Document ID: FERC-2019-0217-0001
Agency: ferc
Document Type: Rule
Title: Interlocking Officers and Directors; Requirements for Applicants and Holders
Posted Date: 2019-03-04T05:00Z

[Federal Register Volume 84, Number 42 (Monday, March 4, 2019)]
[Rules and Regulations]
[Pages 7274-7283]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03419]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 45 and 46

[Docket No. RM18-15-000; Order No. 856]

Interlocking Officers and Directors; Requirements for Applicants 
and Holders

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: In this final rule, the Federal Energy Regulatory Commission 
(Commission) amends its regulations related to interlocking officers 
and directors to clarify and update the requirements for both 
applicants and holders.

DATES: This rule will become effective May 3, 2019.

FOR FURTHER INFORMATION CONTACT: 
    Lindsay Orphanides (Technical Information), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-8372, lindsay.orphanides@ferc.gov.
    Mary Ellen Stefanou (Legal Information), Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-8989, mary.stefanou@ferc.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    1. On July 19, 2018, the Commission issued a Notice of Proposed 
Rulemaking (NOPR),\1\ proposing to revise parts 45 and 46 of the 
Commission's regulations related to interlocking officers and directors 
to clarify and update the requirements for both applicants and holders. 
The Commission proposed to: (1) 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; (2) revise its regulations to clarify its 
position on late-filed applications and informational reports; (3) 
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; (4) revise its regulations to state that 
applicants do not need to list in their applications public utilities 
that do not have officers or directors; (5) revise its regulations with 
regard to public utilities owned by a natural person; and (6) update 
its regulations to remove Sec.  46.2(b), which contains definitions and 
phrases now rendered obsolete.
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    \1\ Revisions to Parts 45 and 46 of the Commission's 
Regulations, Notice of Proposed Rulemaking, 83 FR 37450 (Aug. 1, 
2018), 164 FERC ] 61,032 (2018) (NOPR).
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    2. Comments were filed by Edison Electric Institute (EEI), NRG 
Power Marketing LLC (NRG), Just Energy (U.S.) Corp. (Just Energy), 
Electric Power Supply Association (EPSA), National Rural Electric 
Cooperative Association (NRECA), National Grid USA (National Grid), and 
Golden Spread Electric Cooperative, Inc. (Golden Spread). All comments 
were generally supportive of the proposed changes. Some commenters 
requested clarification on certain proposed changes, while others 
proposed additional changes. We address these issues below.

II. Discussion

A. No Need for Commission Approval of Interlocking Director and Officer 
Positions in Certain Circumstances

1. Proposal
    3. 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.\2\ However, in 1999, Congress amended Federal Power Act

[[Page 7275]]

(FPA) section 305(b)(2) to provide that an applicant for certain 
interlocking positions is no longer required to obtain Commission 
authorization to hold such positions.\3\ In the NOPR, the Commission 
proposed 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,'' \4\ does not need Commission authorization when:
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    \2\ 18 CFR 45.2(b)(2).
    \3\ See Public Law 106-102, sec. 737, 113 Stat. 1338, 1479 
(1999).
    \4\ 18 CFR 45.2(b)(2).
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     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;
     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;
     the public utility for which he/she serves or proposes to 
serve as an officer or director selects underwriters by competitive 
procedures; or
     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.\5\
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    \5\ NOPR, 164 FERC ] 61,032 at P 6. See also 16 U.S.C. 
825d(b)(2).
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2. Comments
    4. EEI, Golden Spread, Just Energy, and NRECA all support the 
Commission's proposed revision to Sec.  45.2 of its regulations.
    5. Golden Spread states in its comments that it is unclear from the 
NOPR if the Commission will require continued reporting of interlocking 
positions 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 in Form No. 
561. If not, Golden Spread states that the Commission may wish to cross 
reference to Sec.  45.2 or clarify Sec.  46.5 of its regulations.\6\
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    \6\ Golden Spread Comments at 3.
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3. Commission Determination
    6. We will revise the language in Sec.  45.2 as proposed in the 
NOPR, which brings the Commission's regulations into conformance with 
the changes made by Congress to FPA section 305(b)(2) in 1999.
    7. In response to Golden Spread's comments, we clarify that the 
Commission will continue to require the reporting of interlocking 
positions 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 in Form No. 
561 under Sec.  46.5 of the Commission's regulations as the statutory 
directive to report such information has not changed.\7\
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    \7\ See 16 U.S.C. 825d(c)(1), (2)(a).
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B. Flexibility To Consider Late-Filed Applications and Informational 
Reports

