Your question assumes that a sufficient test of whether a bidder will, in good faith, be able to make all certifications in the Part 2 Application, is whether the transaction requires disclosure of confidential information (relative to bidding strategy or regarding the Auction Process), and whether the transaction includes provisions that induce a Qualified Bidder to act in a pre-determined way in the auction.  This assumption is false; although this test is relevant, it is not sufficient to determine whether a bidder will, in good faith, be able to make the certifications of the Part 2 Application.

Certainly, if Qualified Bidders were party to a transaction that required a Qualified Bidder to disclose confidential information, or that would induce a Qualified Bidder to behave in a pre-determined way in the auction, then almost certainly the Qualified Bidders would be unable to make all certifications in the Part 2 Application.  However, even if the Qualified Bidders were parties to a transaction that did not require a Qualified Bidder to disclose confidential information and that did not provide inducements for a Qualified Bidder to behave in a pre-determined way in the auction, a Qualified Bidder may well not be able to make some of the certifications from the Part 2 Application.  A Qualified Bidder should evaluate whether it can make each and every certification and it should not conclude that it can make those certifications simply because it has not been a party to a transaction that requires the disclosure of confidential information and/or because it has not been a party to a transaction that provides inducements for a Qualified Bidder to act in a pre-determined way.

Recall that a Qualified Bidder in the BGS-RSCP Auction will be asked to make the following certifications: 

• The Qualified Bidder will be asked to certify that it is not a party to any contract for the purchase of power that might be used as source of supply for BGS-RSCP, and that would require the disclosure of confidential information to the counterparty under such a contract or to any other party, or that would provide instructions, direct financial incentives or other inducements for the BGS-RSCP Bidder to act in a way determined by the counterparty in the agreement and/or in concert with any other bidder in the BGS-RSCP Auction.
• The Qualified Bidder will be asked to certify that it does not have any knowledge of confidential information relative to the bidding strategy of any other Qualified Bidder in the BGS-RSCP Auction.
• The Qualified Bidder will be asked to certify that it will not disclose confidential information relative to its own bidding strategy except to bidders with which it is associated, to its Advisor, and to its financial institution.  The BGS-RSCP Bidder may, however, during negotiations of contractual arrangements for power to serve BGS-RSCP load were it to be a winner at the BGS-RSCP Auction, discuss with the counterparty to such arrangements the nature of the products purchased, the volume, and the price at which it is willing to buy these products.
• The Qualified Bidder will be asked to certify that, except for information publicly announced by the Auction Manager or the Board, it will not disclose any information it has regarding the Auction Process, including any round results and the status of its participation in the BGS-RSCP Auction, with any party except its Advisor and bidders with which it is associated.
• The Qualified Bidder must certify that, other than entities with which it is affiliated, and other than bidders named in the Part 1 Application as parties with whom the Qualified Bidder has entered into a bidding agreement, joint venture for the purpose of bidding in the auction, bidding consortium, or other arrangement pertaining to bidding in the auction, no party has agreed to defray any of its costs of participating in the BGS-RSCP Auction, including the cost of preparing the bid, the cost of any financial guarantees, the cost to be paid upon winning a tranche, and any other participation cost.

Please note that all statements where a bidder is asked to certify that it will not disclose confidential information, the bidder is asked to certify that it will not disclose this confidential information to any other party; these statements are not limited to asking the bidder to certify that it will not disclose confidential information to other Qualified Bidders.

You ask about certain specific types of transactions. Please note that all transactions require a case-by-case consideration of whether the parties to the transaction that are Qualified Bidders will be able to make the certifications of the Part 2 Application; see, for instance, FAQ-26, FAQ-27, FAQ-31, and FAQ-45.

