Document ID: FERC-2018-0975-0001
Agency: ferc
Document Type: Proposed Rule
Title: Interlocking Officers and Directors; Requirements for Applicants and Holders
Posted Date: 2018-08-01T04:00Z

[Federal Register Volume 83, Number 148 (Wednesday, August 1, 2018)]
[Proposed Rules]
[Pages 37450-37455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16463]

 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / 
Proposed Rules  

[[Page 37450]]

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 45 and 46

[Docket No. RM18-15-000]

Interlocking Officers and Directors; Requirements for Applicants 
and Holders

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission proposes to revise its regulations related to 
interlocking officers and directors to clarify and update the 
requirements for both applicants and holders. In particular, the 
Commission proposes to update its regulations to reflect statutory 
changes to the circumstances in which an applicant who would otherwise 
require Commission authorization to hold an interlocking position need 
not do so. The Commission also proposes to revise its regulations to 
clarify its position on late-filed applications and informational 
reports. The Commission further proposes to revise its regulations to 
clarify that an interlock holder is not required to file a notice of 
change when merely changing positions within a holding company. 
Additionally, the Commission proposes to revise its regulations to 
state that applicants do not need to list in their applications public 
utilities that do not have officers or directors. Next, the Commission 
proposes to revise its regulations with regard to public utilities 
owned by a natural person. Finally, the Commission proposes to update 
its regulations to remove a section containing definitions and phrases 
now rendered obsolete.

DATES: Comments are due October 1, 2018.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE, 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT:
Amery Por[eacute] (Technical Information), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-6312
Mary Ellen Stefanou (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE, Washington, 
DC 20426, (202) 502-8989

SUPPLEMENTARY INFORMATION:
    1. Section 305(b) of the Federal Power Act (FPA) \1\ prohibits 
individuals from concurrently holding positions as an officer or 
director of more than one public utility; or concurrently holding the 
positions of officer or director of a public utility and of an entity 
authorized by law to underwrite or participate in the marketing of 
public utility securities; \2\ or concurrently holding the positions of 
officer or director of a public utility and a company supplying 
electrical equipment to such public utility, unless the holding of such 
positions has been authorized by the Commission upon a showing that 
neither public nor private interests will be adversely affected.\3\ 
Congress enacted section 305(b) to prevent certain perceived abuses 
with holding companies, including (1) excessive charges to subsidiary 
public utility companies resulting from the lack of arm's length 
bargaining or the restraint of free and independent competition; (2) 
allocation of charges for goods and services among subsidiary companies 
in different States so as to frustrate State regulation; (3) control of 
subsidiary public utility companies through disproportionately small 
investment resulting in account practices, and rate, dividend and other 
policies that complicated and obstructed State regulation; and (4) a 
general lack of economy of management and operation of public 
utilities, a lack of efficiency and adequacy of services or a lack of 
effective public regulation and a lack of economies in raising 
capital.\4\
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    \1\ 16 U.S.C. 825d(b) (2012).
    \2\ However, section 305(b)(2) of the FPA, 16 U.S.C. 825d(b)(2), 
exempts from this prohibition certain interlocks between public 
utilities and a financial institution that is authorized to 
underwrite or participate in the marketing of public utility 
securities.
    \3\ 16 U.S.C. 825d(b).
    \4\ Title I, Sec. 1, of the Public Utility Act of 1935 (49 Stat. 
803, 15 U.S.C. 79a). Title I was the Public Utility Holding Company 
Act of 1935. Title II became Parts II and III of the Federal Power 
Act, which include section 305(b).
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    2. The Commission implemented Congress' mandate in part 45 of the 
Commission's regulations.\5\ Consistent with the statute, part 45 
provides that an application or informational filing be filed, and 
authorization granted, before a person may hold otherwise proscribed 
interlocking positions. Part 46 of the Commission's regulations, which 
implements section 305(c) of the FPA,\6\ describes the annual filing 
requirements for those holding interlocking positions, including the 
relevant definitions.
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    \5\ 18 CFR part 45 (2017).
    \6\ 16 U.S.C. 825d(c).
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    3. As described below, we propose revisions to parts 45 and 46 of 
our regulations.\7\
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    \7\ 18 CFR part 46. Section 305(c) of the FPA, as relevant here, 
requires that any person holding interlocking positions in both a 
public utility and any of the entities listed in section 305(c)(2) 
of the FPA file an annual report listing such interlocking 
positions. 16 U.S.C. 825d(c). The Commission implements section 
305(c) in part 46 of its regulations and through its FERC Form No. 
561.
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I. Discussion

