Strengthen Your FERC EQR Reporting

Regulatory reporting, and in particular FERC EQR reporting, has experienced material change in the recent past with additional changes currently proposed. For an organization required to manage EQR reporting, those FERC changes obviously impact the processes and tools implemented to service your current reporting model. If your organization has aggregated or divested physical trading portfolio the impact is exacerbated by supporting multiple process and systems, increasing the overhead required for ensuring accuracy and difficulty responding to FERC questions at the corporate level.   

The solution to this internal and external complexity is to develop a corporate-level Program to administer, manage, track and execute the EQR reporting function for your own organization, as well as related subsidiaries, affiliates, and assets. The result of this effort is a corporate capability and understanding of the portfolio's EQR reporting, improved accuracy and ability to explain results, an Operating Manual for both internal and regulator reference, and reduced overhead overall.

Best Way to Structure an Effective Regulatory Program

EQR Program Management Office (PMO): The EQR PMO serves to align multiple business functions and leadership to regulatory reporting requirements, governance, timeliness, budget, accountability, and business processes for the entire reporting function.

EQR Data Dictionary Development: The EQR Data Dictionary is an amalgamation of data types spanning the entire business landscape needed for reporting purposes. It includes data mapping requirements, source technology, availability and processes required to effectively report your business as required by FERC.

Recommended IT Solution: Based on the development of the EQR PMO and Data Dictionary, the recommended IT solution is a functional roadmap that advocates an IT strategy that leverages existing technology, while highlighting gaps is systems and processes, that leads to a more automated and transparent EQR reporting result.  

How to Execute the Solution

Create the EQR Program Management Office

1. Build EQR Program Charter: Start from the beginning, listing both your long term and near term strategic objectives and success criteria. Design the team structure and resource allocation for this effort, along with key milestones and timeline. Create the decision schedule and budget estimate.
2. Perform Assessment: Inventory all current processes utilized for EQR, all current EQR reports, and all current EQR resources. Evaluate future state requirements (processes, reports, resources, and regulatory). Perform gap analysis (processes, reports, resources, and regulatory). Asses impact of gaps identified within each system in scope. Prioritize gaps based on estimated cost/benefit of addressing.
3. Build EQR Operating Manual: Build policies, design operating procedures and define the organizational structure.

Develop the EQR Data Dictionary

1. Analyze Current EQR Capability: Compile EQR Legacy inventory components, perform future-state assessment, and document process and technology gaps. Identify success criteria.
2. Build EQR Data Dictionary: Create business landscape chart. Map data dictionary draft. Identify exceptions and gaps, and validate exceptions and gaps with FERC. Document responses (internal / FERC). Finalize data dictionary as current state.

Recommend IT solution

1. As-is analysis: Map current technology landscape, create future-state vision, and identify Gaps.
2. Roadmap: Evaluate long-term system solution options, document long-term solution design, and develop roadmap to future-state.

Experienced Help

While this effort is straightforward and worthwhile, it can be time consuming without experienced assistance expediting the effort. That experienced assistance can and should also act as 3rd party counsel with the FERC to validate exceptions and gaps. If you wish to discuss your EQR reporting for your own portfolio, please contact me at david.perez@enitegroup.com or Ryan Rogers at ryan.rogers@enitegroup.com.