The Federal Energy Regulatory Commission (“Commission”) has published a Notice of Proposed Rulemaking (“NOPR”) proposing a broad duty of candor on all communications to the Commission. The rule would require all entities in communication with the Commission to submit accurate and factual information and not submit false information or omit material information. This new section would be added as 18 CFR part 1 and require candor in all communications to the Commission related to any matter subject to the Commission’s jurisdiction. While a variety of existing regulations prohibit submitting false or misleading information to the Commission, those regulations constitute a patchwork network of differing standards. Through this proposed rule, the Commission seeks to create a uniform standard imposing a duty of candor on entities before it and believes a broadly imposed duty of candor will improve Commission oversight of jurisdictional markets. An entity may be protected from violation of this regulation where it has exercised due diligence to prevent such a violation.
The Commission seeks comments on all aspects of the proposed rule, most specifically on the need for a broad duty of candor rule, whether 18 CFR 35.41(b) gives an appropriate foundation for the proposed expansion of the duty of candor, the Commission’s authority for proposing this rule, whether certain entities should be exempt, the scope of the rule and communications it may cover, and if the proposed rule adequately identifies organizations who assist the Commission in its statutory obligations. It requests comments be submitted by November 10, 2022. The proposed rule is found here (FERC Docket No. RM22-20).
For further information, please contact Michael Postar or Sean Neal.
