Document ID: FERC-2006-1934-0002
Agency: ferc
Document Type: Proposed Rule
Title: Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the Public Utility Holding Company Act of 2005; Transaction Subject to FPA Section 203; Supplemental Notice of Technical Conference
Posted Date: 2006-12-06T05:00Z

[Federal Register: December 6, 2006 (Volume 71, Number 234)]
[Proposed Rules]               
[Page 70692-70695]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06de06-14]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 2, 33, 365 and 366

[Docket No. AD07-2-000]

 
Repeal of the Public Utility Holding Company Act of 1935 and 
Enactment of the Public Utility Holding Company Act of 2005; 
Transaction Subject to FPA Section 203; Supplemental Notice of 
Technical Conference

November 27, 2006.
AGENCY: Federal Energy Regulatory Commission, DOE.

[[Page 70693]]

ACTION: Supplemental notice of technical conference.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
holding a technical conference in Commission Docket No. AD07-2-000 on 
December 7, 2006, to discuss certain issues raised in rulemakings 
issued in Commission Docket Nos. RM05-32-000 and RM05-34-000. The 
Commission is providing the agenda for the conference, a list of 
participants and providing interested parties an opportunity to file 
written comments following the conference.

DATES: Comments may be filed on issues raised at the conference, on or 
before January 26, 2007.

FOR FURTHER INFORMATION CONTACT:

Roshini Thayaparan (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6857.
Andrew P. Mosier, Jr. (Legal Information), Office of General Counsel, 
888 First Street, NE., Washington, DC 20426, (202) 502-6274.

SUPPLEMENTARY INFORMATION: This conference addresses certain issues 
raised in rulemakings issued in Docket No. RM05-32-000 (70 FR 75592, 
December 20, 2005) and Docket No. RM05-34-000. (71 FR 1348, January 6, 
2006).
    As announced in the Notice of Technical Conference issued on 
October 6, 2006, the Federal Energy Regulatory Commission (Commission) 
will hold a technical conference on December 7, 2006, to discuss 
certain issues raised in rulemakings issued in Docket Nos. RM05-32 and 
RM05-34.\1\ The technical conference will be held from 9:30 am to 4:30 
pm (EST) at the Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, in the Commission Meeting Room. All 
interested persons are invited to attend, and registration is not 
required.
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    \1\ Repeal of the Public Utility Holding Company Act of 1935 and 
Enactment of the Public Utility Holding Company Act of 2005, Order 
No. 667, FERC Stats. & Regs. ] 31,197 (2005), order on reh'g, Order 
No. 667-A, FERC Stats. & Regs. ] 31,213, order on reh'g, Order No. 
667-B, FERC Stats. & Regs. ] 31,224 (2006), reh'g pending; 
Transactions Subject to FPA Section 203, Order No. 669, FERC Stats. 
& Regs. ] 31,200 (2006), order on reh'g, Order No. 669-A, FERC 
Stats. Regs. ] 31,214 (2006), order on reh'g, Order No. 669-B, FERC 
Stats. & Regs. ] 31,225 (2006).
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    The agenda for this conference, with a list of participating 
panelists, is attached. In order to allot sufficient time for questions 
and responses, each speaker will be provided with five (5) minutes for 
prepared remarks. Due to the limitation of time, slides and graphic 
displays (e.g., PowerPoint[supreg] presentations) will not be permitted 
during the conference. Presenters who wish to distribute copies of 
their prepared remarks or handouts should bring 100 double-sided copies 
to the technical conference. Presenters who wish to include comments, 
presentations, or handouts in the record for this proceeding should 
file their comments with the Secretary of the Commission. Comments may 
either be filed on paper or electronically via the eFiling link on the 
Commission's Web site at http://www.ferc.gov. Following the conference, 

any interested person will be permitted to file written comments in the 
above docket on or before January 26, 2007.
    A free webcast of this event will be available through http://www.ferc.gov.
 Anyone with Internet access who desires to view this 

event can do so by navigating to http://www.ferc.gov's Calendar of 

Events and locating this event in the Calendar. The event will contain 
a link to its webcast. The Capitol Connection provides technical 
support for the free webcasts. It also offers access to this event via 
television in the DC area and via phone bridge for a fee. Visit http://www.CapitolConnection.org
 or contact Danelle Perkowski or David 

Reininger at 703-993-3100 for more information about this service.
    Commission conferences are accessible under section 508 of the 
Rehabilitation Act of 1973. For accessibility accommodations please 
send an e-mail to accessibility@ferc.gov or call toll free 1-866-208-
3372 (voice) or 202-208-1659 (TTY), or send a FAX to 202-208-2106 with 
the required accommodations.
    For more information about this conference, please contact:

Andrew P. Mosier, Jr., Office of Energy Markets and Reliability, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6274, Andrew.Mosier@ferc.gov.
Roshini Thayaparan, Office of the General Counsel--Energy Markets, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6857, Roshini.Thayaparan@ferc.gov.

