UNITED STATES OF AMERICA
BEFORE THE

FEDERAL ENERGY REGULATORY COMMISSION

)

Collection of Connected Entity Data from)

Regional Transmission Organizations)Docket No. RM15-23-000

and Independent System Operators)

)

COMMENTS OF THE ISO/RTO COUNCIL

The ISO/RTO Council (“IRC”)1 respectfully submits these comments in response to the
September 17, 2015, Notice of Proposed Rulemaking (“NOPR”) issued by the Commission
commencing a rulemaking proposing to amend Commission regulations to require each Regional
Transmission Organization (“RTO”) and Independent System Operator (“ISO”) to deliver to the
Commission, on an ongoing basis, data required from its respective market participants that
would identify them by means of a common alpha-numeric identifier, list their “Connected
Entities,” and describe in brief the nature of the relationship of each Connected Entity.2
The IRC is not taking a position on the need for this information by the Commission. However, the IRC offers the following comments and requests certain clarifications that should be addressed in the Final Rule to clearly define the implementation of the rule as well as the role of the ISO/RTO in collecting and transmitting Connected Entity data to the Commission.

The IRC is comprised of the Alberta Electric System Operator (“AESO”), the California Independent

I.COMMENTS

a. The ISO/RTOs Should Not be Required to Include in their Tariffs the Authority
to Audit Market Participant Data

The Commission has proposed that the ISO/RTOs include in their respective tariffs the
authority, but not the obligation, to audit market participants to determine if their submitted
Connected Entity data is accurate. As clarified by staff during the Technical Conference held on
December 8, the “RTOs/ISOs would not be responsible for verifying the accuracy of the
information submitted, but are not prohibited from doing so at their discretion.”3 However,
including the language proposed by the Commission in the ISO/RTO tariffs is not necessary. If
an individual ISO/RTO deems it necessary to review the Connected Entity data, it may do so
under its current tariff authority. Although some ISO/RTOs may choose to review the
Connected Entity data, or a subset thereof, auditing the large amount of data that will be received
under the much broader “Connected Entity” definition may not be an appropriate task for every
ISO/RTO.

To the extent the Commission seeks to have the ISOs and RTOs merely serve as a

conduit for this information, the ISOs and RTOs would serve purely an administrative function
and would have no basis upon which to conduct such an audit. Creating the basis of necessary
expertise to conduct such audits may require certain ISO/RTOs to incur significant additional
costs to develop the necessary expertise. As it currently stands, certain IRC members may not be
adequately staffed to perform this function, nor would it be within their jurisdictional
responsibility to audit the relationships that establish a Connected Entity designation. The burden
of ensuring the accuracy and completeness of the information both as a legal and practical matter

3 Staff Presentation at the Technical Conference on Connected Entity Data from the RTOs and ISOs, FERC Accession, No. 20151210-4005 (December 10, 2015) (“Staff Presentation”), Slide 9.

should be borne by the entities providing the information. Moreover, the burden of auditing and validating that information should be borne by the entity that has required the information to be submitted, i.e., the Commission. Accordingly the ISO/RTOs request that the Commission
remove the proposal to place the ISOs/RTOs in an audit role.

b. The Commission Should Clarify that the ISO/RTOs will not be Held Responsible
for the Accuracy of the Data Submitted by Market

As discussed above, FERC staff stated during the technical conference that “[t]he

RTOs/ISOs would not be responsible for verifying the accuracy of the information submitted.”4 The IRC members seek further clarification from the Commission confirming that the ISO/RTOs are not responsible for the accuracy of the data submitted by market participants and are not
liable for any aspect of such submission. Regardless of how the Commission decides the audit issue raised in subsection a. above, the IRC requests that the Commission separately clarify that the responsibility for all aspects of the information, including its accuracy, lies with market
participants and not the ISO/RTO that transmit it.

c. The Commission Should Clarify that ISO/RTOs will not be Required to Utilize
LEIs in all Applications and Databases

With respect to the Legal Entity Identifier (“LEI”), although the IRC agrees that the

establishment of a standard identification system will greatly benefit the Commission’s ability to
conduct investigations of trading patterns, the Commission should clarify that it intends to
require ISO/RTOs to include LEIs only in connection with the Connected Entity data submitted
to the Commission. At the December 8 technical conference, a speaker suggested that all current
ISO/RTO identifiers should be replaced with LEIs. While an ISO/RTO may choose to do this,
this replacement should not be mandatory because replacing current ISO/RTO identifiers could

