Document ID: FERC-2009-1476-0002
Agency: ferc
Document Type: Rule
Title: Revised Filing Requirements for Centralized Service Companies Under the Public Utility Holding Company Act of 2005, the Federal Power Act, and the Natural Gas Act
Posted Date: 2009-12-28T05:00Z

[Federal Register: December 28, 2009 (Volume 74, Number 247)]
[Rules and Regulations]               
[Page 68526-68529]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de09-20]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 366 and 367

[Docket No. RM09-21-000; Order No. 731]

 
Revised Filing Requirements for Centralized Service Companies 
Under the Public Utility Holding Company Act of 2005, the Federal Power 
Act, and the Natural Gas Act

Issued December 17, 2009.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission is revising its 
regulations to require every centralized service company that provides 
non-power services to any public utility, natural gas company, or both, 
to file Form No. 60 (Annual Report of Centralized Service Companies) 
annually and abide by the Uniform System of Accounts, unless exempted 
or granted a waiver. This rule provides greater transparency and will 
aid the Commission in fulfilling its regulatory obligations under the 
Federal Power Act and the Natural Gas Act to ensure that rates are just 
and reasonable.

DATES: Effective Date: This rule will become effective January 27, 
2010.

FOR FURTHER INFORMATION CONTACT: 
Thomas Russo (Technical Information), Division of Financial Regulation, 
Office of Enforcement, Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426,Telephone (202) 502-8792.
Lawrence Greenfield (Legal Information), Office of the General 
Counsel--Energy Markets,Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426, Telephone (202) 502-6415.
Gary D. Cohen (legal issues), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426, (202) 502-8321.

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

Order No. 731

Final Rule

Issued December 17, 2009.

Table of Contents

                                                               Paragraph
                                                                 Nos.

I. Introduction.............................................           1
II. Background..............................................           3
III. Discussion.............................................           7
    A. Comments.............................................           8
    B. Analysis.............................................           9
    C. Filing Date..........................................          13
IV. Information Collection Statement........................          14
V. Environmental Analysis...................................          24
VI. Regulatory Flexibility Act Certification................          25
VII. Document Availability..................................          26

I. Introduction

    1. The Federal Energy Regulatory Commission (Commission) is 
revising its regulations at 18 CFR 366.1, 366.23, 367.1 and 367.2 to 
require every centralized service company that provides non-power 
services to any public utility, natural gas company, or both, to file 
Form No. 60 (Annual Report of Centralized Service Companies) annually 
and abide by the Uniform System of Accounts, unless exempted or granted 
a waiver pursuant to 18 CFR 366.3 or 366.4.\1\
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    \1\ We are not adopting any revisions to the regulatory text of 
18 CFR part 368 or 18 CFR 369.1, because the current text of those 
regulations already is consistent with this Final Rule.
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    2. The Commission believes that these revisions promote 
transparency and are consistent with the Commission's regulatory 
obligation to regulate public utilities under the Federal Power Act 
(FPA) \2\ and natural gas companies under the Natural Gas Act (NGA) \3\ 
to ensure that rates are just and reasonable. The revisions also better 
track the Commission's intent in prior orders directing the filing of 
Form No. 60.
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    \2\ 16 U.S.C. 791a et seq.
    \3\ 15 U.S.C. 717 et seq.
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II. Background

