The FERC XBRL Mandate: All You Need To Know

The FERC collects operational and financial data from the companies it regulates. The FERC has from Q3 2021 moved to an XBRL-based system for collecting this information from energy companies. XBRL stands for eXtensible Business Reporting Language. XBRL involves the placement of machine-readable labels against each item of data being reported. The XBRL format allows easier analysis and peer-to-peer comparison of reported data.

Before Q3 2021, filings to the FERC were done using MS Visual FoxPro, a data collection system that Microsoft has stopped supporting. The main criticism against Visual FoxPro was that it used to make data collection a laborious process.

XBRL or eXtensible Business Reporting Language is a structured data format in which many regulatory bodies, business directories, stock exchanges, and central banks around the world require financial and business disclosures from the companies or entities they oversee. XBRL allows the entities to apply machine-readable (XBRL) tags or labels against the numbers or information in their reports. This process makes the reports machine-readable. When rendered using XBRL software, these reports become highly interactive and easy to analyze and compare with peer company reports.

Before the XBRL-based filing system kicked in, US energy companies used to file their information to the FERC in PDF format. Data locked in a PDF file needs to be manually sifted through if any analysis or comparison needs to be carried out. With data now being submitted by the companies in a uniform, structured format, the FERC can validate, analyze, and process the data with ease. Moreover, external stakeholders of the FERC data can rest assured that the reported data is of high quality.

The FERC XBRL mandate makes life easier for US energy companies in two ways. Firstly, the software that companies will use to create and submit XBRL reports will be a lot more user-friendly than an obsolete system (MS Visual FoxPro). Companies can simply upload their data onto XBRL software via MS Excel or Word documents. There is no need to manually enter the data. Secondly, companies can use the data filed in XBRL format for their own analysis and peer-to-peer comparisons. All XBRL data filed with the FERC can be accessed at a click.

An XBRL filing involves applying machine-readable (XBRL) tags against individual numbers or disclosures in a document. A FERC XBRL filing should ideally work the same way – with each line item in a FERC Form being assigned an XBRL tag. However, owing to FERC filing companies’ unfamiliarity with the XBRL format, a few software vendors have gone the extra mile to ensure that companies needn’t be troubled by the technical aspects of the format. They have ‘embedded’ XBRL tags within FERC Forms on their software platforms so that the tagging of each fact is taken care of automatically. One such software, which handles XBRL tagging at the backend and helps companies create high-quality FERC XBRL reports is IRIS CARBON®.

As mentioned earlier, preparing an XBRL document involves applying XBRL tags or machine-readable labels to each number or line item in the document. The XBRL tags need to be selected from a collection of such tags known as a taxonomy. In other words, an XBRL taxonomy is a dictionary of XBRL tags.

The XBRL tags within a taxonomy are machine-readable representations of the facts or concepts that need to be reported. Hence, the FERC XBRL taxonomy is a collection of XBRL tags that represent the concepts that need to be disclosed through FERC Forms.

The taxonomy used for FERC filings is a closed taxonomy while the taxonomies used by SEC filers are open taxonomies. Open taxonomies allow the creation of extension elements or custom XBRL tags in case no appropriate tag exists in those taxonomies for a company-specific disclosure. Closed taxonomies do not allow the formation of extension elements. While using a closed taxonomy, companies may leave information untagged if no specific XBRL element exists with which to tag the information.

On Feb 17, 2022, FERC released its updated taxonomy version 2.0. Companies need to use the new taxonomy for their Q4 2021 filings. The FERC has provided companies 60 days of buffer time to adopt the new taxonomy and complete their submission before Apr 18, 2022.

Communication from FERC regarding the taxonomy update can be viewed at https://www.ferc.gov/filing-forms/eforms-refresh

The new taxonomy can be viewed on the FERC eForms portal – https://ecollection.ferc.gov/taxonomyHistory

You can also view the sample rendering forms in HTML format. You can view this on the FERC portal under Vendor Files Library – https://www.ferc.gov/vendor-files-library

Some of the changes in FERC taxonomy 2.0, across form types, can be categorized as:

• Correction of Labels
• Addition/Deletion of Line items
• Deletion of concepts that were not being used

To sum it up, the vast majority of the concepts remain the same. FERC has polished the taxonomy from its previous version.