Federal Register / Vol. 70, No. 184 / Friday, September 23, 2005 / Proposed Rules 55805 

and that are not unduly discriminatory 

or preferential. 

1. Should the Commission require 

unregulated transmission utilities to 

provide transmission service under rates 

that are comparable to those they charge 

themselves and under terms and 

conditions that are comparable to those 

they apply to themselves and that are 

not unduly discriminatory or 

preferential? 

2. If so, should the Commission 

impose this requirement on all 

unregulated transmission utilities 

through a rulemaking proceeding, or 

should the Commission apply this new 

law on a case-by-case basis, through 

complaints, motions seeking 

enforcement or sua sponte action by the 

Commission? 

3. Section 1231 of the EPAct 2005 

authorizes the Commission to require 

unregulated transmitting utilities to 

provide transmission service on terms 

and conditions that are comparable to 

those under which the utility provides 

transmission service to itself and that 

are not unduly discriminatory or 

preferential. Can terms and conditions 

be both comparable and unduly 

discriminatory or preferential or are 

comparable terms and conditions 

necessarily not unduly discriminatory 

or preferential? 

Procedure for Comments 

37. The Commission invites interested 

persons to submit comments, and other 

information on the matters, issues and 

specific questions identified in this 

notice. Comments are due on or before 

November 22, 2005. Comments must 

refer to Docket No. RM05–25–000, and 

must include the commenters’ name, 

the organization they represent, if 

applicable, and their address. 

38. To facilitate the Commission’s 

review of the comments, commenters 

are requested to provide an executive 

summary of their position, not to exceed 

ten pages. Commenters are requested to 

identify each specific question posed by 

the NOI that their discussion addresses 

and to use appropriate headings. 

Additional issues the commenters wish 

to raise should be identified separately. 

The commenters should double space 

their comments. 

39. Comments may be filed on paper 

or 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, Office of the 

Secretary, 888 First Street NE., 

Washington, DC 20426. 

40. 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 

are not required to serve copies of their 

comments on other commenters. 

Document Availability 

41. 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. 

42. 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) in the 

docket number field. 

43. User assistance is available for 

eLibrary and the Commission’s Web site 

during normal business hours. For 

assistance, please contact the 

Commission’s 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 (e-mail at 

public.referenceroom@ferc.gov). 

By direction of the Commission. 

Magalie R. Salas, 

Secretary. 

[FR Doc. 05–19003 Filed 9–22–05; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Parts 365 and 366 

[Docket No. RM05–32–000] 

Repeal of the Public Utility Holding 

Company Act of 1935 and Enactment 

of the Public Utility Holding Company 

Act of 2005 

September 16, 2005. 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

ACTION: Notice of Proposed Rulemaking. 

SUMMARY: Pursuant to Title XII, Subtitle 

F of the Energy Policy Act of 2005 

(EPAct 2005), the Federal Energy 

Regulatory Commission (Commission) 

proposes to issue rules implementing 

the repeal of the Public Utility Holding 

Company Act of 1935, and the 

enactment of the Public Utility Holding 

Company Act of 2005, EPAct 2005. The 

Commission also proposes to remove its 

exempt wholesale generator rules, 18 

CFR part 365 (2005), as they are no 

longer necessary. The Commission seeks 

public comment on the rules proposed 

herein. 

DATES: Comments are due October 14, 

2005. Reply comments are due October 

21, 2005. 

ADDRESSES: Comments and reply 

comments may be filed electronically 

via the eFiling link on the Commission’s 

Web site at http://www.ferc.gov. 

Commenters unable to file comments 

electronically must send an original and 

14 copies of their comments and reply 

comments to: Federal Energy Regulatory 

Commission, Office of the Secretary, 

888 First Street, NE., Washington, DC, 

20426. Refer to the Comment 

Procedures section of the preamble for 

additional information on how to file 

comments and reply comments. 

FOR FURTHER INFORMATION CONTACT: 

Brandon Johnson (Legal Information), 

Federal Energy Regulatory Commission, 

888 First Street, NE., Washington, DC 

20426, (202) 502–6143. 

James Guest (Technical Information), 

Federal Energy Regulatory Commission, 

888 First Street, NE., Washington, DC 

20426, (202) 502–6614. 

James Akers (Technical Information), 

Federal Energy Regulatory Commission, 

888 First Street, NE., Washington, DC 

20426, (202) 502–8101. 

SUPPLEMENTARY INFORMATION: 

55806 Federal Register / Vol. 70, No. 184 / Friday, September 23, 2005 / Proposed Rules 

1Energy Policy Act of 2005, Pub. L. No. 109–58, 

119 Stat. 594 (2005). 

2 15 U.S.C. §§ 79a et seq. (2000). 

3EPAct 2005 at §§ 1261 et seq. 

4 Id. at § 1274(a). 

5 Id. at §§ 1266, 1272, 1275. 

6A related section of EPAct 2005, section 1289, 

involving, among other things, holding company 

acquisitions of securities, will be addressed in 

another rulemaking proceeding. 

Moreover, we recognize that the repeal of PUHCA 

1935 and section 318 of the FPA will give the 

Commission jurisdiction under section 204 of the 

FPA over certain issuances of securities and 

assumptions of liabilities by companies within 

holding company systems that are currently subject 

to the jurisdiction of the Securities and Exchange 

Commission (SEC). If the Commission determines 

that it is necessary or appropriate to revise or 

supplement its current regulations under section 

204 of the FPA (16 U.S.C. 824c (2000)), 18 CFR Part 

34 (2005), we will do so in a separate rulemaking 

proceeding. 

7 16 U.S.C. 824d–e (2000). 

8 15 U.S.C. 717c–d (2000). 

9 16 U.S.C. 825 (2000); 15 U.S.C. § 717g (2000). 

10EPAct 2005 at § 1289. 

11There are comparable confidentiality 

provisions in the FPA and the NGA for public 

utility books and records and natural gas company 

books and records. 16 U.S.C. 825 (2000); 15 U.S.C. 

717g (2000). 