Transaction of a shaped product may or may not impede the ability of Qualified Bidders to make or uphold the certifications of the Part 2 Application.  Transaction of a shaped product in isolation, with that product having a fixed price, a fixed volume and delivery pattern, along with no contingency between winning at the auction and purchasing the product, may not reveal the buyer’s or the seller’s assessment of migration risk or weather risk.  A shaped product can be used not only to support a bid in the auction but it can be used outside the auction and it can be resold to another buyer in or out of the auction.  A shaped product in and of itself is not sufficient to meet the supply obligations of a BGS-RSCP Supplier; several other significant components are required.  Such a transaction need not reveal or provide confidential information relative to the bidding strategy, but such a transaction could reveal or provide confidential information relative to the bidding strategy.  For example, if this transaction were not an isolated transaction but instead the parties were engaged in a series of transactions that included shaped products for varying delivery patterns, or if shaped products were added to other components that could be used for BGS-RSCP Supply, the totality of these transactions would most likely reveal confidential information relative to the bidding strategy of one or both parties.  If the totality of the transactions reveal confidential information relative to the bidding strategy of one or both parties, it would not be possible for the bidders to make or uphold all certifications of the Part 2 Application.  Each Qualified Bidder is asked in its Part 2 Application to certify that it does not have and will not obtain confidential information relative to the bidding strategy of another Qualified Bidder and that it has not and will not reveal confidential information relative to its own bidding strategy to another party.  Confidential information relative to bidding strategy includes the bidder’s estimation of the value of a tranche of the various EDC systems; the bidder’s estimation of the risks associated with serving BGS-RSCP load or of serving a particular EDC; and a bidder’s contractual arrangements for power with a party to serve BGS-RSCP load were the bidder to be a winner at the auction.

Transaction of a load-following energy product, that is, one that followed actual BGS-RSCP load in some way, for example for an EDC territory, would likely impede the ability of Qualified Bidders to make or uphold the certifications of the Part 2 Application, even if the product were not a full-requirements product.  Transaction of such a product would reveal a significant component of a bidder’s cost and would reveal an estimation of the seller’s risk of serving BGS-RSCP load.  Such products have no or extremely limited alternative use outside of the context of the BGS-RSCP Auction.  It is difficult to envision that a Qualified Bidder could transact for such a product with another Qualified Bidder and be able to make all certifications in the Part 2 Application including certifications that the bidder has not revealed confidential information relative to its bidding strategy and is unaware of confidential information relative to another Qualified Bidder’s bidding strategy.  The same would be true of basis products that would be tied to the BGS-RSCP load shape in any way, or to any product for which the transaction was contingent upon the outcome of the auction.

Two bidders that have qualified for the same auction and that meet in the course of conducting ordinary business (e.g., the trading of standard energy products such as 7x24 blocks of energy) do not contravene the Association and Confidential Information Rules simply through the ordinary conduct of business.  Each of these Qualified Bidders will have to certify to the fact that it does not have any knowledge of confidential information relative to the bidding strategy of the other Qualified Bidder, or any other Qualified Bidder for the same auction.  A standard product can be used not only to support a bid in the auction but it can be used outside the auction and it can be resold to another buyer in or out of the auction; furthermore, a standard product in and of itself is not sufficient to meet the supply obligations of a BGS-RSCP Supplier or of a BGS-CIEP Supplier.  As such, the transaction of a standard product does not reveal confidential information relative to bidding strategy.

However, bidders that meet in the course of ordinary business should take particular care not to discuss anything relative to their bidding strategy in the auction or auctions in which they are participating. 

