72090 Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules 

Authority for This Rulemaking 

Title 49 of the United States Code 

specifies the FAA’s authority to issue 

rules on aviation safety. Subtitle I, 

Section 106, describes the authority of 

the FAA Administrator. Subtitle VII, 

Aviation Programs, describes in more 

detail the scope of the Agency’s 

authority. 

We are issuing this rulemaking under 

the authority described in Subtitle VII, 

Part A, Subpart III, Section 44701, 

‘‘General requirements.’’ Under that 

section, Congress charges the FAA with 

promoting safe flight of civil aircraft in 

air commerce by prescribing regulations 

for practices, methods, and procedures 

the Administrator finds necessary for 

safety in air commerce. This regulation 

is within the scope of that authority 

because it addresses an unsafe condition 

that is likely to exist or develop on 

products identified in this rulemaking 

action. 

Regulatory Findings 

We have determined that this 

proposed AD would not have federalism 

implications under Executive Order 

13132. This proposed AD would not 

have a substantial direct effect on the 

States, on the relationship between the 

national Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. 

For the reasons discussed above, I 

certify that the proposed regulation: 

1. Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866; 

2. Is not a ‘‘significant rule’’ under the 

DOT Regulatory Policies and Procedures 

(44 FR 11034, February 26, 1979); and 

3. Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

We prepared a regulatory evaluation 

of the estimated costs to comply with 

this proposed AD and placed it in the 

AD docket. See the ADDRESSES section 

for a location to examine the regulatory 

evaluation. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Safety. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

2. The Federal Aviation 

Administration (FAA) amends § 39.13 

by adding the following new 

airworthiness directive (AD): 

Airbus: Docket No. FAA–2005–23142; 

Directorate Identifier 2005–NM–154–AD. 

Comments Due Date 

(a) The FAA must receive comments on 

this AD action by January 3, 2006. 

Affected ADs 

(b) None. 

Applicability 

(c) This AD applies to Airbus Model A319–

131, –132, and –133 airplanes; Model A320–

232 and –233 airplanes; and Model A321–

131 and –231 airplanes; certificated in any 

category; as identified in Airbus All 

Operators Telex (AOT) A320–71A1036, 

Revision 1, dated June 28, 2005. 

Unsafe Condition 

(d) This AD results from a report that, 

during modification of certain engine 

forward mount assemblies of the left and 

right engines done at an engine shop visit, an 

incorrect torque was applied to the 

attachment bolts. We are issuing this AD to 

prevent structural failure of the secondary 

load path of the forward engine mount, 

which, if combined with failure of the 

primary load path, could result in separation 

of the engine from the airplane. 

Compliance 

(e) You are responsible for having the 

actions required by this AD performed within 

the compliance times specified, unless the 

actions have already been done. 

Note 1: For the purposes of this AD, a 

detailed inspection is: ‘‘An intensive 

examination of a specific item, installation, 

or assembly to detect damage, failure, or 

irregularity. Available lighting is normally 

supplemented with a direct source of good 

lighting at an intensity deemed appropriate. 

Inspection aids such as mirror, magnifying 

lenses, etc., may be necessary. Surface 

cleaning and elaborate procedures may be 

required.’’

Inspection and Corrective Action 

(f) Perform a detailed inspection for cracks 

or failure of the primary load path 

components of the engine forward mount by 

doing all the applicable actions in 

accordance with the procedures in AOT 

A320–71A1036, Revision 1, dated June 28, 

2005. Do any corrective action before further 

flight in accordance with the procedures in 

the AOT. Perform the actions at the time 

specified in paragraph (f)(1) or (f)(2) of this 

AD, as applicable. 

(1) For Model A321–131 and –231 

airplanes: Do the inspection within 5 days 

after the effective date of this AD. 

(2) For Model A319–131, –132, and –133 

airplanes: Do the inspection within 10 days 

after the effective date of this AD. 

(g) For all airplanes: At the applicable time 

specified in paragraph (g)(1) or (g)(2) of this 

AD, remove, re-install, and re-torque each of 

the attachment bolts of the engine forward 

mount assembly in accordance with the 

procedures in AOT A320–71A1036, Revision 

1, dated June 28, 2005. 

