[Federal Register Volume 74, Number 101 (Thursday, May 28, 2009)]
[Rules and Regulations]
[Pages 25410-25413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12381]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 33

[Docket No. RM07-21-002; Order No. 708-B]


Blanket Authorization Under FPA Section 203

Issued May 21, 2009.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule; order on reporting requirements for blanket 
authorization under FPA Section 203.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) adopts 
reporting requirements under the expanded blanket authorization 
established in Order No. 708-A, which amends section 33.1(c)(12) of the 
Commission's regulations.

DATES: Effective Date: These regulations are effective July 27, 2009.

FOR FURTHER INFORMATION CONTACT:

Noah Monick (Legal Information), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426, (202) 502-8299.
Andrew Mosier (Technical Information), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, (202) 502-6274.
Ronald Lafferty (Technical Information), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, (202) 502-8026.

SUPPLEMENTARY INFORMATION:

Before Commissioners: Jon Wellinghoff, Chairman; Suedeen G. Kelly, 
Marc Spitzer, and Philip D. Moeller.

[[Page 25411]]

Order on Reporting Requirements for Blanket Authorization Under FPA 
Section 203

Order No. 708-B

Issued May 21, 2009.

    1. In this order, the Federal Energy Regulatory Commission 
(Commission) adopts reporting requirements that apply to the expanded 
blanket authorization under Sec.  33.1(c)(12) of the Commission's 
regulations,\1\ adopted in Order No. 708-A.\2\
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    \1\ 18 CFR 33.1(c)(12) (2008).
    \2\ Blanket Authorization Under FPA Section 203, Order No. 708, 
73 FR 11003 (Feb. 29, 2008), FERC Stats. & Regs. ] 31,265 (2008), 
order on reh'g, Order No. 708-A, 73 FR 43066 (July 24, 2008), FERC 
Stats. & Regs. ] 31,273 (2008).
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I. Background

    2. In Order No. 708, the Commission amended its regulations under 
section 203 of the Federal Power Act (FPA) to provide for five 
additional blanket authorizations under FPA section 203(a)(1).\3\ The 
Commission found that the blanket authorizations would facilitate 
investment in the electric utility industry and, at the same time, 
ensure that public utility customers are adequately protected from any 
adverse effects of such transactions. One of the additional blanket 
authorizations provided that a public utility could transfer its 
outstanding voting securities to any holding company granted blanket 
authorizations in paragraph (c)(2)(ii) of Sec.  33.1 of the 
Commission's regulations, if after the transfer, the holding company 
and any of its associate or affiliate companies in aggregate would own 
less than 10 percent of the outstanding voting interests of such public 
utility. In adopting Sec.  33.1(c)(12) of the Commission's regulations, 
the Commission rejected requests to extend the blanket authorization to 
``any person,'' on the grounds that without increased reporting 
requirements, any such extension would best be made on a case-by-case 
basis.\4\ The Commission also rejected requests to expand the reporting 
requirements applicable to the Commission's blanket authorizations 
under Sec.  33.1 of the Commission's regulations.
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    \3\ 16 U.S.C. 824b(a)(1) (2006).
    \4\ Order No. 708, FERC Stats. & Regs. ] 31,265 at P 20.
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    3. In Order No. 708-A, the Commission granted, in part, and denied, 
in part, the requests for rehearing of Order No. 708. Among other 
things, the Commission expanded the blanket authorization under Sec.  
33.1(c)(12) of the Commission's regulations to authorize a public 
utility to transfer its outstanding voting securities to ``any person'' 
other than a holding company if, after the transfer, such person and 
any of its associate or affiliate companies will own less than 10 
percent of the outstanding voting interests of such public utility. The 
Commission stated that it would also adopt a reporting requirement for 
entities transacting under that blanket authorization. In order to 
properly tailor the additional reporting requirement, the Commission 
also stated that it would issue a request for supplemental comments on 
the narrow issue of the scope and form of the reporting requirements 
under the expanded blanket authorizations under Sec.  33.1(c)(12) of 
the Commission's regulations.
    4. In its request for rehearing, the Financial Institutions Energy 
Group \5\ (Financial Group) proposed several conditions for the 
reporting requirement. Financial Group proposed that within a specified 
time following consummation of the transaction, the following 
information be reported: (1) Names of all parties to the transaction; 
(2) identification of both the pre-transaction and post-transaction 
voting security holdings (and the percentage ownership) in the public 
utility held by the acquirer and its associates or affiliate companies; 
(3) the date the transaction was consummated; (4) identification of any 
public utility or holding company affiliates of the parties to the 
transaction; and (5) the same type of statement currently required 
under Sec.  33.2(j)(1) of the Commission's regulations,\6\ which 
describes Exhibit M to an FPA section 203 filing.
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    \5\ Financial Group consisted at the time of its comments on 
September 22, 2008 of the following members: Bank of America, N.A., 
Barclays Bank PLC, CitiGroup Energy Inc., Credit Suisse Energy LLC 
(a subsidiary of Credit Suisse), Deutsche Bank AG, J. Aron & Co. (a 
subsidiary of The Goldman Sachs Group), JPMorgan Chase & Co., Lehman 
Brothers Commodity Services Inc. (a subsidiary of Lehman Brothers 
Holding Inc.), Merrill Lynch Commodities, Inc., Morgan Stanley 
Capital Group Inc., Soci[eacute]t[eacute] G[eacute]n[eacute]rale, 
and UBS Energy LLC (a subsidiary of UBS AG).
    \6\ 18 CFR 33.2(j)(1).
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    5. On July 17, 2008, the Commission issued an order seeking 
supplemental comments on the narrow issue of the scope and form of the 
reporting requirements under the expanded blanket authorization. The 
Commission sought comment on whether Financial Group's proposed 
reporting requirement should be adopted, as proposed or modified. The 
Commission requested that commenters who disagreed with the proposed 
reporting requirement should explain why and propose alternative 
reporting requirements. The Commission also sought comment as to 
whether reports should be filed with the Commission on a quarterly 
basis or on some other basis.

