UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Parts 35 and 284 

(Docket No. RM06-14-000) 

Revisions to Record Retention Requirements for Unbundled Sales Service, 

Persons Holding Blanket Marketing Certificates, and Public Utility Market-Based Rate 

Authorization Holders 

(Issued February 16, 2006) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Notice of Proposed Rulemaking. 

SUMMARY: The Federal Energy Regulatory Commission (Commission) is proposing 

to amend its regulations regarding the blanket certificates for unbundled natural gas sales 

services held by interstate natural gas pipelines, the blanket marketing certificates held by 

persons making sales for resale of natural gas at negotiated rates in interstate commerce 

and the market-based rate authorizations held by certain sellers of electricity and related 

products. Specifically, the Commission is proposing to extend the record retention 

requirement in the sections of the Commission’s regulations that apply to such sellers 

from three to five years. 

DATES: Comments are due [insert date 30 days after publication in the FEDERAL 

REGISTER]. 
ADDRESSES: You may submit comments, identified by docket number, by any of the 

following methods: 

• Agency Web Site: http://www.ferc.gov . Follow the instructions for submitting 

comments electronically via the eFiling link on the Commission’s web site at 

http://www.ferc.gov. 

• Mail: Commenters unable to file comments electronically must send an original 

and 14 copies of their comments to: Federal Energy Regulatory Commission, 

Secretary of the Commission, 888 First Street N.E., Washington, DC, 20426. 

Refer to the Comment Procedures section of the preamble for additional 

information on how to file comments. 

FOR FURTHER INFORMATION CONTACT: 

Frank Karabetsos 

Office of General Counsel 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-8133 

Frank.Karabetsos@ferc.gov

Mark Higgins 

Office of Market Oversight and Investigations 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-8273 

Mark.Higgins@ferc.gov

SUPPLEMENTARY INFORMATION:
 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Joseph T. Kelliher, Chairman; 

 Nora Mead Brownell, and Suedeen G. Kelly. 

Revisions to Record Retention Requirements for 

Unbundled Sales Service, 

Persons Holding Blanket Marketing Certificates, and 

Public Utility Market-Based Rate Authorization Holders

Docket No. RM06-14-000 

NOTICE OF PROPOSED RULEMAKING 

(Issued February 16, 2006) 

1. The Federal Energy Regulatory Commission is proposing to revise §§ 284.288(b) 

and 284.403(b) of its codes of conduct regulations,1

 as promulgated pursuant to Order 

No. 644.2

 Sections 284.288(b) and 284.403(b) of the codes of conduct regulations 

require sellers to maintain certain records for a period of three years to reconstruct prices 

charged for natural gas. Similarly, the Commission is proposing to revise new § 35.37(d)

of the Commission’s regulations. Section 35.37(d) is the codification of former Market 

1

 18 CFR 284.288(b) and 284.403(b) (2005). In a Final Rule in Docket No. 

RM06-5-000 issued simultaneously with this notice of proposed rulemaking (NOPR), the 

Commission is redesignating sections 284.288(c) and 284.403(c) of the Commission’s 

regulations as sections 284.288(b) and 284.403(b), respectively. Unless otherwise 

specified, this NOPR will refer to these sections on record retention under their new 

designations, sections 284.288(b) and 284.403(b). 

2 Amendments to Blanket Sales Certificates, 105 FERC ¶ 61,217 (2003), reh’g 

denied 107 FERC ¶ 61,174; 68 FR 66323 (Nov. 26, 2003); 18 CFR 284.288 and 284.403 

(2003) (Order No. 644). Order No. 644 is currently on appeal. See Cinergy Marketing & 

Trading, L.P. v. FERC, No. 04-1168 et al. (D.C. Cir. April 28, 2004). 
Docket No. RM06-14-000 - 2 -

 