(1) If the inspection specified in paragraph 

(f) of this AD was accomplished after the 

effective date of this AD: Do the actions 

within 2,250 flight cycles after accomplishing 

the inspection. 

(2) If the inspection specified in paragraph 

(f) of this AD was accomplished before the 

effective date of this AD: Do the actions 

within 2,250 flight cycles after the effective 

date of this AD. 

Actions Accomplished Previously 

(h) Inspections, adjustments or repairs 

done before the effective date of this AD in 

accordance with the procedures in AOT 

A320–71A1036, dated June 27, 2005, are 

acceptable for compliance with the 

corresponding actions required by this AD. 

No Reporting Required 

(i) Although AOT A320–71A1036, 

Revision 1, dated June 28, 2005, recommends 

that inspection results be reported to the 

manufacturer, this AD does not include that 

requirement. 

Alternative Methods of Compliance 

(AMOCs) 

(j)(1) The Manager, International Branch, 

ANM–116, Transport Airplane Directorate, 

FAA, has the authority to approve AMOCs 

for this AD, if requested in accordance with 

the procedures found in 14 CFR 39.19. 

(2) Before using any AMOC approved in 

accordance with § 39.19 on any airplane to 

which the AMOC applies, notify the 

appropriate principal inspector in the FAA 

Flight Standards Certificate Holding District 

Office. 

Related Information 

(k) French emergency airworthiness 

directive UF–2005–117, dated June 29, 2005, 

also addresses the subject of this AD. 

Issued in Renton, Washington, on 

November 18, 2005. 

Kalene C. Yanamura, 

Acting Manager, Transport Airplane 

Directorate, Aircraft Certification Service. 

[FR Doc. 05–23513 Filed 11–30–05; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 284 

[Docket No. RM06–5–000] 

Amendments to Codes of Conduct for 

Unbundled Sales Service and for 

Persons Holding Blanket Marketing 

Certificates 

November 21, 2005. 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules 72091 

1 18 CFR 284.288 and 284.403 (2005). Sections 

284.288 and 284.403 of the Commission’s 

regulations are provided in Attachment A hereto. 

2Amendments to Blanket Sales Certificates, 

Order No. 644, 105 FERC ¶ 61,217 (2003), reh’g 

denied 107 FERC ¶ 61,174; 68 FR 66,323 (Nov. 26, 

2003); 18 CFR 284.288(a) and 284.403(a) (2003) 

(Order No. 644). Order No. 644 is currently on 

appeal. See Cinergy Marketing & Trading, L.P. v. 

FERC, No. 04–1168 et al. (D.C. Cir., appeal filed 

April 28, 2004). 

3Energy Policy Act of 2005, Pub. L. 109–58, 119 

Stat. 594 (2005). 

4Prohibition of Energy Market Manipulation, 113 

FERC ¶ 61,067 (2005) (Prohibition of Energy Market 

Manipulation NOPR). 

5 105 FERC ¶ 61,217 at P 91 (2003). 

6 18 CFR 284.288(a)(1)–(2) and 284.403(a)(1)–(2) 

(2005). 

7Policy Statement on Natural Gas and Electric 

Price Indices, 104 FERC ¶ 61,121 (2003). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Federal Energy 

Regulatory Commission (Commission) is 

proposing to amend its regulations 

regarding the blanket certificates for 

unbundled gas sales services held by 

interstate natural gas pipelines and the 

blanket marketing certificates held by 

persons making sales for resale of gas at 

negotiated rates in interstate commerce. 

Specifically, the Commission proposes 

to repeal sections of the Commission’s 

regulations pertaining to codes of 

conduct with respect to certain sales of 

natural gas once we have issued final 

regulations implementing the antimanipulation provisions of the Energy 

Policy Act of 2005 and have 

incorporated other aspects of such 

regulations in appropriate Commission 

orders, rules and regulations. The 

Commission seeks public comment on 

whether such regulations should be 

repealed as proposed herein. 

DATES: Comments are due January 3, 

2006. Reply comments are due January 

17, 2006. 

ADDRESSES: 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 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. 

