The Federal Energy Regulatory Commission (FERC), established in 1977, regulates the natural gas industry, hydropower projects, electric utilities, and oil pipelines in the US. From the third quarter of 2021, the regulator has adopted an XBRL-based system for collecting financial and operational data from the companies under its purview. XBRL stands for eXtensible Business Reporting Language. The new filing system is meant to improve the efficiency of data collection as well as facilitate its analysis.
US energy companies will soon be submitting their annual filings to the FERC in XBRL format. The filings include:
- 2021 FERC Form Nos. 1 and 1-F
- 2021 FERC Form Nos. 2 and 2-A
- 2021 FERC Form No. 6
Moving On From MS Visual FoxPro To The XBRL Format
Before introducing the XBRL mandate, FERC required companies to use MS Visual FoxPro to submit their financial and operational data. Each company had to gather the relevant data and enter it manually into Visual FoxPro. However, Microsoft stopped supporting Visual FoxPro in 2010. The software then started showing a lack of maintenance.
On June 20, 2019, the FERC adopted the XBRL standard for collecting financial and operational data from US energy companies. It announced a switch from its Visual FoxPro-based e-forms to an XBRL-based data collection system. The XBRL standard would be used for reporting on Form Nos. 1, 1-F, 2, 2-A, 3-Q electric, 3-Q natural gas, 6, 6-Q, 60, and 714. The Visual FoxPro-based filing system became unavailable after 30th September 2021.
Benefits Of FERC Adopting XBRL Format
The FERC’s adoption of XBRL to modernize and enhance reporting and produce decision-useful information is in keeping with the precedent set by the US SEC to improve data collection and demonstrate the flexibility of the XBRL standard in dealing with different types of data.
The FERC XBRL filing requirement does not change the amount or type of data US energy companies need to report. It just changes the mechanism of data delivery. The same data is now delivered in the digital XBRL format.
Here’s how FERC’s switch to XBRL format changes things for the filing companies:
Enhanced Data Analysis and Comparability
The XBRL data standard offers not merely a method to collect data effectively, but also a way to analyze and compare the collected data. Since the data is in a machine-readable format, XBRL software can be used to access the data. The data can also be analyzed and compared with that filed by other companies belonging to the same sector. Energy companies can also now compare their data from different reporting periods.
Improved Software Capabilities Under the XBRL Regime
To file digital reports with the FERC, companies will have to select from a wide range of XBRL reporting software available in the market. Such software is bound to simplify the FERC filing process because they possess features and functionalities much better than what would be offered by an obsolete filing system (Visual FoxPro). Moreover, the available solutions would be those being used to file XBRL reports with other regulators such as the SEC. This would mean the solutions are backed by state-of-the-art features and functionalities, as well as support from XBRL experts. And such solutions would also be frequently updated and in line with FERC requirements.
Data Transfer Made Easy With Simple Spreadsheet Upload
In the days of Visual FoxPro, companies had to deal with manually transferring their data onto the system. With the FERC XBRL filing system now in place, companies have it easier. Several XBRL reporting solutions come with features that allow data transfer with a simple spreadsheet upload. One such solution is IRIS CARBON. For a list of all the ideal functionalities you need for a perfect FERC XBRL reporting experience, read this blog.
Lower Compliance Costs And Simplified Filing Process
The new FERC XBRL mandate comes with one-time software acquisition costs. In the long run, compliance costs will be reduced for energy companies. Moreover, the XBRL format brings greater efficiency to the filing process because of the convenience that better software capabilities bring to FERC reporting teams. With repetitive tasks such as manual data entry and filing out of the way, professionals in reporting teams can spend time on high-quality functions such as analysis and decision-making.
Moving on from the MS Visual FoxPro regime, US energy companies have much to gain from the new XBRL-based filing system. Some of the gains are enumerated above.
If you’re looking for a solution that facilitates high-quality XBRL filings with the FERC, IRIS CARBON® is what you need. IRIS CARBON® is a state-of-the-art XBRL reporting platform used by SEC filers. It is a collaborative platform that provides you with 24*7 technical support from XBRL Experts. We keep innovating and upgrading our solution aligned with the FERC XBRL Mandate requirements.