Introduction
The Federal Energy Regulatory Commission (FERC) announced on November 25, 2025, the withdrawal of a notice of proposed rulemaking (NOPR) initially issued in December 2020. This NOPR sought to amend FERC regulations by codifying a safe harbor policy that provides a rebuttable presumption of good faith for market participants reporting transaction data to price index developers in natural gas and electric markets. The withdrawal terminates the rulemaking proceeding in Docket No. RM20-7-000, as detailed in Federal Register Volume 90, Number 225. FERC's action reflects recent improvements in voluntary data reporting and index robustness, rendering the proposed codification unnecessary at this time. This development underscores ongoing efforts to enhance transparency and reliability in energy price formation without additional regulatory mandates, building on policies established after the 2000-2001 Western Energy Crisis.
Background and Origins of the Safe Harbor Policy
The safe harbor policy originated in FERC's 2003 Price Index Policy Statement, issued in response to market manipulations during the Western Energy Crisis. That crisis highlighted vulnerabilities in energy price indices, prompting FERC to promote accurate and voluntary reporting of transaction data. As explained in the policy statement, FERC aimed to foster "robust, reliable indices" by creating a rebuttable presumption that companies reporting data in good faith would not face investigations or penalties for inadvertent errors. The statement noted, "the Commission [created] a rebuttable presumption that companies and individuals that report trade data to price index developers in accordance with the standards adopted here are doing so in good faith, and will not be investigated or subjected to administrative penalties for inadvertent mistakes made in the course of reporting energy transaction information."
This policy was clarified in subsequent orders in 2003 and 2005, emphasizing the need for transparent price discovery in natural gas and electric markets. The 2020 NOPR proposed embedding this safe harbor into specific regulations—18 CFR 35.41(c), 284.288(a), and 284.403(a)—to address concerns that FERC might deviate from it in future enforcement actions. The goal was to reduce perceived regulatory risks and encourage more participants to report data, thereby strengthening price indices used in jurisdictional tariffs.
Details of the Proposed Rulemaking and Public Response
The NOPR, published in the Federal Register on March 2, 2021 (86 FR 12132), proposed language affirming a rebuttable presumption of accuracy, timeliness, and good faith for data providers. It also clarified that inadvertent reporting errors would not violate FERC regulations. FERC received nine comments, with eight generally supportive. Commenters such as the Electric Power Supply Association and the Natural Gas Supply Association argued that codification could boost reporting by alleviating fears of enforcement. For instance, they reasoned it would "encourage more price reporting to index developers."
One commenter, Public Citizen, Inc., opposed the proposal, stating there was "no evidence that the regulation would result in any meaningful improvement in reporting to index developers." Additional suggestions from commenters, including reforms to FERC's audit processes or direct creation of indices by the agency, fell outside the NOPR's scope and were not addressed in the withdrawal notice.
Reasons for Withdrawal
FERC's decision to withdraw the NOPR stems from developments since 2020 that have enhanced price index formation without needing codified changes. A key factor is the 2022 Revised Policy Statement on price indices (179 FERC ¶ 61,036), which reduced reporting burdens by allowing data providers to submit either next-day or next-month transactions, rather than both, and encouraged reporting to multiple index developers with biennial self-audits. This flexibility led to tangible increases in participation: in 2023, 23 new companies began reporting based on Form No. 552 submissions.
Additionally, some price index developers have incorporated fixed-price transaction data from the Intercontinental Exchange (ICE), bolstering index reliability. Four developers also secured reapprovals in Docket No. PL03-3, confirming their processes meet FERC standards. FERC noted that "the price reporting burden for data providers has lessened and the number of new data providers has increased, thereby, bolstering price index formation." Over two decades, FERC has consistently applied the safe harbor, never penalizing inadvertent errors, and reaffirmed its commitment in the 2022 statement.
Implications and Perspectives
The withdrawal maintains the status quo, preserving the safe harbor as a policy rather than a regulation. This could reassure market participants wary of regulatory shifts, as FERC emphasized its ongoing commitment: "We remain committed to the Safe Harbor Policy, as it promotes robust, voluntary reporting to index developers." From one perspective, supporters of codification might view this as a missed opportunity to provide ironclad protections, potentially deterring some reporters amid evolving market dynamics.
Conversely, opponents like Public Citizen may see the decision as pragmatic, avoiding unnecessary rules without proven benefits. Broader implications include sustained confidence in energy markets, where reliable indices support fair pricing in natural gas and electricity. Legal precedents, such as the foundational Price Index Policy Statement, continue to guide enforcement, ensuring good-faith reporters face no undue scrutiny.
Conclusion
FERC's withdrawal of the 2020 NOPR reinforces the effectiveness of existing policies in promoting voluntary data reporting for energy price indices. Key takeaways include the policy's roots in post-crisis reforms, positive responses to the proposal, and recent gains in market participation that obviate the need for codification. Moving forward, potential trajectories involve monitoring reporting trends through annual Form No. 552 data and assessing index robustness via periodic reapprovals. Ongoing debates may center on whether further incentives, such as expanded audit flexibilities, are needed to address any future declines in participation. Challenges could arise if market conditions change, prompting renewed calls for regulatory assurances, but FERC's consistent application of the safe harbor offers a stable framework for now.