1. Proposal
    8. The Commission proposed in the NOPR to revise Sec.  45.3(a) of 
its regulations, which currently states that ``late-filed applications 
will be denied'' and Sec.  45.9(b), which currently states that 
``[f]ailure to timely file the informational report will constitute a 
failure to satisfy this condition and will constitute automatic 
denial.'' The Commission stated that it expects its regulations to be 
followed but recognizes that good faith errors and oversights may 
occasionally result in the inadvertent violation of the timing of FPA 
section 305(b)'s filing requirements. In addition, the Commission 
stated that it expects applicants to 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 FPA 
section 305(b). Further, the Commission stated that, if an error or 
oversight occurs, it expects that those errors and oversights will be 
expeditiously identified and rectified, and applications to hold 
interlocking director positions be promptly filed. Therefore, the 
Commission proposed to delete the above-quoted language, and replace it 
with language providing for consideration of late-filed applications 
for interlocking positions on a case-by-case basis.\8\
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    \8\ NOPR, 164 FERC ] 61,032 at PP 7-9.
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2. Comments
    9. EEI, Golden Spread, Just Energy, National Grid, NRECA, and NRG 
all support the Commission's proposed changes to Sec. Sec.  45.3(a) and 
45.9(b). EEI takes issue with the Commission's statement in the NOPR 
preamble that, ``[i]n 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.'' \9\ To avoid 
``misinterpretation,'' EEI encourages the Commission to restate the 
quoted provision to say: ``When errors and oversights are discovered, 
the Commission expects that those errors and oversights will be 
expeditiously rectified, and if required applications will be promptly 
filed.'' \10\
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    \9\ EEI Comments at 4 (quoting NOPR, 164 FERC ] 61,032 at P 9).
    \10\ Id.
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3. Commission Determination
    10. We adopt the changes to Sec. Sec.  45.3(a) and 45.9(b) of the 
Commission's regulations proposed in the NOPR that will allow for 
consideration of late-filed applications for interlocking positions on 
a case-by-case basis.\11\ We do not think that it is 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 good faith errors and oversights, 
and the error or oversight is promptly identified and expeditiously 
rectified.
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    \11\ We note that 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 the 
requirements of the FPA, and should make every effort to ensure that 
their officers and directors, in turn, act in accordance with the 
statutory directives in FPA section 305(b).
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    11. We decline to amend our statement in the NOPR preamble to state 
that the Commission's expectation is that errors and oversights be 
expeditiously rectified ``when errors and oversights are discovered,'' 
as suggested by EEI. We expect that errors and oversights be both 
promptly identified and expeditiously rectified, and we reiterate our 
expectation--grounded in the statute \12\--that applicants be attentive 
to their obligation to timely file for the required authorizations and 
thus make every effort to ensure that they act in accordance with the 
statutory directives in FPA section 305(b). The Commission would look 
unfavorably on FPA section 305(b) applications where an applicant has 
not been properly attentive to his/her obligation to file for the 
required authorization.
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    \12\ 16 U.S.C. 825d(b)(1).

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[[Page 7276]]

