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 “patchwork” of duty of candor obligations with a broad rule requiring any entity to “submit accurate and factual information and not submit false or misleading information or omit material information” in communications with FERC and other specified organizations. Although FERC terminated this rulemaking proceeding, it stressed that there are “numerous existing regulations that prohibit untruthful, inaccurate, or incomplete communications to the Commission and other organizations” and warned that it “will continue to diligently enforce those regulations.”
FERC’s 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’s 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’s Market Behavior Rules.
To assist with compliance in this trending area, we highlight some of FERC’s candor requirements, both those highlighted in the Duty of Candor NOPR and in other regulations.
Statutes and Regulations Identified in the Duty of Candor NOPR:
- 18 C.F.R. § 35.41(b): All entities with MBR authority must submit accurate information and cannot submit information that is false, misleading or contains material omissions in all communications with FERC, ISO/RTOs, market monitors and jurisdictional transmission providers.
- 16 U.S.C. § 825c(a): Licensees and public utilities must submit periodic or annual reports under oath.
- 16 U.S.C. § 825f(a) and 15 U.S.C. § 717m(a): Written statements in investigations under the Federal Power Act (FPA) and Natural Gas Act must be made under oath.
- 16 U.S.C. § 797(b): Certain hydroelectric-related filings must be submitted under oath.
- 15 U.S.C. § 717i(a): Natural gas companies must submit periodic or annual reports under oath.
- 15 U.S.C. § 717f(d): Applications for natural gas certificates must be made in writing to FERC and be verified under oath.
- 49 U.S.C. App. § 20(7)(b): The Interstate Commerce Act prohibits the knowing and willful filing of any “false entry” in any annual or other report required to be filed under this section.
- 18 C.F.R. §§ 1c.1(a)(2), 1c.2(a)(2): FERC regulations prohibit entities from making untrue statements of material fact or omitting a material fact in connection with jurisdictional natural gas and electric transactions.
- 18 C.F.R. § 157.5(a)-(b): Applicants seeking natural gas certificates must be forthright in their applications.
- 18 C.F.R. §§ 284.288(a), 284.403(a): Sellers that report their trades to index publishers must provide accurate and factual information and not knowingly submit false or misleading information or omit material information to index publishers.
- 18 C.F.R. §§ 385.506(b), 385.507(d): Testimony and evidence submitted in proceedings before FERC administrative law judges must be submitted under oath.
- 18 C.F.R. § 385.1907: Compliance reports must be made under oath.
- 18 C.F.R. § 385.2005: Any filing submitted with FERC must be signed, and such signature constitutes a certificate that the signer knows the contents are true to the best of his/her knowledge and belief.
- 18 C.F.R. § 385.2101(c): A person appearing before FERC or the presiding officer must conform to the standards of ethical conduct required of practitioners before the courts of the United States.
Other Duty of Candor-Related Regulations:
- 18 C.F.R. § 4.32(a)(4): Facts alleged in applications for hydropower preliminary permits, licenses or exemptions must be subscribed and verified under oath by a knowledgeable person.
- 18 C.F.R. § 35.13(d)(6): A utility’s officer must attest that the cost-of-service statements and supporting data in rate filings under this section are true, accurate and current representations of the utility’s books, budgets or other corporate documents to the best of their knowledge, information and belief.
- 18 C.F.R. § 33.7: Public utilities’ applications for certain transactions under FPA section 203 must be verified under oath.
- 18 C.F.R. § 39.2(d): Users, owners or operators of the Bulk-Power System within the United States (other than Alaska and Hawaii) must provide FERC, the Electric Reliability Organization and the applicable regional entity information that is necessary to implement FPA Section 215.
- 18 C.F.R. § 50.12(a)(4)–(5): Applicants seeking necessary rights-of-way as part of a permit to site interstate electric transmission facilities under FPA section 216 must ensure that all communications with the affected landowners are factually correct and promptly correct any misrepresentations.
- 18 C.F.R. § 385.1901(d)(4): A request for a written interpretation from the general counsel construing a provision of the Natural Gas Policy Act must be accompanied by a statement that to the best of the applicant’s personal knowledge there is no untrue statement or omission of a material or relevant fact in the request.
- FERC Form No. 1, General Instruction III; 18 C.F.R. § 141.1(b)(2)(iii): FERC Form No. 1 (as well as various other required forms) must be completed “fully and accurately.”
- 18 C.F.R. § 385.403(d)(2): Persons participating in discovery in a FERC proceeding must timely amend prior discovery responses if they learn a response was incorrect when made or has become materially incorrect.
- 18 C.F.R. § 1b.14(b): Subpoenaed parties in a FERC investigation must submit a statement that they made a diligent search and are producing all documents called for by the subpoena.
Although FERC withdrew the Duty of Candor NOPR, entities interacting with FERC, its staff and certain other entities must adhere to all obligations of candor, accuracy, completeness and honesty. For compliance advice in this enforcement priority area, contact the authors.