12The Commission does not intend to reimpose 

the registration requirement contained in 17 CFR 

250.1. Instead, the Commission proposes to replace 

the registration requirement with a requirement that 

all entities falling within the definition of ‘‘holding 

company’’ in PUHCA 2005 notify the Commission 

of their status as a holding company and whether 

they qualify for exemption pursuant to section 1266 

of EPAct 2005. 

13These provisions, generally speaking, specify 

accounting, cost allocation, and recordkeeping 

requirements applicable to SEC-regulated holding 

companies and service companies. 

Introduction 

1. On August 8, 2005, the Energy 

Policy Act of 2005 (EPAct 2005) 1 was 

signed into law. In relevant part, it 

repeals the Public Utility Holding 

Company Act of 1935 (PUHCA 1935) 2

and enacts the Public Utility Holding 

Company Act of 2005 (PUHCA 2005),3

which, with one exception not relevant 

here, will become effective six months 

from the date of enactment.4 Sections 

1266, 1272, and 1275 of EPAct 2005 

direct the Commission to issue certain 

rules and to provide detailed 

recommendations to Congress on 

technical and conforming amendments 

to federal law within four months after 

the date of enactment.5 In addition, 

EPAct 2005 directs the Commission to 

issue a final rule exempting certain 

entities from the federal access to books 

and records provisions of EPAct 2005 

within 90 days of the effective date of 

Subtitle F. 

2. The Commission proposes to add a 

new Subchapter U and Part 366 to Title 

18 of the Code of Federal Regulations to 

implement Title XII, Subtitle F of EPAct 

2005 and to remove Subchapter T and 

Part 365 of Title 18 of the Code of 

Federal Regulations, and intends to 

issue final rules (as well as to submit the 

required report to Congress) within four 

months.6 The Commission seeks 

comments on its proposals for the 

required rules discussed below. 

3. Section 1264 of PUHCA 2005 

concerns Commission access to the 

books and records of holding companies 

and other companies in holding 

company systems, and section 1275 of 

PUHCA 2005 concerns the 

Commission’s authority to review and 

authorize the allocation of costs for nonpower goods or administrative or 

management services. We note that the 

federal books and records access 

provision, section 1264, and the nonpower goods and services provision, 

section 1275, of PUHCA 2005 

supplement the Commission’s existing 

ratemaking authority under the Federal 

Power Act (FPA) to protect customers 

against improper cross-subsidization or 

encumbrances of public utility assets 7

and similarly our ratemaking authority 

under the Natural Gas Act (NGA).8

These provisions of PUHCA 2005 also 

supplement the Commission’s broad 

authority under FPA section 301 and 

NGA section 8 to obtain the books and 

records of regulated companies and any 

person that controls or is controlled by 

such companies if relevant to 

jurisdictional activities.9 Further, with 

respect to the electric industry, the 

Congress has enhanced our already 

significant authorities over public utility 

mergers, acquisitions and dispositions 

of jurisdictional facilities.10 We believe 

that our existing FPA and NGA 

authorities, in combination with our 

enhanced authority over public utility 

mergers, acquisitions, and dispositions 

of jurisdictional facilities, and our new 

PUHCA 2005 authority, provide a sound 

framework to protect customers. To the 

extent that additional rulemakings or 

orders may be needed to protect 

customers adequately, the Commission 

will take appropriate actions in the 

future. 

Definitions 

4. The Commission proposes to 

largely incorporate in section 366.1 of 

its regulations the text of section 1262 

of EPAct 2005, which contains the 

definitions of relevant terms used in 

PUHCA 2005 and in our proposed 

regulations. 

Books and Records Requirements 

5. Sections 1264(a) and (b) of EPAct 

2005 generally provide that each 

holding company and each associate 

company of a holding company, as well 

as each affiliate of a holding company 

or any subsidiary company of a holding 

company, shall maintain, and shall 

make available to the Commission, such 

books, accounts, memoranda, and other 

records (books and records) as the 

Commission determines are relevant to 

the costs incurred by a public utility or 

natural gas company that is an associate 

company of such holding company and 

necessary or appropriate for the 

protection of public utility or natural 

gas company customers with respect to 

jurisdictional rates. Moreover, section 

1264(c) empowers the Commission to 

examine the books and records of any 

company in a holding company system, 

or any affiliate thereof, that the 

Commission determines are relevant to 

the costs incurred by a public utility or 

natural gas company within such 

holding company system and necessary 

or appropriate for the protection of 

public utility or natural gas company 

customers with respect to jurisdictional 

rates. Finally, section 1264(d) forbids 

any member, officer, or employee of the 

Commission from divulging any fact or 

information that has come to his or her 

knowledge during the course of the 

examination of such books and records, 

except as may be directed by the 

Commission or a court of competent 

jurisdiction.11

6. The Commission proposes to 

incorporate largely without 

modification the text of section 1264 by 

adding section 366.2 to the 

Commission’s regulations. Moreover, 

the Commission proposes to adopt 

certain accounting, cost-allocation, 

recordkeeping, and related rules 

promulgated by the SEC for holding 

companies and their service companies, 

as they existed on the date of enactment 

of EPAct 2005, specifically 17 CFR 

250.1,12 250.26, 250.27, 250.80, 250.93, 

250.94, 259.5S, and 259.313 and 17 CFR 

parts 256 and 257.13 The Commission 

seeks comments, however, as to whether 

there are provisions of these SEC rules 

that the Commission should not adopt 

and also whether the Commission 

should adopt any additional accounting, 

cost-allocation, recordkeeping and 

related rules to carry out its statutory 

duties under PUHCA 2005. The 

Commission also seeks comments 

concerning which SEC reporting 

requirements the Commission should 

retain, and which ones it should not. 

Finally, in proposing to adopt the 

above-specified SEC regulations, the 

Commission does not intend to broaden 

their applicability beyond the types of 

companies to which they now apply. 

Commenters may address whether this 

scope of applicability is appropriate and 

Federal Register / Vol. 70, No. 184 / Friday, September 23, 2005 / Proposed Rules 55807 

14 16 U.S.C. 824(e) (2000). 