C. Supplemental Applications or Notices of Change for Positions Pre-
Authorized Under Sec.  45.9

1. Proposal
    12. The Commission proposed in the NOPR 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). The Commission stated that 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. The NOPR specifically stated that the holder of 
interlocking officer and director positions must file a notice of 
change when he/she no longer holds any interlocking positions within 
the scope of the statute and regulations because no longer holding any 
interlocking positions would constitute a ``material or substantial 
change.'' \13\
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    \13\ NOPR, 164 FERC ] 61,032 at P 10.
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2. Comments
    13. EEI, Golden Spread, Just Energy, National Grid, NRECA, and NRG 
all support the Commission's proposed revisions to Sec. Sec.  45.4 and 
45.5.
    14. EEI asks the Commission to add two points to its proposal to 
revise Sec. Sec.  45.4 and 45.5. First, EEI asks for clarification that 
the Commission ``means a notice is required only when the officer or 
director resigns or withdraws from all pre-authorized interlocking 
officer and director positions, not just from one such position, as 
that would comport with the logic of the changes the Commission is 
adopting as to subsection 45.5(b).'' \14\ EEI asserts that ``the 
Commission should specify that public utility officers and directors 
who are pre-approved under the holding company provisions at subsection 
45.9(a) do not need to file `notice of change' reports when they 
resign, but rather can rely on updates to their annual filings by 
removing the companies from which they have resigned during the 
previous year.'' \15\
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    \14\ EEI Comments at 7.
    \15\ Id. at 9-10.
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    15. Second, EEI also asks the Commission to specify that Sec.  
45.9(c) does not require an additional informational report in the case 
of new or different interlocking positions within a holding company 
system for an individual that has already filed a Sec.  45.9 
informational report.\16\ EEI asserts that existing public utility 
officers and directors pre-approved under Sec.  45.9(a) are not 
applicants as that term is used in Sec.  45.5; therefore, they are not 
required to file applications at the Commission, only informational 
reports.\17\
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    \16\ Id. at 7.
    \17\ Id. at 10.
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    16. Golden Spread asks the Commission to consider making an 
additional edit to Sec.  45.5(b) to change the requirement for filing a 
notice of change (e.g., for a withdrawal, or failure of reelection or 
appointment) from a ``within 30 days'' requirement to a ``within 60 
days'' requirement, stating that even when good faith efforts are made 
to learn of changes from affected officers and directors, it can take 
beyond a full month to learn of changes.\18\
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    \18\ Golden Spread Comments at 4.
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    17. Just Energy recommends the Commission adopt a number of 
clarifying edits to Sec. Sec.  45.4(c) and 45.9(a)(3) and (b). In Sec.  
45.4(c), Just Energy proposes that the Commission describe interlocking 
positions that ``qualify for automatic authorization pursuant'' to 
Sec.  45.9(a), as opposed to positions that ``are identified'' in Sec.  
45.9(a). Just Energy suggests that, in Sec.  45.9(a)(3), the Commission 
authorize interlocking positions of an officer or director of more than 
one public utility where such officer or director is already authorized 
under this part to hold positions as officer or director of those ``or 
any other public utilities'' where the interlock involves affiliated 
public utilities. Just Energy's proposed amendment to Sec.  45.9(b) 
would create a new paragraph (b)(2) that states that a person is 
``exempt from filing an informational report pursuant to [section] 
45.4.''
    18. Just Energy also states that it supports the proposal that 
officers and directors do not need to file a notice of change when they 
leave some but not other positions within a corporate family, and 
instead report interlock changes among affiliates in the applicable 
Form No. 561. Just Energy accordingly recommends additional amendments 
to amended Sec.  45.5(b) to state that a notice of change under this 
section would not be required if the only change to be reported is ``a 
resignation or withdrawal from fewer than all positions held between or 
among affiliated public utilities, a reelection or reappointment to a 
position that was previously authorized,'' or holding a different or 
additional interlocking position ``that would qualify for automatic 
authorization pursuant to'' Sec.  45.9(a). Just Energy states that its 
proposed amendments address the Commission's clarification regarding 
partial resignations and harmonize Sec.  45.5 with the proposed 
amendments regarding appointments with affiliated entities.\19\
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    \19\ Just Energy Comments at 6-7.
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3. Commission Determination
    19. We adopt the NOPR's proposed revisions to Sec. Sec.  45.4 and 
45.5 of the Commission's regulations to state 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), with certain clarifications and 
amendments discussed below.
    20. In response to EEI, we clarify that the change to Sec.  45.5(b) 
adopted in this final rule means that, in the case of interlocking 
positions that are identified in Sec.  45.9(a), a notice of change now 
need only be filed when the officer or director resigns or withdraws as 
an officer or director from all previously held interlocking officer 
and director positions. When he/she resigns from only one position out 
of several interlocking positions for which he/she received 
authorization pursuant to Sec.  45.9, he/she need only include this 
information in the annual Form No. 561.
    21. We also clarify in response to EEI that Sec.  45.9(c) does not 
require an additional informational report when an officer or director 
has a new or different interlocking position within a holding company 
system compared to what was reported when he/she originally filed an 
informational report under Sec.  45.9. Instead, he/she need only 
include the new or different interlocking position(s) in the annual 
Form No. 561.
    22. We agree with Golden Spread's proposal to alter the timing of 
the notice of change filing requirement from 30 days to within 60 days 
of the triggering event. We think this change is reasonable because 30 
days may be too short a period to comply with the regulation, and 
allowing for 60 days may result in more accurate filings. We therefore 
amend Sec.  45.5(b) to state that the filing of a notice of change 
shall be made within 60 days.
    23. We adopt Just Energy's proposed amendments to Sec. Sec.  
45.4(c), 45.9(a)(3) and (b), and 45.5(b). We find that the amendments 
proposed by Just Energy more clearly state the revisions adopted by 
this final rule.

