Document ID: FERC-2015-1772-0001
Agency: ferc
Document Type: Proposed Rule
Title: Ownership Information in Market-Based Rate Filings,
Posted Date: 2015-12-24T05:00Z

[Federal Register Volume 80, Number 247 (Thursday, December 24, 2015)]
[Proposed Rules]
[Pages 80302-80307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32273]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM16-3-000]

Ownership Information in Market-Based Rate Filings

AGENCY: Federal Energy Regulatory Commission, Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes 
to amend its regulations to clarify the scope of ownership information 
that sellers seeking to obtain or retain market-based rate authority 
must provide. The Commission proposes to find that the current policy 
that requires sellers to provide comprehensive ownership information is 
not necessary for the Commission's assessment of horizontal or vertical 
market power. The Commission further proposes to amend its regulations 
to clarify the types of ownership changes that must be

[[Page 80303]]

reported to the Commission via a notice of change in status.

DATES: Comments are due February 22, 2016.

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: 
Ashley Dougherty (Technical Information), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-8851, ashley.dougherty@ferc.gov.
Laura Chipkin (Legal Information), Office of General Counsel, Federal 
Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426, (202) 502-8615, laura.chipkin@ferc.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

 
                      Paragraph Numbers
 
I. Background...............................................           2
II. Proposed Reform.........................................           6
    A. Ownership Information Required in Initial                       6
     Applications and Triennial Updated Market Power
     Analyses...............................................
    B. Ownership Information Required in Change in Status             15
     Filings................................................
III. Information Collection Statement.......................          18
IV. Environmental Analysis..................................          22
V. Regulatory Flexibility Act...............................          24
VI. Comment Procedures......................................          25
VII. Document Availability..................................          29
 

Notice of Proposed Rulemaking (December 17, 2015)

    1. In this Notice of Proposed Rulemaking (NOPR), the Commission 
proposes to amend its regulations to clarify the scope of ownership 
information that sellers seeking to obtain or retain market-based rate 
authority must provide.\1\ The Commission proposes to find that the 
current policy that requires sellers to provide comprehensive ownership 
information is not necessary for the Commission's assessment of 
horizontal or vertical market power. The Commission further proposes to 
amend its regulations to clarify the types of ownership changes that 
must be reported to the Commission via a notice of change in status.
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    \1\ All references in this NOPR to ``seller'' (or ``sellers'') 
refer to both applicants seeking to obtain market-based rate 
authority and to sellers seeking to retain market-based rate 
authority.
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I. Background