    3. On September 17, 2009, the Commission issued a notice of 
proposed rulemaking proposing to revise 18 CFR 366.1 and 18 CFR 367.1 
to clarify that ``service companies'' includes entities providing non-
power goods or services to any public utility or any natural gas 
company, or both, in the same holding company system, and to revise 18 
CFR 366.23 and 18 CFR 367.2 to clarify that every centralized service 
company that provides non-power services to a public utility, a natural 
gas company, or both, in the same holding company system, must file 
FERC Form No. 60 (Annual Report of Centralized Service Companies) 
annually and must abide by the Uniform System of Accounts, unless the 
holding company is exempted or granted a waiver pursuant to 18 CFR 
366.3 or 366.4.\4\
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    \4\ Revised Filing Requirements for Centralized Service 
Companies Under the Public Utility Holding Company Act of 2005, the 
Federal Power Act, and the Natural Gas Act, Notice of Proposed 
Rulemaking, 74 FR 48884 (Sep. 25, 2009), FERC Stats. & Regs. ] 
32,647 (2009) (Form 60 Notice).
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    4. In the Form 60 Notice, the Commission explained that the 
Commission intended in Order Nos. 667, 667-A, and 684,\5\ to require 
every centralized service company that provides non-power services to a 
public utility, a natural gas company, or both, to file Form No. 60 
(Annual Report of Centralized Service Companies) annually, unless the 
holding company is exempted or granted a waiver pursuant to 18 CFR 
366.3 or 366.4.
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    \5\ 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 (2006), order on reh'g, 
Order No. 667-B, FERC Stats. & Regs. ] 31,224 (2006), order on 
reh'g, Order No. 667-C, 118 FERC ] 61,133 (2007); Financial 
Accounting, Reporting and Records Retention Requirements Under the 
Public Utility Holding Company Act of 2005, Order No. 684, FERC 
Stats. & Regs. ] 31,229 (2006).
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    5. However, as explained in the Form 60 Notice, the codification of 
this requirement in the regulatory text did not make this requirement 
clear. Thus, in the Form 60 Notice, the Commission proposed new 
language that would more clearly express this requirement.

[[Page 68527]]

    6. In response to the Form 60 Notice, comments were filed by the 
American Public Gas Association (APGA). These comments, more 
specifically addressed below, support the Commission's proposals in the 
Form 60 Notice.

III. Discussion

    7. It was our intention in Order Nos. 667, 667-A and 684 that every 
centralized service company providing non-power services either to any 
public utility or to any natural gas company (or to both) in the same 
holding company system file Form No. 60 and comply with the Uniform 
System of Accounts, unless the holding company is exempted or granted a 
waiver. However, as explained in the Form 60 Notice, it has recently 
come to our attention that, as currently written, the regulatory text 
of 18 CFR 366.1, 366.23, 367.1 and 367.2 could be read to reach a 
different, unintended conclusion. Namely, that centralized service 
companies providing non-power services to natural gas companies would 
be excluded from the requirement to file Form No. 60 if the companies 
that were part of the holding company system did not include a public 
utility. The proposed revisions to 18 CFR 366.1, 18 CFR 366.23, 18 CFR 
367.1 and 18 CFR 367.2 described in the Form 60 Notice were all 
designed to close this inadvertent loophole.\6\
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    \6\ See Form 60 Notice, FERC Stats. & Regs. ] 32,647 at P 12-17; 
accord id. P 4-11. We note, however, that, irrespective of the 
revisions we are adopting in this Final Rule, under 18 CFR 
366.23(a)(2), any service company in a holding company system that 
does not file Form No. 60 is required to file a narrative 
description of the company's functions during the prior calendar 
year (Form No. 61) absent an exemption or waiver.
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A. Comments

    8. APGA supports the Commission's proposals in the Form 60 Notice. 
APGA argues both that the proposed regulations are consistent with the 
Commission's expressed intention as to the scope of the filing 
requirement and that ``centralized service companies that provide 
services to natural gas companies or both natural gas companies and 
public utilities warrant the same treatment as centralized service 
companies that provide services to just public utilities. In APGA's 
view, this is because the same concerns regarding transparency (and 
effective rate regulation) persist among both natural gas companies and 
public utilities.'' \7\ Thus, APGA supports revisions to the 
Commission's regulations to make the requirement to file Form No. 60 
clearer and adds that the ``Commission's proposal is consistent with 
its obligation to ensure just and reasonable rates for public utilities 
under the FPA and for natural gas companies under the NGA.'' \8\ 
Finally, APGA states that the Commission possesses the authority to 
require centralized service companies to file FERC Form No. 60, 
pursuant to the FPA and NGA, respectively, in addition to its authority 
under PUHCA 2005.\9\
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    \7\ APGA Comments at 2-3.
    \8\ Id. at 3.
    \9\ Id.
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B. Analysis