No, they could not.  Any contractual arrangements for both certain ancillary services and RECs tied to the volume of BGS-CIEP load should the marketer be a winner at the auction would reveal confidential information relative to the marketer's bidding strategy.  The products together account for most requirements that a BGS-CIEP Supplier must meet and that involve price risk.  For energy, the EDC pays the BGS-CIEP Supplier the zonal real-time locational marginal price, and the BGS-CIEP Supplier does not generally face price risk for energy.  For capacity, the BGS-CIEP Supplier pays the price from the Reliability Pricing Model (“RPM”), which is known before the auction begins.  A generator that is qualified for the BGS-CIEP Auction and that sells a contract to cover the variable ancillary services and RECs needed to serve BGS-CIEP to a marketer that is also qualified for the BGS-CIEP Auction, has knowledge of confidential information relative to the bidding strategy of the marketer. The generator would not be able to certify that it does not have any knowledge of confidential information relative to the bidding strategy of another Qualified Bidder.  The marketer may not be able to certify that it does not have any knowledge of confidential information relative to the bidding strategy of the generator if it has acquired knowledge of the generator's estimation of the risks associated with serving BGS-CIEP load through the transaction.  Further, the marketer would not be able to certify that it has not disclosed confidential information relative to its own bidding strategy to another Qualified Bidder in the BGS-CIEP Auction.

No, they could not.  The contractual arrangements with the generator for supply to serve full-requirements BGS-RSCP load should the marketer be a winner at the auction would reveal confidential information relative to the marketer's bidding strategy.  There is no other use (or market) for full-requirements BGS-RSCP supply other than bidding in the BGS-RSCP Auction; further, the product is sufficient to meet virtually all supply requirements of a BGS-RSCP Supplier.  Thus, a generator that is qualified for the BGS-RSCP Auction and that sells full-requirements supply for BGS-RSCP to a marketer that is also qualified for the BGS-RSCP Auction, has knowledge of confidential information relative to the bidding strategy of the marketer.  The generator would not be able to certify that it does not have any knowledge of confidential information relative to the bidding strategy of another Qualified Bidder.  The marketer may not be able to certify that it does not have any knowledge of confidential information relative to the bidding strategy of the generator if it has acquired knowledge of the generator's estimation of the risks associated with serving BGS-RSCP load or of serving a particular Electric Distribution Company (“EDC”) through the transaction.  Further, the marketer would not be able to certify that it has not disclosed confidential information relative to its own bidding strategy to another Qualified Bidder.

There is no necessary relationship between associations and an Arrangement with respect to the auction.

If two entities participate in an Arrangement, they are not necessarily associated.  For two entities to be associated with one another, some degree of relationship through the corporate structure of the two entities is necessary.  Separate entities that have no corporate ties could participate in an Arrangement to submit bids in the auction, each providing separate resources or expertise for participating in the auction (e.g., financial support from one entity and trading expertise from another).  In that case, the entities participate in an Arrangement but they are not associated.

If two entities are associated, they are not necessarily part of an Arrangement.  It is possible that two entities that are affiliated (and thus associated) would not know of each other’s plans to participate in the auction.  Such entities may not be able (because one of the entities is regulated, for example) or may not be willing to collaborate in the submission of bids in the auction.  In that case, the entities are not part of any sort of Arrangement but they are nevertheless associated.  

That is correct.

No.  The time period during which these certifications apply does not end when the auction is completed.

For instance, in its Part 2 Application, a Qualified Bidder undertakes not to disclose confidential information relative to its own bidding strategy, and undertakes to uphold this certification until the Board renders a decision on the auction results.  The certification extends beyond the time at which the auction closes.  The Board approves the auction results up to two business days after the close of the BGS-RSCP Auction or after the close of the BGS-CIEP Auction, whichever closes later.  Obtaining quotes or making arrangements for BGS Supply when the auction is completed may affect a bidder’s ability to uphold this certification.  See, for instance, FAQ-49 and FAQ-50, as well as all other questions and answers in the Transaction and Hedging section of this document.

Please note further that certifications concerning confidential information regarding the Auction Process hold beyond the Board approval of the auction results.  Please consult the Association and Confidential Information portion of the Auction Rules to review the time period during which each certification must hold.

Once the auction has been concluded, if the Board approves the auction results, the Board may choose to release information regarding final auction prices and the names of the winners.  The Association and Confidential Information Rules state that, at that point, a BGS Supplier may itself release information regarding the number of tranches it has won and the territories that the winner will be serving.  Such details regarding your sales as a BGS Supplier may be released under the Association and Confidential Information Rules.