    4. On October 27, 2016, Commission staff issued its 2016 Biennial 
Staff Memo Concerning Retrospective Analysis of Existing Rules,\8\ in 
which it identified certain Commission regulations as ripe for 
evaluation, including 18 CFR part 45. The Edison Electric Institute 
(EEI) submitted comments in support of the Commission's suggested 
revisions to 18

[[Page 37451]]

CFR part 45 and proposed additional revisions.\9\
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    \8\ 2016 Biennial Staff Memo Concerning Retrospective Analysis 
of Existing Rules, Docket No. AD12-6-002 (published Oct. 27, 2016) 
(81 FR 76542, Nov. 3, 2016).
    \9\ See Edison Electric Institute Comments, Docket No. AD12-6-
002 (Nov. 28, 2016).
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    5. Based on our review of our regulations, as well as our review of 
the comments submitted by EEI, we propose the following changes to the 
regulations in part 45, as well as certain revisions to part 46.
    6. Section 45.2 of the Commission's regulations describes the types 
of interlocking positions that require Commission authorization, 
including those between a public utility and entities authorized by law 
to underwrite or participate in the marketing of public utility 
securities.\10\ However, in 1999, Congress amended section 305(b)(2) of 
the FPA to provide that an applicant for certain interlocking positions 
is no longer required to obtain Commission authorization to hold such 
positions.\11\ As a result, the Commission proposes to revise Sec.  
45.2 of its regulations to add that an applicant for an interlocking 
position between a public utility and a ``bank, trust company, banking 
association, or firm that is authorized by law to underwrite or 
participate in the marketing of public utility securities,'' \12\ does 
not need Commission authorization when:
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    \10\ 18 CFR 45.2(b)(2).
    \11\ See Public Law 106-102, sec. 737, 113 Stat. 1338, 1479 
(1999).
    \12\ 18 CFR 45.2(b)(2).
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    (1) He/she does not participate in any deliberations or decisions 
of the public utility regarding the selection of the bank, trust 
company, banking association, or firm to underwrite or participate in 
the marketing of securities of the public utility, if he/she serves as 
an officer or director of a bank, trust company, banking association, 
or firm that is under consideration in the deliberation process;
    (2) the bank, trust company, banking association, or firm of which 
he/she is an officer or director does not engage in the underwriting 
of, or participate in the marketing of, securities of the public 
utility of which he/she holds the position of officer or director;
    (3) the public utility for which he/she serves or proposes to serve 
as an officer or director selects underwriters by competitive 
procedures; or
    (4) the issuance of securities of the public utility for which he/
she serves or proposes to serve as an officer or director has been 
approved by all Federal and State regulatory agencies having 
jurisdiction over the issuance.\13\
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    \13\ See also 16 U.S.C. 825d(b)(2).
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    7. Sections 45.3 and 45.9 of the Commission's regulations require 
applications and informational filings be filed with the Commission 
before an applicant holds any interlocking positions within the purview 
of section 305. The Commission's regulations currently provide in Sec.  
45.3(a) that ``late-filed applications will be denied'' and in Sec.  
45.9(b) that ``[f]ailure to timely file the informational report will 
constitute a failure to satisfy this condition and will constitute 
automatic denial.''
    8. The Commission expects its regulations to be followed. However, 
the Commission recognizes that good faith errors and oversights may 
occasionally result in the inadvertent violation of the timing of 
section 305(b)'s filing requirements. The Commission believes that it 
is not in the public interest to deny otherwise-qualified applicants' 
late-filed applications and informational filings made under these 
regulations when the late filing is due solely to such good faith 
errors and oversights alone. Late-filed applications do not impede the 
Commission's ability to decide the case. The statutory standard for 
authorization to hold otherwise-proscribed interlocks requires the 
Commission to determine whether the holding of otherwise-proscribed 
interlocks adversely affects neither public nor private interests, and 
that determination typically would not depend solely on the date an 
applicant happens to file.\14\ Nor would applications that are filed 
late solely due to good faith errors and oversights implicate the 
abuses that Congress attempted to prevent in promulgating section 305. 
Further, denying late-filed applications could cause unnecessary 