II. Comments

    6. The Commission received one comment on the proposed reporting 
requirements, from Financial Group. Financial Group states that the 
Commission should adopt the reporting requirements it proposed earlier. 
Financial Group argues that for transactions involving non-holding 
companies, these requirements would give the Commission at least as 
much comfort (if not greater comfort) with respect to possible changes 
in control as the preexisting reporting requirements applicable to 
holding companies. The information required in the reports, Financial 
Group argues, will allow the Commission to determine whether there is a 
change in control--the purpose for monitoring these types of 
transactions.
    7. With respect to the proposed requirement to include information 
regarding cross-subsidization, Financial Group states that it does not 
believe that this condition is necessary, but it does not object to the 
inclusion of this condition if the Commission deems it necessary. 
Financial Group notes that the transactions at issue presumptively do 
not convey an ability to exercise control, so there should be no 
concern about cross-subsidization for the Commission to consider. If 
the Commission does require a statement regarding cross-subsidization, 
Financial Group argues that this statement should not be required where 
neither party to the transaction has captive customers.
    8. Financial Group recommends that the Commission require the 
reporting information on transactions covered by the blanket 
authorization in section 33(c)(12) of the Commission's regulations to 
be provided within 30 days after the end of the calendar quarter in 
which the transactions occurred. This timeline would allow companies 
who have made multiple transactions to make a combined filing that 
would cover each of their transactions in the prior quarter. Such a 
filing would be more efficient both for the filing party and for the 
Commission's review. Financial Group requests that the Commission 
affirm that the reporting requirement is not intended to be ongoing; 
once a transaction has been reported there are no further reporting 
requirements with respect to that transaction.
    9. Accordingly, Financial Group suggests that a new section 
33(c)(17) be added with respect to the reporting requirement for 
transactions under the

[[Page 25412]]

blanket authorization, to state as follows:

    A public utility granted blanket authorization under section 
33.1(c)(12)(ii) to transfer its outstanding voting securities, and 
the acquirer of such voting securities, shall within 30 days after 
the end of the calendar quarter in which such transfer has occurred, 
file with the Commission a report containing the following 
information:
    (i) The names of all parties to the transaction;
    (ii) Identification of the pre- and post-transaction voting 
security holdings (and percentage ownership) in the public utility 
held by the acquirer and its associate or affiliate companies;
    (iii) The date the transaction was consummated; and
    (iv) Identification of any public utility or holding company 
affiliates of the parties to the transaction.