    2. The Commission allows power sales at market-based rates if the 
seller and its affiliates do not have, or have adequately mitigated, 
horizontal and vertical market power. In Order No. 697, the Commission 
stated that ``[t]he first step for a seller seeking market-based rate 
authority is to file an application to show that it and its affiliates 
do not have, or have adequately mitigated, market power.'' \2\ In Order 
No. 697, the Commission adopted two indicative screens for assessing 
horizontal market power: The pivotal supplier screen and the wholesale 
market share screen, each of which serves as a cross check on the other 
to determine whether sellers may have market power and should be 
further examined.\3\ With respect to the vertical market power 
analysis, in cases where a public utility or any of its affiliates 
owns, operates, or controls transmission facilities, the Commission 
requires that there be a Commission-approved Open Access Transmission 
Tariff (OATT) on file or that the seller or its applicable affiliate 
has received waiver of the OATT requirement or qualifies for the 
blanket OATT waiver provided by Order No. 807,\4\ before granting a 
seller market-based rate authorization.\5\ The Commission also 
considers a seller's ability to erect other barriers to entry as part 
of the vertical market power analysis.\6\ As such, the Commission 
requires a seller to provide a description of its ownership or control 
of, or affiliation with an entity that owns or controls, intrastate 
natural gas transportation, storage or distribution facilities; and 
physical coal supply sources and ownership of or control over who may 
access transportation of coal supplies.\7\ In addition, a seller is 
required to make an affirmative statement that it and its affiliates 
have not erected barriers to entry into the relevant market and will 
not erect barriers to entry into the relevant market.\8\
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    \2\ Market-Based Rates for Wholesale Sales of Electric Energy, 
Capacity and Ancillary Services by Public Utilities, Order No. 697, 
FERC Stats. & Regs. ] 31,252, at P 290, clarified, 121 FERC ] 61,260 
(2007) (Clarifying Order), order on reh'g, Order No. 697-A, FERC 
Stats. & Regs. ] 31,268, clarified, 124 FERC ] 61,055, order on 
reh'g, Order No. 697-B, FERC Stats. & Regs. ] 31,285 (2008), order 
on reh'g, Order No. 697-C, FERC Stats. & Regs. ] 31,291 (2009), 
order on reh'g, Order No. 697-D, FERC Stats. & Regs. ] 31,305 
(2010), aff'd sub nom. Mont. Consumer Counsel v. FERC, 659 F.3d 910 
(9th Cir. 2011), cert. denied, 133 S. Ct. 26 (2012).
    \3\ Id., FERC Stats. & Regs. ] 31,252 at PP 62-63.
    \4\ Open Access and Priority Rights on Interconnection 
Customer's Interconnection Facilities, Order No. 807, 80 FR 17,654 
(Apr. 1, 2015), FERC Stats. & Regs. ] 31,367 (2015).
    \5\ Order No. 697, FERC Stats. & Regs. ] 31,252 at P 408. See 
also Kingfisher Wind, LLC, 151 FERC ] 61,276, at PP 26-27 (2015) 
(providing guidance on how qualified sellers can claim blanket OATT 
waiver under Order No. 807 and demonstrate lack of vertical market 
power).
    \6\ Order No. 697, FERC Stats. & Regs. ] 31,252 at PP 440-451.
    \7\ Order No. 697, FERC Stats. & Regs. ] 31,252 at 447; 18 CFR 
35.37(e) (2015). The Commission previously had also required sellers 
to describe sites for generation capacity, but eliminated this 
requirement in Order No. 816. See Refinements to Policies and 
Procedures for Market-Based Rates for Wholesale Sales of Electric 
Energy, Capacity and Ancillary Services by Public Utilities, Order 
No. 816, 80 FR 67,056 (Oct. 30, 2015), 153 FERC ] 61,065, at PP 212, 
368 (2015) (Order No. 816).
    \8\ Order No. 697, FERC Stats. & Regs. ] 31,252 at PP 447-448.
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    3. On rehearing, in Order No. 697-A, the Commission set forth a 
requirement that a seller seeking to obtain or retain market-based rate 
authority must identify all of its upstream owners as well as describe 
the business activity of its owners and whether they are involved in 
the energy industry. Specifically, footnote 258 of Order No. 697-A 
states:

    A seller seeking market-based rate authority must provide 
information regarding its affiliates and its corporate structure or 
upstream ownership. To the extent that a seller's owners are 
themselves owned by others, the seller seeking to obtain or retain 
market-based rate authority must identify those upstream owners. 
Sellers must trace

[[Page 80304]]

upstream ownership until all upstream owners are identified. Sellers 
must also identify all affiliates. Finally, an entity seeking 
market-based rate authority must describe the business activities of 
its owners, stating whether they are in any way involved in the 
energy industry.\9\
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    \9\ Order No. 697-A, FERC Stats. & Regs. ] 31,268 at n.258.

    4. However, as discussed below, after seven years of experience in 
implementing the requirements of footnote 258, we believe that the 
associated burdens on the industry of providing this information may 
outweigh the benefits of this information for purposes of assessing 
whether a seller should be granted market-based rate authorization.\10\ 
As part of that assessment, the Commission requires the submission of 
an asset appendix containing the generation and transmission assets of 
the seller and its affiliates.\11\ Further, in Order No. 816, the 
Commission instituted a requirement for the submission of a corporate 
organizational chart depicting all affiliates, as defined in section 
35.36(a)(9) of the Commission's regulations.\12\
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    \10\ Market-based rate filings include initial market-based rate 
applications, notices of change in status and triennial updated 
market power analyses.
    \11\ Order No. 697, FERC Stats. & Regs. ] 31,252 at P 895; 18 
CFR 35.37(a)(2) (2015).
    \12\ Order No. 816, 153 FERC ] 61,065 at P 333 (to be codified 
at 18 CFR 35.37(a)(2) (2015)).
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    5. In conjunction with the new organizational chart requirement in 
Order No. 816, we propose in this NOPR to provide a new complementary 
framework under which sellers can describe their ownership structure, 
as described more fully below. Consistent with this new framework, we 
also propose to clarify when a change in ownership would trigger the 
requirement in section 35.42 to file a notice of change in status.