4 Staff Presentation at Slide 9.

require substantial IT and business efforts on behalf of the affected ISO/RTOs. In addition, if

LEIs are required to be attached to market transactions, significant system changes for ISO/RTO
market software would be needed to account for a LEI “marker” for each transaction. Such a
requirement would also raise further questions about whether standardization of market systems
across ISO/RTO markets may be required to track inter-market transactions consistent with the
Commission’s proposed rules. Accordingly, the Commission should confirm that current
ISO/RTO identifiers do not need to be replaced with LEIs in the context of ISO/RTO
applications and databases.

d. The Commission Should Limit Application of the Term “Connected Entity” for
the Purposes of Data Collection Contemplated in the NOPR so as to Ensure that
it does not Negatively Impact ISO/RTO Governance, Code of Conduct and/or
Credit Rules

The Commission should also consider the relationship of the “Connected Entity” term
and its impacts on ISO/RTO rules unrelated to market transactions. In particular, the current
definitions of “affiliate” in the various ISO/RTO tariffs guide the ISO/RTOs in several aspects
unrelated to market transactions, including governance rules relating to voting and stakeholder
participation, instructing the code of conduct of rules relating to prohibited investments, and
calculation of credit limits for affiliated entities. Wholesale replacement of the term “affiliate”
with the more broadly defined “Connected Entity” in respective ISO/RTO tariffs would create

broad impacts that the Commission did not intend when proposing the new rules. The IRC does
not read the present Proposed Rule as requiring a whole-scale change in our tariffs to change
governance and related use of the term “affiliate” and staff comments during the December 8
technical conference seem to confirm this reading of the Commission’s order, but clarification is
important

Additionally, when evaluating the individual compliance filings to be submitted by the various ISO/RTOs, the IRC suggests that the Commission give significant deference to the
ISO/RTOs’ existing definitions and uses of the term “affiliate” so as to recognize that the
Proposed Rule will not affect how the ISO/RTOs treat the affiliate relationships between entities for purposes beyond the information gathering intended by the Proposed Rule.

II.CONCLUSION

The IRC respectfully requests that the Commission consider these Comments in this

proceeding and grant the clarifications discussed herein.

Respectfully submitted,

/s/ Anna McKenna/s/ Carl F. Patka

Roger E. Collanton, General CounselRobert E. Fernandez, General Counsel

Anna A. McKenna,*Assistant General Counsel,Raymond Stalter

RegulatoryDirector of Regulatory Affairs

California Independent System OperatorCarl F. Patka*

CorporationAssistant General Counsel

250 Outcropping WayNew York Independent System Operator,

Folsom, California 95630Inc.

amckenna@caiso.com10 Krey Boulevard

Rensselaer, NY 12144

cpatka@nyiso.com

/s/ Margoth Caley/s/ Craig Glazer

Raymond W. HepperCraig Glazer*

Vice President, General Counsel, and SecretaryVice President-Federal Government Policy

Regulatory CounselRobert V. Eckenrod*

ISO New England Inc.Senior Counsel

One Sullivan RoadPJM Interconnection, L.L.C.

Holyoke, Massachusetts 01040Suite 600

mcaley@iso-ne.com1200 G Street, N.W.

Washington, D.C. 20005 202-423-4743

Craig.Glazer@pjm.com

Robert.Eckenrod@pjm.com

/s/ Stephen G. Kozey/s/ Matt Morais

Stephen G. Kozey*Matt Morais*

Senior Vice President, General Counsel, andAssociate General Counsel, Markets and

SecretaryRegulatory Policy

Aaron Fate*Southwest Power Pool, Inc.

Senior Corporate Counsel201 Worthen Drive

Midcontinent Independent System Operator,Little Rock, Arkansas 72223-4936

Inc.mmorais@spp.org

P.O. Box 4202

Carmel, Indiana 46082-4202
skozey@midwestiso.org
afate@midwestiso.org

*Designated to receive service

Dated: January 22, 2016