inefficiencies for companies. Therefore, the Commission proposes to 
delete the above-quoted language, and to replace it with language 
providing for consideration of late-filed applications for interlocking 
positions on a case-by-case basis.\15\
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    \14\ 16 U.S.C. 825d(b)(1).
    \15\ The public utilities whose officers and directors are 
subject to the statutory directive in section 305(b) to file, as 
regulated entities themselves subject to and thus sensitive to the 
requirements of the FPA, would be well-advised to and should make 
every effort to ensure that their officers and directors, in turn, 
act in accordance with the statutory directives in section 305(b).
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    9. The Commission expects that applicants will be attentive to 
their obligation to timely file for the required authorizations and 
make every effort to ensure they act in accordance with the statutory 
directives in section 305(b). In cases where occasional errors and 
oversights occur, the Commission expects that those errors and 
oversights will be expeditiously identified and rectified, and 
applications to hold interlocking director positions promptly filed. 
The Commission would look unfavorably on section 305(b) applications 
where an applicant has not been attentive to his/her obligation to file 
for the required authorization.
    10. The Commission proposes to revise Sec. Sec.  45.4 and 45.5 of 
its regulations to clarify that supplemental applications and notices 
of change need not be filed in the case of a person already authorized 
to hold interlocks identified in Sec.  45.9(a) who may assume new or 
different positions that are still among those identified by Sec.  
45.9(a).\16\ For example, a promotion within a holding company system 
would not require an interlock holder to file a notice of change. Such 
changes in positions among related public utilities are already 
reported in the annual Form No. 561s, and separate filings under Sec.  
45.4 or Sec.  45.5 are unnecessary. However, the Commission clarifies 
that, for such interlocking positions, a holder would still be required 
to file a notice of change when he/she no longer holds any interlocking 
positions within the scope of the statute and regulations. No longer 
holding any interlocking positions would constitute a ``material or 
substantial change.''
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    \16\ If an applicant has a pending application, however, we 
would expect that the applicant would supplement his/her application 
should a change occur while the application is pending. In contrast, 
as noted above, an applicant who has been granted authorization and 
no longer has a pending application is differently situated, and any 
change in the positions held can be addressed in the next Form No. 
561.
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    11. The Commission proposes to revise Sec.  45.8(c)(1) of its 
regulations to state that applicants under part 45 do not need to list 
in their applications those public utilities that do not have officers 
or directors. The Commission recognizes the growing complexity of 
corporate structures. Thus, in the interest of reducing regulatory 
burdens, the Commission proposes to eliminate the requirement that 
applications under part 45 list those public utilities that do not have 
officers or directors.
    12. The Commission proposes to revise Sec.  45.9 of its regulations 
to add the word ``person'' when defining the corporate relationships 
within the scope of the automatic authorizations addressed in Sec.  
45.9. The Commission would thus recognize that public utilities can be 
owned not just by a corporate entity but by a natural person, and the 
regulations should reflect this possibility.
    13. Finally, the Commission proposes to update its regulations in 
part 46 to remove Sec.  46.2(b), because the definitions were rendered 
obsolete as a result of the enactment of the Energy

[[Page 37452]]

Policy Act of 2005 and the concurrent repeal of the Public Utility 
Holding Company Act of 1935.\17\ The Commission notes that Sec.  
46.2(b) currently references the definition of ``holding company 
system'' and ``registered holding company system'' in the Public 
Utility Holding Company Act (PUHCA) of 1935.\18\ However, the 
Commission recognizes that the Energy Policy Act of 2005 repealed the 
PUHCA of 1935.\19\ Thus, the Commission proposes to remove Sec.  
46.2(b). The Commission also proposes to update part 46 to change 
``Rural Electrification Administration'' to ``Rural Utilities Service'' 
to reflect the name change of that organization.
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    \17\ See Energy Policy Act of 2005, Public Law 109-58, 1261-77, 
119 Stat. 594, 972-78 (2005).
    \18\ 16 U.S.C. 79a et seq.
    \19\ EPAct 2005, Public Law 109-58, 1263.
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II. Information Collection Statement

