UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 45 

(Docket No. RM05-6-000; Order No. 664) 

Commission Authorization to Hold Interlocking Positions 

(September 16, 2005) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Final Rule. 

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

its regulations to clarify the time frame within which individuals must file applications 

for authorization to hold interlocking positions, and the information provided in certain 

informational reports required for automatic authorization of certain interlocking 

positions. 

EFFECTIVE DATE: The amended regulations will become effective [insert date 30 

days after publication in the FEDERAL REGISTER].
 

FOR FURTHER INFORMATION CONTACT: 

James Akers (Technical Information) 

Office of Markets, Tariffs and Rates 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-8101 

Melissa Mitchell (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-6038 

SUPLEMENTARY INFORMATION: 
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Joseph T. Kelliher, Chairman; 

 Nora Mead Brownell, and Suedeen G. Kelly. 

Commission Authorization to Hold Docket No. RM05-6-000 

Interlocking Positions 

ORDER NO. 664 

FINAL RULE 

(September 16, 2005) 

1. In this final rule, to meet its responsibility under section 305(b) of the Federal 

Power Act (FPA),1

 the Commission amends part 45 of its regulations2 to clarify that 

individuals seeking Commission authorization to hold interlocking positions must obtain 

such authorization from the Commission prior to holding that interlocking position. The 

Commission also clarifies the regulations to define the term “holding” as acting as, 

serving as, voting as, or otherwise performing or assuming the duties and responsibilities 

of the interlocking positions requiring Commission authorization. 

2. The Commission also amends its regulations to require that individuals filing an 

informational report for automatic authorization under section 45.9 of the Commission’s 

 1

 16 U.S.C. 825d(b). 

2

 18 CFR part 45. 
Docket No. RM05-6-000 - 2 -

regulations3

 must file such informational report prior to holding that interlocking position 

and that the informational report must include a statement or affirmation that the 

individual has not yet assumed the duties or responsibilities of the position for which the 

automatic authorization is sought. 

DISCUSSION

3. Section 305(b) of the FPA prohibits individuals from concurrently holding 

positions as an officer or director of more than one public utility; or to hold the positions 

of officer or director of a public utility and of an entity authorized by law to underwrite or 

participate in the marketing of public utility securities4

; or to hold the positions of officer 

or director of a public utility and a company supplying electrical equipment to that 

particular public utility, unless the holding of such positions has been authorized by the 

Commission upon a showing that neither public nor private interests will be adversely 

affected thereby. 

4. The Commission implemented Congress’ mandate in part 45 of the Commission’s 

regulations.5

 Section 45.3 of the regulations currently states that: 

the holding of positions within the purview of [section 305(b)] shall be 

unlawful unless the holding shall have been authorized by order of the 

Commission. Nothing in this part shall be construed as authorizing the 

 3

 18 CFR 45.9. 

4

 However, section 305(b)(2) of the FPA exempts from this prohibition certain 

interlocks between public utilities and securities underwriters and marketers. 

5

 18 CFR part 45. 
Docket No. RM05-6-000 - 3 -

holding of positions prior to the order of the Commission on application 

therefore. Applications shall be filed within 30 days after election or 

appointment to any positions within the purview of section 305(b) of the 

Act.”6

 

The Commission has stated in previous orders that it does not look favorably on late-filed 

applications for authorization to hold interlocking positions.7

5. In examining Congress’ intent in enacting section 305(b) of the FPA, the 

Commission has explained that “among the evils sought to be eliminated by the 

enactment of section 305(b)” was “the lack of arm’s length dealings between public 

utilities and organizations furnishing financial services or electrical equipment.”8

 In this 

regard, the legislative history indicates that, with respect to section 305(b) of the FPA, 

“Congress exhibited a relentless interest in, bordering on an obsession with, the evils of 

concentration of economic power in the hands of a few individuals. It recognized that the 

conflicts of interest stemming from the presence of the same few persons on boards of 

 6

 18 CFR 45.3. 

7 William T. Coleman, 21 FERC ¶ 61,242 at 61,535 n.3 (1982). 

8 Paul H. Henson, 51 FERC ¶ 61,104 at 61,231 (1990), citing John Edward 

Aldred, 2 FPC 247, 261 (1940). 
Docket No. RM05-6-000 - 4 -

companies with intersecting interests generated subtle and difficult-to-prove failures in 

the arm’s length bargaining process.”9

6. While the statute requires prior authorization to hold otherwise proscribed 

interlocking positions, the regulations allow for applications to be filed up to 30 days 

after election or appointment to the interlocking position and also do not expressly 

address how applications filed more than 30 days late should be treated. The regulations 

do not allow for serving in the covered positions before receiving Commission 

authorization. Therefore, in a Notice of Proposed Rulemaking (NOPR) issued on March 