FOR FURTHER INFORMATION CONTACT: 

Frank Karabetsos, Office of General 

Counsel, Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426, (202) 502–8133, 

Frank.Karabetsos@ferc.gov. 

SUPPLEMENTARY INFORMATION: 

Introduction 

1. In this Notice of Proposed 

Rulemaking (NOPR), the Commission 

seeks comments on whether to repeal 

sections 284.288 and 284.403 of its 

regulations,1 which requires that 

pipelines and all sellers for resale 

adhere to a code of conduct with respect 

to certain sales of natural gas, as 

implemented pursuant to Order No. 

644.2 The central purpose of sections 

284.288 and 284.403 of the 

Commission’s regulations is to prohibit 

market manipulation. In the Energy 

Policy Act of 2005 (EPAct 2005),3

Congress enacted new section 4A of the 

Natural Gas Act (NGA) which 

specifically bars manipulation in 

connection with the purchase or sale of 

natural gas or transportation services 

and authorizes the Commission to 

promulgate rules and regulations 

prohibiting market manipulation. In a 

Notice of Proposed Rulemaking issued 

October 20, 2005, the Commission has 

proposed rules to implement the new 

statutory anti-manipulation provisions.4

We propose repealing sections 284.288 

and 284.403 of the Commission’s 

regulations once we have issued final 

regulations implementing the antimanipulation provisions of EPAct 2005 

and have incorporated other aspects of 

sections 284.288 and 284.403 of the 

Commission’s regulations in appropriate 

Commission orders, rules, and 

regulations. We are also requesting 

comment on whether sections 284.288 

and 284.403 should be repealed 

prospectively. 

Background 

2. On November 17, 2003, acting 

pursuant to section 7 of the NGA, we 

issued a final rule, Order No. 644, 

amending blanket certificates for 

unbundled gas sales services held by 

interstate natural gas pipelines and 

blanket marketing certificates held by 

persons making sales for resale of 

natural gas at negotiated rates in 

interstate commerce. This rule requires 

that pipelines that provide unbundled 

natural gas sales service and all sellers 

of natural gas for resale adhere to a code 

of conduct with respect to natural gas 

sales. The Commission determined that 

in order to protect and maintain the 

competitive natural gas market and to 

continue its light-handed regulation of 

the gas sales within its jurisdiction, it 

was necessary to place additional 

conditions on its grant of market-based 

sales certificates. In formulating such 

conditions to the market-based rate 

certificates the Commission was 

fulfilling its obligation to appropriately 

monitor markets and to ensure that 

market-based rates remain within the 

zone of reasonableness required by the 

NGA.5

3. Under sections 284.288(a) and 

284.403(a) of the Commission’s 

regulations, a pipeline providing 

unbundled natural gas sales service 

under section 284.284, or any person 

making natural gas sales for resale in 

interstate commerce pursuant to section 

284.402, ‘‘is prohibited from engaging in 

actions or transactions that are without 

a legitimate business purpose and that 

are intended to or foreseeably could 

manipulate market prices, market 

conditions, or market rules for natural 

gas.’’ Prohibited actions or transactions 

include wash trades and collusion for 

the purpose of market manipulation.6

4. Sections 284.288(b) and 284.403(b) 

deal with reporting of transaction 

information to price index publishers. 

They require that if a seller reports 

transaction data, the data be accurate 

and factual, and not knowingly false or 

misleading, and be reported in 

accordance with the Commission’s 

Policy Statement on price indices.7

Sections 284.288(b) and 284.403(b) also 

require that sellers notify the 

Commission of whether they report 

transaction data to price index 

publishers in accordance with the 

Policy Statement, and to update any 

changes in their reporting status. 

5. Sections 284.288(c) and 284.403(c) 

require that sellers retain for a minimum 

three year period all data and 

information upon which they billed the 

prices charged for natural gas sales 

made under their market-based sales 

certificates or in transactions the prices 

of which were reported to price index 

publishers. 

6. Sections 284.288(d)–(e) and 

284.403(d)–(e) of the Commission’s 

regulations are largely procedural in 

nature. Specifically, sections 284.288(d) 

and 284.403(d) deal with remedies for 

violations of the codes of conduct 

requirements set forth in preceding 

paragraphs (a) through (c) of sections 

284.288 and 284.403. Sections 

284.288(e) and 284.403(e) deal with 

time limits on complaints and 

Commission enforcement of the codes of 

conduct requirements. 

