{"id":98118,"date":"2025-12-01T14:34:11","date_gmt":"2025-12-01T19:34:11","guid":{"rendered":"https:\/\/www.mcguirewoods.com\/?post_type=insight&p=98118"},"modified":"2025-12-01T14:34:15","modified_gmt":"2025-12-01T19:34:15","slug":"ferc-withdraws-duty-of-candor-nopr-warns-entities-of-continuing-broad-obligations","status":"publish","type":"insight","link":"https:\/\/www.mcguirewoods.com\/client-resources\/alerts\/2025\/12\/ferc-withdraws-duty-of-candor-nopr-warns-entities-of-continuing-broad-obligations\/","title":{"rendered":"FERC Withdraws Duty of Candor NOPR, Warns Entities of Continuing Broad Obligations"},"content":{"rendered":"\n

On Nov. 20, 2025, the Federal Energy Regulatory Commission (FERC) withdrew a July 2022 notice of proposed rulemaking (Duty of Candor NOPR) that considered supplementing its \u201cpatchwork\u201d of duty of candor obligations with a broad rule requiring any entity to \u201csubmit accurate and factual information and not submit false or misleading information or omit material information\u201d in communications with FERC and other specified organizations. Although FERC terminated this rulemaking proceeding, it stressed that there are \u201cnumerous existing regulations that prohibit untruthful, inaccurate, or incomplete communications to the Commission and other organizations\u201d and warned that it \u201cwill continue to diligently enforce those regulations.\u201d<\/p>\n\n\n\n

FERC\u2019s warning is reflected in its increasing focus on candor requirements in enforcement matters. Five of the 11 settlements resolving FERC investigations in fiscal year (FY) 2025 involved alleged inaccurate communications to FERC-approved independent system operators or regional transmission organizations (ISO\/RTOs), which operate wholesale electric markets. Of the first two settlements of FY 2026, one involved alleged misleading statements to an ISO\/RTO and the other included alleged false, inaccurate and misleading statements to a FERC-approved regional reliability organization. While all but one of these settlements involved violations of one of FERC\u2019s Market Behavior Rules (18 C.F.R. 35.41(b)) that specifically apply to entities with market-based rate (MBR) authority, many other regulatory and statutory provisions have similar candor obligations and apply to other entities appearing before FERC. FERC can bring enforcement actions related to these other obligations, even if the entity is not subject to FERC\u2019s Market Behavior Rules<\/a>.<\/p>\n\n\n\n

To assist with compliance in this trending area, we highlight some of FERC\u2019s candor requirements, both those highlighted in the Duty of Candor NOPR and in other regulations.<\/p>\n\n\n\n

Statutes and Regulations Identified in the Duty of Candor NOPR:<\/strong><\/p>\n\n\n\n