The offers that you presented as a Registered Bidder in the BGS Auctions are confidential information regarding the Auction Process.  A bidder undertakes not to disclose confidential information regarding the Auction Process from the time of submission of the Part 2 Application.  However, it would not be considered a violation of the certifications if you were to provide these in order to comply with a governmental requirement or inquiry as long as you designate the information as confidential and that you use your best efforts to seek to protect the information from release by the governmental authority and from being subject to release under any applicable open records statutes.  The Auction Manager would also appreciate, but does not require, notification that such information has been requested of you.   

In your Part 1 Application, you agreed not to disclose that you are a Qualified Bidder.  In your Part 2 Application, you agreed not to disclose that you are a Registered Bidder (see, for instance, FAQ-26, FAQ-27, FAQ-31, and FAQ-34).

There are ways in which auction participation could be revealed absent an explicit statement that you are intending to bid in the auction.  Doing so could violate certifications that you have made in the Part 1 and Part 2 Applications.  What you may be able to say for purposes of your SEC disclosure without violating certifications in the Part 1 and Part 2 Applications depends on your other business activities and your overall business outlook.

To the extent that you own significant generation in PJM, the marketing of which would be materially affected by the auction, providing factual information about the auction would not be unusual and it would not necessarily reveal that you are participating in the auction.  A generation owner in PJM would be expected to have an interest in the BGS Auctions given that the auctions may create a demand for forward power products.  These products need not be sales made at the auctions, but could be anything including sales of standard products to bidders or third-party suppliers.  The auctions could thus be material to such an entity, even if it were not participating in the auctions.  For such an entity to include in its SEC filings public factual information about the auctions or to refer to previously disclosed information about the auctions, would not, if carefully done, reveal that the entity is a Qualified Bidder or a Registered Bidder.  It should be clear to readers of such information that whether or not the entity is a bidder, the BGS Auctions could have an effect on the entity's business outlook.  Such a release of information, if carefully done, need not violate any certification.

At the other end of the spectrum, an entity that has no significant presence in PJM and that included in its SEC filings information about the auctions may well be viewed as using the filing to communicate that it is participating in one or both of the BGS Auctions.  Such an entity may be violating the certification that it will not reveal that it is a Qualified Bidder or Registered Bidder in one or both of the BGS Auctions.

No, this would not be a violation of those certifications.

Once the auction has concluded, if the Board approves the auction results, the Board may choose to release information regarding final auction prices and the names of the winners.  The Association and Confidential Information Rules state that, at that point, a winner may itself release information (only) regarding the number of tranches it has won and the territories that the winner will be serving. The Association and Confidential Information Rules state that, at that point, a losing bidder may itself release information (only) regarding the fact that it participated in the auction.

The Registered Bidder may not make such a disclosure prior to the Board having approved the auction results.  Winners and losing bidders otherwise continue to be bound by all certifications from the Association and Confidential Information Rules that extend beyond the Board decision on the auction results.  Please consult the Association and Confidential Information Rules portion of the Auction Rules to identify which certifications must be upheld beyond the Board decision on the auction results.

No, once an entity has completed the Part 1 Application for a BGS Auction, this entity cannot announce that it is participating in a BGS Auction.  In its Part 1 Application, the entity certifies that upon becoming a Qualified Bidder, it will not disclose information regarding the list of Qualified Bidders, including the identity of any one Qualified Bidder.  This prohibits the Qualified Bidder from announcing or revealing to anyone that it is itself a Qualified Bidder, since this would reveal the identity of a Qualified Bidder.

In its Part 2 Application, the Qualified Bidder certifies that upon becoming a Registered Bidder, it will not disclose information regarding the list of Registered Bidders, including the identity of any one Registered Bidder.  This prohibits the Registered Bidder from announcing or revealing to anyone that it is itself a Registered Bidder, since this would reveal the identity of a Registered Bidder.