II. Proposed Reform

A. Ownership Information Required in Initial Applications and Triennial 
Updated Market Power Analyses

    6. Following the issuance of Order No. 697-A in 2008, corporate 
families, structures, and ownership in the energy industry have become 
increasingly complex. Through the Commission's implementation of the 
requirements of footnote 258, it has become clear that the upstream 
ownership structure of sellers is often layered with numerous levels 
and types of ownership interests (e.g., full and partial, passive and 
controlling, etc.). In many instances, sellers initially do not fully 
comply with the requirements of footnote 258 in their market-based rate 
filings. Many sellers have difficulty obtaining the names of all 
owners, particularly those that own a small percentage of the seller or 
are a partial owner of a partial indirect owner. As a result, in 
response to requests by Commission staff for the information required 
by footnote 258, some sellers submit multiple amendments to their 
filings, resulting in extra expenditures for the seller and significant 
processing delays for information that does not directly affect the 
analysis of the seller's market power.
    7. Sellers have frequently alleged that it is very difficult to 
identify and describe individual shareholders, particularly those with 
less than ten percent voting interests, because they do not know and 
cannot obtain this information themselves.\13\ In such circumstances, 
strict adherence to the requirements of footnote 258 could require 
rejection of filings on procedural grounds irrespective of any market 
power concerns.\14\
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    \13\ See, e.g., 2014 ESA Project Company, LLC, Amended Filing at 
2, Docket No. ER15-1496-001 (filed June 4, 2015) (``Shareholders are 
not required to notify, or obtain consent from, [Applicant's 
managing organization] when shareholders transfer their shares or 
the associate beneficial interests or voting rights'').
    \14\ See 18 CFR 35.5 (2015) (providing for rejection of rate 
filing for failure to comply with the applicable requirements).
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    8. As noted above, a seller seeking market-based rate authority 
must show that it and its affiliates do not have, or have adequately 
mitigated, horizontal market power. Further, the Commission's review of 
a seller's ability to exercise vertical market power, whether through 
ownership of transmission facilities or other barriers to entry, 
involves examining the seller and its affiliates.\15\ However, because 
information about owners that are not considered affiliates under 
section 35.36(a)(9) is not necessary to evaluate horizontal and/or 
vertical market power (and is not required to be identified in the 
asset appendix or the corporate organizational chart), continuing to 
require information on unaffiliated owners may create a burden that is 
unrelated to the Commission's approach to determining whether a seller 
should have market-based-rate authority.\16\
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    \15\ See 18 CFR 35.37 (2015).
    \16\ We note that the Commission recently issued a NOPR seeking 
comment on a proposal to require each regional transmission 
organization and independent system operator to electronically 
deliver to the Commission data from market participants that lists 
market participants' ``connected entities,'' including entities that 
have certain ownership, employment, debt or contractual 
relationships to the market participant, and describes the nature of 
such relationships. See Collection of Connected Entity Data from 
Regional Transmission Organizations and Independent System 
Operators, Docket No. RM15-23-000, 80 FR 58,382 (Sept. 29, 2015), 
FERC Stats. & Regs. ] 32,711 (2015) (cross-referenced at 152 FERC ] 
61,219 (2015)). We recognize that some of the ownership information 
that is proposed herein to be no longer necessary for determining 
whether to grant market-based rate authority would be required under 
the connected entities NOPR for the purposes described in that 
proceeding.
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    9. Accordingly, we propose to amend section 35.37(a)(2) of the 
Commission's regulations to provide a new framework under which sellers 
would be required to describe their ownership structure that is both 
less burdensome for the industry and more useful to the Commission for 
purposes of whether a seller should have market-based-rate authority. 
Under this new framework, we propose to revise section 35.37(a)(2) of 
the Commission's regulations to define an affiliate owner as an owner 
that meets the definition of affiliate provided in 18 CFR 
35.36(a)(9).\17\ We propose to require that a seller seeking to obtain 
or retain market-based rate authority identify and describe two 
categories of upstream owners. First, a seller must identify and 
describe the furthest upstream affiliate owner(s) in its ownership 
chain, which we propose to define as the seller's ``ultimate affiliate 
owner(s).'' \18\ Second, a seller must identify and describe all 
affiliate owners that have a franchised service area or market-based 
rate authority, or that directly own or control: Generation; 
transmission; intrastate natural gas transportation, storage or 
distribution facilities; physical coal supply sources or ownership of 
or control over who may access transportation of coal