7. At the same time that Order No. 

644 was adopted for pipelines that 

provide unbundled natural gas sales 

service and holders of blanket certificate 

authority that make sales for resale of 

natural gas, the Commission also issued 

an order to require wholesale sellers of 

electricity at market-based rates to 

72092 Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules 

8 Investigation of Terms and Conditions of Public 

Utility Market-Based Rate Authorizations, ‘‘Order 

Amending Market-Based Rate Tariffs and 

Authorizations,’’ 105 FERC ¶ 61,218 (2003), reh’g 

denied, 107 FERC ¶ 61,175 (2004) at Appendix A. 

9The proposed Part 159 regulations are also 

provided in Attachment A hereto. 

10As discussed in the Prohibition of Energy 

Market Manipulation NOPR (at P 14), section 4A of 

the NGA, as added by section 315 of EPAct 2005, 

and the proposed implementing rules are patterned 

after section 10(b) of the Securities Exchange Act 

of 1934 and related regulations, which provides a 

level of certainty as to how the proposed rules will 

operate that is not typically available. 

11Concurrently with this NOPR, we are issuing 

an order pursuant to section 206 of the Federal 

Power Act (FPA) in Docket No. EL06–16–000 to 

consider similar changes to the Market Behavior 

Rules, which are currently included in all public 

utility sellers’ market-based rate tariffs and 

authorizations. 

12The timing of proposed repeal is important. We 

do not intend to leave any gap in our regulations 

prohibiting manipulation of energy markets or other 

requirements of sections 284.288 and 284.403 of the 

Commission’s regulations. 

13 15 U.S.C. 78j(b) (2005). 

14Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201 

(1976). 

15Sundstrand Corp. v. Sun Chemical Corp., 553 

F.2d 1033 (7th Cir. 1977), cert. denied, 434 U.S. 875 

(1977) (defining recklessness in the section 10(b) 

and Rule 10b–5 context as ‘‘a highly unreasonable 

omission, involving not merely simple, or even 

inexcusable negligence, but an extreme departure 

from the standards of ordinary care, and which 

presents a danger of misleading buyers or sellers 

that is either known to the defendant or is so 

obvious that the actor must have been aware of it.’’); 

accord In Re Silicon Graphics Securities Litigation, 

183 F.3d 970, 977 (9th Cir. 1999). 

adhere to certain behavioral rules when 

making sales of electricity.8

EPAct 2005 and Proposed New Rules 

8. As noted, section 315 of EPAct 

2005 amended the NGA to add a new 

section 4A, which prohibits the use or 

employment of ‘‘any manipulative or 

deceptive device or contrivance’’ in 

connection with the purchase or sale of 

natural gas or the purchase or sale of 

transportation services subject to the 

jurisdiction of the Commission. In order 

to implement the anti-manipulation 

provisions of NGA section 4A, we 

issued the Prohibition of Energy Market 

Manipulation NOPR, proposing new 

regulations (proposed Part 159 

regulations) to make it unlawful for any 

entity, directly or indirectly, in 

connection with the purchase or sale of 

natural gas or the purchase or sale of 

transportation services subject to the 

jurisdiction of the Commission (1) to 

use or employ any device, scheme, or 

artifice to defraud, (2) to make any 

untrue statement of a material fact or to 

omit to state a material fact necessary in 

order to make the statements made, in 

the light of the circumstances under 

which they were made, not misleading, 

or (3) to engage in any act, practice, or 

course of business that operates or 

would operate as a fraud or deceit upon 

any person.9

9. In the Prohibition of Energy Market 

Manipulation NOPR, we recognized that 

sections 284.288(a) and 284.403(a) of 

the Commission’s regulations also 

prohibit manipulative conduct. We 

noted that conduct that violates sections 

284.288(a) or 284.403(a) and the 

proposed Part 159 regulations will be 

treated as one violation of antimanipulation rules, and that we will not 

apply duplicative penalties for the same 

conduct in the event that conduct were 

to violate both sections 284.288(a) or 

284.403(a) and the proposed Part 159 

regulations. We also indicated that we 

would seek comment on whether 

sections 284.288(a) and 284.403(a) of 

the Commission’s regulations should be 

revised or repealed in light of the 

proposed Part 159 regulations. 

