71484 Federal Register / Vol. 70, No. 228 / Tuesday, November 29, 2005 / Notices 

1 16 U.S.C. 824e (2000). 

2 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 

(the Market Behavior Rules Order). The Market 

Behavior Rules are currently on appeal. See Cinergy 

Marketing & Trading, L.P. v. FERC, Nos. 04–1168 

et al. (DC Cir., appeal filed April 28, 2004). 

3Energy Policy Act of 2005, Public Law No. 109–

58, 119 Stat. 594 (2005). 

4Prohibition of Energy Market Manipulation, 113 

FERC ¶ 61,067 (2005) (NOPR). 

5Market Behavior Rules Order, 105 FERC ¶

61,218 at PP 3, 158–74. 

obligation to file the quarterly report for 

the quarter ending December 2005. 

Filed Date: 10/28/2005. 

Accession Number: 20051101–0011. 

Comment Date: 5 p.m. Eastern Time 

on Friday, November 18, 2005. 

Docket Numbers: ER06–88–000. 

Applicants: El Paso Electric Company. 

Description: El Paso Electric Co 

submits notice of cancellation & a 

cancellation tariff sheet for the purpose 

of canceling a Transaction Agreement 

with Southwestern Public Service Co. 

Filed Date: 10/28/2005. 

Accession Number: 20051101–0012. 

Comment Date: 5 p.m. Eastern Time 

on Friday, November 18, 2005. 

Docket Numbers: ER06–96–000. 

Applicants: American Electric Power 

Service Corporation. 

Description: AEP on behalf of 

Southwestern Electric Power Co submits 

the executed Second Power Supply 

Agreement with East Texas Electric 

Coop, Inc. et al. 

Filed Date: 10/28/2005. 

Accession Number: 20051102–0367. 

Comment Date: 5 p.m. Eastern Time 

on Friday, November 18, 2005. 

Docket Numbers: ER99–830–013; 

ER04–925–005. 

Applicants: Merrill Lynch Capital 

Services, Inc.; Merrill Lynch 

Commodities, Inc. 

Description: Merrill Lynch 

Commodities, Inc & Merrill Lynch 

Capital Services, Inc reports the change 

in status in connection with the transfer 

of equity interests in Granite Ridge I 

SPE, LLC etc. 

Filed Date: 10/28/2005. 

Accession Number: 20051101–0015. 

Comment Date: 5 p.m. Eastern Time 

on Friday, November 18, 2005. 

Any person desiring to intervene or to 

protest in any of the above proceedings 

must file in accordance with Rules 211 

and 214 of the Commission’s Rules of 

Practice and Procedure (18 CFR 385.211 

and 385.214) on or before 5 p.m. Eastern 

time on the specified comment date. It 

is not necessary to separately intervene 

again in a subdocket related to a 

compliance filing if you have previously 

intervened in the same docket. Protests 

will be considered by the Commission 

in determining the appropriate action to 

be taken, but will not serve to make 

protestants parties to the proceeding. 

Anyone filing a motion to intervene or 

protest must serve a copy of that 

document on the Applicant. In reference 

to filings initiating a new proceeding, 

interventions or protests submitted on 

or before the comment deadline need 

not be served on persons other and the 

Applicant. 

The Commission encourages 

electronic submission of protests and 

interventions in lieu of paper, using the 

FERC Online links at http:// 

www.ferc.gov. To facilitate electronic 

service, persons with Internet access 

who will eFile a document and/or be 

listed as a contact for an intervenor 

must create and validate an 

eRegistration account using the 

eRegistration link. Select the eFiling 

link to log on and submit the 

intervention or protests. 

Persons unable to file electronically 

should submit an original and 14 copies 

of the intervention or protest to the 

Federal Energy Regulatory Commission, 

888 First St., NE., Washington, DC 

20426. 

The filings in the above proceedings 

are accessible in the Commission’s 

eLibrary system by clicking on the 

appropriate link in the above list. They 

are also available for review in the 

Commission’s Public Reference Room in 

Washington, DC. There is an 

eSubscription link on the web site that 

enables subscribers to receive email 

notification when a document is added 

to a subscribed dockets(s). For 

assistance with any FERC Online 

service, please email 

FERCOnlineSupport@ferc.gov or call 

(866) 208–3676 (toll free). For TTY, call 

(202) 502–8659. 