Furthermore, an entity cannot discuss its participation with anyone while the auction is on-going. In its Part 1 Application, the entity also agrees to the Auction Rules.  At that point, the entity agrees that as a Qualified Bidder, it will not disclose any confidential information regarding the Auction Process. Confidential information regarding the Auction Process explicitly includes the status of a bidder’s participation in the auction.  There are only narrow and specific exceptions to this principle; namely, the Qualified Bidder may discuss confidential information regarding the Auction Process with an Advisor, or with bidders with which it is associated (as disclosed in its Part 2 Application).

Yes.  An entity that receives a Notification of Qualification acquires Qualified Bidder status and retains this status until the end of the Auction Process.  Similarly, an entity that receives a Notification of Registration acquires Registered Bidder status and retains this status until the end of the Auction Process.  There is no possibility to rescind or change this status.  This means that an entity that becomes a Qualified Bidder and that does not submit a Part 2 Application is bound by all the certifications it has made in the Part 1 Application.  Similarly, an entity that becomes a Registered Bidder is bound by all the certifications it has made in the Part 1 and Part 2 Applications, regardless of whether the Registered Bidder subsequently participates in the auction.

Please review the certifications in the Part 1 and Part 2 Applications for more details and in particular for the time period during which these certifications must remain in effect.

No, your view is incorrect.  This scenario presents important issues of compliance with the Association and Confidential Information Rules.

Please note that an entity that submits a Part 1 Application in the BGS-RSCP Auction, if successful, becomes a Qualified Bidder.  Status as a Qualified Bidder cannot be rescinded or changed after the Auction Manager has provided the entity with the Notification of Qualification and has provided the entity with the confidential information that is available only to Qualified Bidders in the BGS-RSCP Auction.  There is no such thing as a "supplier" status, no possibility to change status from a Qualified Bidder to a supplier, and no possibility to rescind status as a Qualified Bidder (see, for instance, FAQ-33). 

If an entity – call it Party A – submits a Part 1 Application for the BGS-RSCP Auction, qualifies as a bidder, and does not subsequently submit a Part 2 Application, Party A need not make certifications in the Part 2 Application, including certifications from the Association and Confidential Information Rules. But this does not mean that Party A is not in the ambit of the Association and Confidential Information Rules.  Party A must continue to abide by its certifications made in the Part 1 Application.

Furthermore, other Qualified Bidders in the BGS-RSCP Auction that do submit a Part 2 Application are also asked to make certifications, including certifications from the Association and Confidential Information Rules.  In making these certifications, other Qualified Bidders must consider the list of all Qualified Bidders, and this list of Qualified Bidders includes Party A.  This means that any Qualified Bidder in the BGS-RSCP Auction that has negotiated or negotiates supply arrangements specific to BGS-RSCP supply with Party A and that submits a Part 2 Application will most likely be unable to attest that it does not have any knowledge of confidential information relative to the bidding strategy of another Qualified Bidder (namely, Party A).  Furthermore, a Qualified Bidder that submits a Part 2 Application may, as a result of interactions with Party A, be unable to attest to any one of the following:

• it is not associated with another Qualified Bidder;
• it has not entered into any agreement with another Qualified Bidder regarding bids at the auction;
• it is not a party to any contract for the purchase of power that might be used as source of supply for BGS-RSCP, and that (i) would require the disclosure of any confidential information (confidential information relative to the bidding strategy or confidential information regarding the Auction Process) to the counterparty under such a contract; or (ii) that would require the disclosure of any confidential information (confidential information relative to the bidding strategy or confidential information regarding the Auction Process) to any other party; or (iii) that would provide instructions, direct financial incentives, or other inducements for the bidder to act in a way determined by the counterparty in the agreement and/or in concert with any other bidder in the auction;
• it does not have any knowledge of confidential information relative to the bidding strategy of any other Qualified Bidder;
• it has not disclosed confidential information relative to its bidding strategy;
• no party has agreed to defray any of its costs of participating in the auction; and
• it will not disclose any confidential information regarding the Auction Process.