Discussion 

10. Our goal is to provide firm but fair 

enforcement of the statutes, orders, 

rules, and regulations we administer. To 

do so, it is important that our rules be 

as clear as possible so that market 

participants and entities subject to our 

rules and regulations understand what 

conduct is proscribed and can act 

accordingly.10 We propose to repeal 

sections 284.288 and 284.403 in light of 

the proposed Part 159 regulations to 

implement the new anti-manipulation 

provisions contained in section 4A of 

the NGA and of the Commission’s other 

rules and regulations.11 All market 

participants subject to sections 284.288 

and 284.403 are ‘‘entities’’ subject to 

EPAct 2005 and therefore will be subject 

to the new regulations prohibiting 

manipulation, deceit, and fraud in 

connection with wholesale natural gas 

transactions. Other aspects of sections 

284.288 and 284.403 of the 

Commission’s regulations either reflect 

existing requirements or can be 

incorporated into other rules, making it 

unnecessary to retain the separate list of 

rules in sections 284.288(a)–(e) and 

284.403(a)–(e) of the Commission’s 

regulations. 

11. We think that repeal of sections 

284.288 and 284.403 of the 

Commission’s regulations will simplify 

the Commission’s rules and regulations, 

avoid confusion, and provide greater 

clarity and regulatory certainty to the 

industry. At the same time, we think 

that the behaviors described in sections 

284.288 and 284.403 of the 

Commission’s regulations will still be 

addressed through other rules and 

regulations. We emphasize our belief 

that repeal of sections 284.288 and 

284.403 of the Commission’s regulations 

is intended to take into account the 

passage of EPAct 2005, which has 

provided the Commission with 

expanded anti-manipulation authority, 

and to simplify and streamline the rules 

and regulations sellers must follow, not 

to eliminate beneficial rules governing 

market behavior. 

12. The heart of sections 284.288 and 

284.403 of the Commission’s regulations 

is subparagraph (a), prohibiting 

manipulation. We recognize that there is 

overlap between sections 284.288(a) and 

284.403(a) of the Commission’s 

regulations and the proposed Part 159 

regulations. We are concerned that this 

could cause unnecessary confusion and 

regulatory uncertainty once the 

proposed Part 159 regulations are in 

place. It is our view that the scope of the 

new statutory prohibition on 

manipulation and the reach of the 

proposed Part 159 regulations eliminate 

the need for sections 284.288(a) and 

284.403(a) of the Commission’s 

regulations. 

13. We recognize there are some 

differences, but the differences do not 

seem to require keeping sections 

284.288 and 284.403 of the 

Commission’s regulations once the new 

Part 159 regulations are final.12 For 

instance, there is a difference in the 

standard of proof between sections 

284.288(a) and 284.403(a) of the 

Commission’s regulations and the 

proposed Part 159 regulations. In new 

section 4A of the NGA, Congress used 

the terms ‘‘manipulative or deceptive 

device or contrivance’’ and directed that 

they be given the same meaning as used 

in section 10b of the Securities 

Exchange Act of 1934.13

Those terms have been interpreted to 

require a showing of scienter, that is, an 

intent to deceive, manipulate or 

defraud.14 In other words, knowing, 

intentional, or reckless conduct is 

proscribed.15 In contrast, sections 

284.288(a) and 284.403(a) of the 

Commission’s regulations do not require 

a showing of scienter, as they prohibit 

actions or transactions that 

‘‘foreseeably’’ could manipulate market 

prices, conditions, or rules. The 

‘‘foreseeably’’ requirement has 

generated controversy and uncertainty, 

however. We believe the use of a 

scienter standard, given the precedent 

in other regulatory contexts, will draw 

a clearer line between acceptable and 

prohibited behavior. 

14. We also note that the new 

authority granted to the Commission in 

section 4A of the NGA and our 

proposed Part 159 regulations governs 

more transactions and more entities 

Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules 72093 

16 18 CFR Part 225 (2005). 