    14. The Paperwork Reduction Act (PRA) \20\ requires each federal 
agency to seek and obtain Office of Management and Budget (OMB) 
approval before undertaking a collection of information directed to 10 
or more persons or contained in a rule of general applicability. OMB's 
regulations \21\ require approval of certain information collection 
requirements imposed by agency rules. Upon approval of a collection of 
information, OMB will assign an OMB control number and an expiration 
date. Respondents subject to the filing requirements of an agency rule 
will not be penalized for failing to respond to these collections of 
information unless the collections of information display a valid OMB 
control number.
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    \20\ 44 U.S.C. 3507(d).
    \21\ 5 CFR part 1320.
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    15. The revisions proposed in this NOPR would clarify and update 
the requirements \22\ for those seeking and holding interlocking 
positions. The Commission anticipates that the revisions, once 
effective, would reduce regulatory burdens. The Commission will submit 
the proposed reporting requirements to OMB for its review and approval 
under section 3507(d) of the Paperwork Reduction Act.\23\
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    \22\ 18 CFR parts 45 and 46.
    \23\ 44 U.S.C. 3507(d).
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    16. While the Commission expects that the regulatory revisions 
proposed herein will reduce the burdens on affected entities, the 
Commission nonetheless solicits public comments regarding the accuracy 
of the burden and cost estimates below.
    17. Burden Estimate: \24\ The estimated burden and cost for the 
requirements contained in this NOPR follow.
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    \24\ ``Burden'' is the total time, effort, or financial 
resources expended by persons to generate, maintain, retain, or 
disclose or provide information to or for a Federal agency. For 
further explanation of what is included in the information 
collection burden, refer to 5 CFR 1320.3

                                                                    FERC Form No. 520
                                         [Application for authority to hold interlocking directorate positions]
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                                                 Annual number
                                   Number of     of responses    Total number    Average burden  & cost per   Total annual burden hours      Cost per
                                  respondents   per respondent   of responses          response \25\             (total annual cost)      respondent ($)
                                           (1)             (2)     (1) * (2) =  (4)........................  (3) * (4) = (5)............       (5) / (1)
                                                                           (3)
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Full..........................              16               1              16  50 hrs.; $3,950............  800 hrs.; $63,200..........          $3,950
Informational.................             500               1             500  8 hrs.; $632...............  4,000 hrs.; $316,000.......             632
Notice of Change..............             100               1             100  0.25 hrs.; $19.75..........  25 hrs.; $1,975............           19.75
                               -------------------------------------------------------------------------------------------------------------------------
    Total.....................  ..............  ..............  ..............  ...........................  4,825 hrs.; $381,175.......  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Title: FERC-520 (Application for Authority to Hold Interlocking 
Directorate Positions).
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    \25\ The Commission staff thinks that the average respondent for 
this collection is similarly situated to the Commission, in terms of 
salary plus benefits. Based upon FERC's 2018 annual average (for 
salary plus benefits) of $164,820, the average hourly cost is $79/
hour.
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    OMB Control No.: 1902-0083.
    Abstract: The FPA, as amended, mandates federal oversight and 
approval of certain electric corporate activities to ensure that 
neither public nor private interests are adversely affected. 
Accordingly, the Commission's regulations prescribe related information 
filing requirements to achieve this goal. Such filing requirements are 
found in 18 CFR parts 45 and 46.
    Overview of the Data Collection. FERC-520 provides information 
related to complex electric corporate activities, in particular, the 
holding of interlocking positions, and thereby serves to safeguard 
public and private interests, as the FPA requires.
    FERC-520 is divided into two types of applications: Full and 
informational. The full application, as specified in 18 CFR 45.8, 
implements the FPA requirement under section 305(b) that it is unlawful 
for any person to concurrently hold the positions of officer or 
director of more than one public utility; or a public utility and a 
financial institution that is authorized to underwrite or participate 
in the marketing of public utility securities; or a public utility and 
an electrical equipment supplier to such public utility, unless 
authorized by the Commission. In order to obtain authorization, an 
applicant must demonstrate that neither public nor private interests 
will be adversely affected by the holding of the positions. The full 
application provides the Commission with information about any 
interlocking position for which the applicant seeks authorization 
including, but not limited to, a description of duties and the 
estimated time devoted to the position.
    An informational (abbreviated) application, as specified in 18 CFR 
45.9, allows an applicant to receive automatic authorization for an 
interlocked position upon receipt of the filing by the Commission. The 
informational application applies only to those individuals who seek 
authorization as: (1) An officer or director of two or more public 
utilities where the same holding company owns, directly or indirectly, 
that percentage of each utility's stock (of whatever class or classes) 
which is required by each utility's by-laws to elect directors; (2) an 
officer or director of two public utilities, if one utility is owned, 
wholly or in part, by the other