Every Qualified Bidder with which Party A wants to negotiate a supply arrangement is faced with not being able to make all certifications, with the need to make information disclosures, and with the possibility of being subject to any remedies as determined by the Auction Manager, which include not being able to participate in the BGS-RSCP Auction.  The potential problem is not avoided by negotiating after the Part 2 Application has been submitted.  If such an arrangement is negotiated after the Part 2 Application is submitted, a Qualified Bidder with which Party A negotiates a supply arrangement is faced with being unable to uphold the certifications made in the Part 2 Application and is subject to sanctions (see, for instance, FAQ-26, FAQ-27, and FAQ-30).

The scenario you present therefore raises a number of important issues with respect to compliance with the Association and Confidential Information Rules for any BGS-RSCP Bidder negotiating with Party A.  If Party A did not submit a Part 1 Application and did not become a Qualified Bidder, although each Qualified Bidder must take due care to uphold certifications in the Part 1 and Part 2 Applications (see, for instance, the discussion in FAQ-27), the same issues may not arise.

The applicant is subject to sanctions if a certification it makes becomes untrue.  The certifications are designed so that the applicant should either know or be able to control whether the certification stays true during the period to which a certification applies.  There is no exception from sanctions if a certification becomes untrue, even if an action taken by the applicant is not the proximate cause.

In weighing the appropriateness of a sanction, we would expect that the Board would consider whether the applicant should have reasonably been aware of the possibility of the event that caused the certification to become untrue, as well as the nature of the relationship between the applicant and the party whose action caused the certification to become untrue.

Sanctions can be imposed for such a violation.  These sanctions include loss of all rights to serve any BGS Load won in the auction, forfeiture of the Pre-Auction Letter of Credit, liquidated damages of $100,000, action under state or federal laws, debarment from participation in future BGS Auctions, prosecution under applicable state and federal laws, or other sanctions that the Board may consider appropriate.  The Auction Manager will make a recommendation to the Board on a possible sanction and the Board will make the final determination.

It depends on the certification.  Some certifications of the Part 2 Applications are required for a Qualified Bidder to become a Registered Bidder.  For example, a Qualified Bidder must certify that, other than agreements disclosed in the Part 1 Application, the Qualified Bidder has not entered into any agreement with any other Qualified Bidder regarding participation in the auction for which it is applying.  If a Qualified Bidder is unable to make this certification, the Qualified Bidder will not be able to participate in the auction.

Other certifications of the Part 2 Application allow the Qualified Bidder to make an information disclosure to explain why it is unable to make a certain certification.  For example, a Qualified Bidder that is unable to certify that it is not associated with any other Qualified Bidder will be asked to identify the Qualified Bidder(s) with which it is associated, and will be asked to describe the nature of the association.  If a Qualified Bidder makes such a disclosure because it cannot make one of the certifications in the Part 2 Application, this disclosure will be considered when the Part 2 Application is processed.  The Auction Manager may require additional information and will decide on a course of action on a case-by-case basis to preserve the competitiveness and integrity of the auction.  This course of action could include allowing the Qualified Bidder to complete the Part 2 Application successfully without additional undertakings, could include requiring additional undertakings as a condition for the successful completion of the Part 2 Application and for participation in the auction, and could include rejection of the Part 2 Application.

Yes.  The BGS-RSCP and BGS-CIEP Auctions are separate in all important respects.  The evaluation of the Association and Confidential Information Rules pertains to each auction separately.  A bidder in the BGS-RSCP Auction is asked in its Part 1 and Part 2 Applications to make a number of certifications found in the BGS-RSCP Auction Rules.  In these rules, a “bidder” means a bidder in the BGS-RSCP Auction.  Most of these certifications are made in Insert #P2-1 required by the Part 2 Application, where it is stated: "In these certifications, a “Qualified Bidder” refers to an entity qualified to participate in the BGS-RSCP Auction."  Similarly, a bidder in the BGS-CIEP Auction is asked in its Part 1 and Part 2 Applications to make a number of certifications found in the BGS-CIEP Auction Rules.  In these rules, a “bidder” means a bidder in the BGS-CIEP Auction.  Most of these certifications are made in Insert #P2-3 required by the Part 2 Application, where it is stated: "In these certifications, a “Qualified Bidder” refers to an entity qualified to participate in the BGS-CIEP Auction.”

