52210 Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 

9 7 U.S.C.19(a). 

1 74 FR 12178 (Mar. 23, 2009); these rules became 

effective on April 22, 2009. 

assigned OMB control number 3038– 

0060 to this collection of information. 

B. Cost-Benefit Analysis 

Section 15(a) of the CEA 9 requires the 

Commission to consider the costs and 

benefits of its actions before issuing an 

order under the Act. By its terms, 

section 15(a) does not require the 

Commission to quantify the costs and 

benefits of such an order or to determine 

whether the benefits of such an order 

outweigh its costs; rather, it requires 

that the Commission ‘‘consider’’ the 

costs and benefits of its action. Section 

15(a) further specifies that the costs and 

benefits shall be evaluated in light of 

five broad areas of market and public 

concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. 

The bulk of the costs imposed by the 

requirements of Commission Rule 36.3 

relate to significant and increased 

information-submission and reporting 

requirements adopted in response to the 

Reauthorization Act’s directive that the 

Commission take an active role in 

determining whether contracts listed by 

ECMs qualify as SPDCs. The enhanced 

requirements for ECMs will permit the 

Commission to acquire the information 

it needs to discharge its newlymandated responsibilities and to ensure 

that ECMs with SPDCs are identified as 

entities with the elevated status of 

registered entity under the CEA and are 

in compliance with the statutory terms 

of the core principles of section 

2(h)(7)(C) of the Act. The primary 

benefit to the public is to enable the 

Commission to discharge its statutory 

obligation to monitor for the presence of 

SPDCs and extend its oversight to the 

trading of SPDCs. 

Issued in Washington, DC on October 5, 

2009 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E9–24386 Filed 10–8–09; 8:45 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Notice of Intent, Pursuant to the 

Authority in Section 2(h)(7) of the 

Commodity Exchange Act and 

Commission Rule 36.3(c)(3), To 

Undertake a Determination Whether 

the PG&E Citygate Financial Basis 

Contract, Offered for Trading on the 

IntercontinentalExchange, Inc., 

Performs a Significant Price Discovery 

Function 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of action and request for 

comment. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘CFTC’’ or 

‘‘Commission’’) is undertaking a review 

to determine whether the PG&E Citygate 

Financial Basis (‘‘PGE’’) contract, 

offered for trading on the 

IntercontinentalExchange, Inc. (‘‘ICE’’), 

an exempt commercial market (‘‘ECM’’) 

under Sections 2(h)(3)–(5) of the 

Commodity Exchange Act (‘‘CEA’’ or the 

‘‘Act’’), performs a significant price 

discovery function. Authority for this 

action is found in section 2(h)(7) of the 

CEA and Commission rule 36.3(c) 

promulgated thereunder. In connection 

with this evaluation, the Commission 

invites comment from interested parties. 

DATES: Comments must be received on 

or before October 26, 2009. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

• Follow the instructions for 

submitting comments. Federal 

eRulemaking Portal: http:// 

www.regulations.gov 

• E-mail: secretary@cftc.gov. Include 

PG&E Citygate Financial Basis (PGE) 

Contract in the subject line of the 

message. 

• Fax: (202) 418–5521 

• Mail: Send to David A. Stawick, 

Secretary, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581 

• Courier: Same as mail above. 

All comments received will be posted 

without change to http:// 

www.CFTC.gov/. 

FOR FURTHER INFORMATION CONTACT: 

Gregory K. Price, Industry Economist, 

Division of Market Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. Telephone: (202) 418–5515. Email: gprice@cftc.gov; or Susan Nathan, 

Senior Special Counsel, Division of 

Market Oversight, same address. 

Telephone: (202) 418–5133. E-mail: 

snathan@cftc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

On March 16, 2009, the CFTC 

promulgated final rules implementing 

provisions of the CFTC Reauthorization 

Act of 2008 (‘‘Reauthorization Act’’) 1

which subjects ECMs with significant 

price discovery contracts (‘‘SPDCs’’) to 

self-regulatory and reporting 

requirements, as well as certain 

Commission oversight authorities, with 

respect to those contracts. Among other 

things, these rules and rule amendments 

revise the information-submission 

requirements applicable to ECMs, 

establish procedures and standards by 

which the Commission will determine 

whether an ECM contract performs a 

significant price discovery function, and 

provide guidance with respect to 

compliance with nine statutory core 

principles applicable to ECMs with 

SPDCs. These rules became effective on 

April 22, 2009. 

In determining whether an ECM’s 

contract is or is not a SPDC, the 

Commission will evaluate the contract’s 

material liquidity, price linkage to other 

contracts, potential for arbitrage with 

other contracts traded on designated 

contract markets or derivatives 

transaction execution facilities, use of 

the ECM contract’s prices to execute or 

settle other transactions, and other 

factors. 