[[Page 80305]]

supplies.\19\ To the extent that an affiliate owner does not fall into 
either of the two categories described above, the seller will not need 
to identify it when describing its ownership structure.
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    \17\ As specified in the Commission's current regulations, 
``affiliate'' of a specified company means: (i) Any person that 
directly or indirectly owns, controls, or holds with power to vote, 
10 percent or more of the outstanding voting securities of the 
specified company; (ii) Any company 10 percent or more of whose 
outstanding voting securities are owned, controlled, or held with 
power to vote, directly or indirectly, by the specified company; 
(iii) Any person or class of persons that the Commission determines, 
after appropriate notice and opportunity for hearing, to stand in 
such relation to the specified company that there is liable to be an 
absence of arm's-length bargaining in transactions between them as 
to make it necessary or appropriate in the public interest or for 
the protection of investors or consumers that the person be treated 
as an affiliate; and (iv) Any person that is under common control 
with the specified company. For purposes of paragraph (a)(9)of the 
Commission's regulations, owning, controlling or holding with power 
to vote, less than 10 percent of the outstanding voting securities 
of a specified company creates a rebuttable presumption of lack of 
control. 18 CFR 35.36(a)(9) (2015).
    \18\ A seller may have more than one ultimate affiliate owner. 
For example, if a seller is owned 50 percent by affiliate A and 50 
percent by affiliate B, there are two ownership ``chains'' or 
``branches.'' The seller must identify and describe the ultimate 
affiliate owner at the top of each chain/branch, i.e., the last 
affiliate owner in that chain/branch.
    \19\ To the extent sellers will be describing such affiliate 
owners in the horizontal and vertical market power sections of the 
filing, that description will fulfill this requirement.
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    10. Identifying the ultimate affiliate owner is necessary for the 
Commission to form a meaningful picture of a seller's ownership 
structure and to understand what affiliates ultimately have the power 
to influence a seller's operations. The seller should also describe 
each ultimate affiliate owner's connection to the seller, and this 
description should be sufficient to allow the Commission to understand 
the relation between the seller and the ultimate affiliate owner(s), 
and could include references to the required corporate organizational 
chart. Identifying affiliate owners that have a franchised service area 
or market-based rate authority, or that directly own or control: 
Generation; transmission; intrastate natural gas transportation, 
storage or distribution facilities; physical coal supply sources or 
ownership of or control over who may access transportation of coal 
supplies assists the Commission in its analysis of a seller's 
horizontal and vertical market power.
    11. In addition, where sellers are directly or indirectly owned or 
controlled by a foreign government or any political subdivision of a 
foreign government or any corporation which is owned in whole or in 
part by such entity, we propose to require that the seller identify 
such foreign government, political subdivision, or corporation.
    12. We caution sellers to examine all ownership information to 
ensure that the required affiliate owners are identified. Sellers 
should not assume that owners are not affiliates of the seller without 
looking to the top of the ownership chain. For example, suppose seller 
(Company A) has four owners (Companies B, C, D, and E) each of which 
directly owns eight percent of the voting securities of A. If Company F 
owns 100 percent of the voting securities of Companies B, C, D, and E, 
under the Commission's affiliate definition, Company F indirectly owns 
32 percent of the voting securities of Company A and is an affiliate of 
Company A. Under our proposed new framework, sellers must identify 
Company F only if Company F is an ultimate affiliate owner or if it is 
an affiliate owner that has a franchised service area or market-based 
rate authority, or that directly owns or controls: Generation; 
transmission; intrastate natural gas transportation, storage or 
distribution facilities; physical coal supply sources or ownership of 
or control over who may access transportation of coal supplies.\20\
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    \20\ We further caution sellers to be mindful that the 
Commission does not allow for a derivative share method to calculate 
ownership interests in downstream, partially-owned entities for 
purposes of identifying affiliates. See Tonopah Solar Energy, LLC, 
151 FERC ] 61,203, at PP 11-12 (2015).
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    13. With respect to owners that a seller represents to be passive, 
we propose to require that the seller affirm that its passive owners 
own a separate class of securities, have limited consent rights, do not 
exercise day-to-day control over the company, and cannot remove the 
manager without cause.\21\
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    \21\ See, e.g., AES Creative Resources, L.P., 129 FERC ] 61,239 
(2009) (AES Creative) (distinguishing between controlling interests 
and passive investment interests). See also EquiPower Resources 
Management, LLC, Docket No. ER10-1089-000 (June 16, 2010) 
(deficiency letter asking seller to demonstrate that certain 
interests were passive by providing answers to clarifying 
questions).
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    14. We seek comments on these proposals.