 

The objectives of the Association and Confidential Information Rules of preventing collusive arrangements and of preventing any one bidder from gaining superior information regarding its competitors mean that these rules do imply some restrictions on the day-to-day market activities of bidders and on possible supply arrangements.

For example, if one bidder (Bidder A) transacts with another bidder (Bidder B) and in the process Bidder A learns Bidder B’s valuation for the auction product, then Bidder A would have gained superior information about a competitor, and this transaction could foster collusion (see, for instance, FAQ-41 and FAQ-42).  The fact that the Association and Confidential Information Rules aim to prevent a bidder from gaining superior information about its competitors that might affect the Auction Process implies that Bidder A cannot sell a full-requirements product to Bidder B.  Such a supply arrangement would provide Bidder A with reliable information regarding Bidder B’s valuation of the auction product. This is an example of a restriction on supply arrangements implied by the Association and Confidential Information Rules.  As another example, each bidder is asked to certify that it has not entered into a supply arrangement that would provide explicit instructions on how to bid (see certification 5 of the Association and Confidential Information Rules portion of the Auction Rules, section VI.E.4 in the BGS-CIEP Auction Rules and section VII.E.4 in the BGS-RSCP Auction Rules).  This is a restriction on supply arrangements that aims to prevent coordination of bidding of several bidders if these bidders all entered into supply arrangements that provided bidding instructions.

The Association and Confidential Information Rules attempt to place only necessary restrictions on supply arrangements and on day-to-day market activities.  Such restrictions are unavoidable if these rules are to meet their goals.  These rules may impact hedging activities and supply arrangements of bidders.  Each bidder should be aware of these rules at all times, should be aware of the entities that have become Qualified Bidders for the auction in which it is participating, and should be especially mindful of these rules from the start of the auction until the Board renders a decision on the auction results.  For additional information, see, for instance, FAQ-45, FAQ-46, and FAQ-47, as well as other questions and answers in the “Transactions and Hedging” section of this document.

The Association and Confidential Information Rules do not “permit” or “prohibit” any specific transaction. Rather, these rules focus on employing a system of certifications to ensure that competition in the auction is not compromised either because bidders are not bidding independently, or because a bidder gains superior information about its competitors that might affect the Auction Process. If a bidder is unable to make a certification, typically the bidder will make an information disclosure and the Auction Manager may ask for more information to decide, on a case-by-case basis, upon a remedy that will ensure that competitiveness at the auction is not jeopardized (see, for instance, FAQ-29).  A list of permitted or prohibited transactions is not feasible or practicable: a given transaction may in one context allow the bidder to make all the certifications in the Association and Confidential Information Rules, while the same bidder may be unable to make one or more certifications with respect to the same type of transaction in another context. The bidder must make this determination considering the full context in which the transaction is made.

Yes. If a bidder is party to a bidding agreement with another party, is part of a bidding consortium or joint venture for the purpose of bidding in the auction, or is party to any arrangement involving joint or coordinate bidding with another party, then the bidder is not bidding independently.  Any such agreement and arrangement must be disclosed in the Part 1 Application.

Furthermore, the Association and Confidential Information Rules included in the BGS-RSCP Auction Rules (section VII.E.) and the BGS-CIEP Auction Rules (section VI.E.) provide specific criteria for one bidder to be associated with another bidder.  Such associations are links among bidders that may impede their ability to act independently.  Bidders are entirely responsible for reviewing these criteria and for evaluating their ability to make certifications in this regard.  Any such associations must be declared in the Part 2 Application. 

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