17Order No. 486, Regulations Implementing the 

National Environmental Policy Act, 52 FR 47897 

Continued 

than is the case for sections 284.288(a) 

and 284.403(a) of the Commission’s 

regulations, which covers only certain 

natural gas sellers. More precisely, 

Congress made the anti-manipulation 

provisions of section 315 applicable to 

‘‘any entity’’ and in connection with 

both the purchase and sale of natural 

gas, as well as the purchase or sale of 

transportation services subject to our 

jurisdiction. Sections 284.288(a) and 

284.403(a) of the Commission’s 

regulations, on the other hand, are 

applicable only to a pipeline providing 

unbundled natural gas sales service 

under section 284.284, or any person 

making natural gas sales for resale in 

interstate commerce pursuant to section 

284.402, a smaller subset of the entities 

and types of transactions than those 

subject to EPAct 2005 section 315 

prohibition of manipulation. 

15. Additionally, it is our view that it 

is not necessary to retain the explicit 

prohibitions against certain conduct set 

forth in sections 284.288(a)(1)–(2) and 

284.403(a)(1)–(2) (wash trades and 

collusion for the purpose of market 

manipulation). These are examples of 

prohibited manipulation, both of which 

are manipulative or deceptive devices or 

contrivances. Thus, both would be 

barred by the proposed Part 159 

regulations. For example, wash trades 

would be devices or schemes to defraud 

(proposed section 159.1(a)(1)). It is our 

view that market participants are on 

notice that wash trades and colluding to 

manipulate are prohibited activities 

under the proposed Part 159 

regulations, subject to penalty and 

remedial action. 

16. Turning to the other 

subparagraphs of sections 284.288 and 

284.403 of the Commission’s 

regulations, it appears that the 

requirements imposed there either are 

duplicative of other rules or regulations 

or can be incorporated into other rules 

of general applicability. For instance, 

the first part of sections 284.288(b) and 

284.403(b), requiring sellers to provide 

accurate data to price index publishers 

if the seller is reporting transactions to 

such publishers, calls for accurate and 

truthful representations. It is our view 

that failure to do so would be a violation 

of the proposed Part 159 regulations. 

Sections 284.288(b) and 284.403(b) of 

the Commission’s regulations also 

include a requirement that sellers notify 

the Commission of their price reporting 

status and any changes in that status. 

This does not appear elsewhere in our 

current or proposed regulations. We 

note, however, that price transparency 

is also addressed by EPAct 2005, which 

adds new section 23 to the NGA. 

Section 23 gives us authority to 

promulgate rules and regulations 

necessary to facilitate price 

transparency. We intend to address 

market transparency issues in a separate 

proceeding, and anticipate that rules 

adopted in that proceeding will address 

the sections 284.288(b) and 284.403(b) 

requirements for providing transaction 

information to price index publishers 

and informing the Commission of price 

reporting status. 

17. Sections 284.288(c) and 284.403(c) 

requires sellers to maintain certain 

records for a period of three years to 

reconstruct prices charged for natural 

gas. The Commission has a number of 

specific record retention requirements 

applicable to natural gas companies 

subject to the jurisdiction of the 

Commission in Part 225 of our 

regulations.16 In many cases, these 

requirements are for time periods longer 

than three years. The Part 225 

requirements are largely related to costof-service rate requirements, however. 

We believe it is important that all 

pipelines providing unbundled natural 

gas sales service and all persons holding 

blanket certificates making natural gas 

sales for resale in interstate commerce 

retain the data and information 

described in sections 284.288(c) and 

284.403(c) of the Commission’s 

regulations. We intend to address this 

retention requirement in the context of 

our rules under the NGA, such that 

there will be no gap in the retention 

requirement. We believe that doing so 

would eliminate the need to retain 

sections 284.288(c) and 284.403(c) of 

the Commission’s regulations. 

18. If the Commission decides to 

repeal sections 284.288(a)–(c) and 

284.403(a)–(c) of its regulations, it is the 

Commission’s view that sections 

284.288(d) and 284.403(d) of the 

Commissions’ regulations, dealing with 

remedies, and sections 284.288(e) and 

284.404(e), dealing with time limits on 

complaints and Commission 

enforcement, are largely procedural and 

would become superfluous without the 

underlying operative paragraphs and 

therefore should be deleted. 