    9. Based on the analysis contained in the Form 60 Notice and after 
consideration of the comments filed in response to the Form 60 Notice, 
we are revising our regulations to clarify that the FERC Form No. 60 
annual filing requirement, as well as the requirement to abide by the 
Uniform System of Accounts, extends to any centralized service company 
that provides non-power services to any public utility or any natural 
gas company, or both, in the same holding company system, so that the 
filing requirements will now expressly apply to all the entities that 
the Commission envisioned covering in its earlier orders, (i.e., the 
centralized service companies that serve public utilities and natural 
gas companies subject to the Commission's jurisdiction under the FPA 
and NGA).
    10. Therefore, in this Final Rule, the Commission is revising 18 
CFR 366.1 and 18 CFR 367.1 to clarify that ``service companies'' 
include entities providing non-power goods or services to any public 
utility or any natural gas company, or both, in the same holding 
company system, and to revise 18 CFR 366.23 and 18 CFR 367.2 to clarify 
that every centralized service company that provides non-power services 
to a public utility, a natural gas company, or both, in the same 
holding company system, must file FERC Form No. 60 (Annual Report of 
Centralized Service Companies) annually and must abide by the Uniform 
System of Accounts, unless the holding company is exempted or granted a 
waiver pursuant to 18 CFR 366.3 or 366.4.
    11. The Commission finds that these revisions will promote 
transparency and are consistent with the Commission's regulatory 
obligation to regulate public utilities under the FPA and natural gas 
companies under the NGA to ensure just and reasonable rates. The 
revisions also better track the Commission's intent in prior orders 
directing the filing of FERC Form No. 60.\10\
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    \10\ See Form 60 Notice, FERC Stats. & Regs. ] 32,647 at P 12-
17.
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    12. In contrast to Order Nos. 667, 667-A and 684, in this 
rulemaking the Commission is relying explicitly on the Commission's 
authority under the FPA and NGA, in addition to its authority under 
PUHCA 2005. Accordingly, in this Final Rule, we are also revising the 
name of subchapter U, and of parts 366 and 367, title 18, CFR, to 
better reflect the Commission's reliance on its statutory authority 
under the FPA and NGA, in addition to its authority under PUHCA 2005.

C. Filing Date

    13. As this Final Rule merely clarifies existing filing obligations 
that are already in place, we will require centralized service 
companies that are subject to this Final Rule to file Form No. 60 by 
May 1, 2010.

IV. Information Collection Statement

    14. Office of Management and Budget (OMB) regulations require OMB 
to review and approve certain information collection requirements 
imposed by agency rule.\11\ The Commission is submitting notification 
of the information collection requirements contained in this Final Rule 
to OMB for review and approval under section 3507(d) of the Paperwork 
Reduction Act of 1995.\12\
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    \11\ 5 CFR 1320.11.
    \12\ 44 U.S.C. 3507(d).
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    15. The Office of Management and Budget's (OMB) regulations in 5 
CFR 1320.11 require that it approve certain reporting and recordkeeping 
requirements (collections of information) imposed by an agency. 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 this Final 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.
    16. This Final Rule clarifies that the requirement to file FERC 
Form No. 60 as it currently exists applies to centralized service 
companies in holding company systems that include a natural gas company 
(where there is not also a public utility); in holding company systems 
that include a public utility, these requirements already apply. 
Likewise, this Final Rule clarifies that the Uniform System of Accounts 
as it currently exists applies to centralized service companies in 
holding company systems that include a natural gas company (where there 
is not also a public utility); in holding company systems that include 
a public utility, these requirements already apply. Finally, this Final 
Rule revises the

[[Page 68528]]

definitions in 18 CFR parts 366 and 367 to match the requirements we 
are implementing in this Final Rule.
    17. Since most holding companies include only public utilities or 
include both public utilities and natural gas companies and so would 
already be subject to these requirements, we expect that this 
clarification will have an impact on only a relatively small number of 
companies. Implementation of this Final Rule is necessary to provide 
greater transparency and will aid the Commission in fulfilling its 
regulatory obligation under the FPA and the NGA to ensure that rates 
are just and reasonable.
    18. In the Form 60 Notice, the Commission explained that, when the 
Commission issued Order Nos. 667, 667-A and 684, it did not intend to 
exclude centralized service companies providing non-power services to 
holding companies that included natural gas companies (but no public 
utilities) from the requirement to file Form No. 60 or to abide by the 
Uniform System of Accounts. Thus, the Commission continues to rely on 
the estimate made in Order No. 684 of the burden associated with the 
annual filing of Form No. 60 (2,850 hours and $342,000).\13\
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    \13\ See Order No. 684, FERC Stats. & Regs. ] 31,229, at P 226; 
see also Form 60 Notice, FERC Stats. & Regs. ] 32,647 at P 20.
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    19. Moreover, in response to the Form 60 Notice, the sole comment 
filed supported the Form 60 Notice proposals and did not raise any 
concerns as to the reporting burden. Therefore, the Commission will use 
the same estimate in this Final Rule.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                 Data collection                     Number of     responses per     Hours per     Total No. of
                                                    respondents     respondent       response          hours
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FERC Form No. 60................................              38               1              75           2,850
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    Information Collection Costs: 2,850 hours at $120/hour = $342,000.
    Title: FERC Form No. 60, Annual Report of Centralized Service 
Companies.
    Action: Proposed collections.
    OMB Control No.: 1902-0215.
    Respondents: Business or other for profit, Interstate natural gas 
pipelines and public utilities (not applicable to small businesses).
    Frequency of Responses: Annually.
    20. Necessity of Information: This Final Rule explicitly requires, 
absent an exemption or waiver, any centralized service company 
providing non-power services to any natural gas company or any public 
utility, or both, to file FERC Form No. 60 annually and to comply with 
the Uniform System of Accounts. This information is needed to promote 
transparency and to allow the Commission to determine whether rates of 
natural gas pipelines and public utilities are just and reasonable.
    21. Implementation of these requirements will help the Commission 
carry out its responsibilities under the FPA, NGA, and PUHCA 2005 to 
ensure that public utilities and natural gas companies do not engage in 
improper pricing and undue discrimination. The information collection 
requirements of this Final Rule will be reported to the Commission and 
posted on the Commission's Web site.
    Internal Review: The Commission has reviewed the reporting and 
accounting requirements proposed in this Final Rule. These requirements 
conform to the Commission's plan for efficient information collection, 
communication, and management within the natural gas pipeline and 
electric power industries, and are necessary to meet the Commission's 
obligations under PUHCA, the FPA, and the NGA. The Commission has 
assured itself, by means of its internal review, that there is 
specific, objective support for the burden estimates associated with 
the information collection requirements.
    22. 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: 
Michael Miller, Office of the Chief Information Officer, Phone: (202) 
502-8415, fax: (202) 273-0873, e-mail: michael.miller@ferc.gov].
    23. Comments concerning the collection of information and the 
associated burden estimate, should be sent to the contact listed above 
and to the Office of Management and Budget, Office of Information and 
Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer for 
the Federal Energy Regulatory Commission, phone: (202) 395-4638, fax: 
(202) 395-7285].

V. Environmental Analysis

    24. 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.\14\ The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.\15\ The actions proposed here fall within categorical 
exclusions in the Commission's regulations for rules that are 
clarifying, corrective, or procedural, for information gathering, 
analysis, and dissemination, for accounting-related matters, and for 
rate-related matters.\16\ Therefore, no environmental assessment is 
necessary.
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    \14\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \15\ 18 CFR 380.4.
    \16\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(15), 
380.4(a)(16), 380.4(a)(25); accord id. 380.4(a)(27).
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VI. Regulatory Flexibility Act Certification

    25. The Regulatory Flexibility Act of 1980 (RFA) \17\ generally 
requires a description and analysis of rulemakings that will have a 
significant economic impact on a substantial number of small entities. 
The regulations adopted here impose requirements only on holding 
companies of public utilities and natural gas pipelines, the majority 
of which are not small businesses, and thus the regulations proposed 
here will not have a significant economic impact on a substantial 
number of small entities. These requirements are, in fact, designed to 
benefit all customers, including small businesses. Accordingly, the 
Commission hereby certifies that the regulations proposed here will not 
have a significant adverse impact on a substantial number of small 
entities.
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    \17\ 5 U.S.C. 601-12.
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VII. Document Availability

    26. 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

[[Page 68529]]

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 p.m. Eastern time) at 888 First 
Street, NE., Room 2A, Washington, DC 20426.
    27. From the Commission's Home Page on the Internet, this 
information is available in eLibrary. The full text of this document is 
available in eLibrary both 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.
    28. User assistance is available for eLibrary and the Commission's 
Web site during the Commission's normal business hours. For assistance, 
contact FERC Online Support by e-mail at FERCOnlineSupport@ferc.gov, or 
by telephone at 202-502-6652 (toll-free at (866) 208-3676) or for TTY, 
contact (202) 502-8659.

List of Subjects

18 CFR Part 366

    Electric power, Natural gas, Reporting and recordkeeping 
requirements.

18 CFR Part 367

    Electric power, Natural gas, Uniform System of Accounts, Reporting 
and recordkeeping requirements.

    By the Commission.
Kimberly D. Bose,
Secretary.
    In consideration of the foregoing, the Commission amends parts 366 
and 367, subchapter U, Chapter I, Title 18, Code of Federal 
Regulations, as follows:

0
1. The title of Subchapter U is revised to read as follows:

SUBCHAPTER U--REGULATIONS UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT 
OF 2005, FEDERAL POWER ACT AND NATURAL GAS ACT

0
2. The title of part 366 is revised to read as follows:

PART 366--BOOKS AND RECORDS

0
3. The authority citation for part 366 is revised to read as follows:

    Authority: 15 U.S.C. 717 et seq., 16 U.S.C. 791a et seq., and 42 
U.S.C. 16451-16463.

0
4. The heading of Subpart A is revised to read as follows:

Subpart A--Definitions and Provisions Under PUHCA 2005, the Federal 
Power Act and the Natural Gas Act

0
5. In Sec.  366.1, the definition of ``service company'' is revised to 
read as follows:

Sec.  366.1  Definitions.

* * * * *
    Service company. The term ``service company'' means any associate 
company within a holding company system organized specifically for the 
purpose of providing non-power goods or services or the sale of goods 
or construction work to any public utility or any natural gas company, 
or both, in the same holding company system.
* * * * *

0
6. The heading of Subpart B is revised to read as follows:

Subpart B--Accounting and Recordkeeping Under PUHCA 2005, the 
Federal Power Act and the Natural Gas Act

0
7. In Sec.  366.23, paragraph (a)(1) is revised to read as follows:

Sec.  366.23  FERC Form No. 60, Annual reports of centralized service 
companies, and FERC-61, Narrative description of service company 
functions.

    (a) General. (1) FERC Form No. 60. Unless otherwise exempted or 
granted a waiver by Commission rule or order pursuant to Sec. Sec.  
366.3 and 366.4, every centralized service company (see Sec.  367.2 of 
this chapter) in a holding company system, regardless of whether that 
service company is providing services to a public utility, a natural 
gas company, or both, must file an annual report, FERC Form No. 60, as 
provided in Sec.  369.1 of this chapter. Every report must be submitted 
on the FERC Form No. 60 then in effect and must be prepared in 
accordance with the instructions incorporated in that form.
* * * * *

0
8. The heading of part 367 is revised to read as follows:

PART 367--UNIFORM SYSTEM OF ACCOUNTS FOR CENTRALIZED SERVICE 
COMPANIES SUBJECT TO THE PROVISIONS OF THE PUBLIC UTILITY HOLDING 
COMPANY ACT OF 2005, FEDERAL POWER ACT AND NATURAL GAS ACT

0
9. The authority citation for part 367 is revised to read as follows:

    Authority: 15 U.S.C. 717 et seq., 16 U.S.C. 791a et seq., and 42 
U.S.C. 16451-16463.

0
10. In Sec.  367.1, paragraph (a)(45) is revised to read as follows:

Sec.  367.1  Definitions.

    (a) * * *
    (45) Service company means any associate company within a holding 
company system organized specifically for the purpose of providing non-
power goods or services or the sale of goods or construction work to 
any public utility or any natural gas company, or both, in the same 
holding company system.
* * * * *

0
11. In Sec.  367.2, paragraph (a) is revised to read as follows:

Sec.  367.2  Companies for which this system of accounts is prescribed.

    (a) Unless otherwise exempted or granted a waiver by Commission 
rule or order pursuant to Sec. Sec.  366.3 and 366.4 of this chapter, 
this Uniform System of Accounts applies to any centralized service 
company operating, or organized specifically to operate, within a 
holding company system for the purpose of providing non-power services 
to any public utility or any natural gas company, or both, in the same 
holding company system.
* * * * *
[FR Doc. E9-30449 Filed 12-24-09; 8:45 am]

BILLING CODE 6717-01-P