15 Id. at § 825. 

16Section 1275(b) provides that the Commission 

will exempt any company in a holding company 

system whose public utility operations are confined 

substantially to a single state. We interpret this to 

mean that holding company whose public utility 

operations are confined substantially to a single 

state may not, under this provision, elect to require 

the Commission to review and authorize an 

allocation of costs for non-power goods and 

services. This is discussed, infra, in paragraphs 15–

17. 

17 16 U.S.C. 824–e (2000); accord 15 U.S.C. 717c–

d (2000); see generally EPAct 2005 at § 1275(c) 

(stating that nothing in section 1275 affects the 

authority of the Commission under other applicable 

law). While the scope of our jurisdiction over 

wholesale sales of natural gas is more limited than 

our jurisdiction over wholesale sales of electric 

energy, and our rate review may differ in certain 

respects, such reviews could be undertaken under 

sections 4 or 5 of the NGA. 

Separately, we note that we are in discussions 

with the SEC regarding the transfer of books and 

records pursuant to section 1273 of EPAct 2005. 

18See Inquiry Concerning the Commission’s 

Merger Policy Under the Federal Power Act: Policy 

Statement, Order No. 592, 61 FR 68595 (Dec. 18, 

1996), FERC Stats. & Regs., Regulations Preambles 

July 1996–December 2000 ¶ 31,044 at 30,124–25 

(1996) (Merger Policy Statement), reconsideration 

denied, Order No. 592–A, 62 FR 33341 (June 19, 

1997), 79 FERC ¶ 61,321 (1997). 

may propose any regulatory text needed 

to implement it. 

Exemption Authority 

7. Section 1266(a) of EPAct 2005 

directs the Commission to issue a final 

rule within 90 days after the effective 

date of Subtitle F exempting from the 

requirements of section 1264 of EPAct 

2005 any person that is a holding 

company, solely with respect to one or 

more: 

(1) Qualifying facilities under the Public 

Utility Regulatory Policies Act of 1978 (16 

U.S.C. 2601 et seq. (2000)); 

(2) Exempt wholesale generators; or 

(3) Foreign utility companies. 

8. Section 1266(b) further directs the 

Commission to exempt a person or 

transaction from the requirements of 

section 1264 if, upon application or sua 

sponte: 

(1) The Commission finds that the books 

and records of a person are not relevant to 

the jurisdictional rates of a public utility or 

natural gas company; or 

(2) The Commission finds that a class of 

transactions is not relevant to the 

jurisdictional rates of a public utility or 

natural gas company. 

9. PUHCA 2005 requires the 

Commission to exempt any person that 

falls within the classes designated by 

section 1266(a) from the requirements of 

section 1264, and therefore, the 

Commission proposes to adopt such an 

exemption. At this time, the 

Commission does not propose to 

categorically exempt classes of entities 

or transactions described in section 

1266(b) from the requirements of section 

1264. Rather, we propose to rely on 

case-by-case applications for additional 

exemptions until we have gained further 

experience subsequent to the repeal of 

PUHCA 1935. However, we seek 

comment on whether the Commission 

should exempt classes of transactions 

involving mutual fund passive investors 

or other groups of passive investors 

from the new federal books and records 

access requirements. 

10. Finally, we note that although a 

person that is a holding company solely 

with respect to exempt wholesale 

generators or qualifying facilities will be 

exempted from the Federal access to 

books and records provisions in section 

1264, many exempt wholesale 

generators and qualifying facilities may 

nevertheless be public utilities under 

section 201 of the FPA 14 and remain 

subject to the Commission’s authority 

with regard to their books and records 

under section 301 of the FPA, unless 

otherwise waived.15 An exemption from 

the requirements of section 1264 is not 

an exemption from FPA section 301, 

NGA section 8, or any other 

requirements of the FPA and the NGA. 

Allocation of Costs of Non-Power Goods 

or Services 

11. Section 1275(b) of EPAct 2005 

provides that, in the case of non-power 

goods or administrative or management 

services provided by an associate 

company organized specifically for the 

purpose of providing such goods or 

services to any public utility in the same 

holding company system, at the election 

of certain holding company systems 16

or a state commission having 

jurisdiction over the public utility, the 

Commission, after the effective date of 

PUHCA 2005, shall review and 

authorize an allocation of costs for such 

goods and services to the extent relevant 

to that associate company. Section 

1275(b) thus grants to certain holding 

company systems and state 

commissions a right to obtain 

Commission review and authorization 

of such cost allocations, and we propose 

to reflect this statutory provision in new 

section 366.4(b) of our regulations. 

12. We note that, irrespective of the 

new section 1275(b) of PUHCA 2005, 

with the repeal of PUHCA 1935 and the 

elimination of SEC review of the 

allocation of costs for non-power goods 

and services, we have authority under 

sections 205 and 206 of the FPA and 

sections 4 and 5 of the NGA to review 

the rate recovery in jurisdictional rates 

of such associate and affiliated company 

non-power goods and services costs, 

either upon application under section 

205 of the FPA or section 4 of the NGA 

or upon complaint or our own motion 

under section 206 of the FPA and 

section 5 of the NGA, and we also have 

the authority to review and or require 

the filing of cost allocation agreements 

with the Commission since they are 

contracts affecting jurisdictional rates.17

13. The Commission seeks comments 

as to whether, in light of the repeal of 

PUHCA 1935, holding companies that 

prior to the repeal of PUHCA 1935 were 

registered holding companies should be 

required to file such cost allocation 

agreements with the Commission under 

section 205 of the FPA and section 4 of 

the NGA. 

14. In addition, we note that section 

1275(b) provides for Commission review 

and authorization of cost allocations for 

non-power goods or services provided 

by service companies to public utilities, 

but it does not do so where such nonpower goods and services are provided 

to gas utility companies and natural gas 

companies. We invite comments as to 

whether the Commission should 

recommend an amendment clarifying 

that holding company systems and state 

commissions having jurisdiction over 

gas utility companies and natural gas 

companies in the holding company 

systems are included within the scope 

of section 1275(b). 