B. Ownership Information Required in Change in Status Filings

    15. The Commission requires market-based rate sellers to timely 
report any change in status that would ``reflect a departure from the 
characteristics that the Commission relied upon in granting market-
based rate authority.'' Section 35.42 of the Commission's regulations, 
18 CFR 35.42, which provides a non-exhaustive list of events that could 
trigger the change in status reporting requirement, is silent as to 
generic ownership changes, but requires that a seller must report 
certain new affiliations with any entity not disclosed in the 
application for market-based rate authority that has a franchised 
service area, or that directly owns or controls: generation facilities; 
transmission facilities; intrastate natural gas transportation, storage 
or distribution facilities; physical coal supply sources or ownership 
of or control over who may access transportation of coal supplies. 
However, a literal reading of footnote 258 requires sellers to report 
changes in upstream ownership via notices of change in status 
filings.\22\
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    \22\ Footnote 258 provides: ``To the extent that a seller's 
owners are themselves owned by others, the seller seeking to obtain 
or retain market-based rate authority must identify those upstream 
owners.'' See Order No. 687-A, FERC Stats. & Regs. ] 31,628 at n.258 
(emphasis added).
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    16. We believe that uncertainty as to the interpretation of 
footnote 258 has led to inconsistent reporting of changes in ownership. 
In our experience, some sellers report any change in ownership, other 
sellers only report changes in ownership when the new owner would be 
considered an affiliate pursuant to section 35.36(a)(9), and yet other 
sellers only report changes in ownership when the change in ownership 
causes a change in one of the triggering events explicitly listed in 
section 35.42. Accordingly, we propose to resolve the uncertainty and 
create a consistent reporting standard by amending section 35.42 of the 
Commission's regulations \23\ to specify the types of ownership changes 
that would require a change in status filing.
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    \23\ In Order No. 816, the Commission amended, among other 
things, sections 35.37 and 35.42 of its regulations. The further 
proposed regulatory text changes in this NOPR are keyed off of the 
new regulatory text as promulgated in Order No. 816.
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    17. In light of our proposal to require sellers to identify and 
describe in their initial applications and triennial updated market 
power analyses their ultimate affiliate owners, and all affiliate 
owners that have franchised service areas or market-based rate 
authority or that directly own or control: generation; transmission; 
intrastate natural gas transportation, storage or distribution 
facilities; physical coal supply sources or ownership of or control 
over who may access transportation of coal supplies it follows that the 
identity of such affiliate owners are characteristics that the 
Commission relies upon in granting the seller market-based rate 
authority. However, we are also mindful of Order No. 816, in which the 
Commission amended section 35.42 to provide a 100 MW threshold for 
reporting new affiliations, and thus we propose that these two concepts 
be combined, as described below. In addition, we propose in the instant 
rulemaking to specify the following scenario as an additional departure 
from the characteristics the Commission relied upon in granting market-
based rate authority and which should be reported to the Commission: 
when the seller acquires a new ultimate affiliate owner(s). 
Accordingly, we propose to require sellers to submit a notice of change 
in status in this scenario as well. In summary, combining all three of 
the above concepts, we propose that a change in status reporting 
requirement will be triggered by: (a) Any change in the seller's 
ultimate affiliate owner(s); or (b) the introduction of any new 
affiliate owner of the seller that has a franchised service area or 
that: directly owns or controls generation (if it represents a 100 MW 
or more net increase in seller and affiliate generation); owns, 
operates or controls transmission; or that directly