Magalie R. Salas,
Secretary.

Agenda for Technical Conference on Public Utility Holding CompanyAct of 
2005 and Federal Power Act Section 203 Issues \2\

December 7, 2006
Welcome Remarks:
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    \2\ The lists of panelists for this technical conference may 
change. The Commission will issue a further notice of changes if 
time permits. Additionally, issues raised in the Order No. 667, et 
al. and Order No. 669, et al. rulemakings with respect to whether 
the Commission should change its merger policy, including its 
competition analysis, will be discussed at a subsequent technical 
conference.
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    9:30 a.m.-9:45 a.m.
Panel 1: Panel on Cross-Subsidization
    9:45 a.m.-11:45 a.m.

    The Commission invites panelists to discuss whether there are 
additional actions, under the Federal Power Act (FPA) or Natural Gas 
Act (NGA), that the Commission should take to supplement the 
protections against cross-subsidization that were implemented in Order 
No. 667, et al. and Order No. 669, et al. Specifically, the Commission 
seeks panelist input on any or all of the following issues:

FPA Section 203 Authorities

    [cir] In discussing the safeguards necessary to protect consumers 
under FPA section 203, Order No. 669 states that applicants ``must 
adopt sufficient safeguards, including any necessary cash management 
controls (such as restrictions on upstream transfers of funds, ring 
fencing, etc.) to prevent any cross-subsidization between holding 
companies and their new subsidiaries before receiving section 203 
approval.'' As a general matter, the Commission and most states have 
authority to review proposed mergers/corporate dispositions involving 
public utilities and to impose cross-subsidization safeguards as a 
condition of approval; they also have rate related authorities to 
protect customers against inappropriate cross-subsidization. Should the 
Commission adopt specific generic cross-subsidization safeguards in its 
section 203 regulations or is it preferable, particularly in light of 
state authorities, for the Commission to permit applicants to implement 
safeguards on a case-by-case basis subject to audit oversight?
    [cir] With respect to FPA section 203 merger/corporate 
applications, should the Commission require more specific cross-subsidy 
protections in addition to

[[Page 70694]]

the general requirement that there shall be no cross-subsidization 
resulting from or reasonably foreseeable as a result of a FPA section 
203 transaction?
    [cir] Should the Commission adopt, by regulation, generic ``ring 
fencing'' or other conditions of merger approvals (other than codifying 
a version of its current code of conduct/merger restrictions) or should 
the Commission continue to consider such conditions on a case-by-case 
basis? In light of the fact that most states have authority to adopt 
such protections, is further generic action by the Commission 
inappropriate or unnecessary at this time?
    [cir] Is the Commission getting sufficient information in FPA 
section 203 applications to make a determination that a merger or other 
corporate transaction will not result in cross-subsidization or the 
encumbrance of utility assets? If not, what additional information 
should the Commission require FPA section 203 applicants to file?

FPA and NGA Rate and Accounting Authorities

    [cir] Are there additional generic actions the Commission should 
take under its FPA or NGA authorities (other than FPA section 203, 
which is discussed in other questions above) to protect customers 
against inappropriate cross-subsidization or encumbrances of utility 
assets? Are reporting requirements, rather than restrictions, a better 
way in which to protect against cross-subsidization and the encumbrance 
of utility assets?
    [cir] Should the Commission adopt regulations under FPA sections 
205 and 206 to codify existing restrictions regarding power and non-
power goods and services transactions between traditional public 
utilities and their ``unregulated'' affiliates? Should these existing 
restrictions apply to all traditional public utilities and their 
affiliates irrespective of whether they are seeking merger approval 
under FPA section 203 or market-based rate approval under FPA section 
205? Should the scope of the existing power and non-power goods and 
services restrictions be expanded and, if so, how?
    [cir] In light of the submissions to date of the FERC Form No. 60 
(Service Company Report), which applies to centralized service 
companies, is the Commission getting sufficient information to protect 
against inappropriate cross-subsidization and the encumbrance of 
utility assets? Is there other information the Commission should 
routinely collect, or is case-by-case access to books and records in 
audit and rate proceedings sufficient to ensure that customers are 
protected against inappropriate cross-subsidization?