In order to facilitate the Commission’s 

identification of possible SPDCs, 

Commission rule 36.3(c)(2) requires that 

an ECM operating in reliance on section 

2(h)(3) promptly notify the Commission 

and provide supporting information or 

data concerning any contract: (i) That 

averaged five trades per day or more 

over the most recent calendar quarter; 

and (ii)(A) for which the ECM sells price 

information regarding the contract to 

market participants or industry 

publications; or (B) whose daily closing 

or settlement prices on 95 percent or 

more of the days in the most recent 

quarter were within 2.5 percent of the 

contemporaneously determined closing, 

settlement, or other daily price of 

another agreement. 

II. Determination of a SPDC 

A. The SPDC Determination Process 

Commission rule 36.3(c)(3) 

establishes the procedures by which the 

Commission makes and announces its 

determination on whether a specific 

ECM contract serves a significant price 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 52211 

2The Commission may commence this process on 

its own initiative or on the basis of information 

provided to it by an ECM pursuant to the 

notification provisions of Commission rule 

36.3(c)(2). 

3Where appropriate, the Commission may choose 

to interview market participants regarding their 

impressions of a particular contract. Further, while 

they may not provide direct evidentiary support 

with respect to a particular contract, the 

Commission may rely for background and context 

on resources such as its October 2007 Report on the 

Oversight of Trading on Regulated Futures 

Exchanges and Exempt Commercial Markets (‘‘ECM 

Study’’). http://www.cftc.gov/stellent/groups/ 

public/@newsroom/documents/file/ 

pr5403-07_ecmreport.pdf. 

4 7 U.S.C. 2(h)(7)(C). 

5 17 CFR Part 36, Appendix A. 

6 44 U.S.C. 3507(d). 

discovery function. Under those 

procedures, the Commission will 

publish a notice in the Federal Register 

that it intends to undertake a 

determination as to whether the 

specified agreement, contract, or 

transaction performs a significant price 

discovery function and to receive 

written data, views, and arguments 

relevant to its determination from the 

ECM and other interested persons.2

After prompt consideration of all 

relevant information,3 the Commission 

will, within a reasonable period of time 

after the close of the comment period, 

issue an order explaining its 

determination. Following the issuance 

of an order by the Commission that the 

ECM executes or trades an agreement, 

contract, or transaction that performs a 

significant price discovery function, the 

ECM must demonstrate, with respect to 

that agreement, contract, or transaction, 

compliance with the core principles 

under section 2(h)(7)(C) of the CEA 4

and the applicable provisions of Part 36. 

If the Commission’s order represents the 

first time it has determined that one of 

the ECM’s contracts performs a 

significant price discovery function, the 

ECM must submit a written 

demonstration of its compliance with 

the core principles within 90 calendar 

days of the date of the Commission’s 

order. For each subsequent 

determination by the Commission that 

the ECM has an additional SPDC, the 

ECM must submit a written 

demonstration of its compliance with 

the core principles within 30 calendar 

days of the Commission’s order. 

B. PG&E Citygate Financial Basis 

Contract 

The PGE contract is cash settled based 

on the difference between the bidweek 

price index for a particular calendar 

month at the PG&E Citygate hub, as 

published by Intelligence Press, Inc. 

(IPI), in NGI’s Bidweek Survey, and the 

final settlement price of the New York 

Mercantile Exchange’s (NYMEX’s) 

physically-delivered Henry Hub natural 

gas futures contract for the same 

calendar month. The bidweek price is 

computed from fixed-price, bilateral 

transactions executed during the last 

five business days of a given month, 

where the transactions specify the 

delivery of natural gas at the PG&E hub 

during the following calendar month. 

The price index is computed as the 

volume-weighted average of the 

applicable natural gas transactions. 

Bidweek prices are published on the 

first business day of the month in which 

the gas flows. The size of the PGE 

contract is 2,500 mmBtu, and the unit 

of trading is any multiple of 2,500 

mmBtu. The PGE contract is listed for 

up to 72 calendar months commencing 

with the next calendar month. 

Based upon a required quarterly 

notification filed on July 27, 2009 

(mandatory under Rule 36.3(c)(2)), the 

ICE reported that, with respect to its 

PGE contract, the total number of trades 

was 1,142 in the second quarter of 2009, 

resulting in a daily average of 17.8 

trades. During the same period, the PGE 

contract had a total trading volume of 

99,418 contracts and an average daily 

trading volume of 1,553.4 contracts. 

Moreover, the open interest as of June 

30, 2009, was 150,299 contracts. 

It appears that the PGE contract may 

satisfy the material liquidity, price 

linkage, and material price reference 

factors for SPDC determination. With 

respect to material liquidity, trading in 

the ICE PGE contract averaged more 

than 1,500 contracts on a daily basis, 

with more than 15 separate transactions 

each day. In addition, the open interest 

in the subject contract was substantial. 