Behavior Rule 5.3

 Section 35.37(d) requires that sellers retain for a minimum threeyear period all data and information upon which they billed the prices charged for 

electricity and related products in sales made under their market-based rate tariffs and 

authorizations or in transactions the prices of which were reported to price index 

publishers.4

 Subsequent to the issuance of Order No. 644 and the Market Behavior Rules 

Order, Congress provided the Commission with specific anti-manipulation authority in 

the Energy Policy Act of 2005 (EPAct 2005). 5

 To implement this new authority, the 

Commission recently issued Order No. 670, where we said we would adhere to a five3

 Concurrently herewith, the Commission is codifying certain Market Behavior 

Rules, including Market Behavior Rule 5, which are currently tariff conditions for 

market-based rate sellers of electricity and related products. Conditions for Public Utility 

Market-Based Rate Authorization Holders, Docket No. RM06-13-000 (February 16, 

2006) (Market Behavior Rules Codification Order). The Commission had promulgated 

Market Behavior Rule 5 along with the other Market Behavior Rules in the Market 

Behavior Rules Order. Investigation of Terms and Conditions of Public Utility MarketBased Rate Authorizations, “Order Amending Market-Based Rate Tariffs and 

Authorizations,” 105 FERC ¶ 61,218 (2003), reh’g denied, 107 FERC ¶ 61,175 (2004) 

(Market Behavior Rules Order). The Market Behavior Rules are currently on appeal. 

Cinergy Marketing & Trading, L.P. v. FERC, Nos. 04-1168 et al. (D.C. Cir. April 28, 

2004). Unless otherwise specified, this NOPR will refer to this rule on record retention 

under its new designation, section 35.37(d). 

4

 18 CFR 35.37(d). 

5

 Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594 (2005). Congress 

prohibited the use or employment of “any manipulative or deceptive device or 

contrivance” in connection with the purchase or sale of natural gas or electric energy or 

transportation or transmission services subject to the jurisdiction of the Commission. 

Congress directed the Commission to give these terms the same meaning as under the 

Securities Exchange Act of 1934, 15 U.S.C. 78j(b) (2000). 
Docket No. RM06-14-000 - 3 -

year statute of limitations where we seek civil penalties for violations of the new antimanipulation rules.6

 This NOPR proposes to amend these regulations to extend the 

record retention requirement of §§ 284.288(b), 284.403(b) and 35.37(d) of the 

Commission’s regulations from three to five years, in order to be consistent with the 

recently issued Order No. 670. 

I. Background

2. On November 17, 2003, we issued Order No. 644, amending blanket certificates 

for unbundled natural gas sales services held by interstate natural gas pipelines and 

blanket marketing certificates held by persons making sales for resale of natural gas at 

negotiated rates in interstate commerce. This rule requires that pipelines that provide 

unbundled natural gas sales service and all sellers of natural gas for resale adhere to a 

code of conduct with respect to certain natural gas sales. Sections 284.288(b) and 

284.403(b) of the codes of conduct regulations require that sellers retain for a minimum 

three-year period all data and information upon which they billed the prices charged for 

natural gas sales made under §§ 284.284 or 284.402, or in transactions the prices of 

which were reported to price index publishers.

3. At the same time that Order No. 644 was adopted for pipelines that provide 

unbundled natural gas sales service and holders of blanket certificate authority that make 

 6 Prohibition of Energy Market Manipulation, Order No. 670, 71 FR 4244 

(Jan. 26, 2006), FERC Stats. & Regs. ¶ 31,202, 114 FERC ¶ 61,047 (Jan. 19, 2006) 

(Order No. 670). 
Docket No. RM06-14-000 - 4 -

 

sales for resale of natural gas, the Commission also issued the Market Behavior Rules 

Order to require wholesale sellers of electricity at market-based rates to adhere to certain 

behavioral rules when making sales of electricity. The record retention rule, now 

§ 35.37(d) of the Commission’s regulations, requires that sellers retain for a minimum 

three-year period all data and information upon which they billed the prices charged for 

electricity and related products in sales made under their market-based rate tariffs and 

authorizations or in transactions the prices of which were reported to price index 

publishers. 

4. In a Notice of Proposed Rulemaking dated November 21, 2005,7

 the Commission 

proposed to rescind §§ 284.288 or 284.403 of the Commission’s regulations once we 

issued final regulations implementing the anti-manipulation provisions of EPAct 2005 

and have had the opportunity to incorporate the non-duplicative aspects of §§ 284.288 or 

284.403 of the Commission’s regulations into other rules of general applicability. At the 

same time, we issued an order in Docket No. EL06-16-000 proposing similar changes to 

the behavior rules applicable to wholesale sellers of electricity at market-based rates.8

 

On January 19, 2006, the Commission issued Order No. 670, adopting regulations 

7 Amendments to Codes of Conduct for Unbundled Sales Service and for Persons 

Holding Blanket Marketing Certificates, 113 FERC ¶ 61,189 (2005). 

8 See Investigation of Terms and Conditions of Public Utility Market-Based Rate 

Authorizations, “Order Proposing Revisions to Market-Based Rate Tariffs and 

Authorizations,” 113 FERC ¶ 61,190 (2005). 
Docket No. RM06-14-000 - 5 -

implementing the EPAct 2005 anti-manipulation provisions.9

 In Order No. 670, the 

Commission stated that it will adhere to a five-year statute of limitations where we seek 

civil penalties for violations of the new anti-manipulation rules.10

5. In a final rule and order issued simultaneously with this NOPR, we decided to 

rescind §§ 284.288(a), (d) and (e) and 284.403(a), (d) and (e) of the Commission’s 

regulations,11 and to rescind Market Behavior Rules 2 and 6.12 The Commission stated 

that, although Order No. 670 made it unnecessary to retain §§ 284.288(a), (d) and (e) and 

284.403(a), (d) and (e) of the Commission’s regulations or to retain Market Behavior 

Rules 2 and 6, there is benefit to retaining §§ 284.288(b)-(c) and 284.403(b)-(c) 

(redesigated as §§ 284.288(a)-(b) and 284.403(a)-(b)) of the Commission’s regulations, 

and to retaining Market Behavior Rules 1, 3, 4, and 5 (new §§ 35.37(a)-(d) of the 

Commission’s regulations). 

II. Discussion

6. Sections 284.288(b), 284.403(b) and 35.37(d) of the Commission’s regulations 

require sellers to maintain certain records for a period of three years to reconstruct prices 

 9

 18 CFR 1c.1 and 1c.2, 71 FR 4,244 (2006). 

10 Order No. 670, 114 FERC ¶ 61,047 at P 63. 

11 Amendments to Codes of Conduct for Unbundled Sales Service and for 

Persons Holding Blanket Marketing Certificates, Docket No. RM06-5-000 (February 16, 

2006). 

12 Order Revising Market-Based Rate Tariffs and Authorizations, Docket No. 

EL06-16-000 (February 16, 2006).
Docket No. RM06-14-000 - 6 -

 

charged for natural gas and electricity, respectively. This is different from the record 

retention requirements in Parts 125 and 225 of our regulations, which largely are related 

to cost-of-service rate requirements.13 Given the importance of records related to any 

investigation of possible wrongdoing and related to assuring compliance, and in order to 

avoid confusion, the Commission decided to retain §§ 284.288(b), 284.403(b) and 

35.37(d) of the Commission’s regulations. 

7. In this NOPR, we propose increasing the record retention requirement from three 

years to five years. In Order No. 670, we did not adopt a specific statute of limitations on 

complaints or enforcement actions that may be brought pursuant to the Commission’s 

anti-manipulation authority.14 However, we did note that, when a statutory provision 

under which civil penalties may be imposed lacks its own statute of limitations (as is the 

case with respect to the Commission’s anti-manipulation authority), a five-year limitation 

period applies.15 It would be inconsistent to allow complaints or enforcement actions 

seeking civil penalties for alleged violations to our anti-manipulation authority to be 

commenced more than three years after the transactions giving rise to such actions were 

carried out, but not to require that the data and information related to such transactions be 

13 18 CFR Parts 125, 225 (2005). 