19. In addition to simplifying our 

codes of conduct rules, avoiding 

confusion, and providing more 

regulatory certainty, it is also our view 

that a smooth transition from the 

existing codes of conduct regulations to 

the proposed Part 159 regulations and 

other rules and regulations achieves our 

original goal in adopting sections 

284.288 and 284.403 of the 

Commission’s regulations, that is, to 

fulfill our obligation to ensure that 

market-based rates remain within the 

zone of reasonableness required by the 

NGA. In EPAct 2005, Congress has 

provided broad and strong prohibitions 

of market manipulation, and reliance on 

rules implementing these statutory 

prohibitions will likewise assure that 

wholesale markets reflect competitive 

forces and produce just and reasonable 

rates. 

20. We seek comment on whether 

sections 284.288 and 284.403 of the 

Commission’s regulations should be 

repealed prospectively, including 

responses to the following questions: 

A. Are there any aspects of sections 

284.288 and 284.403 of the 

Commission’s regulations that should be 

retained, or can all substantive 

provisions of sections 284.288 and 

284.403 of the Commission’s regulations 

be reflected in the proposed Part 159 

regulations and other Commission rules 

and regulations? 

B. Is there a need or basis for retaining 

existing sections 284.288(a) and 

284.403(a) of the Commission’s 

regulations in light of the antimanipulation provisions set forth in the 

proposed Part 159 regulations? 

C. Should the affirmative defense of 

‘‘legitimate business purpose’’ in 

existing sections 284.288(a) and 

284.403(a) of the Commission’s 

regulations be retained in any form? 

D. Is the requirement of sections 

284.288(b) and 284.403(b) of the 

Commission’s regulations to report 

transaction information accurately, to 

the extent a seller reports such 

information to price index publishers, 

necessary in light of the proposed Part 

159 regulations? 

21. We encourage responses to the 

specific questions above as well as 

additional relevant comments regarding 

whether sections 284.288 and 284.403 

of the Commission’s regulations should 

be repealed. 

Information Collection Statement 

22. This proposed rule implements 

the existing requirements as set forth in 

section 4A of the NGA and does not 

include new information requirements 

under the provisions of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.). 

Environmental Analysis 

23. 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 

72094 Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules 

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

Preambles 1986–1990 ¶ 30,783 (1987). 

18 18 CFR 380.4 (2005). 

19See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 

380.4(a)(27) (2005). 

20 5 U.S.C. 601–12 (2000). 

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. 

15 U.S.C. 632 (2000). The Small Business Size 

Standards component of the North American 

Industry Classification System defines a small 

electric utility as one that, including its affiliates, 

is primarily engaged in the generation, 

transmission, and/or distribution of electric energy 

for sale and whose total electric output for the 

preceding fiscal years did not exceed 4 million 

MWh. 13 CFR 121.201 (2004) (Section 22, Utilities, 

North American Industry Classification System, 

NAICS). 

categorically excluded certain actions 

from these requirements as not having a 

significant effect on the human 

environment.18 The actions proposed 

here fall within categorical exclusions 

in the Commission’s regulations for 

rules that are clarifying, corrective, or 

procedural, for information gathering, 

analysis, and dissemination, and for 

sales, exchange, and transportation of 

natural gas that requires no construction 

of facilities.19 Therefore, an 

environmental assessment is 

unnecessary and has not been prepared 

in this NOPR. 

Regulatory Flexibility Act 

24. The Regulatory Flexibility Act of 

1980 (RFA) 20 generally requires a 

description and analysis of final rules 

that will have significant economic 

impact on a substantial number of small 

entities.21 The Commission is not 

required to make such analyses if a rule 

would not have such an effect. 

25. The Commission does not believe 

that this proposed rule would have such 

an impact on small entities. The 

proposed rule merely repeals sections 

284.288 and 284.403 of the 

Commission’s regulations. Therefore, 

the Commission certifies that this 

proposed rule, if finalized, will not have 

a significant economic impact on a 

substantial number of small entities. 