III. Discussion

    10. As the Commission stated in Order No. 708-A, the expansion of 
the blanket authorization under 18 CFR 33.1(c)(12) to include ``any 
person'' requires additional reporting so that the Commission and the 
public may monitor the purchase and sale of securities under the 
blanket authorization. We find that the reporting requirements proposed 
by Financial Group provide adequate disclosure of trades made under the 
blanket authorization, and we adopt them here. The information required 
in these reports will allow the Commission to review the purchases of 
both holding and non-holding companies to determine whether any further 
action is required under Commission regulations.
    11. With respect to the proposed disclosure requirement involving 
cross-subsidization,\7\ we find that such a statement would be useful 
for the Commission in reviewing trades. Accordingly, we will require 
the disclosure report to include a statement either indicating that 
neither party to the transaction has any captive customers, or 
providing the information required in Sec.  33.2(j)(1) of the 
Commission's regulations.\8\
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    \7\ Financial Group proposed that parties include in their 
disclosure the same type of statement currently required under 
section 33.2(j)(1), which describes Exhibit M to an FPA section 203 
filing.
    \8\ 18 CFR 33.2(j)(1).
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    12. Specifically, we will require that public utilities engaging in 
transactions under the blanket authorization under 18 CFR 33.1(c)(12) 
submit a report to the Commission within 30 days of the end of the 
calendar quarter in which the transactions occurred. At this time, we 
will not require continuing reporting requirements with respect to the 
blanket authorization for a transaction once that transaction has been 
reported. The following information, which will be codified under Sec.  
33.1(c)(17) of the Commission's regulations, must be included in the 
report:
    <bullet> Names of all parties to the transaction;
    <bullet> Identification of both the pre-transaction and post-
transaction voting security holdings (and the percentage ownership) in 
the public utility held by the acquirer and its associate or affiliate 
companies;
    <bullet> The date the transaction was consummated;
    <bullet> Identification of any public utility or holding company 
affiliates of the parties to the transaction;
    <bullet> A statement on cross-subsidization of the same type as 
currently required under section 33.2(j)(1) of the Commission's 
regulations,\9\ which describes Exhibit M to an FPA section 203 filing.
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    \9\ 18 CFR 33.2(j)(1).
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    13. The required reports for this fiscal year should be filed 
electronically under Docket HC09-8-000.

IV. Information Collection Statement

    14. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting and record keeping (information 
collections) requirements imposed by agency rules.\10\ Therefore, the 
Commission is submitting the information collection to OMB for review 
and approval in accordance with section 3507(d) of the Paperwork 
Reduction Act of 1995.\11\
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    \10\ 5 CFR 1320.12.
    \11\ 44 U.S.C. 3507(d).
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    Burden Estimate: The public reporting burden for the reporting 
requirements and the records retention requirement is as follows.

----------------------------------------------------------------------------------------------------------------
                                                     Number of       Number of       Hours per
            Data collection FERC-519                respondents      responses       response          Total
----------------------------------------------------------------------------------------------------------------
Reporting.......................................              20               1               1              20
                                                 ---------------------------------------------------------------
    Totals......................................              20               1               1              20
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    Information Collection Costs: The Commission has projected the 
average annualized cost of all respondents to be the following: 20 
hours (reporting) @ $66 per hour = $1,320 for respondents. No capital 
costs are estimated to be incurred by respondents.
    Title: FERC-519(b), ``Blanket Authorization Transaction Report 
under Section 203 FPA.''
    Action: New collection.
    OMB Control No: To be determined.
    The applicant will not be penalized for failure to respond to this 
information collection unless the information collection displays a 
valid OMB control number or the Commission has provided justification 
as to why the control number should not be displayed.
    Respondents: Businesses or other for profit.
    Frequency of Responses: On occasion.
    Necessity of the Information: This order codifies a limited 
reporting requirement for entities taking advantage of a blanket 
authorization under FPA section 203(a)(1), which in turn provides for a 
category of jurisdictional transactions under section 203(a)(1) for 
which the Commission would not require applications seeking before-the-
fact approval. The information will enable the Commission and the 
public to monitor transactions that occur under the 18 CFR 33.1(c)(12) 
blanket authorization, as extended in Order No. 708-A.
    Internal Review: The Commission has conducted an internal review of 
the public reporting burden associated with the collection of 
information and assured itself, by means of internal review, that there 
is specific, objective support for its information burden estimate.
    15. Interested persons may obtain information on the reporting 
requirements by contacting: Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426 [Attention: Michael Miller, 
Office of the Executive Director, Phone (202) 502-8415, fax (202) 273-
0873, e-mail: <a href="/cdn-cgi/l/email-protection#a1ccc8c2c9c0c4cd8fccc8cdcdc4d3e1c7c4d3c28fc6ced7"><span class="__cf_email__" data-cfemail="1e73777d767f7b7230737772727b6c5e787b6c7d30797168">[email protected]</span></a>].