[[Page 7277]]

D. Public Utilities Within a Holding Company That Do Not Have Directors 
and Officers

1. Proposal
    24. In the NOPR, the Commission recognized the growing complexity 
of corporate structures. Thus, the Commission proposed 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.\20\
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    \20\ NOPR, 164 FERC ] 61,032 at P 11.
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2. Comments
    25. EEI, Golden Spread, and NRG support the Commission's proposed 
revision to Sec.  45.8(c)(1). Golden Spread ``agrees that if such 
structures exist and do not have officers and directors, such 
information would be extraneous.'' \21\ NRECA states that it has no 
position on the Commission's proposal; it acknowledges the growing 
complexity of corporate structures ``but does not appreciate why that 
trend warrants reducing the information in these applications.'' \22\ 
NRECA requests that the Commission explain in more detail the 
regulatory burden that will be relieved and the information that will 
be lost by the proposed change.\23\
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    \21\ Golden Spread Comments at 4.
    \22\ NRECA Comments at 2.
    \23\ Id.
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3. Commission Determination
    26. We adopt the NOPR's proposed revisions to Sec.  45.8(c)(1) of 
the Commission's 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. While we are not aware of any 
applications that have been filed where a company does not have any 
officers or any directors, we understand from EEI that such companies 
do exist.\24\
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    \24\ See Edison Electric Institute Comments, Docket No. AD12-6-
002 (Nov. 28, 2016).
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    27. In response to Golden Spread and NRECA, we are not aware that 
any material information would be lost by making this change. We expect 
the universe of companies that do not have any officers or directors to 
be small, as it is still atypical for a company to have neither 
officers nor directors. We also note that, under Sec.  45.2(a), the 
obligation to make the appropriate filings extends to any person 
elected or appointed to perform executive duties or functions similar 
to those ordinarily performed by presidents, vice presidents, directors 
and others.\25\ This pre-existing requirement, which the Commission has 
not proposed to change, should ensure that the change adopted above 
will not materially affect the Commission's oversight of jurisdictional 
interlocking positions.
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    \25\ 18 CFR 45.2(a).
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E. Corporate Relationships Within the Scope of Automatic Authorizations

1. Proposal
    28. In the NOPR, the Commission proposed 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 recognized that public 
utilities can be owned not just by a corporate entity but by a natural 
person, and that the regulations should reflect this possibility.\26\
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    \26\ NOPR, 164 FERC ] 61,032 at P 12.
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2. Comments
    29. EEI, Golden Spread, and NRECA support the Commission's proposed 
revision to Sec.  45.9. Golden Spread adds that it thinks this proposed 
change does not apply to cooperative governance structures.
3. Commission Determination
    30. We adopt the proposed revision to Sec.  45.9 of the 
Commission's regulations to add the word ``person'' when defining the 
corporate relationships within the scope of the automatic 
authorizations addressed in Sec.  45.9. Given that some public 
utilities can be and are now owned by natural persons, a change in the 
regulations to reflect this development is warranted.\27\
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    \27\ In response to Golden Spread, we do not envision a 
cooperative governance structure where a rural electric cooperative 
is owned by its customers/ratepayers to fall within the scope of 
this rule. See generally Wolverine Power Supply Cooperative, Inc., 
93 FERC ] 61,328, at 62,119 (2000), reh'g denied, 94 FERC ] 61,178, 
at 61,616 (2001).
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F. Removal of Sec.  46.2(b)

1. Proposal
    31. The Commission proposed in the NOPR 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 Policy Act 
of 2005 and the concurrent repeal of the Public Utility Holding Company 
Act of 1935 (PUHCA 1935).\28\ The Commission noted in the NOPR that 
Sec.  46.2(b) currently references the definition of ``holding company 
system'' and ``registered holding company system'' in PUHCA 1935.\29\ 
However, the Energy Policy Act of 2005 repealed PUHCA 1935.\30\ Thus, 
the Commission proposed to remove Sec.  46.2(b). The Commission also 
proposed to update part 46 to change ``Rural Electrification 
Administration'' to ``Rural Utilities Service'' to reflect the name 
change of that organization.\31\
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    \28\ See Public Law 109-58, sec. 1261-77, 119 Stat. 594, 972-78 
(2005).
    \29\ 16 U.S.C. 79a et seq.
    \30\ Public Law 109-58, sec.1263, 119 Stat. 594, 974 (2005).
    \31\ NOPR, 164 FERC ] 61,032 at P 13.
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2. Comments
    32. EEI, Golden Spread, and NRECA all support the removal of Sec.  
46.2(b) and the update of part 46 to change ``Rural Electrification 
Administration'' to ``Rural Utilities Service.''
3. Commission Determination
    33. We adopt the proposed removal of Sec.  46.2(b) from the 
Commission's regulations, as it is now outdated, and we update part 46 
of the Commission's regulations to change ``Rural Electrification 
Administration'' to ``Rural Utilities Service'' to reflect the change 
in name of that organization.

G. Additional Issues Raised by Commenters

1. Amending Sec.  45.1(a)(3)
a. Comments
    34. EEI requests that the Commission amend Sec.  45.1(a)(3) of its 
regulations by changing the closing phrase ``a public utility'' to 
``such public utility,'' as stated in the opening sentence of FPA 
section 305(b)(1). EEI asserts that this change to the regulations 
would align the regulations with the statute, and it would recognize 
that Congress intended to require approval for interlocking director 
and officer positions between a utility and an electrical supplier only 
when the supplier supplies equipment to the utility involved, not just 
to other utilities. EEI also states that this change also would conform 
the part 45 regulations with one another.\32\
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    \32\ EEI Comments at 9.
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b. Commission Determination
    35. We adopt EEI's suggested amendment to Sec.  45.1(a)(3) of the 
Commission's regulations by changing the closing phrase ``a public 
utility'' to ``such public utility.'' We agree with EEI that this 
change will better align the regulations with the statute, and 
recognize that Congress intended to require approval for interlocking 
director and officer positions between a utility and an electrical 
supplier only when the supplier supplies electrical equipment to the 
utility involved, and not just to any utility.

[[Page 7278]]