Panelists

    [cir] The Honorable Ray Baum, Commissioner, Oregon Public Utility 
Commission
    [cir] The Honorable Robert Garvin, Commissioner, Wisconsin Public 
Service Commission
    [cir] John Antonuk, President, The Liberty Consulting Group
    [cir] Randolph Elliot, Principal, Miller, Balis & O'Neil, P.C., on 
behalf of the American Public Power Association and the National Rural 
Electric Cooperative Association
    [cir] Brian Little, Assistant Controller, AGL Resources Inc.
    [cir] Electric Utility Company Representative--TBA
    [cir] Electric Utility Company Representative--TBA
    [cir] Financial Representative--TBA

Lunch:
    12 p.m.-1 p.m.
Panel 2: Panel on Cash Management Programs and Money Pools
    1 p.m.-2:30 p.m.

    The Commission adopted its Cash Management Rule, Order No. 634, et 
al., prior to the Public Utility Holding Company Act of 2005 (PUHCA 
2005), when the Commission had no direct authority over holding 
companies. The Commission invites panelists to discuss whether, and if 
so how, the Commission should modify its Cash Management Rule in light 
of PUHCA 2005. Should the Commission codify specific safeguards that 
must be adopted for cash management programs and money pool agreements 
and transactions? If so, what should those safeguards be?

Panelists

    [cir] Denise Parrish, Deputy Administrator, Wyoming Office of 
Consumer Advocate
    [cir] Denise M. Furey, Senior Director, Fitch Ratings
    [cir] Gas Industry Representative--TBA
    [cir] Electric Utility Company Representative--TBA
    [cir] Electric Utility Company Representative--TBA
    [cir] State/Customer Representative--TBA

Break:
    2:30 p.m.-2:45 p.m.
Panel 3: Panel on Exemptions, Waivers and Blanket Authorizations Set 
Forth in OrderNos. 667, et al. and 669, et al.
    2:45 p.m.-4:15 p.m.

    In Order No. 667, et al. and Order No. 669, et al., the Commission 
set forth specific exemptions, waivers and blanket authorizations from 
the regulatory requirements set forth in those orders. The Commission 
invites panelists to discuss whether modifications to the specific 
exemptions, waivers and blanket authorizations set forth in Order No. 
667, et al. and Order No. 669, et al. are warranted. Specifically, the 
Commission seeks input as to the following issues:

--Exemptions and waivers set forth in Order No. 667, et al.:

    [cir] Does the Commission need to consider additional or different 
exemptions and waivers than those set forth in Order No. 667, et al. or 
should it wait until it has had more experience under the current 
rules?

--Blanket authorizations set forth in Order No. 669, et al.:

    [cir] Does the Commission need to consider additional or different 
blanket FPA section 203 authorizations than those set forth in Order 
No. 669, et al. or should it wait until it has had more experience 
under the current rules?
    [cir] In Order No. 669, et al., the Commission granted a blanket 
authorization under FPA section 203(a)(2) for holding companies to 
acquire up to 10 percent of voting securities of a securities in a 
transmitting utility, an electric utility company, or a holding company 
in a holding company system that includes a transmitting utility or an 
electric utility company. Under what circumstances would it be 
appropriate for the Commission to grant a parallel blanket 
authorization under FPA section 203(a)(1) for transactions that (a) 
involve or permit transfers (dispositions) of up to 10 percent of a 
public utility's voting stock; (b) involve a transfer of up to 10 
percent of the voting stock of a holding company that directly or 
indirectly owns or controls a public utility?

Panelists

    [cir] State/Customer Representative--TBA
    [cir] Customer/Financial Representative--TBA
    [cir] Walter R. Burkley, Vice President and Counsel, Capital 
Research and Management Company
    [cir] Steven Bunkin, Managing Director and Associate General 
Counsel, Goldman, Sachs & Co./J. Aron & Company
    [cir] Debra Bolton, Vice President and Assistant General Counsel, 
Mirant
    [cir] Ike Gibbs, Vice President, Compliance Director and Assistant 
General Counsel, JPMorgan Chase & Co.
    [cir] Electric Utility Company Representative--TBA

[[Page 70695]]

Closing Remarks:
    4:15 p.m.-4:30 p.m.

    The Commissioners and staff may ask questions at the conclusion of 
presentations. All interested persons may file written comments 
following the technical conference on or before January 26, 2007.

[FR Doc. E6-20609 Filed 12-5-06; 8:45 am]

BILLING CODE 6717-01-P