Magalie R. Salas, 

Secretary. 

[FR Doc. E5–6632 Filed 11–28–05; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

[Docket No. EL06–16–000] 

Investigation of Terms and Conditions 

of Public Utility Market-Based Rate 

Authorizations; Order Proposing 

Revisions to Market-Based Rate Tariffs 

and Authorizations 

Issued November 21, 2005. 

Before Commissioners: Joseph T. 

Kelliher, Chairman; Nora Mead 

Brownell, and Suedeen G. Kelly 

1. The Commission issues this order 

pursuant to section 206 of the Federal 

Power Act (FPA) 1 to propose repeal of 

the Market Behavior Rules, which are 

currently included in all public utility 

sellers’ market-based rate tariffs and 

authorizations.2 The central purpose of 

the Market Behavior Rules is to prohibit 

market manipulation. In the Energy 

Policy Act of 2005 (EPAct 2005),3

Congress enacted new section 222 of the 

FPA which specifically bars 

manipulation in connection with the 

purchase or sale of wholesale electric 

energy or transmission services and 

authorizes the Commission to 

promulgate rules and regulations 

prohibiting market manipulation. In a 

Notice of Proposed Rulemaking (NOPR) 

issued October 20, 2005, the 

Commission has proposed rules to 

implement the new statutory antimanipulation provisions.4 We propose 

repealing the Market Behavior Rules 

once we have issued final regulations 

implementing the anti-manipulation 

provisions of EPAct 2005 and have 

incorporated other aspects of the Market 

Behavior Rules in appropriate 

Commission orders, rules, and 

regulations. We are also requesting 

comment on whether the Market 

Behavior Rules should be repealed 

prospectively. 

Background 

2. On November 17, 2003, acting 

pursuant to section 206 of the FPA, we 

amended all market-based rate tariffs 

and authorizations to include the 

Market Behavior Rules. We determined 

that sellers’ market-based tariffs and 

authorizations to make sales at market 

rates would be unjust and unreasonable 

unless they included clearly-delineated 

rules governing market participant 

conduct, and that the Market Behavior 

Rules fairly apprised market 

participants of their obligations in 

competitive power markets and were 

just and reasonable.5

3. Market Behavior Rule 1 requires 

sellers to follow Commission-approved 

rules and regulations in organized 

power markets. These rules and 

regulations are part of the tariffs of 

Independent System Operators (ISO) or 

Regional Transmission Organizations 

(RTO), and sellers’ agreements to 

operate within ISOs and RTOs bind 

them to follow the applicable rules and 

regulations of the organized market. 

4. Market Behavior Rule 2 prohibits 

‘‘actions or transactions that are without 

a legitimate business purpose and that 

are intended to or foreseeably could 

Federal Register / Vol. 70, No. 228 / Tuesday, November 29, 2005 / Notices 71485 

6Policy Statement on Natural Gas and Electric 

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

7 18 CFR part 358 (2005). 

8 18 CFR 284.288 and 284.403 (2005). 

9The proposed part 47 regulations are also 

provided in Attachment A hereto. 

10As discussed in the NOPR (at P 14), section 222 

of the FPA, as added by section 1283 of EPAct 2005, 

and the proposed part 47 regulations 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 order, we are issuing a 

Notice of Proposed Rulemaking in Docket No. 

RM06–5–000 to consider similar changes in our 

part 284 regulations promulgated in Order No. 644. 

manipulate market prices, market 

conditions, or market rules for electric 

energy or electricity products.’’ Actions 

or transactions explicitly contemplated 

in Commission-approved rules and 

regulations of an organized market, or 

undertaken by a market-based rate seller 

at the direction of an ISO or RTO, 

however, are not violations of Market 

Behavior Rule 2. In addition, Market 

Behavior Rule 2 prohibits certain 

specific behavior: Rule 2(a) prohibits 

wash trades, Rule 2(b) prohibits 

transactions predicated on submitting 

false information, Rule 2(c) prohibits the 

creation and relief of artificial 

congestion, and Rule 2(d) prohibits 

collusion for the purpose of market 

manipulation. 

