US FERC 18 CFR 35.37 & 35.42 Market-Based Rate Solar Filing Guide

Key Takeaways

• Wholesale solar generators must secure FERC Market-Based Rate (MBR) authority under Section 205 of the Federal Power Act (August 2026).
• A market power analysis must address both horizontal and vertical market power (August 2026).
• Sellers must timely report any change in status to the Commission to retain MBR authority (August 2026).
• Monthly updates to FERC's relational database are due by the 15th day of the month following a change (August 2026).

Understanding FERC Market-Based Rate Authority for Solar Sellers

The Federal Energy Regulatory Commission (FERC) establishes regulations under Title 18 Code of Federal Regulations (CFR) § 35.37 and § 35.42. These regulations govern market-based rate (MBR) applications for wholesale power marketers and solar independent power producers (IPPs) across the United States. Wholesale solar generators selling energy into RTO/ISO markets, such as PJM, CAISO, ERCOT, MISO, or SPP, must secure FERC Market-Based Rate (MBR) authority under Section 205 of the Federal Power Act (August 2026).

This framework establishes requirements for market power tests, rebuttals to presumptions of market power, barrier-to-entry declarations, and ongoing reporting obligations.

Market Power Analysis Requirements

A core component of an MBR application is the market power analysis. Under 18 CFR 35.37, a market power analysis must address whether a Seller has horizontal and vertical market power (August 2026). This ensures that entities seeking to sell power at market-based rates do not possess undue influence over the market.

Horizontal Market Power Assessment

Horizontal market power refers to a Seller's ability to influence prices in the wholesale energy market. If a Seller does not pass one or both screens designed to assess horizontal market power, the Seller may rebut a presumption of horizontal market power by submitting a Delivered Price Test analysis (August 2026). This analysis provides a more detailed economic assessment to demonstrate a lack of market power. A Seller that does not rebut a presumption of horizontal market power or that concedes market power is subject to mitigation, as described in § 35.38 (August 2026).

Vertical Market Power Assessment

Vertical market power relates to a Seller's influence over inputs to electric power production. To demonstrate a lack of vertical market power in wholesale energy markets, a Seller must provide specific information. This includes details regarding the affiliation, ownership, or control of inputs such as the transportation or distribution of inputs to electric power production (August 2026). This information is required to be included in the record of each new application for market-based rates and each updated market power analysis (August 2026).

Affirmative Barrier to Entry Statement

In addition to market power analyses, a Seller is required to make an affirmative statement that it and its affiliates have not erected barriers to entry into the relevant market and will not erect barriers to entry into the relevant market (August 2026). This declaration reinforces the commitment to competitive market practices.

Ongoing Reporting: Change in Status and Database Updates

Obtaining MBR authority is conditional on ongoing compliance with reporting requirements. As a condition of obtaining and retaining market-based rate authority, a Seller must timely report to the Commission any change in status that would reflect a departure from the characteristics the Commission relied upon in granting market-based rate authority (August 2026). This includes, for example, affiliation with any entity not disclosed in the application for market-based rate authority (August 2026).

Material corporate ownership changes or new generation affiliations require monthly updates to FERC's relational database (August 2026). A Seller must report on a monthly basis changes to its previously-submitted relational database information, excluding updates to the horizontal market power screens. These submissions must be made by the 15th day of the month following the change (August 2026). The submission must be prepared in conformance with the instructions posted on the Commission's website (August 2026).

Category 1 sellers, characterized by a de minimis market presence, may enjoy simplified filing exemptions (August 2026). In contrast, Category 2 sellers must submit triennial market power updates (August 2026).