In regard to price linkage, the final 

settlement price of the PGE contract is 

based, in part, on the final settlement 

price of the NYMEX’s physicallydelivered natural gas contract, where 

the NYMEX is registered with the 

Commission as a designated contract 

market (‘‘DCM’’). In terms of material 

price reference, the ICE maintains 

exclusive rights over IPI’s bidweek price 

indices. As a result, no other exchange 

can offer such a basis contract based on 

IPI’s PG&E bidweek index. While other 

third-party price providers produce 

natural gas price indices for a variety of 

trading centers, those indices may not 

have the same values or quality as IPI’s 

price indices; each company’s bidweek 

indices are based on transactions that 

are consummated during the last five 

days of the month prior to delivery and 

are voluntarily submitted by traders. In 

addition, the ICE sells its price data to 

market participants in a number of 

different packages which vary in terms 

of the hubs covered, time periods, and 

whether the data are daily only or 

historical. For example, the ICE offers 

‘‘West Gas End of Day’’ and ‘‘OTC Gas 

End of Day’’ data packages with access 

to all price data or just 12, 24, 36, or 48 

months of historical data. 

III. Request for Comment 

In evaluating whether an ECM’s 

agreement, contract, or transaction 

performs a significant price discovery 

function, section 2(h)(7) of the CEA 

directs the Commission to consider, as 

appropriate, four specific criteria: Price 

linkage, arbitrage, material price 

reference, and material liquidity. As it 

explained in Appendix A to the Part 36 

rules,5 the Commission, in making 

SPDC determinations, will apply and 

weigh each factor, as appropriate, to the 

specific contract and circumstances 

under consideration. 

As part of its evaluation, the 

Commission will consider the written 

data, views, and arguments from any 

ECM that lists the potential SPDC and 

from any other interested parties. 

Accordingly, the Commission requests 

comment on whether the ICE’s PGE 

contract performs a significant price 

discovery function. Commenters’ 

attention is directed particularly to 

Appendix A of the Commission’s Part 

36 rules for a detailed discussion of the 

factors relevant to a SPDC 

determination. The Commission notes 

that comments which analyze the 

contract in terms of these factors will be 

especially helpful to the determination 

process. In order to determine the 

relevance of comments received, the 

Commission requests that commenters 

explain in what capacity are they 

knowledgeable about the subject 

contract. 

IV. Related Matters 

A. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) 6 imposes certain requirements 

on federal agencies, including the 

Commission, in connection with their 

conducting or sponsoring any collection 

of information, as defined by the PRA. 

Certain provisions of final Commission 

rule 36.3 impose new regulatory and 

reporting requirements on ECMs, 

resulting in information collection 

requirements within the meaning of the 

PRA; OMB previously has approved and 

assigned OMB control number 3038– 

0060 to this collection of information. 

mstockstill on DSKH9S0YB1PROD with NOTICES

52212 Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 

7 7 U.S.C. 19(a). 

B. Cost-Benefit Analysis 

Section 15(a) of the CEA 7 requires the 

Commission to consider the costs and 

benefits of its actions before issuing an 

order under the Act. By its terms, 

section 15(a) does not require the 

Commission to quantify the costs and 

benefits of such an order or to determine 

whether the benefits of such an order 

outweigh its costs; rather, it requires 

that the Commission ‘‘consider’’ the 

costs and benefits of its action. Section 

15(a) further specifies that the costs and 

benefits shall be evaluated in light of 

five broad areas of market and public 

concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. 

The bulk of the costs imposed by the 

requirements of Commission Rule 36.3 

relate to significant and increased 

information-submission and reporting 

requirements adopted in response to the 

Reauthorization Act’s directive that the 

Commission take an active role in 

determining whether contracts listed by 

ECMs qualify as SPDCs. The enhanced 

requirements for ECMs will permit the 

Commission to acquire the information 

it needs to discharge its newlymandated responsibilities and to ensure 

that ECMs with SPDCs are identified as 

entities with the elevated status of 

registered entity under the CEA and are 

in compliance with the statutory terms 

of the core principles of section 

2(h)(7)(C) of the Act. The primary 

benefit to the public is to enable the 

Commission to discharge its statutory 

obligation to monitor for the presence of 

SPDCs and extend its oversight to the 

trading of SPDCs. 

Issued in Washington, DC, on October 5, 

2009 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E9–24390 Filed 10–8–09; 8:45 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Sunshine Act Meetings 

AGENCY HOLDING THE MEETING: 

Commodity Futures Trading 

Commission. 

Sunshine Act Meetings 

TIME AND DATE: 11 a.m., Tuesday, 

October 27, 2009. 

