The Federal Energy Regulatory Commission (FERC) is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil in the US. It administers the accounting and financial reporting regulations of the FERC-regulated companies. On 20th June 2019, FERC revised its electronic filing format to incorporate structured data in the eXtensible Business Reporting Language (XBRL) format. The US energy companies need to submit their quarterly and annual reports in the XBRL format.
FERC has decided to implement the filing of :
- Quarterly reports in XBRL format from November 2021
- Annual reports in XBRL format from April 2022
FERC believes that transitioning to standardized, machine-readable data makes it easier for financial companies to submit data. It enables FERC and other market participants to provide a faster, more accurate analysis of energy company data. Over time, this change will lower the costs when preparing and filing financial reports.
IRIS CARBON® writes about the Seven Things You Must Know About FERC XBRL Mandate:
Who All Need To Comply With The FERC XBRL Mandate?
The FERC XBRL mandate applies to the following:
- Electricity companies
- Natural gas companies
- Oil pipeline companies
- Centralized service companies
The List Of FERC XBRL Forms
The FERC XBRL format replaced the PDF-based forms. Here is a list of Forms that all FERC filers should keep a record of:
From MS Visual FoxPro To FERC XBRL Format For Filing
The previously used system by FERC was Visual FoxPro (a Microsoft® product). There was a lack of maintenance on Visual FoxPro. This outdated software could have posed a significant future risk for the energy companies’ filings.
FERC purposefully looked for a new data reporting standard that was nonproprietary. Different software vendors can now design and implement systems independently. Therefore reduces the dependency of relying on a single company’s proprietary software.
The transition to XBRL filing can save time during the filing process. Using XBRL, you can also validate the data more effectively and reduce manual data input errors. This change does not increase the amount or type of data reported to FERC. It just changes the means of data delivery.
Benefits of FERC XBRL Format To The Energy Companies
Transitioning to XBRL is a step toward modernizing the reporting process. While such a drastic change might be tough to accept, the benefits are clear:
- Elimination of Manual Entering Data into a Web Form: Filers will no longer fill out forms, per se. Instead, they will supply data to FERC, and FERC will generate a form with the required information embedded within it.
- Enables Quick and Correct Data Analysis: Fulfill their oversight responsibilities with great speed and accuracy.
- Eliminates Errors during the Filing Process: Filers need to tag the information with appropriate XBRL tags and validate the data before final submission. Results in High-Quality reporting.
- XBRL makes Compliance Easier and empowers Automation.
- Instantaneous Gathering of Industry Insights: With information transparency, the XBRL approach allows energy leaders to think of their business processes differently.
What is FERC Taxonomy and Tagging?
FERC with XBRL US developed a new reporting taxonomy specifically designed to encompass the information required in energy reporting. On 17th July 2020, the FERC taxonomy got finalized.
If you are familiar with the US GAAP or IFRS taxonomies, you may notice that the FERC taxonomy is organized by ‘Forms’ rather than by financial presentations related to particular topics.
Here is what you need to know about the FERC Taxonomy:
- Form-Based Structure: Historically, FERC collected data using ‘Forms’. Hence, the taxonomy structure reflects the structure of the ‘Forms’.
- No ‘Extensions’: The taxonomy is designed to eliminate the need for extensions. The FERC implementation will not permit filers to define extension elements or relationships.
- Scope for Company-Specific Data: The FERC forms give filers the flexibility to report company-specific data. Taxonomy encourages providing additional information in the footnotes. However, footnotes are not intended to be structured.
- Validations for Error-Free Reporting: The FERC taxonomy includes validations to ensure the quality of data submitted.
- No Additional Disclosures: The taxonomy does not require additional disclosures beyond those defined in the forms.
- The data across different forms for the same company should be consistent.
The Timetable For Implementation
We recommend having a plan prepared beforehand. The timetable below provides a general guideline for compliance:
* Note that because May 1, 2022, falls on a weekend, filers will be allowed to submit their filings by May 2, 2022.
Support Software Matters When Complying with FERC XBRL Mandate
Some energy companies might already be familiar with XBRL filing software because they have filed financial statements with the SEC in the XBRL format. However, if you are dealing with the XBRL format for the first time, we have prepared a ‘Checklist’ to look for in the software:
- Check for the Right Credentials and Certification
- Check for Testimonials and Customer References
- Choose software that Eliminates XBRL Tagging Completely
- Choose software that Simplifies Data-Transfer
- Ensure availability of expert XBRL support
Find the complete Checklist here.