Comment Procedures 

26. The Commission invites interested 

persons to submit 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 January 3, 2006. 

Reply comments are due January 17, 

2006. Comments must refer to Docket 

No. RM06–5–000, and must include the 

commenter’s name, the organization 

they represent, if applicable, and their 

address in their comments. Comments 

may be filed either in electronic or 

paper format. Comments may be filed 

electronically via the eFiling link on the 

Commission’s Web site at http:// 

www.ferc.gov. The Commission accepts 

most standard word processing formats 

and commenters may attach additional 

files with supporting information in 

certain other file formats. Commenters 

filing electronically do not need to make 

a paper filing. Commenters that are not 

able to file comments electronically 

must send an original and 14 copies of 

their comments to: Federal Energy 

Regulatory Commission, Office of the 

Secretary, 888 First Street, NE., 

Washington, DC 20426. 

27. All comments will be placed in 

the Commission’s public files and may 

be viewed, printed, or downloaded 

remotely as described in the Document 

Availability section below. Commenters 

on this proposal are not required to 

serve copies of their comments on other 

commenters. 

Document Availability 

28. 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 

FERC’s Home Page (http://www.ferc.gov) 

and in FERC’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. 

29. From FERC’s Home Page on the 

Internet, this information is available in 

the eLibrary. The full text of this 

document is available in the eLibrary 

both in PDF and Microsoft Word format 

for viewing, printing, and/or 

downloading. To access this document 

in eLibrary, type the docket number 

excluding the last three digits of this 

document in the docket number field. 

User assistance is available for 

eLibrary and the FERC’s Web site during 

our normal business hours. For 

assistance contact FERC Online Support 

at FERCOnlineSupport@ferc.gov or tollfree at (866) 208–3676, or for TTY, 

contact (202) 502–8659. 

List of Subjects in 18 CFR Part 284 

Continental Shelf, Natural gas, 

Reporting and recordkeeping 

requirements. 

By direction of the Commission. 

Magalie R. Salas, 

Secretary. 

In consideration of the foregoing, the 

Commission proposes to amend part 

284, chapter I, title 18, Code of Federal 

Regulations, as follows. 

PART 284—CERTAIN SALES AND 

TRANSPORTATION OF NATURAL GAS 

UNDER THE NATURAL GAS POLICY 

ACT OF 1978 AND RELATED 

AUTHORITIES 

1. The authority citation for part 284 

continues to read as follows: 

Authority: 15 U.S.C. 717–717w, 3301–

3432; 42 U.S.C. 7101–7532; 43 U.S.C. 1331–

1356. 

§ 284.288 [Removed] 

2. Remove § 284.288. 

§ 284.403 [Removed] 

3. Remove § 284.403. 

[FR Doc. 05–23405 Filed 11–30–05; 8:45 am] 

BILLING CODE 6717–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 55 

[OAR–2004–0091; FRL–8000–1] 

Outer Continental Shelf Air 

Regulations Consistency Update for 

California 

AGENCY: Environmental Protection 

Agency (‘‘EPA’’). 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to update a 

portion of the Outer Continental Shelf 

(‘‘OCS’’) Air Regulations. Requirements 

applying to OCS sources located within 

25 miles of States’ seaward boundaries 

must be updated periodically to remain 

consistent with the requirements of the 

corresponding onshore area (‘‘COA’’), as 

mandated by section 328(a)(1) of the 

Clean Air Act, as amended in 1990 (‘‘the 

Act’’). The portion of the OCS air 

regulations that is being updated 

pertains to the requirements for OCS 

sources by the State of California and 

South Coast Air Quality Management 

District (South Coast AQMD). The 

intended effect of approving the OCS 

requirements for the State of California 

and South Coast AQMD is to regulate 

emissions from OCS sources in 

accordance with the requirements 

onshore. The change to the existing 

requirements discussed below is 

proposed to be incorporated by 

reference into the Code of Federal 

Regulations and is listed in the 

appendix to the OCS air regulations. 

DATES: Comments on the proposed 

update must be received on or before 

January 3, 2006. 

ADDRESSES: Submit comments, 

identified by docket number OAR–

2004–0091, by one of the following 

methods: