FERC Sets Technical Conference to Improve the Work of Market Monitors That Investigate Market Participants' Actions

The Federal Energy Regulatory Commission has announced it will conduct a technical conference in early 2007 to review its policies on Market Monitoring Units (MMU).

MMUs, described by the Commission as its "eyes and ears," are significant players in restructured electric markets. They have the authority to investigate--and refer to the Commission--tariff violations that can result in civil penalties of up to $1 million per day, establish prices in mitigated markets and propagate new mitigation measures that must be considered by the Commission.

In reviewing PJM Interconnection's tariff revisions, the Commission announced a generic conference to investigate issues with MMU policies more broadly, including the need to safeguard and advance the independence of the MMU and ensuring the transparency and clarity of its functions. In their concurring opinion, Commissioners Suedeen Kelly and Jon Wellinghoff indicated that the technical conference gives the Commission the opportunity to consider:

• what are "best practices" among the MMUs;
• whether the MMUs are structured to allow them to carry out their responsibilities in the most effective manner;
• whether the Commission should establish a Code of Professional Responsibility for market monitors, similar to the codes that govern the behavior of lawyers and accountants;
• whether the Commission should disclose to the MMU the dispensation of matters referred, subject to appropriate confidentiality restrictions;
• the appropriate role of the MMU in assessing the impact on markets of demand response resources; and
• whether provisions should be included in ISO/RTO tariffs in order to redress certain undesirable market behavior in an expeditious manner.