[[Page 37453]]

and, as its primary business, owns or operates transmission or 
generation facilities to provide transmission service or electric power 
for sale to its owners; or (3) an officer or director of more than one 
public utility, if such person is already authorized under part 45 to 
hold different positions as officer or director of those utilities 
where the interlock involves affiliated public utilities.
    FERC-520 also includes the requirement to file a notice of change 
if there are new positions or changes to the positions held. The 
Commission is proposing to revise its requirements and no longer 
require a notice of change when a person is merely changing positions 
within a holding company system. This proposal is expected to reduce 
the number of filed notices of change by 50 percent annually (from 200 
filings to 100 filings) and to reduce the corresponding total burden.
    Type of Respondents: Individuals who plan to concurrently become or 
concurrently are officers or directors of public utilities and of 
certain other entities must request authorization to hold such 
interlocking positions by submitting a FERC-520.
    Internal Review: The Commission has reviewed the information 
collection requirements and has determined that certain changes are 
needed and that the remaining requirements are necessary. These 
requirements conform to the Commission's need for efficient information 
collection, communication, and management within the energy industry. 
The Commission has specific, objective support for the burden estimates 
associated with the information collection requirements. Interested 
persons may obtain information on the reporting requirements by 
contacting the following: Federal Energy Regulatory Commission, 888 
First Street NE, Washington, DC 20426 [Attention: Ellen Brown, Office 
of the Executive Director], email: [email protected], Phone: (202) 
502-8663, fax: (202) 273-0873. Comments concerning the collection of 
information and the associated burden estimate(s) may also be sent to 
the Office of Information and Regulatory Affairs, Office of Management 
and Budget, 725 17th Street NW, Washington, DC 20503 [Attention: Desk 
Officer for the Federal Energy Regulatory Commission]. Due to security 
concerns, comments should be sent electronically to the following email 
address: [email protected]. Please refer to FERC-520, OMB 
Control No. 1902-0083 in your submission.

III. Environmental Analysis

    18. 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.\26\ We 
conclude that neither an Environmental Assessment nor an Environmental 
Impact Statement is required for this NOPR under 380.4(a) of the 
Commission's regulations, which provides a categorical exemption for 
approval of ``action under section [ ] . . . 305 of the FPA relating to 
. . . interlocking directorates, . . . .'' \27\
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    \26\ Regulations Implementing the National Environmental Policy 
Act, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \27\ 18 CFR 380.4(a)(16).
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IV. Regulatory Flexibility Act