5. Market Behavior Rule 3 requires 

sellers to provide accurate and factual 

information, and not to submit false or 

misleading information or to omit 

material information, in any 

communication with the Commission, 

market monitors, ISOs, RTOs, or 

jurisdictional transmission providers. 

6. Market Behavior Rule 4 deals with 

reporting of transaction information to 

price index publishers. It requires 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.6 Rule 4 also requires 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. 

7. Market Behavior Rule 5 requires 

that sellers retain for a minimum three 

year period all data and information 

upon which they billed the prices 

charged for electricity and related 

products in sales made under their 

market-based rate tariffs and 

authorizations or in transactions the 

prices of which were reported to price 

index publishers. 

8. Finally, Market Behavior Rule 6 

directs sellers not to violate, or to 

collude with others in actions that 

violate, sellers’ market-based rate codes 

of conduct or the Standards of Conduct 

under Part 358 of our regulations.7

9. At the same time that the Market 

Behavior Rules were adopted for 

jurisdictional wholesale electric 

transactions, the Commission issued 

Order No. 644, which introduced 

parallel provisions in part 284 of our 

regulations under the Natural Gas Act 

governing pipelines and holders of 

blanket certificate authority that sell 

natural gas at wholesale.8 Not every 

aspect of the electric Market Behavior 

Rules was applicable in the natural gas 

sales context, however. The part 284 

regulations encompass Market Behavior 

Rule 2, including wash sales and 

collusion to manipulate, and Market 

Behavior Rules 4 and 5. 

EPAct 2005 and Proposed New Rules 

10. As noted, section 1283 of EPAct 

2005 amended the FPA to add a new 

section 222, which prohibits the use or 

employment of ‘‘any manipulative or 

deceptive device or contrivance’’ in 

connection with the purchase or sale of 

electric energy or transmission services 

subject to the jurisdiction of the 

Commission. In order to implement the 

anti-manipulation provisions of FPA 

section 222, we issued the NOPR 

proposing new regulations (proposed 

part 47 regulations) to make it unlawful 

for any entity, directly or indirectly, in 

connection with the purchase or sale of 

electric energy or the purchase or sale 

of transmission 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

11. In the NOPR we recognized that 

Market Behavior Rule 2 also prohibits 

manipulative conduct. We noted that 

conduct that violates both Market 

Behavior Rule 2 and the proposed part 

47 regulations will be treated as one 

violation of anti-manipulation rules, 

and that we will not apply duplicative 

penalties for the same conduct in the 

event that conduct were to violate both 

Market Behavior Rule 2 and the 

proposed part 47 regulations. We also 

indicated that we would seek comment 

on whether Market Behavior Rule 2 

should be revised or repealed in light of 

the proposed part 47 regulations. 

Discussion 

12. 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 the 

Market Behavior Rules in light of the 

proposed part 47 regulations to 

implement the new anti-manipulation 

provisions contained in section 222 of 

the FPA and of the Commission’s other 

rules and regulations.11 All marketbased rate sellers are ‘‘entities’’ subject 

to EPAct 2005 and therefore will be 

subject to the new regulations 

prohibiting manipulation, deceit, and 

fraud in connection with wholesale 

electricity transactions. Other aspects of 

the Market Behavior Rules either reflect 

existing requirements or can be 

incorporated into other rules, making it 

unnecessary to retain the separate list of 

rules in each seller’s tariff. 

13. We think that repeal of the Market 

Behavior Rules 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 the 

Market Behavior Rules will still be 

addressed through other rules and 

regulations. We emphasize our belief 

that repeal of the Market Behavior Rules 

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. 

14. The heart of the Market Behavior 

Rules are Rules 2 and 3, prohibiting 

manipulation and requiring complete, 

accurate, and factual representations. 

We recognize that there is overlap 

between Market Behavior Rules 2 and 3 

and the proposed part 47 regulations. 