14 Order No. 670, 114 FERC ¶ 61,047 at P 62. 

15 Id.
Docket No. RM06-14-000 - 7 -

retained for at least that long. Accordingly, we propose, and seek comment on, an 

increase of the record retention requirement to five years.

III. Regulatory Flexibility Act Certification

8. The Regulatory Flexibility Act of 198016 generally requires a description and 

analysis of final rules that will have significant economic impact on a substantial number 

of small entities.17 The Commission is not required to make such analyses if a rule 

would not have such an effect. The proposed rule merely extends an already existing 

record retention requirement from three to five years. Therefore, the Commission 

certifies that this proposed rule, if finalized, will not have a significant economic impact 

on a substantial number of small entities. 

IV. Information Collection Statement 

9. As discussed herein, the Commission is proposing to extend the existing record 

retention period of §§ 284.288(b), 284.403(b) and 35.37(d) of the Commission’s 

regulations from three years to five years consistent with the statute of limitations that 

 16 5 U.S.C. 601-612 (2000). 

17 The RFA definition of “small entity” refers to the definition provided in the 

Small Business Act, which defines a “small business concern” as a business which is 

independently owned and operated and which is not dominant in its field of operation. 

15 U.S.C. 632 (2000). The Small Business Size Standards component of the North 

American Industry Classification System defines a small electric utility as one that, 

including its affiliates, is primarily engaged in the generation, transmission, and/or 

distribution of electric energy for sale and whose total electric output for the preceding 

fiscal years did not exceed 4 million MWh. 13 CFR 121.201 (Section 22, Utilities, North 

American Industry Classification System, NAICS) (2004). 
Docket No. RM06-14-000 - 8 -

 

applies to actions seeking civil penalties for violations of the Commission’s new antimanipulation rules that could be related to such data and information. The increased 

duration of information retention contained in this proposed revised rule has been 

submitted to the Office of Management and Budget (OMB) for review under the Section 

3507(d) of the Paperwork Reduction Act of 1995.18 OMB’s regulations require OMB to 

approve certain information collection requirements imposed by agency rule.19

10. The Commission’s regulations, in §§ 284.288(b), 284.403(b) and 35.37(d), specify 

the existing record retention requirements applicable to certain sellers of natural gas and 

electricity. The information provided to the Commission under Part 284 for record 

retention purposes remains identified as FERC-549. The Commission identifies the 

information provided for under Part 35 as FERC-516. As discussed above, the 

Commission proposes to extend the records retention requirements in Parts 35 and 284 of 

its regulations for an additional two years consistent with Order No. 670. 

11. Comments are solicited on the need for this increased records retention period, 

whether it will have practical utility, the accuracy of the provided burden estimates, and 

any suggested methods for minimizing respondents’ burden, including the use of 

automated information techniques. The burden estimates for complying with this 

proposed rule are as follows: 

18 44 U.S.C. 3507(d). 

19 5 CFR 1320.11. 
Docket No. RM06-14-000 - 9 -

Data Collection 

FERC-516 & 

FERC-549 

No. of 

Respondents 

No. of 

Responses 

Hours Per 

Response 

Total Annual 

Hours 

Records 

Retention 

FERC-516 1,150 1 2 2300 

FERC-549 222 1 2 444 

Totals 1,372 1 2 2,744 

Total Annual hours for Record Retention: Recordkeeping, 2,744 hours. 