PLACE: 1155 21st St., NW., Washington, 

DC, 9th Floor Commission Conference 

Room. 

STATUS: Closed. 

MATTERS TO BE CONSIDERED: Rule 

Enforcement Review Meeting. 

CONTACT PERSON FOR MORE INFORMATION: 

Sauntia S. Warfield, 202–418–5084. 

Sauntia S. Warfield, 

Assistant Secretary of the Commission. 

[FR Doc. E9–24560 Filed 10–7–09; 4:15 pm] 

BILLING CODE 6351–01–P 

DEPARTMENT OF DEFENSE 

Department of the Army; Corps of 

Engineers 

Intent To Prepare a Draft 

Environmental Impact Statement for 

the Proposed Dallas Floodway Project, 

a Multipurpose Project Containing 

Levee Remediation, Flood Risk 

Management, Ecosystem Restoration, 

Recreation Enhancement, and Other 

Proposed Projects Along the Trinity 

River Within and Adjacent to the 

Existing Dallas Floodway in Dallas 

County, Dallas TX 

AGENCY: Department of the Army, U.S. 

Army Corps of Engineers, DoD. 

ACTION: Notice of intent. 

SUMMARY: The U.S. Army Corps of 

Engineers (USACE), Fort Worth District, 

in partnership with the City of Dallas, 

intends to prepare a Draft 

Environmental Impact Statement (DEIS), 

pursuant to Section 102 of the National 

Environmental Policy Act (NEPA) as 

implemented by the regulations 

promulgated by the Council on 

Environmental Quality (40 Code of 

Federal Regulations Parts 1500–1508 

and USACE Engineering Regulation 

200–2–2) to analyze the potential 

comprehensive environmental 

consequences resulting from the 

implementation of proposed levee 

remediation, flood risk management, 

ecosystem restoration, recreation 

enhancement, and other proposed 

projects in and around the Dallas 

Floodway, in Dallas, TX. 

The USACE is preparing the DEIS in 

response to the authority contained in 

the United States Senate Committee on 

Environment and Public Works 

Resolution dated April 22, 1988, and 

Section 5141 of the Water Resources 

Development Act WRDA of 2007. The 

USACE must determine the technical 

soundness and environmental 

acceptability of the authorized project, 

levee remediation plans and other 

projects that are being proposed within 

and adjacent to the Dallas Floodway. 

The study area is located in and 

adjacent to the Dallas Floodway along 

the Trinity River, in Dallas, TX. The 

study area includes the area bound by 

the Loop 12 crossing of the Elm Fork 

and the I–30 crossing of the West Fork 

(river mile 505.50) to the southeastern 

edge of the Central Wastewater 

Treatment Plant on the Trinity River 

(river mile 494.63), as well as areas to 

the east and west of the Dallas 

Floodway to incorporate drainage basins 

associated with the east and west levee 

interior drainage systems. The study 

area encompasses approximately 36,292 

acres. 

FOR FURTHER INFORMATION CONTACT: For 

questions regarding the Dallas Floodway 

Projects EIS, please contact Mr. Jeffry 

Tripe, Regional Technical Specialist, 

U.S. Army Corps of Engineers, Fort 

Worth District, P.O. Box 17300, Fort 

Worth, TX, 76102–0300, (817) 886– 

1716, or via e-mail at 

Jeffry.A.Tripe@usace.army.mil. 

SUPPLEMENTARY INFORMATION: The Dallas 

County Levee Improvement District 

(DCLID) constructed the original Dallas 

Floodway levees between 1928 and 

1931. The DCLID rerouted the Trinity 

River by constructing a channel within 

the leveed floodway and filled the 

original river channel or used it for 

sump storage. In the mid-forties, major 

floods, compounded by continued 

urbanization in the watershed, resulted 

in increased drainage into the Dallas 

Floodway and severe flooding. To 

reduce flooding within the Dallas 

Floodway project area, Congress 

authorized the Dallas Floodway flood 

control project in 1945 and 1950. This 

resulted in several USACE 

improvements to the Dallas Floodway, 

completed in 1958. 

The existing Upper Trinity River 

Feasibility Study (UTRFS) serves as an 

umbrella study to all USACE projects in 

the basin. The USACE initiated the 

UTRFS in response to the authority 

contained in the United States Senate 

Committee on Environment and Public 

Works Resolution dated April 22, 1988. 

This authorizing legislation for the 

overall study defines the area of 

investigations as the Upper Trinity 

River Basin, with specific emphasis on 

the Dallas-Fort Worth Metroplex. The 

UTRFS identified approximately 90 

potential projects addressing flood risk 

management, ecosystem restoration, and 

recreation within the study area. 

In May 1996, acting as the nonFederal sponsor on the on-going UTRFS, 

the North Central Texas Council of 

Governments coordinated with the 

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