[[Page 80306]]

owns or controls: generation; transmission; intrastate natural gas 
transportation, storage or distribution facilities; physical coal 
supply sources or ownership of or control over who may access 
transportation of coal supplies.\24\ We remind sellers that the 
provisions in section 35.42(a)(1) apply to the seller and its 
affiliates because the Commission considers affiliates' assets when 
assessing a seller's horizontal and vertical market power.\25\
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    \24\ We note that some of these requirements exist in the 
current regulation or the regulation as revised by Order No. 816.
    \25\ See Order No. 697, FERC Stats. & Regs. ] 31,252 at P 1017 
(``the Commission's change in status requirements are intended to 
track the requirements embedded in the horizontal and vertical 
analysis as well as the affiliate abuse representations.''). See 
also id. P 3 n.2 (major aspects of the Commission's market-based 
rate regulatory regime include ``whether a market-based rate seller 
or any of its affiliates has market power in generation or 
transmission and, if so, whether such market power has been 
mitigated'' and ``whether the seller or its affiliates can erect 
other barriers to entry.'')
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III. Information Collection Statement

    18. The Paperwork Reduction Act (PRA) \26\ requires each federal 
agency to seek and obtain Office of Management and Budget (OMB) 
approval before undertaking a collection of information directed to ten 
or more persons or contained in a rule of general applicability. OMB's 
regulations,\27\ in turn, require approval of certain information 
collection requirements imposed by agency rules. Upon approval of a 
collection(s) of information, OMB will assign an OMB control number and 
an expiration date. Respondents subject to the filing requirements of a 
rule will not be penalized for failing to respond to these 
collection(s) of information unless the collection(s) of information 
display a valid OMB control number.
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    \26\ 44 U.S.C. 3501-3520.
    \27\ 5 CFR 1320 (2015).
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    19. The Commission is submitting the proposed modifications to its 
information collection to OMB for review and approval in accordance 
with section 3507(d) of the Paperwork Reduction Act of 1995.
    20. The following table provides the estimated burden reduction 
proposed in RM16-3: \28\
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    \28\ In Order No. 697-A, the Commission required that sellers 
seeking to obtain or retain market-based rate authority identify all 
upstream owners and affiliates. Order No. 697-A, FERC Stats. & Regs. 
] 31,268 at P 181 n.258. The Commission most recently updated the 
burden estimates associated with the market-based rate program in 
Order No. 816, which will become effective on January 28, 2016. The 
PRA package and burden estimates for the Order No. 816 are pending 
OMB review.

                                               FERC-919, Estimated Changes, Due to Proposed Rule in RM16-3
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                                                             Annual  number
           Type of requirement                Number of      of  responses   Total number of   Average burden hours & cost   Annual burden hours & total
                                             respondents    per  respondent     responses          per  response \29\                annual cost
                                                      (1)              (2)   (1) * (2) = (3)  (4).........................  (3) * (4) = (5)
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Reduction of requirement for sellers to               509                1              509   -40 hrs.; -$3,858             -20,360 hrs.; -$1,963,722
 describe entire ownership structure in
 Initial Applications and Triennial
 Updated Market Power Analyses, & Change
 of Status --[Decrease in burden and
 cost].
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    Title: FERC-919, Market Based Rates for Wholesale Sales of Electric 
Energy, Capacity and Ancillary Services by Public Utilities.
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    \29\ The Commission estimates this figure based on the Bureau of 
Labor Statistics data (for the Utilities sector, at http://www.bls.gov/oes/current/naics2_22.htm, plus benefits information at 
http://www.bls.gov/news.release/ecec.nr0.htm). The average hourly 
cost (salary plus benefits) of $96.45 is based on the following 
occupational categories:
     Lawyer (Code 23-0000), $129.87/hour.
     Management Analyst (Code 13-1111), $63.03/hour.
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    Action: Proposed revision to existing collection.
    OMB Control No: 1902-0234.
    Respondents: Business or other for profit, and not for profit 
institutions.
    Frequency of Responses: As needed.
    Necessity of the Information: This NOPR reduces the amount and 
scope of ownership information that sellers must provide in their 
market-based rate filings. Interested persons may obtain information on 
the reporting requirements by contacting the Federal Energy Regulatory 
Commission, Office of the Executive Director, 888 First Street NE., 
Washington, DC 20426 [Attention: Ellen Brown, email: 
DataClearance@ferc.gov, phone: (202) 502-8663, fax: (202) 273-0873].
    21. Comments concerning the information collection proposed in this 
NOPR and the associated burden estimates, should be sent to the 
Commission in this docket and may also be sent to the Office of 
Management and Budget, Office of Information and Regulatory Affairs 
[Attention: Desk Officer for the Federal Energy Regulatory Commission]. 
For security reasons, comments should be sent by email to OMB at the 
following email address: oira_submission@omb.eop.gov. Please refer to 
OMB Control Number 1902-0234 in your submission to OMB.

