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Understanding the Wholesale Merchant Function in Legal Terms
Definition & Meaning
The wholesale merchant function refers to the activity of selling electric energy for resale in interstate commerce. This means that wholesale merchants buy electricity in bulk from producers and sell it to other entities, such as utility companies, for further distribution to consumers. This function is essential for maintaining a stable and efficient electricity market, allowing for the movement of energy across state lines.
Table of content
Legal Use & context
This term is commonly used in the context of energy law and regulation. It is particularly relevant for entities involved in the wholesale electricity market, including power producers, distributors, and regulatory bodies. Legal frameworks governing the wholesale merchant function ensure compliance with federal regulations, particularly those set forth by the Federal Energy Regulatory Commission (FERC). Users may find relevant forms and templates on platforms like US Legal Forms to assist with transactions or regulatory compliance.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A company purchases large quantities of electricity from a wind farm and sells it to a regional utility company. The utility then distributes this energy to residential customers.
Example 2: A wholesale merchant enters into contracts with multiple power generation facilities to secure energy supplies, which are then sold to various retailers across state lines. (hypothetical example)
Relevant laws & statutes
Major statutes relevant to the wholesale merchant function include:
Federal Power Act (16 U.S.C. § 824) - Governs the sale of electricity and the regulation of interstate electricity sales.
18 CFR Part 37 - Outlines regulations for open access and same-time information systems in the electricity market.
State-by-state differences
State
Regulatory Body
Key Differences
California
California Public Utilities Commission
Has specific mandates for renewable energy purchases.
Texas
Public Utility Commission of Texas
Operates under a deregulated market structure.
New York
New York State Public Service Commission
Emphasizes energy efficiency and sustainability in wholesale transactions.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Retail Merchant Function
Involves selling electricity directly to end consumers.
Retail merchants deal with final consumers, while wholesale merchants sell to other businesses.
Power Marketer
Entities that buy and sell electricity but may not own generation facilities.
Power marketers may engage in both wholesale and retail transactions, unlike wholesale merchants who focus solely on bulk sales.
Common misunderstandings
What to do if this term applies to you
If you are involved in the wholesale electricity market, ensure that you understand the regulatory requirements and compliance obligations. Consider utilizing legal templates from US Legal Forms to help manage contracts and transactions effectively. If your situation is complex, consulting a legal professional with expertise in energy law may be advisable.
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