    19. The Regulatory Flexibility Act of 1980 (RFA) \28\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
The Small Business Administration's (SBA) Office of Size Standards 
develops the numerical definition of a small entity.\29\ These 
standards are provided in the SBA regulations at 13 CFR 121.201.\30\
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    \28\ 5 U.S.C. 601-12.
    \29\ 13 CFR 121.101.
    \30\ 13 CFR 121.201. See also U.S. Small Business 
Administration, Table of Small Business Size Standards Matched to 
North American Industry Classification System Codes (effective Feb. 
26, 2016), https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf.
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    20. This proposed rule, if adopted, would apply to those 
individuals seeking to hold and those currently holding interlocking 
positions. In order to obtain authorization, an applicant must 
demonstrate that neither public nor private interests will be adversely 
affected by the holding of the interlocking positions.
    21. There are an estimated 16 respondents who could file full 
applications over the course of a year, who would provide one response 
annually with an estimated time commitment of 50 hours per response, 
and a resulting estimated cost of $3,950.00 per respondent. There are 
an estimated 500 respondents who could file informational applications 
over the course of a year, who would provide one response annually with 
an estimated time commitment of 8 hours per response, and a resulting 
estimated cost of $632.00 per respondent. In addition, there are an 
estimated 100 respondents who could file a notice of change annually 
with an estimated time commitment of 0.25 hours, and a resulting cost 
of $19.75 per respondent. Therefore the average annual cost for each of 
the 616 respondents is $618.79. That cost is not significant. More 
importantly, this proposed rule reduces industry cost by eliminating 
the need for the filing of some notices of change.
    22. The Commission certifies that this proposed rule, if adopted, 
will not have a significant economic impact on a substantial number of 
small entities.

V. Comment Procedures

    23. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice of proposed rulemaking 
to be adopted, including any related matters or alternative proposals 
that commenters may wish to discuss. Comments are due October 1, 2018. 
Comments must refer to Docket No. RM18-15-000, and must include the 
commenter's name, the organization they represent, if applicable, and 
their address in their comments.
    24. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    25. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE, 
Washington, DC 20426.
    26. 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.

VI. Document Availability

    27. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE, Room 2A, 
Washington, DC 20426.
    28. From the Commission's Home Page on the internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary

[[Page 37454]]

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.
    29. User assistance is available for eLibrary and the Commission's 
website during normal business hours from the Commission's Online 
Support at 202-502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202)502-8659. Email the Public Reference Room at 
[email protected].

List of Subjects

18 CFR Part 45

    Electric utilities, Reporting and recordkeeping requirements.

18 CFR Part 46

    Antitrust, Electric utilities, Holding companies, Reporting and 
recordkeeping requirements.

    By direction of the Commission.

    Issued: July 19, 2018.
Kimberly D. Bose,
Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
parts 45 and 46, chapter I, title 18, Code of Federal Regulations, as 
follows.

PART 45--APPLICATION FOR AUTHORITY TO HOLD INTERLOCKING POSITIONS

0
1. The authority citation for part 45 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; 3 CFR 142.

0
2. Add Sec.  45.2(d) to read as follows:

Sec.  45.2  Positions requiring authorization.

* * * * *
    (d) A person that holds or proposes to hold an interlocking 
position as officer or director of a public utility and of a 
corporation described by paragraph (b)(2) of this section shall not 
require authorization to hold such positions in the following 
circumstances--
    (1) The person does not participate in any deliberations or 
decisions of the public utility regarding the selection of the bank, 
trust company, banking association, or firm to underwrite or 
participate in the marketing of securities of the public utility, if 
the person serves as an officer or director of a bank, trust company, 
banking association, or firm that is under consideration in the 
deliberation process;
    (2) The bank, trust company, banking association, or firm of which 
the person is an officer or director does not engage in the 
underwriting of, or participate in the marketing of, securities of the 
public utility of which the person holds the position of officer or 
director;
    (3) The public utility for which the person serves or proposes to 
serve as an officer or director selects underwriters by competitive 
procedures; or
    (4) The issuance of securities of the public utility for which the 
person serves or proposes to serve as an officer or director has been 
approved by all Federal and State regulatory agencies having 
jurisdiction over the issuance.
0
3. Revise Sec.  45.3(a) to read as follows:

Sec.  45.3  Timing of filing application.

    (a) The holding of positions within the purview of section 305(b) 
of the Act shall be unlawful unless the holding shall have been 
authorized by order of the Commission. Nothing in this part shall be 
construed as authorizing the holding of positions within the purview of 
section 305(b) of the Act prior to order of the Commission on 
application therefor. Applications must be filed and authorization must 
be granted prior to holding any interlocking positions within the 
purview of section 305(b) of the Act; the Commission will consider 
late-filed applications on a case-by-case basis. The term ``holding,'' 
as used in this part, shall mean acting as, serving as, voting as, or 
otherwise performing or assuming the duties and responsibilities of 
officer or director within the purview of section 305(b) of the Act.
* * * * *
0
4. Add Sec.  45.4(c) to read as follows:

Sec.  45.4  Supplemental applications.

