14254 Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Proposed Rules 

1 16 U.S.C. 824o. 

2Energy Policy Act of 2005, Pub. L. No 109–58, 

Title XII, Subtitle A, 119 Stat. 594, 941 (2005). 

3 16 U.S.C. 824o. 

4Rules Concerning Certification of the Electric 

Reliability Organization; Procedures for the 

Establishment, Approval and Enforcement of 

Electric Reliability Standards, Order No. 672, 71 FR 

8662 (Feb. 17, 2006), FERC Stats. & Regs. ¶ 31,204 

(2006), order on reh’g, Order No. 672–A, 71 FR 

19814 (Apr. 18, 2006), FERC Stats. & Regs. ¶ 31,212 

(2006). 

5North American Electric Reliability Corporation, 

116 FERC ¶ 61,062 (2006). 

6 Mandatory Reliability Standards for the BulkPower Market, 72 FR 64770 (Oct. 20, 2006), FERC 

Stats. & Regs. ¶ 32,608 (2006) (Reliability NOPR). 

7 18 CFR 292.601(c). 

8Revised Regulations Governing Small Power 

Production and Cogeneration Facilities, Order No. 

671, 71 FR 7852 (Feb. 2, 2006), FERC Stats. & Regs. 

¶ 31,203 (2006), order on rehearing, Order No. 771–

A, 71 FERC 30583 (May 22, 2006), FERC Stats. & 

Regs. ¶ 31.219 (2006). 

9 16 U.S.C. 824t–v. 

publishing this appendix of suggested 

guidelines. It is recommended that all credit 

unions develop a program to prepare for a 

catastrophic act. The program should be 

developed with oversight and approval of the 

board of directors. It is recommended the 

program address the following five elements: 

(1) A business impact analysis to evaluate 

potential threats; 

(2) A risk assessment to determine critical 

systems and necessary resources; 

(3) A written plan addressing: 

(i) Persons with authority to enact the plan; 

(ii) Preservation and ability to restore vital 

records; 

(iii) A method for restoring of vital member 

services through identification of alternate 

operating location(s) or mediums to provide 

services, such as telephone centers, shared 

service centers, agreements with other credit 

unions, or other appropriate methods; 

(iv) Communication methods for 

employees and members; 

(v) Notification of regulators as addressed 

in 12 CFR 748.1(b); 

(vi) Training and documentation of 

training to ensure all employees and 

volunteer officials are aware of procedures to 

follow in the event of destruction of vital 

records or loss of vital member services; and 

(vii) Testing procedures, including a means 

for documenting the testing results. 

(4) Internal controls for reviewing the plan 

at least annually and for revising the plan as 

circumstances warrant, for example, to 

address changes in the credit union’s 

operations; and 

(5) Annual testing. 

[FR Doc. E7–5070 Filed 3–26–07; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 292 

[Docket No. RM07–11–000] 

Applicability of Federal Power Act 

Section 215 to Qualifying Small Power 

Production and Cogeneration Facilities 

March 16, 2007. 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

ACTION: Notice of Proposed Rulemaking. 

SUMMARY: The Federal Energy 

Regulatory Commission (Commission) is 

proposing to amend its regulations 

governing qualifying small power 

production and cogeneration facilities, 

to eliminate the exemption from the 

requirements of section 215 of the 

Federal Power Act. From a reliability 

perspective, there does not appear to be 

a meaningful distinction between QF 

and non-QF generators that would 

warrant exemption of QFs from 

mandatory Reliability Standards. 

DATES: Comments are due April 17, 

2007. 

ADDRESSES: You may submit comments, 

identified by Docket No. RM07–11–000, 

by one of the following methods: 

• Agency Web site: http://ferc.gov. 

Follow the instructions for submitting 

comments via the eFiling link found in 

the Comment Procedures section of the 

Preamble. 

• Mail: Commenters unable to file 

comments electronically must mail or 

hand deliver an original and 14 copies 

of their comments to: Federal Energy 

Regulatory Commission, Secretary of the 

Commission, 888 First Street, NE., 

Washington, DC, 20426. Refer to the 

Comment Procedures section of the 

preamble for additional information on 

how to file paper comments. 

FOR FURTHER INFORMATION CONTACT: 

Paul Singh (Technical Information), 

Office of Energy Markets and 

Reliability, Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426, (202) 502–

8576. 

Samuel Higginbottom (Legal 

Information), Office of the General 

Counsel, Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426, (202) 502–

8561. 