25, 2005, the Commission proposed to clarify section 45.3 of the Commission’s 

regulations, to provide that an application must be filed, and authorization granted, before 

a person may hold otherwise proscribed interlocking positions, and that late-filed 

applications will be denied.10

7. In addition to clarifying section 45.3, the Commission also proposed to clarify 

section 45.9, which governs automatic authorization for certain interlocking positions. 

Section 45.9 of the Commission’s regulations provides that a person seeking to hold the 

positions of (1) an officer or director of a public utility and officer or director of another 

public utility (or utilities), where the same holding company owns, directly or indirectly, 

 9 Hatch v. FERC, 654 F.2d 825, 831 (D.C. Cir. 1981) (Hatch), citing, e.g. 79 

Cong. Rec. 10379 (1935) (remarks of Representative Lea), 79 Cong. Rec. 8524 (1935) 

(remarks of Sen. Norris), and 15 U.S.C. 79a(b)(2) (2000); see also Paul H. Henson, 

51 FERC ¶ 61,104 at 61,230 n.5 (1990) (discussing this quotation). 

10 See Commission Authorization to Hold Interlocking Positions, Notice of 

Proposed Rulemaking, 70 Fed. Reg. 17,219 (April 5, 2005) FERC Stats. & Regs. 

¶ 32,580 (2005). 
Docket No. RM05-6-000 - 5 -

wholly or in part, the other public utility, (2) an officer or director of two public utilities, 

if one utility is owned, wholly or in part, by the other or (3) an officer or director of more 

than one public utility, if such person is already authorized under part 45 to hold different 

positions where the interlock involves affiliated public utilities, may apply for “automatic 

authorization” to hold the interlocking positions.11 The regulations require that, as a 

condition of such authorization, persons seeking such authorization under section 45.9 

must file with the Commission an informational report containing the full name and 

business address of the person requesting the authorization, the names of all public 

utilities that the person holds or seeks to hold positions with, the names of any other 

entity that the person serves as an officer or director of and a brief description of those 

positions, and an explanation of the corporate relationship between or among the public 

utilities involved. The informational report is required to be filed “not later than 30 days 

after assuming the duties of the position.”12

8. The NOPR proposed to clarify section 45.9 of the Commission’s regulations, to 

require that the informational reports required for automatic authorization under section 

45.9 must be filed with the Commission prior to an officer or director assuming the duties 

and responsibilities of the requested interlocking positions. The NOPR proposed that 

individuals who file informational reports late will not be entitled to automatic 

 11 Automatic authorization is only for interlocking positions between two or more 

public utilities; it does not authorize a person to hold an interlocking position with, for 

example, an electrical equipment supplier. For those interlocking positions, an 

application under section 45.3 is required. 

12 18 CFR 45.9(b). 
Docket No. RM05-6-000 - 6 -

authorization under section 45.9, as the individual will not have satisfied the condition of 

timely submission of an informational report. 

9. Finally, the Commission requested, in the NOPR, comments on the possibility of 

no longer granting entities (or individuals who serve as officers or directors of entities) 

that have market-based rate authority a waiver of the full requirements of part 45. 

10. The NOPR was published in the Federal Register13 on April 5, 2005. Comments 

were due on or before June 5, 2005. 

A. Prior Filing and Approval for Section 45.3 Applications

(i) Comments

11. The California Electricity Oversight Board (CEOB) supports the proposed rule 

and states that the proposed rule comports completely with the Congressional intent 

behind section 305(b) of the FPA and the public policy of preventing abuses due to 

conflicts of interest. The CEOB argues that, under the language of section 305(b), 

individuals who seek to hold interlocking positions are prohibited from holding 

interlocking positions until the Commission determines that “neither public nor private 

interests will be adversely effected.” Based on this language, the CEOB supports the 

Commission’s proposed rule to require applicants to file with the Commission prior to 

holding interlocking positions. 

12. The Midwest Independent Transmission System Operator, Inc. (Midwest ISO) 

supports the proposed rule and states that requiring applicants for interlocking positions 

to file for Commission authorization prior to holding the interlocking positions will 

 13 70 FR 17,219(April 5, 2005). 
Docket No. RM05-6-000 - 7 -

ensure greater transparency in the nation’s utility industry and promote and preserve 

independence. The Midwest ISO also comments that the Commission should expand the 

scope of the proposed rule to include officers of non-jurisdictional utilities seeking to 

serve on the Board of Directors of a regional transmission organization (RTO) or 

independent system operator (ISO). The Midwest ISO states that allowing officers of 

non-jurisdictional utilities to serve on the Boards of Directors of RTOs and ISOs without 

prior Commission authorization “opens the door to partial stakeholder Boards, and calls 

into question a public utility’s true independence.”14 For these reasons, the Midwest ISO 

supports the proposed rule and requests that the Commission expand the scope of the 

existing rules. 

13. The Edison Electric Institute (EEI) opposes the proposed rule and states that the 

existing rules adequately meet the requirements of section 305(b).15 EEI argues that the 

existing rules strike a reasonable balance between the requirements of section 305(b) and 

the burden those requirements place on individuals and companies. While EEI agrees 

that officers and directors need to comply with the Commission’s regulations, they “are 

not aware of a widespread failure to comply” with the regulations.16 EEI also states that 

it is important that the Commission retain the 30-day window to file interlock 

 14 Midwest ISO Comments at 6. 

15 American Electric Power Company (AEP), Northeast Utilities Service Company 

(NUSCO), Pepco Holdings, Inc. (PHI Companies), Consumers Energy Company 

(Consumers Energy) and Exelon Corporation (Exelon) all support the comments filed by 

EEI. 

16 EEI Comments at 3. 
Docket No. RM05-6-000 - 8 -

applications since requiring individuals to file for authorization prior to holding 

interlocking positions would “pose significant practical difficulties and would disrupt the 

ability of public utilities and their affiliates to maintain functioning boards of directors 

and officer corps in a timely and effective manner.”17 EEI argues that the danger of harm 

from interlocks is small, and that other entities provide oversight of corporate officers, 

including the Securities and Exchange Commission and the New York Stock Exchange.18 

In addition to arguing that the 30-day post-election timeframe is consistent with the 

statute, EEI requests that the Commission extend the window within which an individual 

may file from 30 days to 60 days after election or appointment to a covered position.19

14. AEP, NUSCO, Reliant Energy Inc. (Reliant) and Consumers Energy filed 

comments opposing the proposed rules. They state that requiring applications prior to 

holding a covered position will make it difficult for companies to fill officer or director 

vacancies in a timely fashion and lead to an inefficient selection process with the likely 

result of not selecting the most qualified individuals for the positions. This is 

exacerbated, they claim, by the fact that the companies and individuals often do not know 

in advance of election or appointment who will be selected to serve as an officer or 

director. 

 17 Id. at 14. 

18 Id. at 10-11. 

19 Id. at 16, 25. 
Docket No. RM05-6-000 - 9 -

 (ii) Commission Determination

15. The Commission will adopt the proposed regulations with one modification. We 

revise the proposed section 45.3 to reflect that the definition of the term “holding” applies 

throughout part 45 and not just to section 45.3 

16. The proposed regulations requiring that individuals apply for and receive 

authorization to hold interlocking positions before holding the positions will make the 

Commission’s regulations consistent with the statute. Section 305(b) states that no 

person may hold interlocking positions “unless the holding of such positions shall have 

been authorized by order of the Commission...”20 

17. The Commission disagrees that requiring such prior authorization will make it 

difficult for companies to fill vacancies or disrupt utilities’ ability to maintain functioning 

boards. We find the possibility that a board or officer corps would be faced with so many 

vacancies at one time as to adversely effect a company’s ability to function very unlikely. 

While, as stated by EEI, the Commission may not be the only entity that requires filing 

and approval of corporate officers and directors to maintain corporate oversight, the 

Commission was expressly charged by Congress with the responsibility to oversee 

officers and directors of public utilities and we will not and cannot delegate that 

responsibility to another entity. 

 20 16 U.S.C. 825d(b)(1). 
Docket No. RM05-6-000 - 10 -

18. In response to EEI’s comment that it “is not aware of a widespread failure to 

comply”21 with section 305(b), section 305(b) was intended to be prophylactic in nature 

and to prevent any abuse of corporate positions and control. Furthermore, the fact that 

EEI may not be “aware of a widespread failure to comply”22 with the statute and 

regulations does not speak to the need to clarify the regulations and bring them into 

conformity with the statute. The statute speaks of prior authorization and that is what the 

regulations should require; prior authorization, not 30 days and not 60 days after the fact. 