IV. Environmental Analysis

    22. 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.\30\
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    \30\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
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    23. The Commission has categorically excluded certain actions from 
this requirement as not having a significant effect on the human 
environment. Included in the exclusion are rules that are clarifying, 
corrective, or procedural, or that do not substantially change the 
effect of the regulations being amended.\31\ The actions here fall 
within this categorical exclusion in the Commission's regulations.
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    \31\ 18 CFR 380.4(a)(2)(ii) (2015).
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V. Regulatory Flexibility Act

    24. The Regulatory Flexibility Act of 1980 (RFA) \32\ 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 (SBA) revised its size standard 
(effective January 22, 2014) for electric utilities from a standard 
based on megawatt hours to a standard based on the number of

[[Page 80307]]

employees including affiliates.\33\ This NOPR, if adopted, reduces (for 
small and large entities) the burden and expense associated with filing 
market-based rate applications and triennial market power updates by 
clarifying the current regulations and by requiring identification of 
only the ultimate affiliate owner(s) and affiliate owners that directly 
own or control generation, transmission, or inputs to electric power 
production, have a franchised service area, or have market-based rate 
authority, rather than the comprehensive ownership information 
currently required. In addition, the Commission clarifies and limits 
the types of ownership changes that must be reported to the Commission 
via a notice of change in status. Accordingly, the Commission certifies 
that this NOPR, if adopted, will not have a significant economic impact 
on a substantial number of small entities. An analysis under the RFA is 
not required.
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    \32\ 5 U.S.C. 601-612 (2012).
    \33\ SBA Final Rule on ``Small Business Size Standards: 
Utilities,'' 78 FR 77,343 (Dec. 23, 2013).
---------------------------------------------------------------------------

VI. Comment Procedures

    25. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due February 22, 2016. Comments must refer to 
Docket No. RM16-3-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    26. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. 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.
    27. 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.
    28. 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.

VII. Document Availability

    29. 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.
    30. 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 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.
    31. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at 202-502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

List of Subjects in 18 CFR Part 35

    Electric power rates; Electric utilities; Reporting and record-
keeping requirements.

    By direction of the Commission.

    Issued: December 17, 2015.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Chapter I, Title 18, Code of Federal Regulations, to read as follows:

PART 35--FILING OF RATE SCHEDULES AND TARIFFS

0
1. The authority citation for Part 35 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.

0
2. Amend Sec.  35.37 by revising paragraph (a)(2) to read as follows:

Sec.  35.37  Market power analysis required.

    (a)(1) * * *
    (2) When submitting a market power analysis, whether as part of an 
initial application or an update, a Seller must include a description 
of its ownership structure that identifies all ultimate affiliate 
owner(s), i.e., the furthest upstream affiliate(s) in the ownership 
chain. A Seller must also identify all affiliate owners that have a 
franchised service area or market-based rate authority, and all 
affiliate owners that directly own or control: Generation; 
transmission; intrastate natural gas transportation, storage or 
distribution facilities; physical coal supply sources or ownership of 
or control over who may access transportation of coal supplies. The 
term ``affiliate owner'' means any owner of the Seller that is an 
affiliate of the Seller as defined in Sec.  35.36(a)(9) of this 
chapter. The Seller must also provide an appendix of assets in the form 
provided in Appendix B of this subpart and an organizational chart. The 
organizational chart must depict the Seller's current corporate 
structure indicating all affiliates.
* * * * *
0
3. Amend Sec.  35.42 by revising paragraph (a)(2)(iv) and adding 
paragraph (a)(2)(v) to read as follows:

Sec.  35.42  Change in status reporting requirement.

    (a) * * *
    (2) * * *
    (iv) Has a franchised service area; or
    (v) Is an ultimate affiliate owner, defined as the furthest 
upstream affiliate(s) in the ownership chain.
* * * * *

[FR Doc. 2015-32273 Filed 12-23-15; 8:45 am]
BILLING CODE 6717-01-P