SUPPLEMENTARY INFORMATION: 

Introduction 

1. The Commission is proposing to 

amend the exemptions available to 

qualifying facilities (QFs) so that they 

would no longer be exempt from newlyadded section 215 of the Federal Power 

Act (FPA).1 From a reliability 

perspective, there does not appear to be 

a meaningful distinction between QF 

and non-QF generators that would 

warrant exemption of QFs from 

mandatory Reliability Standards. The 

benefit of this proposal will be 

increased reliability of the North 

American Bulk-Power System. 

Background 

2. On August 8, 2005, the Electricity 

Modernization Act of 2005, which is 

Title XII, Subtitle A, of the Energy 

Policy Act of 2005 (EPAct 2005), was 

enacted into law.2 EPAct 2005 adds a 

new section 215 to the Federal Power 

Act (FPA),3 which requires a 

Commission-certified Electric 

Reliability Organization (ERO) to 

develop mandatory and enforceable 

Reliability Standards, which are subject 

to Commission review and approval. 

Once approved, the Reliability 

Standards may be enforced by the ERO, 

subject to Commission oversight. 

3. On February 3, 2006, the 

Commission issued Order No. 672, 

which implements newly-added section 

215 and provides specific processes for 

the certification of an entity as the ERO, 

the development and approval of 

mandatory Reliability Standards, and 

the compliance with and enforcement of 

approved Reliability Standards.4 On 

April 4, 2006, North American Electric 

Reliability Corporation (NERC) made 

two filings: (1) An application for 

certification of NERC as the ERO; and 

(2) a petition for Commission approval 

of Reliability Standards, with eight 

regional differences and a glossary of 

terms. On July 20, 2006, the 

Commission issued an order certifying 

NERC as the ERO.5 On October 20, 

2006, the Commission issued a Notice of 

Proposed Rulemaking proposing to 

approve 83 of 107 proposed Reliability 

Standards.6

4. In response to the Reliability 

NOPR, Cogeneration Association of 

California and the Energy Producers and 

Users Coalition (CAC/EPUC) filed 

comments pointing out that QFs are 

exempt from section 215 by virtue of 

section 292.601(c) of the Commission’s 

regulations.7 CAC/EPUC suggest that the 

Commission intentionally exempted 

QFs from section 215. CAC/EPUC 

explain that in Order No. 671 issued on 

February 2, 2006,8 the Commission 

stated that it saw no reason to exempt 

QFs from the newly added FPA sections 

220, 221 and 222,9 and explicitly 

excluded those sections of the FPA from 

the QF exemptions contained in section 

292.601 of its regulations, while making 

no similar mention of section 215. 

5. Section 215(b) grants the 

Commission jurisdiction over ‘‘all users, 

owners, and operators of the bulk-power 

system’’ for ‘‘purposes of approving 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Proposed Rules 14255 

10 16 U.S.C. 824o(b). Section 215(b) also states 

that entities described in section 201(f), entities that 

are otherwise exempt from Part II of the FPA unless 

a provision is specifically applicable to those 

entities, are subject to section 215. Id. 11 Mandatory Reliability Standards for the BulkPower System, Order No. 693, FERC Stats. & Regs. 

¶ 31,242 (2007) (issued concurrently with this 

NOPR). 12 Id. A 20 MVA threshold corresponds to 20 MW, 

if a unit is operating at a unity power factor. 

13 44 U.S.C. 3501–3520. 

14 44 U.S.C. 3502(3)(A)(i), 44 U.S.C. 3507(a)(3). 

15 44 U.S.C. 3502(3)(A). 

16 5 CFR 1320.11. 

17Regulations Implementing the National 

Environmental Policy Act, Order No. 486, 52 FR 

47897 (Dec. 17, 1987), FERC Stats. & Regs. ¶ 30,783 

(1987). 

18 18 CFR 380.4(a)(2)(ii). 

19 5 U.S.C. 601–12. 

20The 20 MVA threshold corresponds to 20 MW, 

if a unit is operating at a unity power factor. 

reliability standards. . . . and enforcing 

compliance with [section 215]’’, and 

further provides that ‘‘[a]ll users, 

owners and operators of the bulk-power 

system shall comply with reliability 

standards that take effect under this 

section.’’ 10 Given the statutory directive 

that all users, owners and operators of 

the bulk-power system must comply 

with the reliability standards that take 

effect under section 215, it may no 

longer be appropriate to allow QFs a 

continued exemption from compliance 

with the newly-adopted mandatory and 

enforceable Reliability Standards that 

apply to generator owners and 

operators.11 Moreover, from a reliability 

perspective, there would seem to be no 

meaningful distinction between QF and 

non-QF generators that would warrant 

exemption of QFs from the newlyadopted mandatory Reliability 

Standards. Indeed, QF generators would 

seem to affect the reliability of the BulkPower System as much as non-QF 

generators, and so QF generators should 

be subject to the newly-adopted 

mandatory Reliability Standards. In this 

regard, we note that while many QFs are 

small facilities, others are quite large. 