15. Finally, we note that the SEC and 

state commissions previously have been 

primarily responsible for determining 

allocations of costs for non-power goods 

and services among the various 

associate companies in registered 

holding company systems, and these 

allocations have been made on an ‘‘at 

cost’’ basis. By contrast, the 

Commission’s long-standing policy is 

that registered holding company special 

purpose subsidiaries must provide nonpower goods and services to a public 

utility regulated by the Commission at 

the lower of cost or market, and, for at 

least a decade, we have imposed this 

lower of cost or market standard as a 

condition for approval of mergers that 

result in the creation of a new registered 

holding company.18 We invite 

comments as to whether the 

Commission should apply the lower of 

cost or market standard for the 

allocation of costs for non-power goods 

and services, or if we should instead 

adopt the SEC at cost standard. 

Single-State Holding Company Systems 

and Other Classes of Transactions 

16. Section 1275(d) of EPAct 2005 

directs the Commission to issue rules no 

later than four months after the date of 

enactment of EPAct 2005 to exempt 

55808 Federal Register / Vol. 70, No. 184 / Friday, September 23, 2005 / Proposed Rules 

19This interpretation pertains only to review and 

authorization of cost allocations for non-power 

goods and services under section 1275 of EPAct 

2005. As discussed earlier, we view the ability of 

the Commission to review rate recovery in 

jurisdictional rates under sections 205 and 206 of 

the FPA and sections 4 and 5 of the NGA as a 

separate matter. 

20We note, however, that section 1289 of EPAct 

2005 amends section 203 of the FPA to grant the 

Commission expanded approval authority with 

respect to mergers and the acquisitions of securities 

by holding companies within certain holding 

company systems. 

from the requirements of section 1275 

any company in a holding company 

system whose public utility operations 

are confined substantially to a single 

state (single-state holding company 

systems) and any other class of 

transactions that the Commission finds 

are not relevant to the jurisdictional 

rates of a public utility. We invite 

comments on how the Commission 

should define ‘‘confined substantially to 

a single state.’’

17. While section 1275(d) states that 

single-state holding company systems 

are exempt from the ‘‘requirements’’ of 

section 1275, we note that section 1275 

does not impose any requirements on 

holding company systems, but rather 

grants holding company systems and 

relevant state commissions the right to 

obtain Commission review and 

authorization of cost allocations. 

Instead, the only requirements in 

section 1275 are directed toward the 

Commission, in particular that ‘‘the 

Commission shall review and 

authorize’’ cost allocations if asked to 

do so by the holding company system or 

the relevant state commission. Based on 

the structure of section 1275, we believe 

that the most reasonable interpretation 

of the exemption for single-state holding 

company systems in section 1275(d) is 

that Congress intended to deny singlestate holding company systems and 

relevant state commissions the right to 

obtain Commission review of cost 

allocations pursuant to section 1275. 

Accordingly, we propose to reflect this 

limitation by excluding single-state 

holding company systems from the 

scope of Commission review under 

section 366.4(b) of the Commission’s 

regulations.19 The Commission invites 

comments on this interpretation of 

section 1275(d). 

18. We believe that a similar 

interpretation applies with respect to 

the other classes of transactions that 

may be exempted pursuant to section 

1275(d), namely, that an exemption 

under section 1275(d) forecloses 

Commission review under section 

1275(b). In section 366.4(c) of the 

Commission’s regulations, we propose 

to establish a procedure by which the 

Commission, either upon petition for 

declaratory order or upon its own 

motion, may exclude from the scope of 

Commission review and authorization 

under section 366.4(b) any class of 

transactions that we determine are not 

relevant to the jurisdictional rates of a 

public utility. 

19. The Commission seeks comments 

as to other classes of transactions that, 

pursuant to section 1275(d), should be 

exempted from the requirements of 

section 1275. 

Previously Authorized Activities 

20. Section 1271 of EPAct 2005 states 

essentially that a person may continue 

to engage in activities or transactions 

authorized by rule or order as of the 

date of enactment of EPAct 2005 if that 

person continues to comply with the 

terms of the authorization, and the 

Commission proposes to reflect this 

statutory provision in section 366.5 of 

the Commission’s regulations. In 

addition, the Commission proposes to 

require that, if any such activities are 

challenged in a formal Commission 

proceeding, the person claiming prior 

authorization shall be required to 

provide the full text of any such 

authorization (whether by rule, order, or 

letter) and the application(s) or 

pleading(s) underlying such 

authorization (whether by rule, order, or 

letter). 

Exempt Wholesale Generators and 

Foreign Utility Companies 

21. EPAct 2005 repeals PUHCA 1935 

in its entirety, including section 32, 

which requires the Commission to make 

exempt wholesale generator 

determinations on a case-by-case basis, 

upon application. Although the 

definitional section of PUHCA 2005 

references section 32 of PUHCA 1935, 

the Congress nevertheless repealed 

section 32 in its entirety and did not reenact that provision in the new PUHCA 

2005. The Commission believes that the 

most reasonable interpretation of EPAct 

2005, given the omission of section 32 

in the new PUHCA 2005, is that 

Congress did not intend the 

Commission to continue to make caseby-case determinations of exempt 

wholesale generator status in the future 

(i.e., after the effective date of PUHCA 

2005). Rather, we believe that the most 

reasonable interpretation of the statute 

is that only those entities that are 

holding companies with respect to 

persons granted exempt wholesale 

generator status before the repeal of 

PUHCA 1935 will qualify for an 

exemption from the new federal books 

and records access requirements under 

proposed section 366.3(a)(2) of the 

Commission’s regulations. Accordingly, 

we propose to remove Part 365 of the 

Commission’s regulations, which set 

forth the filing requirements and 

ministerial procedures for persons 

seeking exempt wholesale generator 

status under section 32 of PUHCA 1935, 

and we invite comments on whether we 

should do so. 

22. We note that the benefit of exempt 

wholesale generator status under 

PUHCA 1935 was that entities that the 

Commission determined to have met the 

definition of exempt wholesale 

generator were exempted from the 

myriad requirements of PUHCA 1935. 

