ‘Sellers’ in FERC terms – based on requirements under Section 205(c) of the Federal Power Act (FPA).
The EQR contains Seller-provided data summarizing the terms and conditions in those contractual agreements that fall under FERC’s jurisdiction. These agreements list the services or products provided, including cost-based sales, market-based sales and transmission service. They may also contain transaction information for short-term and long-term cost-based and market-based power sales. Certain non-public utilities are required to file EQRs under Section 220 of the FPA.
As a Seller, you must file an EQR electronically by the end of each quarter. Since 2013, filers have been required to use the EQR filing system located here: https://eqronline.ferc.gov. You’ll find instructions for filing on the FERC website here: https://www.ferc.gov/docs-filing/eqr.asp. Sellers thus file their contract and transaction data routinely four times a year, and this information becomes public record.
Sounds simple, right? Well, there’s a bit more to it. For one, your EQR must accurately reflect the current contracts with all amendments and must represent the actual pricing and products contained in those contracts. You must also maintain five years of historical data in your records and have compliance polices in place for EQR oversight.
Now that you, the Seller, are filing accurate data, have policies in place and are maintaining five years of data, what’s next? As with any FERC or NERC requirements, you can expect audits. FERC’s Division of Audits and Accounting conducts these and, as a public utility and Seller in the market, you need to be ready. They do a multi-scope audit, which means it could include other filings as well as EQRs. Their objective is to ensure that Sellers are filing complete and accurate transactional and contract data.
The Division will perform an audit planning selection process, conduct fieldwork to check for compliance based on audit risks and other criteria, and then develop an audit report that includes findings and recommendations. The audit process could involve non-public data requests, site visits, internal reports, draft audit reports and a description of the Seller’s compliance plans.
If there are any findings, you’ll have to implement corrective action for each finding and recommendation. You may be required to submit quarterly information to FERC Enforcement and to refile as much as five years (!) of EQR data.
How will the Division perform this audit, and what will auditors look for? They will review IT systems used to collect, prepare and report your EQR data. They will also look at your corporate compliance programs to determine who has oversight of EQR compliance, including both internal and external audits. In addition, they will compare your data to other FERC data sources to check for consistency and completeness.
Common EQR audit findings for contract data include:
- Failure to report all contracts and service agreements;
- Failure to remove expired contracts;
- Incorrect contract termination dates;
- Misreported contract units; and
- Incorrect identification of company affiliates.
A few common findings for transaction data include:
- Failure to report FERC jurisdictional data;
- Incorrect product type codes; and
- Misreported transaction units.
Knowing that you can expect audits, you’ll not only want to look after all the elements of compliance but also maintain adequate policies and procedures for demonstrating that compliance. So the question remains: are you ready for an EQR audit?
If you’d like more information on EQRs and audits, please contact the NAES Power Market Compliance Services (PMCS) team at market.compliance@naes.com.