Overview
In support of the Commission’s responsibility to ensure just and reasonable rates, terms, and conditions for consumers, the Division of Energy Market Oversight (Market Oversight) is responsible for monitoring and analyzing the nation’s wholesale natural gas and electric power markets. Market Oversight performs this monitoring and analysis by: (1) examining and analyzing the structure and operation of the markets to identify anomalies, inefficient market rules, tariff and rule violations, and other unusual market behavior as well as significant market events and trends; (2) analyzing market-based rate transactions to determine whether entities are exercising market power and reporting its various analyses and observations to the Commission; (3) collaborating with other Commission offices to develop regulatory strategies, focusing on the competitiveness, fairness, and efficiency of wholesale energy markets; (4) administering, analyzing, and ensuring compliance with the filing requirements of Electric Quarterly Reports (EQRs) and various Commission forms; and (5) conducting outreach and communication.

Functions

• Market Monitoring and Analysis - Market Oversight staff uses public and non-public data from a variety of sources to review market fundamentals and emerging trends and to analyze the structure, operation, and interaction of natural gas and electric markets. As developments warrant, Market Oversight staff initiates projects designed to evaluate market trends, market rules, and participant behavior. Staff coordinates with other Commission program offices to advise the Commission on policy decisions and cases assessing market participant behavior. Staff also presents its analyses to the Commission through occasional market reports and at Commission meetings.



• Market-Based Rate Ex Post Analysis - Market Oversight conducts ongoing analysis of transactional and other market data to detect the presence of market power and ensure that jurisdictional rates remain just and reasonable and not unduly discriminatory or preferential. This ex post analysis includes development of algorithmic screens and other tools to evaluate transactions against market fundamentals at the time of execution with the primary goal of identifying outcomes that may be inconsistent with expectations of a competitive market, and thus an indication of an exercise of market power. Once such outcomes are identified, Market Oversight coordinates with other Commission program offices to determine whether to recommend the Commission take action to remedy market power concerns. Market Oversight also uses these tools to analyze applications and filings for market-based rates, public utility mergers, and other docketed proceedings.



• Agenda Items and Rulemakings - Market Oversight assists the Commission in evaluating the efficacy of certain regulatory policies in light of evolving energy markets and ensures that the Commission has the information needed to administer and monitor the markets effectively. Through its work on docketed proceedings, Market Oversight seeks to enhance market transparency and efficiency while balancing the regulatory burden on market participants.



• Electric Quarterly Reports (EQR) and Forms Administration and Compliance - Market Oversight staff administers and ensures compliance with the Commission’s filing requirements for EQR and the following Commission data collections: Forms Nos. 1, 1-F, 2, 2-A, 6, 3-Q, 6-Q, the Form 60 and FERC-61, the Form 552 and the FERC 730.



• Outreach and Communication - Market Oversight makes available to the public energy market analyses by posting on the Commission’s website its reports such as the Annual State of the Markets Report and Seasonal Market Assessments, and by providing periodic snapshot briefings to state public utility commissions and other agencies. Staff also briefs visiting industry participants, state and federal officials, and foreign delegations on the Commission’s market monitoring activities. Market Oversight has developed a resource manual entitled Energy Primer: A Handbook of Energy Market Basics, which provides the public with a broad overview of the physical wholesale markets for natural gas and electricity and energy-related financial markets.