The principal benefit of being an 

exempt wholesale generator under 

PUHCA 2005 is exemption from the 

new federal books and records access 

requirements. To the extent that these 

new federal books and records access 

requirements add to the Commission’s 

existing very broad books and records 

access authority under FPA section 301 

and NGA section 8, our interpretation 

serves to err on the side of greater 

customer protection. 

23. In any event, as previously noted, 

entities that qualified as exempt 

wholesale generators under PUHCA 

1935 were not exempted from the 

Commission’s authority under the FPA 

if they met the FPA definition of 

‘‘public utility,’’ including the very 

broad access to books and records 

provisions of FPA section 301. Nor will 

they be exempt from these FPA 

provisions as a result of PUHCA 2005. 

24. In addition, we note that Congress 

repealed section 33 of PUHCA 1935, 

which addresses foreign utility 

companies. As with exempt wholesale 

generators, we believe that Congress 

intended to limit the exemption for 

persons that are holding companies 

with respect to foreign utility companies 

to those attaining foreign utility 

company status before repeal of PUHCA 

1935. The Commission seeks comments 

as to this interpretation of EPAct 2005. 

Cross-Subsidization and Encumbrances 

of Utility Assets 

25. PUHCA 2005 is primarily a 

‘‘books and records access’’ statute and 

does not give the Commission any new 

substantive authorities, other than the 

requirement in section 1275 of EPAct 

2005 that the Commission review and 

determine certain non-power goods and 

services cost allocations among holding 

company members upon request. Nor 

does it give the Commission authority to 

pre-approve holding company 

activities.20 Accordingly, outside the 

context of reviewing a holding company 

transaction requiring approval under 

Federal Register / Vol. 70, No. 184 / Friday, September 23, 2005 / Proposed Rules 55809 

21Regulation of Cash Management Practices, 

Order No. 634, 68 FR 40500 (Jul. 8, 2003), III FERC 

Stats. & Regs. ¶ 31,145 (June 26, 2003), Order No. 

634–A, 68 FR 61993 (Oct. 31, 2003), III FERC Stats. 

& Regs. ¶ 31,152 (2003). 22See Merger Policy Statement, FERC Stats. & 

Regs. ¶ 31,044 at 30,124–25. See also Heartland 

Energy Services, Inc., 68 FERC ¶ 61,223 at 62,062–

65 (1994); LG&E Power Marketing Inc., 68 FERC 

¶ 61,247 at 62,121–24 (1994). 23 5 CFR 1320.11 (2005). 

24Regulations Implementing the National 

Environmental Policy Act, Order No. 486, 52 FR 

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

Preambles 1986–1990 ¶ 30,783 (1987). 

25 18 CFR 380.4(a)(3), (5), (16) (2005). 

26 5 U.S.C. § 603 (2000). 

27 5 U.S.C. § 601(3) (2000), citing to section 3 of 

the Small Business Act, 15 U.S.C. § 632 (2000). 

Section 3 of the Small Business Act defines a 

‘‘small business concern’’ as a business that is 

independently owned and operated and that is not 

Continued 

section 203 of the FPA or a proposed 

issuance of securities under section 204 

of the FPA, the Commission will 

continue to rely primarily on its 

ratemaking authorities under sections 

205 and 206 of the FPA and sections 4 

and 5 of the NGA to protect 

jurisdictional customers against 

inappropriate cross-subsidization or 

encumbrances of utility assets on an 

ongoing basis. 

26. The Commission already has in 

place, pursuant to the FPA and NGA, 

certain reporting requirements regarding 

money pools and cash management 

activities that affect jurisdictional 

companies.21 Further, in the electric 

area, we have policies that protect 

against cross-subsidization occurring as 

a result of wholesale power sales 

between affiliates in a holding company 

system as well as sales of non-power 

goods and services between such 

affiliates.22 We seek comment on 

whether, in light of the repeal of 

PUHCA 1935, the Commission needs to 

promulgate additional rules or to adopt 

additional policies to protect against 

inappropriate cross-subsidization or 

encumbrances of utility assets, pursuant 

to our authorities under the FPA and 

NGA. Comments should specify what 

additional rules may be needed and the 

statutory basis for such rules. For 

example, if it has the authority to do so, 

should the Commission issue rules 

regarding public utility holding 

company diversification into non-utility 

businesses? Would the Commission 

have authority to promulgate such rules 

under its FPA or NGA ratemaking 

authority? Should the Commission 

modify its existing cash management 

rules to apply not only to public 

utilities, natural gas companies, and oil 

pipelines, but also to include public 

utility holding companies? We seek 

comment on these and any other related 

issues in order to determine whether, in 

addition to the regulations being 

proposed herein under PUHCA 2005, 

the Commission may need to consider 

promulgating separate, additional rules 

under the FPA or the NGA. 

Additional Conforming or Technical 

Amendments 

27. Section 1272 of EPAct 2005 

directs the Commission to submit to 

Congress detailed recommendations on 

technical and conforming amendments 

to federal law necessary to carry out 

PUHCA 2005 within four months after 

the date of enactment. The Commission 

invites comments as to what technical 

and conforming amendments the 

Commission should include in this 

submission to Congress. 

Information Collection Statement 

28. Office of Management and Budget 

(OMB) regulations require OMB to 

approve certain information collection 

requirements imposed by agency rule.23

However, the Commission is carrying 

out an express statutory mandate 

spelled out in EPAct 2005. Moreover, 

insofar as the Commission is carrying 

over and applying requirements that the 

SEC previously has applied, we note 

that the proposed regulations do not 

impose any new or additional reporting 

burdens. On the contrary, to the extent 

that the Commission’s proposed 

regulations eliminate certain SEC 

regulations concerning accounting, costallocation, recordkeeping, and related 

rules, they reduce the information 

collection burden on regulated entities. 