* * * * *
    (c) Changes in interlocking positions within the scope of Sec.  
45.9. Notwithstanding paragraphs (a) and (b) of this section, in the 
case of interlocking positions that are identified in Sec.  45.9(a), a 
filing under this section will not be required if the only change to be 
reported is holding a different or additional interlocking position 
which is identified in Sec.  45.9(a).
0
5. Revise Sec.  45.5(b) to read as follows:

Sec.  45.5  Supplemental information.

* * * * *
    (b) Notice of changes. In the event of the applicant's resignation, 
withdrawal, or failure of reelection or appointment in respect to any 
of the interlocking positions for which authorization has been granted 
by the Commission, or in the event of any other material or substantial 
change therein, the applicant shall, within 30 days after any such 
change occurs, give notice thereof to the Commission setting forth the 
position, corporation, and date of termination therewith, or other 
material or substantial change. In the case of interlocking positions 
that are identified in Sec.  45.9(a), a notice of change under this 
section will not be required if the only change to be reported is 
holding a different or additional interlocking position which is 
identified in Sec.  45.9(a).
* * * * *
0
6. Revise Sec.  45.8(c)(1) to read as follows:

Sec.  45.8  Contents of application.

* * * * *
    (c) * * *
    (1) Name of utility, unless said utility does not have officers or 
directors.
* * * * *
0
7. Revise Sec.  45.9(a)(1) and (b) to read as follows:

Sec.  45.9  Automatic authorization of certain interlocking positions.

    (a) * * *
    (1) Officer or director of one or more other public utilities if 
the same holding company or person owns, directly or indirectly, that 
percentage of each utility's stock (of whatever class or classes) which 
is required by each utility's by-laws to elect directors;
* * * * *
    (b) Conditions of authorization. As a condition of authorization, 
any person authorized to hold interlocking positions under this section 
must submit, prior to performing or assuming the duties and 
responsibilities of the position, an informational report in accordance 
with paragraph (c) of this section, unless that person is already 
authorized to hold interlocking positions of the type governed by this 
section. The Commission will consider failures to timely file the 
informational report on a case-by-case basis.
* * * * *

PART 46--PUBLIC UTILITY FILING REQUIREMENTS AND FILING REQUIREMENTS 
FOR PERSONS HOLDING INTERLOCKING POSITIONS

0
8. The authority citation for part 46 continues to read as follows:

    Authority:  16 U.S.C. 792-828c; 16 U.S.C. 2601-2645; 42 U.S.C. 
7101-7352; E.O. 12009, 3 CFR 142.

0
9. In Sec.  46.2, revise paragraph (a), remove and reserve paragraph 
(b), and revise paragraphs (c) and (e) to read as follows:

Sec.  46.2  Definitions.

* * * * *
    (a) Public utility has the same meaning as in section 201(e) of the 
Federal Power Act. Such term does not

[[Page 37455]]

include any rural electric cooperative which is regulated by the Rural 
Utilities Service of the Department of Agriculture or any other 
entities covered in section 201(f) of the Federal Power Act.
* * * * *
    (c) Purchaser means any individual or corporation within the 
meaning of section 3 of the Federal Power Act who purchases electric 
energy from a public utility. Such term does not include the United 
States or any agency or instrumentality of the United States or any 
rural electric cooperative which is regulated by the Rural Utilities 
Service of the Department of Agriculture.
* * * * *
    (e) Entity means any firm, company, or organization including any 
corporation, joint-stock company, partnership, association, business 
trust, organized group of persons, whether incorporated or not, or a 
receiver or receivers, trustee or trustees of any of the foregoing. 
Such term does not include municipality as defined in section 3 of the 
Federal Power Act and does not include any Federal, State, or local 
government agencies or any rural electric cooperative which is 
regulated by the Rural Utilities Service of the Department of 
Agriculture.
* * * * *
[FR Doc. 2018-16463 Filed 7-31-18; 8:45 am]
 BILLING CODE 6717-01-P