We are concerned that this could cause 

unnecessary confusion and regulatory 

uncertainty once the proposed part 47 

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 47 

regulations eliminate the need for 

Market Behavior Rules 2 and 3. 

15. We recognize there are some 

differences, but the differences do not 

seem to require keeping the Market 

Behavior Rules once the new part 47 

71486 Federal Register / Vol. 70, No. 228 / Tuesday, November 29, 2005 / Notices 

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 the Market Behavior Rules. 

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.), 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). 

16 In addition, EPAct 2005 section 1282 enacted 

new FPA section 221, which contains a new 

prohibition on providing false information. No 

entity, including an FPA section 201(f) entity, 

‘‘shall willfully and knowingly report any 

information relating to the price of electricity sold 

at wholesale or the availability of transmission 

capacity * * * to a Federal agency with intent to 

fraudulently affect the data being compiled by the 

Federal agency.’’ This prohibition is wider in scope 

than current Market Behavior Rule 4 because it 

applies to any ‘‘entity’’ and is not restricted to 

jurisdictional sales or transmission services. 

17 18 CFR part 125 (2005). 

regulations are final.12 For instance, 

there is a difference in the standard of 

proof between Market Behavior Rule 2 

and the proposed part 47 regulations. In 

new section 222 of the FPA, 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, Market 

Behavior Rule 2 does not require a 

showing of scienter, as it prohibits 

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. 

16. We also note that the new 

authority granted to the Commission in 

section 222 of the FPA and our 

proposed part 47 regulations cover more 

transactions and more entities than is 

the case for Market Behavior Rule 2, 

which governs only market-based rate 

sellers. More precisely, Congress made 

the anti-manipulation provisions of 

section 222 applicable to ‘‘any entity’’

and in connection with both the 

purchase and sale of electric energy, as 

well as the purchase and sale 

transmission services subject to our 

jurisdiction. Market Behavior Rule 2, on 

the other hand, is applicable only to 

sales by ‘‘public utilities’’ that have 

market-based rate authority, a smaller 

subset of the entities and types of 

transactions subject to the section 222 

prohibition of manipulation. 

17. Market Behavior Rule 2 also 

includes a statement that actions or 

transactions explicitly contemplated in 

Commission-approved rules and 

regulations of an organized market, or 

undertaken by a market-based rate seller 

at the direction of an ISO or RTO, are 

not violations of Market Behavior Rule 

2. Actions or transactions pursuant to 

Commission-approved rules and 

regulations of an organized market, or 

pursuant to the direction of a 

Commission-approved RTO or ISO, are 

an affirmative defense to a claim of 

manipulation under the proposed part 

47 regulations, and therefore we will 

presume that such actions or 

transactions are not a violation of the 

proposed part 47 regulations. However, 

we seek comment on whether it is 

necessary to retain this provision in 

market-based rate tariffs. 

18. Similarly, it is our view that it is 

not necessary to retain the explicit 

prohibitions against certain conduct set 

forth in Market Behavior Rule 2 (wash 

trades, transactions predicated on 

submitting false information, 

transactions creating and relieving 

artificial congestion, and collusion for 

the purpose of market manipulation). 

These are examples of prohibited 

manipulation, all of which are 

manipulative or deceptive devices or 

contrivances. Thus, all would be barred 

by the proposed part 47 regulations. For 

example, wash trades or transactions to 

create and relieve artificial congestion 

would be devices or schemes to defraud 

(proposed § 47.1(a)(1)). Transactions 

predicated on false information would 

also involve untrue statements of 

material facts (proposed § 47.1(a)(2)). It 

is our view that market participants are 

on notice that these are prohibited 

activities under the proposed part 47 

regulations, subject to penalty and 

remedial action. 

19. Similarly, with respect to Market 

Behavior Rule 3, if a seller fails to 

provide accurate and factual 

information, or acts in a misleading 

way, that conduct would be a deceit or 

fraud and would be a violation of the 

proposed part 47 regulations. Our view 

is that, like Market Behavior Rule 2, 

conduct subject to Market Behavior Rule 

3 would also be covered by the 

proposed part 47 regulations. Here too, 

it would be confusing to retain a 

duplicative set of rules governing 

market conduct. 