29. In particular, we are adopting the 

following information collections 

currently implemented by the SEC: 

Form U13–60 ‘‘Annual Report for the 

period by a reporting company’’; Form 

U5S ‘‘Annual Report for Public Utility 

Holding Company’’; Rule 26 ‘‘Financial 

Statement and Recordkeeping 

Requirements for registered holding 

companies and subsidiaries’’; Part 257 

‘‘Preservation and Destruction of 

Records of Registered Public Utility 

Holding Companies and of Mutual and 

Subsidiary Service Companies’’. 

30. The Commission also proposes to 

eliminate the requirements contained 

under its own regulations in 18 CFR 

part 365. The corresponding 

information collection is FERC–598 

‘‘Determinations for Entities Seeking 

Wholesale Generator Status’’. 

Action: Revision of currently 

approved collections of information. 

OMB Control Nos.: Currently the 

above information collections have the 

following control numbers—3235–0153, 

32353235–0164, 3235–0182, 3235–0183, 

3235–0306 and 1902–0166. 

Frequency of Responses: Several of 

the information collections have annual 

submissions while other information 

collections require that records be 

maintained. 

Necessity of the Information: The 

proposed rule implements new 

accounting, cost allocation, 

recordkeeping, and related rules under 

part 366 of the Commission’s 

regulations and deletes requirements 

contained in part 365 of its regulations. 

These revisions are to implement the 

repeal of PUHCA 1935 and the 

implementation of certain provisions of 

the EPAct 2005. 

31. For information on the 

requirements, submitting comments on 

these collections of information 

including ways to reduce the burden 

imposed by these requirements, please 

send your comments to the Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 20426 

(Attention: Michael Miller, Office of the 

Executive Director, (202–502–8415)) or 

send comments to the Office of 

Management and Budget (Attention: 

Desk Officer for the Federal Energy 

Regulatory Commission, fax: 202–395–

7285, e-mail: 

oira_submission@omb.eop.gov.) 

Environmental Analysis 

32. 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.24 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 carry out legislation, 

involve information gathering, analyses 

and dissemination, and involve 

accounting.25 These proposed rules, if 

finalized, carry out EPAct 2005 and 

involve information gathering and 

analysis, and involve accounting and 

therefore fall under this exception; 

consequently, no environmental 

consideration is necessary. 

Regulatory Flexibility Act Certification 

33. The Regulatory Flexibility Act of 

1980 (RFA) requires rulemakings to 

contain either a description and analysis 

of the effect that the rule will have on 

small entities or to contain a 

certification that the rule will not have 

a significant economic impact on a 

substantial number of small entities. 26

Most public utilities to which the rules 

proposed herein, if finalized, would 

apply do not fall within the RFA’s 

definition of small entity.27

55810 Federal Register / Vol. 70, No. 184 / Friday, September 23, 2005 / Proposed Rules 

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, for example, 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 year did not exceed four million 

MWh. 13 CFR 121.201 (2005). 

Consequently, the rules proposed 

herein, if finalized, will not have ‘‘a 

significant economic impact on a 

substantial number of small entities.’’

Comment Procedures 

34. The Commission invites interested 

persons to submit comments and reply 

comments on the matters and issues 

proposed in this notice to be adopted, 

including any related matters or 

alternative proposals that commenters 

may wish to discuss. Comments are due 

October 14 2005. Reply comments are 

due October 21, 2005. Comments and 

reply comments must refer to Docket 

No. RM05–32–000, and must include 

the commenter’s name, the organization 

he or she represents, if applicable, and 

his or her address. 

35. 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 who are not 

able to file comments and reply 

comments electronically must send an 

original and 14 copies of their 

comments and reply comments to: 

Federal Energy Regulatory Commission, 

Office of the Secretary, 888 First Street, 

NE., Washington, DC 20426. 

36. 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 on other 

commenters. 

Document Availability 

37. 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. 

38. 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. 

39. 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 (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 Parts 3 and 

365 

Electric power, Natural gas, Public 

utility holding companies and service 

companies, Reporting and 

recordkeeping requirements, Uniform 

System of Accounts and Cost 

allocations. 

By direction of the Commission. 

Magalie R. Salas, 

Secretary. 

In consideration of the foregoing, 

under the authority of EPAct 2005, the 

Commission proposes to amend Chapter 

I of Title 18 of the Code of Federal 

Regulations, as set forth below: 

Subchapter T—[Removed and Reserved] 

PART 365—[REMOVED] 

1. Subchapter T, consisting of Part 

365, is removed and reserved. 

2. Subchapter U, consisting of Part 

366, is added to read as follows: 

Subchapter U—Regulations Under the 

Public Utility Holding Company Act of 2005 

PART 366—PUBLIC UTILITY HOLDING 

COMPANY ACT OF 2005 

Sec. 

366.1 Definitions. 

366.2 Commission access to books and 

records. 

366.3 Exemption from Commission access 

to books and records. 

366.4 Allocation of costs for non-power 

goods and services. 

366.5 Previously authorized activities. 

§ 366.1 Definitions. 

For purposes of this part: 

Affiliate. The term ‘‘affiliate’’ of a 

company means any company, 5 

percent or more of the outstanding 

voting securities of which are owned, 

controlled, or held with power to vote, 

directly or indirectly, by such company. 

Associate company. The term 

‘‘associate company’’ of a company 

means any company in the same 

holding company system with such 

company. 

Commission. The term ‘‘Commission’’

means the Federal Energy Regulatory 

Commission. 

Company. The term ‘‘company’’

means a corporation, partnership, 

association, joint stock company, 

business trust, or any organized group of 

persons, whether incorporated or not, or 

a receiver, trustee, or other liquidating 

agent of any of the foregoing. 

Electric utility company. The term 

‘‘electric utility company’’ means any 

company that owns or operates facilities 

used for the generation, transmission, or 

distribution of electric energy for sale. 

Exempt wholesale generator and 

foreign utility company. The terms 

‘‘exempt wholesale generator’’ and 

‘‘foreign utility company’’ have the 

same meanings as in sections 32 and 33, 

respectively, of the Public Utility 

Holding Company Act of 1935 (15 

U.S.C. 79z–5a, 79z–5b (2000)), as those 

sections existed on August 7, 2005, the 

day before the effective date of the 

Energy Policy Act of 2005, August 8, 

2005. 