19. In response to Midwest ISO’s comments that the Commission should expand the 

scope of the proposed regulations to include officers of non-jurisdictional utilities seeking 

to serve on RTO or ISO boards, the Commission finds that section 305(b) only limits 

interlocking directorates involving public utility boards and does not authorize the 

Commission to bar interlocking directorates involving non-public utility boards of 

directors. The Midwest ISO request goes to the issue of the independence of RTO and 

ISO boards. That issue is not within the purview of section 305(b) or part 45 of the 

Commission’s regulations, and thus of this proceeding. 

B. Prior Filing of Section 45.9 Informational Reports and Affirmation

(i) Comments

20. EEI opposes the proposed change to section 45.9, requiring individuals seeking 

automatic authorization to file their informational report prior to holding the interlocking 

position, for the same reasons explained above. Additionally, EEI requests that the 

 21 EEI Comments at 14. 

22 Id. 
Docket No. RM05-6-000 - 11 -

Commission not require an informational report in deference to the information required 

on the annual Form 561.23 Furthermore, EEI requests that the Commission clarify that 

section 45.9 applies to both registered and exempt holding companies.24

21. Keyspan Corporation (Keyspan), AEP, Sempra Energy (Sempra), NUSCO, 

Reliant, NiSource, Inc. (NiSource), PHI Companies and Exelon filed comments opposing 

the proposed rules requiring individuals seeking automatic authorization under section 

45.9 of the regulations to file their informational reports prior to holding the interlocking 

positions and also requiring information on the dates the individual assumed the 

interlocking positions. They state that requiring informational reports prior to holding the 

positions would unduly restrict corporate and personnel options and jeopardize 

companies’ effective participation in energy markets because changes on corporate 

boards often occur suddenly and without prior notice. Therefore, they argue that a 

requirement that individuals must file their informational reports prior to holding 

interlocking positions would be unduly burdensome. Sempra, Keyspan and NiSource 

state that the proposed rules are inconsistent, requiring informational reports for 

automatic authorization prior to holding interlocking positions and also requiring 

additional information on when the individual assumed the positions for which 

authorization is granted.25 NUSCO and AEP state that additional information is not 

 23 Id. at 5; see 18 CFR part 46. 

24 Id. at 21. 

25 Sempra Comments at 3; Keyspan Comments at 3; NiSource Comments at 5-6. 
Docket No. RM05-6-000 - 12 -

necessary as the currently required informational report, together with the information 

required on Form 561, is sufficient.26 Exelon argues that the informational report is 

duplicative of the information provided in Form 561 and therefore, the informational 

report should be eliminated in lieu of Form 561. 

 (ii) Commission Determination

22. The Commission will adopt the proposed regulations, with two exceptions, 

discussed below. 

23. Section 45.9 of the Commission’s regulations requires that individuals seeking 

automatic authorization need only file with the Commission, in lieu of the application 

otherwise required, an informational report stating the individual’s name and business 

address, the names of all public utilities with which the person currently holds or will 

hold the positions of officer or director and a description of those positions, the names of 

any other entity of which the person serves as officer or director and a description of 

those positions and a brief explanation of the corporate relationship between or among 

the interlocking public utilities.27 Upon the filing of a completed informational report 

under section 45.9, the individual is automatically authorized to hold the interlocking 

positions listed in the informational report. Form 561, in contrast, is an annual report 

required by the Commission, and does not contain the same information. The annual 

Form 561 is not intended nor could it be an appropriate substitute for the need to make a 

contemporaneous filing to comply with the requirements of part 45 of the Commission’s 

 26 AEP Comments at 5; NUSCO Comments at 3. 

27 See 18 CFR 45.9(c). 
Docket No. RM05-6-000 - 13 -

regulations. Therefore, the Commission finds that the informational reports filed under 

section 45.9 are not duplicative of Form 561 and it would not be appropriate to rely 

solely on Form 561. 

24. Moreover, since the automatic authorization is granted upon receipt of filed, 

completed informational reports, we do not agree that requiring the informational report 

prior to holding interlocking positions would be unduly burdensome or restrict a 

companies’ corporate and personnel options. Additionally, for those interlocking 

positions covered by section 45.9, e.g, officers or directors of two or more affiliated 

public utilities,28 it is a one-time filing requirement and, once authorization has been 

given, no further filings are required to hold further interlocking positions of the same 

type.29 Again, therefore, the obligation to make such a filing is not unduly burdensome. 

25. In response to several comments that the proposed regulations are inconsistent by 

requiring the identification of the date the individual assumed the positions at issue in an 

informational report filed prior to holding such positions, we agree. The intent behind the 

proposed language was to provide the Commission with information to assist in 

determining whether the informational report was timely filed or not. Therefore, we will 

not require identification of the date the individual assumed the positions at issue. 

Instead, we will require a statement or affirmation that the individual has not yet 

performed or assumed the duties or responsibilities of the position which necessitated the 

filing of the informational report as of the date of such report. We believe this 

 28 See 18 CFR 45.9(a); accord NOPR at P 8. 

29 See 18 CFR 45.9(b). 
Docket No. RM05-6-000 - 14 -

requirement will provide the Commission with the information it needs with the least 

burden upon the applicants. 

26. We also provide additional clarifying language in section 45.9, explaining that the 

informational report shall be filed prior to performing or assuming the duties and 

responsibilities of the interlocking position. Furthermore, we clarify that the 

informational reports must also comply with the filing requirements outlined in section 

45.7. 

C. Treatment of Existing Applications and of Late-Filed Applications 

 (i) Comments

27. Many commentors state that the proposal to automatically deny any late filed 

applications is unduly harsh.30 Exelon states that automatic denial of late applications is 

“draconian” and urges the Commission to consider another penalty for untimely 

applications, such as a fine.31 Many commentors urge the Commission to continue 

evaluating applications on a case-by-case basis, and to permit late applications where the 

applicant made a good faith effort to file on time. 

28. EEI also argues that the Commission should not institute a rule that automatically 

denies late-filed applications; rather, the Commission should continue to evaluate latefiled applications on a case-by-case basis, and also provide an amnesty period to allow 

individuals to file applications under the current regulations and further assure all 

 30 Sempra Comments at 4; Reliant Comments at 7. 

31 Exelon Comments at 3. 
Docket No. RM05-6-000 - 15 -

individuals currently holding Commission authorized interlocking positions that they will 

not need to refile under the new rules.32 

 (ii) Commission Determination

29. The Commission will adopt the proposed regulations. 

30. While many commentors stated that automatic denial of late-filed applications is 

unduly harsh, the statute provides that individuals seeking to hold interlocking positions 

must receive Commission authorization prior to assuming the interlocking positions.33 

To permit individuals to hold interlocking positions before receiving Commission 

authorization would frustrate section 305(b) and the prophylactic nature of section 

305(b). Therefore, the Commission will automatically deny all late-filed applications for 

authorization to hold interlocking positions. As for an amnesty period, we have long 

stressed the need to timely file,34 we repeated the need to timely file in June 2004, 35 and 

this NOPR has been pending since March 25, 2005, and the regulations adopted here will 

not become effective until 30 days from the date of publication in the Federal Register. 

That is amnesty enough. 

 32 EEI Comments at 23. 

33 Indeed, section 305(b) provides that “it shall be unlawful for any person to hold” 

interlocking positions “unless the holding of such positions shall have been authorized by 

order of the Commission.” 

34 See supra note 7. 

35 Order Advising Public Utilities and their Officers and Directors of Federal 

Power Act Section 305(b) Obligations, 107 FERC ¶ 61,290 (2004). 
Docket No. RM05-6-000 - 16 -

31. Regarding any currently pending applications for Commission authorization to 

hold interlocking positions, the Commission intends to act on these applications on a 

case-by-case basis. Regarding individuals already authorized to hold interlocking 

positions, those individuals need not refile under the new regulations to continue to hold 

their previously authorized interlocking positions (unless and until, of course, they seek 

to assume additional interlocking positions). 

D. Waiver of Full Requirements of Part 45 for Officers and Directors of

Sellers with Market-Based Rate Authority

(i) Comments

32. EEI opposes any change that would cease waivers of the full requirements of part 

45 for persons who are officers of directors of entities authorized to charge market-based 

rates, and to the contrary requests that the Commission include such waivers in the 

regulations rather than granting them on a case-by-case basis.36 EEI argues that entities 

with market-based rates have already passed the Commissions screens for market power 

and affiliate transactions, and therefore, should not need to go through the duplicative 

process of having their officers and directors file a full application under part 45 of the 

Commission’s regulations.37 

33. Sempra, NUSCO, Reliant, Edison Mission Energy and Morgan Stanley Capital 

Group, Inc. (Morgan Stanley) all filed comments opposing the possibility that the 

 36 EEI Comments at 20. 

37 Id. at 8. 
Docket No. RM05-6-000 - 17 -

Commission may cease granting waivers of the full requirements of Part 45 in orders 

granting market-based rate authority. They all state that companies that receive marketbased rate authority undergo significant scrutiny and must pass the Commission’s market 

power and affiliate abuse screens to ensure that entities with market-based rate authority 

will not abuse any power they may have. Morgan Stanley requests that the Commission 

clarify aspects of the waivers, such as specifying the information required when filing the 

abbreviated application and develop a standardized format to submit the information to 

the Commission.38 Morgan Stanley also states that the Commission should clarify that 

the abbreviated filings may be made within 30 days of holding the interlocking 

positions.39 Finally, Morgan Stanley states that, if the Commission eliminates the 

practice of granting waivers of the full requirements of part 45, the Commission should 

apply section 45.9 to power marketers.40

 (ii) Commission Determination

34. The purpose of an application for authorization to hold interlocking positions 

under part 45 is to allow the Commission to review an individual officer or director’s 

proposed interlock in order to find that such individual’s service with more than one 

company will not adversely affect either public or private interests. The fact that a 

particular company may have “passed” the Commission’s market-based rate screens says 

little about whether to grant authorization for an individual officer or director to hold 

 38 Morgan Stanley Comments at 18. 

39 Id. 

40 Id. at 20. 
Docket No. RM05-6-000 - 18 -

interlocking positions under section 305(b). The Commission, moreover, does not 

consider part 45 to be a burdensome regulation. Individuals that are officers or directors 

of entities that do not have market-based rate authority must fulfill the full requirements 

of part 45. The Commission sees no reason to continue to treat these entities differently 

and, as a result, we intend to no longer grant waivers of the full requirements of part 45 in 

our orders granting market-based rate authority. Rather, persons seeking to hold 

interlocking positions will be required henceforth to comply with the full requirements of 

part 45. Since we intend to no longer grant such waivers, there is no need to address 

Morgan Stanley’s request for clarification. 

35. In response to Morgan Stanley’s request that the Commission should permit 

power marketers to apply for automatic authorization under section 45.9, we do not grant 

the request. Allowing persons who are officers or directors of power marketers to seek 

automatic authorization under section 45.9, simply because such entities are power 

marketers, would frustrate the prophylactic nature of section 305(b). Therefore, we will 

deny the request to permit individuals who are officers or directors of power marketers to 

file for automatic authorization under section 45.9 simply because such entities are power 

marketers. 

36. With respect to an individual who currently is authorized to hold interlocking 

positions, that individual will not need to refile under the full requirements of part 45 to 

continue to hold such interlocking positions (unless and until, of course, that individual 

assumes different or additional interlocking positions). 
Docket No. RM05-6-000 - 19 -

E. Miscellaneous

(i) Comments

37. EEI requests that the Commission “indicate that an application will be deemed 

approved if not acted on or flagged for Commission action within 30 or 60 days after the 

application is filed.”41 EEI also requests that the Commission provide clarity and 

guidance as to the factors it considers in reviewing interlocking position applications, to 

further assist companies in their search for appropriate and qualified officers and 

directors.42 To address all of the concerns raised by EEI, it requests the Commission 

hold a technical conference with industry members.43

 (ii) Commission Determination

38. The Commission will amend the proposed regulatory text to provide that absent 

Commission action within 60 days of filing a completed application to hold interlocking 

positions, an application will be deemed granted. However, the Commission will reserve 

the right to revoke such authorization or require further proof that such interlocking 

position will not adversely affect public nor private interests. 

39. In response to EEI’s request for clarity and guidance as to the factors the 

Commission seeks to address in reviewing applications for authorization to hold 

 41 Id. at 18. 

42 Id. at 19. 

43 Id. 
Docket No. RM05-6-000 - 20 -

interlocking positions, the Commission directs EEI, and all other interested parties, to the 

extensive case law on this subject developed over the past 70 years. 

40. Finally, as we have answered all parties’ comments and concerns, we see no need 

to hold a technical conference to address such matters. 

INFORMATION COLLECTION STATEMENT

41. The Office of Management and Budget (OMB) regulations require that OMB 

approve certain reporting and recordkeeping requirements (collections of information) 

imposed by an agency.44 The information collection requirements in this final rule are 

identified under the Commission’s data collection, FERC-520, “Application for 

Authority to Hold Interlocking Positions.” Under section 3507(d) of the Paperwork 

Reduction Act of 1995,45 the reporting requirements in the subject rulemaking will be 

submitted to OMB for review. 

42. Respondents subject to the filing requirements of this final rule will not be 

penalized for failing to respond to this collection of information unless the collection of 

information displays a valid OMB control number. “Display” is defined as publishing 

the OMB control number in regulations, guidelines, forms or other issuances in the 

Federal Register (for example, in the preamble or regulatory text for the final rule 

containing the information collection.)46

 44 5 CFR 1320.11. 

45 44 U.S.C. 3507(d). 

46 See 1 CFR 21.35; 5 CFR 1320.3(f)(3). 
Docket No. RM05-6-000 - 21 -

Public Reporting Burden: In the NOPR, the Commission estimated that requiring the 

additional information would have a minimal effect on respondents but sought comments 

about the time and costs to comply with the requirements. The Commission received 

fourteen comments on its NOPR but none specifically addressing its estimates. 

Therefore, the Commission will retain its initial estimates. However, several commentors 

stated that requiring informational reports prior to persons holding positions would be a 

burdensome task. Other commentors believe that the information required in the 

informational reports duplicates the information reported on the Commission’s FERC 

Form 561. The Commission has addressed these concerns elsewhere in the preamble of 

this final rule. The Commission is submitting a copy of this final rule to OMB for review 

and approval. In their notice of August 16, 2005, OMB took no action on the NOPR, 

instead deferring their approval until review of the final rule. 

Title: FERC-520 “Application for Authority to Hold Interlocking Positions” 

Action: Proposed Data Collection 

OMB Control Nos. 1902-0083 

Respondents: Business or other for profit 

Necessity of the Information: The information collected under the requirements of 

FERC-520 is used by the Commission to implement the statutory provisions of section 

305(b) of the FPA and implemented by the Commission in the Code of Federal 

Regulations under 18 CFR part 45. Under part 45, each person that desires to hold 

interlocking position(s) must submit an application to the Commission or, if qualified, 

comply with the requirements for automatic authorization. Section 305(b) of the FPA 
Docket No. RM05-6-000 - 22 -

makes the holding of certain defined interlocking positions unlawful unless the 

Commission has authorized the holding of such interlocks, and requires the applicant to 

show, in a form and manner as prescribed by the Commission, that neither public nor 

private interests will be adversely affected by the holding of the positions. 

43. The final rule clarifies: (1) the time at which a person must apply for authorization 

to hold interlocking positions under section 305(b) of the FPA and part 45 of the 

Commission’s regulations; (2) clarifies automatic authorizations for certain interlocking 

positions for which authorization is requested; and (3) requires a statement or affirmation 

that an individual has not yet assumed the duties or responsibilities of the position which 

necessitated the filing of an informational report under section 45.9. It is necessary to 

make these clarifications and have this statement or affirmation to ensure the 

Commission receives timely submissions and also has sufficient information to make a 

determination as to the appropriateness of holding the interlocking positions. 

44. Interested persons may obtain information on this information collection by 

contacting the following: Federal Energy Regulatory Commission, 888 First Street, N.E., 

Washington, D.C. 20426, Attention: Michael Miller, Officer of the Executive Director, 

phone: (202) 502-8415, fax: (202) 273-0873, email: michael.miller@ferc.gov. 

45. Comments concerning this information collection can be sent 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) 395-4650, fax: (202) 395-7285.] 
Docket No. RM05-6-000 - 23 -

ENVIRONMENTAL ANALYSIS

46. 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.47 As we stated in the NOPR, 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 procedural, 

ministerial, or internal management programs or decisions,48 as well as actions under 

section 305(b) of the FPA.49 This Final Rule clarifies the time when, and information 

which, an individual seeking Commission authorization to hold interlocking positions 

must file. Therefore, this rule falls within the categorical exemptions provided in the 

Commission’s regulations, and, as a result, neither an environmental impact statement 

nor an environmental assessment is required. 

REGULATORY FLEXIBILITY ACT ANALYSIS OR CERTIFICATION

47. The Regulatory Flexibility Act of 1980 (RFA)50 generally requires a description 

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

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

486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regulations Preambles 1986-1990 

¶ 30,783 (1987). 

48 18 CFR 380.4(a)(1). 

49 18 CFR 380.4(a)(16). 

50 5 U.S.C. 601-12. 
Docket No. RM05-6-000 - 24 -

number of small entities.51 The Commission is not required to make such analyses if a 

rule would not have such an effect. 

48. The Commission does not believe that this final rule would have such an impact 

on small entities. Most persons affected by this final rule are officers or directors of 

companies that do not fall within the RFA’s definition of a small entity. Further, this 

final rule does not substantially change the current requirements and regulations that 

persons who are officers and directors must comply with. Therefore, the Commission 

certifies that this rule will not have a significant impact on a substantial number of small 

entities. 

DOCUMENT AVAILABILITY

49. 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 

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. 

 51 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 that is 

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

15 U.S.C. 632. 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. 
Docket No. RM05-6-000 - 25 -

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

in the Commission’s document management system, eLibrary. The full text of this 

document is available on eLibrary 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. 

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

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

208-3676 (toll free) or 202-502-6652 (email at FERCOnlineSupport@ferc.gov), or the 

Public Reference Room at 202-502-8371, TTY 202-502-8659 (email at 

public.referenceroom@ferc.gov). 

EFFECTIVE DATE AND CONGRESSIONAL NOTIFICATION

52. This Final Rule will take effect [insert date that is 30 days after date of publication 

in the Federal Register]. The Commission has determined, with the concurrence of the 

Administrator of the Office of Information and Regulatory Affairs, Office of 

Management and Budget, that this rule is not a major rule within the meaning of section 

251 of the Small Business Regulatory Enforcement Fairness Act of 1996.52 The 

Commission will submit this final rule to both houses of Congress and the General 

Accountability Office.53

 52 See 5 U.S.C. 804(2). 

53 See 5 U.S.C. 801(a)(1)(A). 
Docket No. RM05-6-000 - 26 -

List of subjects in 18 CFR part 45

Electric utilities; Reporting and recordkeeping requirements 

By the Commission. 

( S E A L ) 

 Magalie R. Salas, 

 Secretary. 

 In consideration of the foregoing, the Commission amends part 45, Chapter I, Title 

18, Code of Federal Regulations, as follows. 

PART 45 – APPLICATION FOR AUTHORITY TO HOLD 

INTERLOCKING POSITIONS 

1. The authority citation for part 45 is revised to read as follows: 

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

7352; 3 CFR 142. 

2. Section 45.3 is revised to read as follows: 

 § 45.3 Timing of filing application. 

 (a) The holding of positions within the purview of section 305(b) of the Act 

shall be unlawful unless the holding shall have been authorized by order of the 

Commission. Nothing in this part shall be construed as authorizing the holding of 

positions within the purview of section 305(b) of the Act prior to order of the 

Commission on application therefor. Applications must be filed and authorization must 

be granted prior to holding any interlocking positions within the purview of section 

305(b) of the Act; late-filed applications will be denied. The term “holding”, as used in 
Docket No. RM05-6-000 - 27 -

this part, shall mean acting as, serving as, voting as, or otherwise performing or assuming 

the duties and responsibilities of officer or director within the purview of section 305(b) 

of the Act. 

 (b) Absent Commission action within 60 days of a completed application to 

hold interlocking positions, an application will be deemed granted. Such authorization is 

subject to revocation by the Commission after due notice to applicant and opportunity for 

hearing. In any such proceeding, the burden of proof shall be upon the applicant to show 

that neither public nor private interests will be adversely affected by the holding of such 

positions. 

3. In § 45.9, paragraph (b) is revised and paragraph (c) (5) is added to read as 

follows: 

 § 45.9 Automatic authorization of certain interlocking positions.

* * * * * 

(b) Conditions of authorization. As a condition of authorization, any person 

authorized to hold interlocking positions under this section must submit, prior to 

performing or assuming the duties and responsibilities of the position, an informational 

report in accordance with paragraph (c) of this section, unless that person is already 

authorized to hold interlocking positions of the type governed by this section. Failure to 

timely file the informational report will constitute a failure to satisfy this condition, and 

will constitute automatic denial. 

(c) Informational report.

* * * 
Docket No. RM05-6-000 - 28 -

(5) A statement or an affirmation that the applicant has not yet performed or 

assumed the duties or responsibilities of the position which necessitated the filing of this 

informational report.