20. Turning to the other Market 

Behavior Rules, 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, 

Market Behavior Rule 1 is essentially a 

restatement of existing obligations to 

comply with Commission rules and 

regulations in organized markets. These 

are tariff requirements of the ISOs and 

RTOs, and failure of a market 

participant to follow these rules and 

regulations is enforceable through the 

organized market’s tariff and related 

agreements. 

21. The first part of Market Behavior 

Rule 4, 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 47 regulations. 

Market Behavior Rule 4 also includes 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 220 to the FPA.16

Section 220 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 Market Behavior Rule 4 

requirements for providing transaction 

information to price index publishers 

and informing the Commission of price 

reporting status. 

22. Market Behavior Rule 5 requires 

sellers to maintain certain records for a 

period of three years to reconstruct 

prices charged for electricity and related 

products. The Commission has a 

number of specific record retention 

requirements applicable to public 

utilities subject to the jurisdiction of the 

Commission in part 125 of our 

regulations.17 In many cases, these 

requirements are for time periods longer 

than three years. The part 125 

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

We believe it is important that all 

market-based rate sellers retain the data 

and information described in Market 

Behavior Rule 5. We intend to address 

this retention requirement in the context 

of our rules under the FPA, such that 

there will be no gap in the retention 

Federal Register / Vol. 70, No. 228 / Tuesday, November 29, 2005 / Notices 71487 

18Fraud and collusion are often used 

interchangeably. See, e.g., Martin v. Wilks, 490 U.S. 

755, 772 (1989). The Supreme Court long ago found 

fraud to be implicit in collusion. Wheeler v. Denver, 

229 U.S. 342, 350 (1913) (‘‘of course, the existence 

of collusion implies the existence of fraud’’); 

Dickerman v. Northern Trust Co., 176 U.S. 181, 190 

(1900) (‘‘Collusion * * * implies the existence of 

fraud of some kind, the employment of fraudulent 

means, or lawful means for the accomplishment of 

an unlawful purpose * * *.’’). 

1 18 CFR 388.104(a) (2005). 

2 18 CFR part 358 (2005). 

3Order Amending Market-Based Rate Tariffs and 

Authorizations, 105 FERC ¶ 61,218 (2003) at 

Appendix A, reh’g denied, 107 FERC ¶ 61,175 

(2004) (electric power); 18 CFR 284.288 and 

284.403 (2005) (natural gas); appeal as to both 

electric power and natural gas Market Behavior 

Rules filed sub nom. Cinergy Marketing & Trading, 

L.P. v. FERC, Nos. 04–1168 et al. (DC Cir., appeal 

filed April 28, 2004). 

requirement. We believe that doing so 

would eliminate the need to retain 

Market Behavior Rule 5. 

23. Finally, Market Behavior Rule 6 

requires adherence to codes of conducts 

and the Standards of Conduct, and 

prohibits collusion to violate the codes 

of conduct or the Standards of Conduct. 

The codes of conduct are issued 

specifically to each market-based rate 

seller as part of their authorization, and 

the Standards of Conduct are applicable 

by rule to all market-based rate sellers 

engaged in or having affiliates engaged 

in transmission services. Our view is 

that Market Behavior Rule 6 restates 

requirements independently applicable 

to market-based rate sellers, except for 

the prohibition on colluding to violate 

the codes of conduct or Standards of 

Conduct. But collusion is a type of 

fraud,18 and thus collusion to violate 

codes of conduct or Standards of 

Conduct would be subject to the 

proposed part 47 regulations. 

24. In addition to simplifying our 

behavior rules, avoiding confusion, and 

providing more regulatory certainty, it is 

also our view that a smooth transition 

from the existing Market Behavior Rules 

to the proposed part 47 regulations and 

other rules and regulations achieves our 

original goal in adopting the Market 

Behavior Rules, that is, to assure that 

wholesale market rates for electric 

energy are just, reasonable, and not 

unduly discriminatory or preferential. 

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. 