V. Environmental Analysis

    16. Commission regulations require that an environmental assessment 
or an environmental impact statement be

[[Page 25413]]

prepared for any Commission action that may have a significant adverse 
effect on the human environment.\12\ No environmental consideration is 
necessary for Commission action that involves information gathering, 
analysis, and dissemination.\13\ Consequently, neither an environmental 
impact statement nor an environmental assessment is required.
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    \12\ Regulations Implementing National Environmental Policy Act, 
Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. ] 
30,783 (1987).
    \13\ 18 CFR 380.4(a)(5).
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VI. Regulatory Flexibility Act

    17. The Regulatory Flexibility Act of 1980 (RFA) \14\ generally 
requires either a description and analysis of a rule that will have a 
significant economic impact on a substantial number of small entities 
or a certification that the rule will not have a significant economic 
impact on a substantial number of small entities. Most utilities to 
which this reporting requirement applies would not fall within the 
RFA's definition of small entity.\15\ Consequently, the Commission 
certifies that this reporting requirement will not have a significant 
economic impact on a substantial number of small entities.
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    \14\ 5 U.S.C. 601-12.
    \15\ 5 U.S.C. 601(3), citing to section 3 of the Small Business 
Act, 15 U.S.C. 632. 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 dominant in its field of operation. The 
Small Business Size Standards component of the North American 
Industry Classification System (NAICS) 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.
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VII. Document Availability

    18. 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.
    19. From FERC's Home Page on the Internet, this information is 
available on 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.
    20. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or e-mail at 
<a href="/cdn-cgi/l/email-protection#f0969582939f9e9c999e95838580809f8284b096958293de979f86"><span class="__cf_email__" data-cfemail="01676473626e6f6d686f64727471716e737541676473622f666e77">[email protected]</span></a>, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at 
<a href="/cdn-cgi/l/email-protection#1f6f6a7d73767c316d7a797a6d7a717c7a6d7070725f797a6d7c31787069"><span class="__cf_email__" data-cfemail="fc8c899e90959fd28e999a998e99929f998e939391bc9a998e9fd29b938a">[email protected]</span></a>.

VIII. Effective Date and Congressional Notification

    21. These regulations are effective July 27, 2009. The Commission 
has determined, with the concurrence of the administrator of the Office 
of Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996. The Commission will submit 
this rule to both houses of Congress and the Government Accountability 
Office.

List of Subjects in 18 CFR Part 33

    Electric utilities, Reporting and recordkeeping requirements.

    By the Commission.
Kimberly D. Bose,
Secretary.

0
In consideration of the foregoing, the Commission amends part 33, 
Chapter I, Title 18 of the Code of Federal Regulations, as follows:

PART 33--APPLICATIONS UNDER FEDERAL POWER ACT SECTION 203

0
1. The authority citation for part 33 continues to read as follows:

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 
U.S.C. 7101-7352; Pub. L. 209-58, 119 Stat. 594.


0
2. In Sec.  33.1, paragraph (c)(12) is revised and paragraph (c)(17) is 
added to read as follows:


Sec.  33.1  Applicability, definitions, and blanket authorizations.

* * * * *
    (c) * * *
    (12) A public utility is granted a blanket authorization under 
section 203(a)(1) of the Federal Power Act to transfer its outstanding 
voting securities to:
    (i) Any holding company granted blanket authorizations in paragraph 
(c)(2)(ii) of this section if, after the transfer, the holding company 
and any of its associate or affiliate companies in aggregate will own 
less than 10 percent of the outstanding voting interests of such public 
utility; or
    (ii) Any person other than a holding company if, after the 
transfer, such person and any of its associate or affiliate companies 
in aggregate will own less than 10 percent of the outstanding voting 
interests of such public utility, and within 30 days after the end of 
the calendar quarter in which such transfer has occurred the public 
utility notifies the Commission in accordance with paragraph (c)(17) of 
this section.
* * * * *
    (17) A public utility granted blanket authorization under paragraph 
(c)(12)(ii) of this section to transfer its outstanding voting 
securities shall, within 30 days after the end of the calendar quarter 
in which such transfer has occurred, file with the Commission a report 
containing the following information:
    (i) The names of all parties to the transaction;
    (ii) Identification of the pre- and post-transaction voting 
security holdings (and percentage ownership) in the public utility held 
by the acquirer and its associate or affilate companies;
    (iii) The date the transaction was consummated;
    (iv) Identification of any public utility or holding company 
affiliates of the parties to the transaction; and
    (v) A statement indicating that the proposed transaction will not 
result in, at the time of the transaction or in the future, cross-
subsidization of a non-utility associate company or pledge or 
encumbrance of utility assets for the benefit of an associate company 
as required in Sec.  33.2(j)(1).

[FR Doc. E9-12381 Filed 5-27-09; 8:45 am]
BILLING CODE 6717-01-P


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