Gas utility company. The term ‘‘gas 

utility company’’ means any company 

that owns or operates facilities used for 

distribution at retail (other than the 

distribution only in enclosed portable 

containers or distribution to tenants or 

employees of the company operating 

such facilities for their own use and not 

for resale) of natural or manufactured 

gas for heat, light, or power. 

Holding company. 

(1) In general. The term ‘‘holding 

company’’ means—

(i) Any company that directly or 

indirectly owns, controls, or holds, with 

power to vote, 10 percent or more of the 

outstanding voting securities of a 

public-utility company or of a holding 

company of any public-utility company; 

and 

(ii) Any person, determined by the 

Commission, after notice and 

opportunity for hearing, to exercise 

directly or indirectly (either alone or 

pursuant to an arrangement or 

understanding with one or more 

persons) such a controlling influence 

over the management or policies of any 

public-utility company or holding 

company as to make it necessary or 

appropriate for the rate protection of 

utility customers with respect to rates 

that such person be subject to the 

obligations, duties, and liabilities 

Federal Register / Vol. 70, No. 184 / Friday, September 23, 2005 / Proposed Rules 55811 

imposed by this subtitle upon holding 

companies. 

(2) Exclusions. The term ‘‘holding 

company’’ shall not include—

(i) A bank, savings association, or 

trust company, or their operating 

subsidiaries that own, control, or hold, 

with the power to vote, public utility or 

public utility holding company 

securities so long as the securities are—

(A) Held as collateral for a loan; 

(B) Held in the ordinary course of 

business as a fiduciary; or 

(C) Acquired solely for purposes of 

liquidation and in connection with a 

loan previously contracted for and 

owned beneficially for a period of not 

more than two years; or 

(ii) A broker or dealer that owns, 

controls, or holds with the power to 

vote public utility or public utility 

holding company securities so long as 

the securities are—

(A) Not beneficially owned by the 

broker or dealer and are subject to any 

voting instructions which may be given 

by customers or their assigns; or 

(B) Acquired within 12 months in the 

ordinary course of business as a broker, 

dealer, or underwriter with the bona 

fide intention of effecting distribution of 

the specific securities so acquired. 

Holding company system. The term 

‘‘holding company system’’ means a 

holding company, together with its 

subsidiary companies. 

Jurisdictional rates. The term 

‘‘jurisdictional rates’’ means rates 

accepted or established by the 

Commission for the transmission of 

electric energy in interstate commerce, 

the sale of electric energy at wholesale 

in interstate commerce, the 

transportation of natural gas in 

interstate commerce, and the sale in 

interstate commerce of natural gas for 

resale for ultimate public consumption 

for domestic, commercial, industrial, or 

any other use. 

Natural gas company. The term 

‘‘natural gas company’’ means a person 

engaged in the transportation of natural 

gas in interstate commerce or the sale of 

such gas in interstate commerce for 

resale. 

Person. The term ‘‘person’’ means an 

individual or company. 

Public utility. The term ‘‘public 

utility’’ means any person who owns or 

operates facilities used for transmission 

of electric energy in interstate commerce 

or sales of electric energy at wholesale 

in interstate commerce. 

Public-utility company. The term 

‘‘public-utility company’’ means an 

electric utility company or a gas utility 

company. 

Single-state holding company system. 

The term ‘‘single-state holding company 

system’’ means a holding company 

system whose public utility operations 

are confined substantially to a single 

state. 

State commission. The term ‘‘state 

commission’’ means any commission, 

board, agency, or officer, by whatever 

name designated, of a state, 

municipality, or other political 

subdivision of a state that, under the 

laws of such state, has jurisdiction to 

regulate public utility companies. 

Subsidiary company. The term 

‘‘subsidiary company’’ of a holding 

company means—

(1) Any company, 10 percent or more 

of the outstanding voting securities of 

which are directly or indirectly owned, 

controlled, or held with power to vote, 

by such holding company; and 

(2) Any person, the management or 

policies of which the Commission, after 

notice and opportunity for hearing, 

determines to be subject to a controlling 

influence, directly or indirectly, by such 

holding company (either alone or 

pursuant to an arrangement or 

understanding with one or more other 

persons) so as to make it necessary for 

the rate protection of utility customers 

with respect to rates that such person be 

subject to the obligations, duties, and 

liabilities imposed by this subtitle upon 

subsidiary companies of holding 

companies. 

Voting security. The term ‘‘voting 

security’’ means any security presently 

entitling the owner or holder thereof to 

vote in the direction or management of 

the affairs of a company. 

§ 366.2 Commission access to books and 

records. 

(a) In general. Unless otherwise 

exempted by Commission rule or order, 

each holding company and each 

associate company thereof shall 

maintain, and shall make available to 

the Commission, such books, accounts, 

memoranda, and other records as the 

Commission determines are relevant to 

costs incurred by a public utility or 

natural gas company that is an associate 

company of such holding company and 

necessary or appropriate for the 

protection of utility customers with 

respect to jurisdictional rates. 

(b) Affiliate companies. Unless 

otherwise exempted by Commission 

rule or order, each affiliate of a holding 

company or of any subsidiary company 

of a holding company shall maintain, 

and shall make available to the 

Commission, such books, accounts, 

memoranda, and other records with 

respect to any transaction with another 

affiliate, as the Commission determines 

are relevant to costs incurred by a 

public utility or natural gas company 

that is an associate company of such 

holding company and necessary or 

appropriate for the protection of utility 

customers with respect to jurisdictional 

rates. 

(c) Holding company systems. The 

Commission may examine the books, 

accounts, memoranda, and other records 

of any company in a holding company 

system, or any affiliate thereof, as the 

Commission determines are relevant to 

costs incurred by a public utility or 

natural gas company within such 

holding company system and necessary 

or appropriate for the protection of 

utility customers with respect to 

jurisdictional rates. 

(d) Confidentiality. No member, 

officer, or employee of the Commission 

shall divulge any fact or information 

that may come to his or her knowledge 

during the course of examination of 

books, accounts, memoranda, or other 

records as provided in this section, 

except as may be directed by the 

Commission or by a court of competent 

jurisdiction. 

(e) Accounting, cost allocation, 

recordkeeping, and related rules. Each 

holding company and each associate 

company, affiliate, and subsidiary 

thereof is to maintain its books, 

accounts, memoranda, and other records 

in the manner specified in the 

accounting, cost-allocation, and related 

rules contained in 17 CFR 250.1, 250.26, 

250.27, 250.80, 250.93, 250.94, 259.5S, 

and 2.59.313 and 17 CFR parts 256 and 

257. 

§ 366.3 Exemption from Commission 

access to books and records. 

(a) Exempt classes of entities. Any 

person that is a holding company, solely 

with respect to one or more of the 

following, is exempt from the 

requirements of § 366.2 of this chapter: 

(1) Qualifying facilities under the 

Public Utility Regulatory Policies Act of 

1978 (16 U.S.C. 2601 et seq. (2000)); 

(2) Exempt wholesale generators; or 

(3) Foreign utility companies. 

(b) Commission Authority to Exempt 

Additional Entities and Classes of 

Transactions. The Commission shall 

exempt a person or transaction from the 

requirements of § 366.2 of this chapter 

if, upon application or upon the motion 

of the Commission—

(1) The Commission finds that the 

books, accounts, memoranda, and other 

records of any person are not relevant to 

the jurisdictional rates of a public utility 

or natural gas company; or 

(2) The Commission finds that any 

class of transactions is not relevant to 

the jurisdictional rates of a public utility 

or natural gas company. 

55812 Federal Register / Vol. 70, No. 184 / Friday, September 23, 2005 / Proposed Rules 

(c) Any person seeking an exemption 

under this provision, shall file a petition 

for declaratory order pursuant to 

§ 385.207(a) of this chapter justifying its 

request for exemption. Any person 

seeking such an exemption shall bear 

the burden of demonstrating that such 

an exemption is warranted. 

§ 366.4 Allocation of costs for non-power 

goods and services. 

(a) For purposes of this section, the 

term ‘‘public utility’’ has the meaning 

given the term in section 201(e) of the 

Federal Power Act (16 U.S.C. 824(e) 

(2000)). 

(b) Commission review. In the case of 

non-power goods or administrative or 

management services provided by an 

associate company organized 

specifically for the purpose of providing 

such goods or services to any public 

utility in the same holding company 

system, at the election of the system or 

a state commission having jurisdiction 

over the public utility, the Commission 

shall review and authorize the 

allocation of the costs for such goods or 

services to the extent relevant to that 

associate company. Such election to 

have the Commission review and 

authorize cost allocations shall remain 

in effect until further Commission order. 

(c) Exemptions. Any company in a 

single-state holding company system is 

exempt from paragraph (b) of this 

section. A holding company system or 

state commission may, pursuant to this 

subsection, seek a Commission 

determination regarding single-state 

holding company system status by filing 

a petition for declaratory order pursuant 

to Rule 207(a) of the Commission’s 

Rules of Practice and Procedure 

(§ 385.207(a) of this chapter). 

Furthermore, any holding company 

system or state commission seeking 

such a determination shall bear the 

burden of demonstrating that such 

determination is warranted. 

(d) Other classes of transactions. 

Either upon petition for declaratory 

order or upon its own motion, the 

Commission may exclude from the 

scope of Commission review and 

authorization under paragraph (b) of 

this section any class of transactions 

that the Commission finds is not 

relevant to the jurisdictional rates of a 

public utility. Any holding company 

system or state commission seeking to 

obtain such a determination under this 

subsection shall file a petition for 

declaratory order pursuant to Rule 

207(a) of the Commission’s Rules of 

Practice and Procedure justifying its 

request for exemption (§ 385.207(a) of 

this chapter). Furthermore, any holding 

company system or state commission 

seeking such an exemption shall bear 

the burden of demonstrating that such 

determination is warranted. 

(e) Nothing in paragraphs (b)–(d) of 

this section shall affect the authority of 

the Commission under the Federal 

Power Act (16 U.S.C. 791 et seq. (2000)), 

the Natural Gas Act (15 U.S.C. 717 et 

seq. (2000)), or other applicable law, 

including the authority of the 

Commission with respect to rates, 

charges, classifications, rules, 

regulations, practices, contracts, 

facilities, and services. 

§ 366.5 Previously authorized activities. 

Unless otherwise provided by 

Commission rule or order, a person may 

continue to engage in activities or 

transactions authorized under the 

Public Utility Holding Company Act of 

2005 prior to the date of enactment of 

Energy Policy Act of 2005, August 8, 

2005, for the period of time provided in 

such authorization, so long as that 

person continues to comply with the 

terms of such authorization. If any such 

activities or transactions are challenged 

in a formal Commission proceeding, the 

person claiming prior authorization 

shall be required to provide the full text 

of any such authorization (whether by 

rule, order, or letter) and the 

application(s) or pleading(s) underlying 

such authorization (whether by rule, 

order, or letter). 

[FR Doc. 05–19000 Filed 9–22–05; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 447 and 455 

[CMS–2198–CN] 

RIN 0938–AN09 

Medicaid Program; Disproportionate 

Share Hospital Payments 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Correction of proposed rule. 

SUMMARY: This document corrects a 

technical error that appeared in the 

proposed rule published in the Federal 

Register on August 26, 2005 entitled 

‘‘Medicaid Program; Disproportionate 

Share Hospital Payments.’’

FOR FURTHER INFORMATION CONTACT: Jim 

Frizzera, (410) 786–9535. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In FR Doc. 05–16974 of August 26, 

2005 (70 FR 50262), we inadvertently 

omitted a sample Excel spreadsheet that 

displays the reporting requirements 

described in section III.A. of the 

proposed rule. 

II. Correction of Errors 

In FR Doc. 05–16974 of August 26, 

2005 (70 FR 50262), we are making the 

following correction: 

On page 50264, third column, after 

the first full paragraph, add the 

following Excel spreadsheet: 

BILLING CODE 4120–01–P