Information Retention Costs: The Commission projects an annualized average cost of all 

respondents as 2,744 hours @ $17 an hour = $46,648 (staffing) + $2,538,200 (1,372 

entities @ $925 per year x 2 (storage)). This cost is based on 120 cubic feet (20 fourdrawer file cabinets transferred off site to a storage facility). The costs include cubic feet 

of storage plus the cost of floor space plus the costs for records storage cartons. The 

Commission is requiring that entities retain records for an additional two years. Total 

costs = $2,584,848. Greater savings can be accomplished if documents are stored 

electronically, i.e., one file cabinet (four-drawer) (10,000 pages on average) = 500 

MegaBytes (MByte) = one CD ROM. The Commission seeks comments on the costs to 

comply with this requirement. 

Title: FERC- 549, Gas Pipeline Rates: Natural Gas Policy Act, Section 311; FERC-516, 

Electric Rate Schedule Filings.

Action: Proposed Collection. 
Docket No. RM06-14-000 - 10 -

OMB Control No: 1902-0086 and 1902-0096. 

Respondents: Businesses or other for profit.

Frequency of Responses: Records of market-based rate transactions shall be retained for 

five years instead of three.

Necessity of the Information: It would be very difficult (if possible at all) for the 

Commission to monitor and prosecute violations of pipeline and blanket certificate sales 

of natural gas and market-based rate sales of electricity unless the underlying sales 

information were retained. This data retention requirement is consistent with the 

information and data retention requirements applicable to sellers having cost-based 

rates.20 Requiring pipeline and blanket certificate sellers of natural gas, and marketbased rate sellers of electricity, to retain records is also consistent with the Commissions 

past practices as set forth in §§ 284.288(b), 284.403(b) and 35.37(d) of the Commission’s 

regulations, and, although the Commission proposes a retention period of five years 

(as opposed to the existing three-year requirement), such longer period is now required to 

ensure the information and data will remain available to support complaints and 

enforcement actions involving civil penalties for violations that occurred more than three 

years earlier. 

Internal review: The Commission has conducted an internal review of the public 

reporting burden associated with the record retention of information and assured itself, by 

 20 See 18 CFR parts 125, 225. 
Docket No. RM06-14-000 - 11 -

means of internal review, that there is specific, objective support for this 

information burden estimate. Moreover, the Commission has reviewed the increased 

duration of information retention proposed herein and has determined that these 

retentions of information are necessary and conform to the Commission’s plans, as 

described in this order, for the use of the required information.21 

12. Interested persons may obtain information on the proposed increased duration of 

information retention by contacting: Federal Energy Regulatory Commission, 888 First 

Street, N.E., Washington, D.C. 20426, Attention: Michael Miller, Office of the 

Executive Director, Phone: (202) 502-8415, fax: (202) 273-0873, e-mail: 

michael.miller@ferc.gov. Comments on the requirements of the proposed rule may also 

be sent to the Office of Information and Regulatory Affairs, Office of Management and 

Budget, Washington, D.C. 20503, Attention: Desk Officer for the Federal Energy 

Regulatory Commission. 

13. For submitting comments concerning the proposed increased duration of 

information retention and the associated burden estimate(s), please send comments to the 

contact listed above and to the Office of Management and Budget, Office of Information 

and Regulatory Affairs, Washington, D.C. 20503, Attention: Desk Officer for the Federal 

Energy Regulatory Commission, phone: (202)395-7856, fax: (202)395-7285. 

 21 See 44 U.S.C. 3506(c) (2000). 
Docket No. RM06-14-000 - 12 -

V. Environmental Statement

14. The Commission is required to prepare an Environmental Assessment or an 

Environmental Impact Statement for any action that may have a significant adverse effect 

on the human environment.22 The Commission has categorically excluded certain 

actions from this requirement as not having a significant effect on the human 

environment. Included in the exclusion are rules that are clarifying, corrective, or 

procedural or that do not substantially change the effect of the regulations being 

amended.23 The actions proposed herein for the increased duration of information 

retention fall within categorical exclusions in the Commission’s regulations for rules that 

are procedural in nature. Therefore, an environmental assessment is unnecessary and has 

not been prepared in this proposed rulemaking. 

