Disclosure of Insider Information by Participants in the Wholesale Energy Market: Adhering to NEURC Standards
Cost of services:
Reviews of our Clients
... our work on joint projects assured us of your high level of professionalism
Insider information can significantly influence market dynamics, which underscores its importance in the functioning of both the wholesale energy and natural gas markets. The transparency and availability of such information are critical for maintaining market stability and trust among participants. The role of market participants in timely and responsibly disclosing insider information is equally important.
The National Energy and Utilities Regulatory Commission (NEURC) establishes clear requirements and procedures for the disclosure of insider information. Adherence to these requirements is crucial for ensuring energy market transparency. Understanding these requirements can be time-consuming and may not immediately clarify all processes, particularly since practical applications can vary significantly.
Our law firm has extensive experience working with wholesale market participants. We support our clients from the beginning of their activities—from consultation and license acquisition to effective management of company processes and market operations, minimizing all potential risks. Drawing on our experience, we will discuss in our article how to properly meet the NEURC’s disclosure requirements and avoid common pitfalls. Let this knowledge contribute to the success of your business in the energy market.
You may also like: Turnkey Electricity/Gas Company Integrated into the Wholesale Energy Market
What is Insider Information in the Electricity and Gas Markets?
Insider information is defined as precise, unpublished data that directly or indirectly relates to one or more wholesale energy products in the electricity or natural gas markets. The release or publication of this information could significantly influence the market prices of one or more of these products. Insider information includes any substantial undisclosed details.
In the context of the wholesale markets for electricity and natural gas, insider information covers:
- Purchase and sale agreements that deliver to end-users with a total nominal consumption capacity of 600 GWh per year or higher, services related to transmission, and access to the capacity/distribution of electrical energy or natural gas.
- Derivative contracts based on electricity or natural gas, contracts for the transmission of electricity or transportation of natural gas, and access to capacity/distribution management, among others.
This regulation is governed by the NEURC Resolution No. 618, dated March 27, 2024, which outlines all details for reporting economic and trading activities related to wholesale energy products. It's essential that, upon request from the NEURC, participants in the wholesale energy market must also provide details about other related transactions. The NEURC's requests must be well-founded and clearly define the deadlines, methods, and formats for the submission of insider information.
The transmission system operator verifies all the information received from market participants and organizes the principal data to further submit in the appropriate format to the NEURC. The information can be categorized into several groups. Discussion on the timelines for providing this information is also critical. For instance, a few key points concerning the electricity market include:
- Information about the planned unavailability of facilities for producing, storing, consuming, or transmitting electrical energy with a nominal capacity of 100 MW or more must be submitted no later than one hour after the decision is made.
- Information on changes to the actual availability or unplanned outages of such facilities, or on the transmission of electrical energy with a declared capacity of 100 MW or more, is also vital. This also includes infrastructure within the transmission system's offshore zone, which reduces the discharge capacity from wind energy systems by 100 MW or more. Such information must be provided within an hour of any change in actual availability.
- Details about the hourly volume of electricity dispatch, capacity, loading of facilities, etc., are required. The specific timelines for these submissions will vary and are defined by the particular clauses of the NEURC Resolution No. 618, which currently includes 46 points.
In the natural gas market, similarly, wholesale energy market participants are obligated to provide information about the capacities and usage of gas extraction, production, or consumption facilities to the NEURC upon request. This includes both planned and unplanned periods of unavailability.
You may also like: Organization and Training for Suppliers Operating in the Electricity Market
Procedures for Disclosing Insider Information on the Wholesale Energy Market
Market participants disclose such transactions through a data transmission administrator. It's essential that insider information is provided by both parties (the seller and buyer). Additionally, there is a specific platform designed for this purpose, dubbed the "Insider Information Platform." Wholesale energy market participants can use this platform to publish insider information.
The obligation to disclose insider information does not apply to market participants who hold information about the activities or assets of other wholesale energy market participants. Information regarding the economic and trading operations conducted by wholesale energy market participants, including executed or confirmed orders for wholesale energy products, must be provided within clearly specified deadlines. Concerning standard and non-standard agreements:
- Information on standard contracts must be presented no later than the next business day following the transaction, in accordance with the details specified in Section 2.2, Chapter 2 of Resolution No. 618, which governs this activity.
- Information on non-standard contracts must be provided no later than one month after the transaction has occurred.
In case of terminations, or cancellations of agreements and orders:
- For standard agreements – no later than the next business day following the change or termination/cancellation;
- For non-standard agreements – no later than one month after the change or termination/cancellation.
Based on all the information we have discussed, it is evident that the disclosure of insider information is a critical component in the operation of the wholesale energy market. Our company is prepared to assist you in this area by ensuring professional management and the timely provision of all required information. Our services include:
- Insider Information Disclosure Consultations: We will advise you on what information needs to be disclosed, as well as when and how to disclose it effectively.
- Preparation and Submission of Necessary Documents: We will assist in preparing all required documentation and ensure its submission to the appropriate authorities.
- Staff Training: We will provide training for your staff on navigating the electricity market platforms and other crucial aspects of legislative compliance in this field.
We will help you avoid penalties for improper management or delays in providing necessary information, ensuring full compliance with legal requirements. Reach out to us now to secure a stable and risk-free operation of your energy business!