We see no justification for large 

facilities to be exempt from the newlyadopted mandatory and enforceable 

Reliability Standards. Accordingly, we 

are proposing to amend § 292.601(c)(3) 

to add section 215 to the list of FPA 

sections from which QFs are not 

exempt. 

6. The threshold for applicability of 

the Reliability Standards to generating 

units is 20 MVA (gross nameplate 

rating) for an individual generating unit, 

or 75 MVA (gross nameplate rating) in 

aggregate for a generating plant.12 In 

addition, the Reliability Standards are 

applicable to: any generator, regardless 

of size that is a blackstart unit material 

to and designated as part of a 

transmission operator entity’s 

restoration plan; or any generator, 

regardless of size, that is material to the 

reliability of the bulk-power system; the 

determination to include an otherwise 

exempt facility would be made on a 

facility-by-facility basis by the ERO or 

Regional Entity. However, an entity that 

disagrees with NERC’s determination to 

place it in the compliance registry may 

submit a challenge in writing to NERC 

and, if still not satisfied, may lodge an 

appeal with the Commission. Therefore, 

a small entity may appeal to the 

Commission if it believes it should not 

be required to comply with the 

Reliability Standards. According to the 

Energy Information Administration 

(EIA), the total universe of qualifying 

facilities is 3,265 entities. Of these, 

2,423 entities are below 20 MW (which, 

as noted above, roughly corresponds to 

the 20 MVA standard for applicability of 

the reliability standards), which leaves 

842 entities that could be potentially 

impacted by the reliability standards. Of 

these 842 entities, only 745 are listed by 

EIA as being interconnected to the grid. 

Thus, out of a total of 3265 QFs, only 

745, or 23 percent of all QFs would 

meet the generally applicable threshold 

of 20 MVA (although some other QFs 

may be specified as either blackstart 

units material to and designated as part 

of a transmission operator entity’s 

restoration plan or as generators 

material to the reliability of the bulkpower system). In sum, while there 

would seem to be no basis to exempt all 

QFs from the mandatory and 

enforceable Reliability Standards, as a 

result of the threshold for applicability 

of the Reliability Standards to 

generating units, and based on EIA data, 

it appears that less than a quarter of all 

QFs will, in fact, be affected by our 

proposal to eliminate the QF exemption 

from the requirements of section 215 of 

the FPA. 

Information Collection Statement 

7. The Paperwork Reduction Act 

(PRA) 13 requires each Federal agency to 

seek and obtain OMB approval before 

undertaking a collection of information 

directed to ten or more persons, or 

continuing a collection for which the 

Office of Management and Budget 

(OMB) approval and validity of the 

control number are about to expire.14

The PRA defines the phrase ‘‘collection 

of information’’ to be the ‘‘obtaining, 

causing to be obtained, soliciting, or 

requiring the disclosure to third parties 

or the public, of facts or opinions by or 

for an agency, regardless of form or 

format, calling for either—(i) answers to 

identical questions posed to, or 

identical reporting or recordkeeping 

requirements imposed on ten or more 

persons, other than agencies, 

instrumentalities, or employees of the 

United States; or (ii) answers to 

questions posed to agencies, 

instrumentalities, or employees of the 

United States which are to be used for 

general statistical purposes.’’ 15 OMB 

regulations require approval of certain 

information collection requirements 

imposed by agency rules.16

8. As noted above, the Commission is 

proposing to amend the exemption 

available to qualifying facilities from the 

requirements of section 215 of the FPA. 

Because the Commission is not 

proposing information collections in 

this rulemaking, it is not subject to OMB 

review under the PRA. However, the 

Commission will submit for 

informational purposes only a copy of 

this rulemaking to OMB. 

Environmental Analysis 

9. 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.17 The Commission has 

categorically excluded certain actions 

from this requirement as not having a 

significant effect on the human 

environment. As explained above, this 

proposed rule carries out the intent of 

legislation, specifically section 215 of 

the FPA. It lifts an exemption and thus 

makes section 215 of the FPA applicable 

to QFs; it does not substantially change 

the effect of the legislation. Accordingly, 

no environmental consideration is 

necessary.18

Regulatory Flexibility Act Analysis 

10. The Regulatory Flexibility Act of 

1980 (RFA) 19 generally requires a 

description and analysis of rules that 

will have significant economic impact 

on a substantial number of small 

entities. The total universe of qualifying 

facilities is 3,265 entities. Of these, 

2,423 entities are below 20 MW (the 

threshold for applicability of the 

Reliability Standards is 20 MVA for an 

individual generating unit, or 75 MVA 

in aggregate for a generating plant 20) 

which leaves 842 entities that could be 

potentially impacted by the reliability 

standards. Of these 842 entities, only 

745 are listed as being interconnected to 

the grid. Accordingly, we estimate that 

out of a total of 3265 QFs, only 745, or 

23 per cent of all QFs would likely be 

affected by the change in regulations 

proposed here. Thus, most, if not all, 

QFs affected by this rule do not fall 


jlentini on PROD1PC65 with PROPOSAL
14256 Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Proposed Rules 

21The 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. 