VI. Comment Procedures

15. The Commission invites interested persons to submit comments on the increased 

duration of record retention from three to five years proposed in this notice to be adopted, 

including any related matters or alternative proposals that commenters may wish to 

discuss. Comments are due [insert date 30 days from publication in the FEDERAL 

REGISTER]. Reply comments are due fifteen days thereafter. Comments must refer to 

 22 Regulations Implementing the National Environmental Policy Act, Order No. 

486, 52 FR 47897 (1987), FERC Stats. & Regs. ¶ 30,783 (1987). 

23 18 CFR 380.4(a)(2)(ii) (2005). 
Docket No. RM06-14-000 - 13 -

Docket No. RM06-14-000 and must include the commenter’s name, the 

organization they represent, if applicable, and their address in their comments. 

Comments may be filed either in electronic or paper format. 

16. Comments may be filed electronically via the eFiling link on the Commission's 

web site at http://www.ferc.gov. The Commission accepts most standard word 

processing formats and commenters may attach additional files with supporting 

information in certain other file formats. Commenters filing electronically do not need to 

make a paper filing. Commenters that are not able to file comments electronically must 

send an original and 14 copies of their comments to: Federal Energy Regulatory 

Commission, Secretary of the Commission, 888 First Street N.E., Washington, DC, 

20426. 

17. All comments will be placed in the Commission’s public files and may be viewed, 

printed, or downloaded remotely as described in the Document Availability section 

below. Commenters on this proposal are not required to serve copies of their comments 

on other commenters. 

VII. Document Availability

18. In addition to publishing the full text of this document in the Federal Register, the 

Commission provides all interested persons an opportunity to view and/or print the 

contents of this document via the Internet through the Commission’s Home Page 

(http://www.ferc.gov) and in the Commission’s Public Reference Room during normal 
Docket No. RM06-14-000 - 14 -

business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, N.E., Room 

2A, Washington, D.C. 20426. 

19. From the Commission’s Home Page on the Internet, this information is available 

in the eLibrary. The full text of this document is available on eLibrary both in PDF and 

Microsoft Word format for viewing, printing, and/or downloading. To access this 

document in eLibrary, type the docket number excluding the last three digits of this 

document in the docket number field. 

20. User assistance is available for eLibrary and the Commission’s website during 

normal business hours. For assistance, please contact Online Support at 1-866-208-3676 

(toll free) or 202-502-6652 (e-mail at FERCOnlineSupport@FERC.gov), or the Public 

Reference Room at 202-502-8371, TTY 202-502-8659 (e-mail at 

public.referenceroom@ferc.gov). 

List of subjects

18 CFR Part 35

Electric Power Rates, Electric Utilities, Reporting and Record Keeping Requirements 

18 CFR Part 284

Continental Shelf, Natural Gas, Reporting and Record Keeping Requirements 

By direction of the Commission. 

( S E A L ) 

Magalie R. Salas, 

Secretary. 
Docket No. RM06-14-000 - 15 -

In consideration of the foregoing, the Commission proposes to amend parts 

35 and 284 Chapter I, Title 18, Code of Federal Regulations, as follows: 

PART 35 - - FILING OF RATE SCHEDULES AND TARIFFS 

1. The authority citation for part 35 continues to read as follows: 

Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-

7352. 

2. In § 35.37, paragraph (d), the word “three” is removed and the word “five” is 

inserted in its place. 

PART 284 - - CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS 

UNDER THE NATURAL GAS POLICY ACT OF 1978 AND RELATED 

AUTHORITIES 

1. The authority citation for part 284 continues to read as follows: 

Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7532; 43 U.S.C. 

1331-1356. 

2. In § 284.288, paragraph (b), the word “three” is removed and the word “five” is 

inserted in its place. 

3. In § 284.403, paragraph (b), the word “three” is removed and the word “five” is 

inserted in its place.