25. We seek comment on whether the 

Market Behavior Rules should be 

repealed prospectively, including 

responses to the following questions: 

1. Are there any aspects of the Market 

Behavior Rules that should be retained 

in market-based rate sellers’ tariffs and 

authorizations, or can all substantive 

provisions of the Market Behavior Rules 

be reflected in the proposed part 47 

regulations and other Commission rules 

and regulations? 

2. Is there a need or basis for retaining 

existing Market Behavior Rule 2 in light 

of the anti-manipulation provisions set 

forth in the proposed part 47 

regulations? 

3. Should the Commission 

incorporate the qualification that no 

action or transaction explicitly 

contemplated by Commission rules, or 

undertaken at the direction of an ISO or 

RTO, is a violation of Market Behavior 

Rule 2 into the proposed part 47 

regulations? 

4. Should the affirmative defense of 

‘‘legitimate business purpose’’ in 

existing Market Behavior Rule 2 be 

retained in any form? 

5. Is there any aspect of behavior 

forbidden by Market Behavior Rule 3 

that would not act as a fraud or deceit 

in connection with the purchase or sale 

of electric energy or transmission 

services subject to the Commission’s 

jurisdiction? 

6. Is the requirement of Market 

Behavior Rule 4 to report transaction 

information accurately, to the extent a 

seller reports such information to price 

index publishers, necessary in light of 

the proposed part 47 regulations? 

7. Is there any aspect of Market 

Behavior Rule 6 that is not covered 

directly and explicitly by each seller’s 

code of conduct as contained in tariff 

authorizations, or by the Standards of 

Conduct in part 358 of our regulations, 

or by the proposed part 47 regulations? 

26. We encourage responses to the 

specific questions above as well as 

additional relevant comments regarding 

whether the Market Behavior Rules 

should be repealed. 

27. The Commission invites interested 

persons to submit comments on the 

matters, issues, and specific questions 

identified in this order. Comments are 

due thirty (30) days from the date of 

publication of this order in the Federal 

Register, and reply comments are due 

fifteen (15) days from the date that 

initial comments are due. To facilitate 

the Commission’s review of the 

comments, the Commission requests 

that commentors provide an executive 

summary of their position. In addition, 

the Commission requests that 

commentors identify each specific 

question addressed by their comments 

and use appropriate headings. 

The Commission Orders 

(A) Pursuant to the authority 

contained in and subject to the 

jurisdiction conferred upon the 

Commission by section 402(a) of the 

Department of Energy Organization Act 

and by the FPA, particularly section 206 

thereof, and pursuant to the 

Commission’s Rules of Practice and 

Procedure and the regulations under the 

FPA (18 CFR Chapter I), the 

Commission proposes to revise all 

public utility sellers’ market-based rate 

tariffs and authorizations as discussed 

in the body of this order. 

(B) Interested entities may file 

comments and reply comments 

regarding the proposed prospective 

repeal of the Market Behavior Rules set 

forth herein. Initial comments will be 

due 30 days from the date this order is 

published in the Federal Register, and 

reply comments will be due 15 days 

from the date that initial comments are 

due to be filed. 

(C) The Secretary shall promptly 

publish this order in the Federal 

Register. 

By the Commission. 

Magalie R. Salas, 

Secretary. 

[FR Doc. 05–23467 Filed 11–28–05; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

[Docket No. PL06–4–000] 

Informal Staff Advice on Regulatory 

Requirements; Interpretive Order 

Regarding No-Action Letter Process 

Issued November 18, 2005. 

Before Commissioners: Joseph T. 

Kelliher, Chairman; Nora Mead 

Brownell, and Suedeen G. Kelly 

1. The Commission clarifies that 

section 388.104(a) of its regulations 1

may be used to obtain informal staff 

advice regarding certain matters. 

Specifically, this regulation may be used 

to request and obtain staff ‘‘no-action’’

letters, effective immediately, with 

respect to whether staff will recommend 

that the Commission take no 

enforcement action with respect to 

specific proposed transactions, practices 

or situations that may raise issues under 

the Commission’s regulations relating to 

the Standards of Conduct for 

Transmission Providers,2 Market 

Behavior Rules 3 and, when a final rule 

is effective, the Commission’s proposed 

Prohibition of Energy Market