See 15 U.S.C. 632. 

22The Small Business Size Standard component 

of the North American Industry Classification 

System (NAICS) defines a small utility as one that, 

including its affiliates, is primarily engaged in 

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. 

within the definition of small entities,21

nor do they meet the threshold criteria 

for applicability of the RFA to electric 

utilities established by the Small 

Business Administration, which is 

based on a size standard of 4 million 

MWh.22

Comment Procedures 

11. The Commission invites interested 

persons to submit comments on the 

change proposed in this notice to be 

adopted, including any related matters 

or alternative proposals that 

commenters may wish to discuss. 

Comments are due April 16, 2007. 

Comments must refer to Docket No. 

RM07–11–000, and must include the 

commenter’s name, the organization 

they represent, if applicable, and their 

address in their comments. Comments 

and reply comments may be filed either 

in electronic or paper format. 

12. Comments and reply 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 and reply 

comments electronically must send an 

original and 14 copies of their 

comments to: Federal Energy Regulatory 

Commission, Secretary of the 

Commission, 888 First Street, NE., 

Washington, DC, 20426. 

13. All comments and reply 

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 and 

reply comments on other commenters. 

Document Availability 

14. 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 p.m. 

Eastern time) at 888 First Street, NE., 

Room 2A, Washington DC 20426. 

15. 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. 

16. User assistance is available for 

eLibrary and the Commission’s Web site 

during normal business hours. For 

assistance, please contact FERC Online 

Support at 1–866–208–3676 (toll free) or 

(202) 502–8222 (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 in 18 CFR Part 292 

Electric power, Electric power plants, 

Electric utilities, Natural gas, Reporting 

and recordkeeping requirements. 

By direction of the Commission. 

Philis J. Posey, 

Acting Secretary. 

In consideration of the foregoing, the 

Commission proposes to amend part 

292, Chapter I, Title 18, Code of Federal 

Regulations, to read as follows. 

PART 292—REGULATIONS UNDER 

SECTIONS 201 AND 210 OF THE 

PUBLIC UTILITY REGULATORY 

POLICIES ACT OF 1978 WITH REGARD 

TO SMALL POWER PRODUCTION AND 

COGENERATION 

1. The authority citation for part 292 

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 § 292.601 paragraph (c)(3) is 

revised to read as follows: 

§ 292.601 Exemption to qualifying facilities 

from the Federal Power Act. 

* * * * * 

(c) * * * 

(3) Sections 202(c), 210, 211, 212, 213, 

214, 215, 220, 221 and 222; 

* * * * * 

[FR Doc. E7–5285 Filed 3–26–07; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204 and 244 

RIN 0750–AF61 

Defense Federal Acquisition 

Regulation Supplement; Closeout of 

Contract Files (DFARS Case 2006–

D045) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule with request for 

comments. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

remove text addressing DoD procedures 

for closeout of contract files. The text 

proposed for removal will be relocated 

to the DFARS companion resource, 

Procedures, Guidance, and Information. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before May 

29, 2007, to be considered in the 

formation of the final rule. 

ADDRESSES: You may submit comments, 

identified by DFARS Case 2006–D045, 

using any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: dfars@osd.mil. Include 

DFARS Case 2006–D045 in the subject 

line of the message. 

• Fax: (703) 602–0350. 

• Mail: Defense Acquisition 

Regulations System, Attn: Ms. Deborah 

Tronic, OUSD(AT&L)DPAP(DARS), IMD 

3C132, 3062 Defense Pentagon, 

Washington, DC 20301–3062. 

• Hand Delivery/Courier: Defense 

Acquisition Regulations System, Crystal 

Square 4, Suite 200A, 241 18th Street, 

Arlington, VA 22202–3402. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Deborah Tronic, (703) 602–0289. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This proposed rule revises DFARS 

204.804 to remove text addressing DoD 

procedures for closeout of contract files. 

The text will be relocated to the DFARS 

companion resource, Procedures, 

Guidance, and Information (PGI). The 

proposed rule also amends DFARS 

244.304 to clarify an existing reference 

to corresponding PGI text. 


jlentini on PROD1PC65 with PROPOSAL