2. Definition of Electrical Equipment
a. Comments
    36. EEI asks the Commission to modify its current definition of 
``electrical equipment.'' EEI asserts that the definition of electrical 
equipment has been inappropriately construed too broadly in some cases. 
EEI requests that the Commission delete from the current Sec.  46.2(f) 
definition the footnoted cross-reference to the Uniform System of 
Accounts and clarify that the definition applies to both parts 45 and 
46 of the Commission's regulations. EEI asserts that the current 
definition found in Sec.  46.2(f) is straightforward,\33\ and that the 
cross-reference to the Uniform System of Accounts has resulted in the 
term electrical equipment being defined to include common business 
equipment such as computers, calculators, and sprinklers.\34\
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    \33\ Id. at 11 (citing 18 CFR 46.2(f)).
    \34\ Id.
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b. Commission Determination
    37. We decline to delete from the current Sec.  46.2(f) definition 
of electrical equipment the footnoted cross-reference to the Uniform 
System of Accounts. We disagree that the cross-reference to the Uniform 
System of Accounts results in a definition of electrical equipment that 
is too broad. In this regard, we note that, in establishing the 
definition of electrical equipment in Sec.  46.2(f), the Commission 
stated that the footnoted reference to the Commission's Uniform System 
of Accounts was ``a guide only,'' acknowledging that certain items 
found in the accounts listed are clearly not ``electrical equipment'' 
within the scope of Sec.  46.2(f).\35\ We find that the footnoted 
reference to the Uniform System of Accounts continues to provide useful 
guidance to aid the industry as well as the Commission in determining 
what does and does not constitute electrical equipment under part 46, 
and thus should be retained.
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    \35\ Public Utility Filing Requirement and Requirements for 
Persons Holding Interlocking Positions; Order Issuing Final 
Regulations, 45 FR 23413, at 23415-16 (Apr. 7, 1980), FERC Stats. & 
Regs. ] 30,140, at 30,984 (1980).
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    38. We do clarify that, as necessary, the Commission, in evaluating 
applications and reporting under part 45, will continue to look to 
Sec.  46.2(f) and the footnoted reference to the Uniform System of 
Accounts for guidance in determining what constitutes electrical 
equipment under part 45.\36\
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    \36\ See, e.g., Barry Lawson Williams, 134 FERC ] 61,183, at P 
10 (2011).
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3. Blanket Authorizations for Companies Without Captive Customers
a. Comments
    39. EEI, EPSA, Just Energy, and NRG ask the Commission to create a 
blanket authorization for interlock holders at companies within holding 
company systems without captive customers.
i. EEI
    40. EEI requests that the Commission revisit the need for 
interlocking directorate applications and reporting to cover officers 
and directors who hold positions involving, within a holding company 
system, multiple companies that do not have captive customers, such as 
exempt wholesale generators and qualifying facilities, or positions 
involving such companies and their securities underwriters \37\ or 
their electrical equipment suppliers.\38\
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    \37\ But see 16 U.S.C. 825d(b)(2).
    \38\ EEI Comments at 10.
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ii. EPSA
    41. EPSA requests that the Commission consider granting a blanket 
authorization to public utilities without any captive customers, to 
allow individuals to concurrently hold positions as an officer or 
director of more than one public utility within the corporate holding 
company, or positions of officer or director of a public utility and a 
company supplying electrical equipment to a public utility within the 
corporate holding company.\39\
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    \39\ EPSA Comments at 2.
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    42. EPSA argues that this category of public utility, which 
includes independent power producers that are structured as merchant 
sellers of power only, are incapable of and do not pose a danger of 
imposing excessive charges or allocating unreasonable costs to 
customers, flouting state regulation in any way, or harming customers 
through a general lack of economy of management, operation, 
inefficiency, or inadequacy of services. EPSA asserts that, with 
independent entities, any mismanagement or uneconomic transactions are 
not passed on to customers, but are borne exclusively by shareholders. 
EPSA proposes that blanket authorizations be granted solely to those 
utilities on an intra-holding company basis.\40\
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    \40\ Id. at 3.
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    43. EPSA suggests that, to provide oversight to companies eligible 
for its proposed blanket authorization, ``an entity with market-based 
rate authority and previously granted a blanket authorization for 
interlocking positions within its holding company could declare in its 
triennial market-based rate authorization filings that its holding 
company structure remains fully independent, and therefore that entity 
continues to pose no threat of harm to captive customers as a result of 
affiliate abuse concerns and, as such, does not pose a threat to pass 
on rate increases driven by affiliate contracts or contracts between 
independent companies with a common set of officers or directors.'' 
\41\ EPSA also compares its requested blanket authorization to blanket 
authorizations under FPA section 203.\42\
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    \41\ Id. at 4.
    \42\ Id. at 4-5 (citing Transactions Subject to FPA Section 203, 
Order No. 669, 113 FERC ] 61,315, at P 57 (2005), order on reh'g, 
Order No. 669-A, 115 FERC ] 61,097, order on reh'g, Order No. 669-B, 
116 FERC ] 61,076 (2006)).
---------------------------------------------------------------------------

    44. EPSA asserts that granting blanket authorization to intra-
holding company independent power producers and marketers without 
captive customers is a logical outgrowth of the NOPR and is consistent 
with the NOPR's intent, and would serve to reduce regulatory burdens 
and modernize these regulations to better reflect the modern state of 
the electricity generation and sales landscape.\43\ EPSA also suggests 
that the Commission could issue a supplemental notice in order to 
broaden the scope of the NOPR to implement EPSA's proposed changes in 
the final rule.\44\
---------------------------------------------------------------------------

    \43\ Id. at 8-9.
    \44\ Id. at 9.
---------------------------------------------------------------------------

iii. Just Energy
    45. Just Energy requests that the Commission grant blanket 
authorizations to public utilities that are not franchised utilities 
and are not affiliated with a franchised utility. Under Just Energy's 
proposal, officers and directors of such public utilities and their 
affiliates would not be required to seek prior authorization, but would 
disclose all appointments and changes on their annual Form No. 561.\45\
---------------------------------------------------------------------------

    \45\ Just Energy Comments at 5-6.
---------------------------------------------------------------------------

iv. NRG
    46. NRG asks the Commission to issue a ``narrow and discrete'' 
blanket authorization for individuals holding officer positions in 
affiliated entities all under the same holding company structure 
without any captive customers, regardless of whether those positions 
are with public utilities, electrical equipment supply companies, or 
fuel supply companies.\46\ Under this proposal, the individual would be 
able to hold positions in such entities

[[Page 7279]]

without any filing requirements (either a prior-notice filing or the 
annual Form No. 561).\47\
---------------------------------------------------------------------------

    \46\ We note that an interlock involving the latter, i.e., fuel 
supply companies, would not be a jurisdictional interlock under FPA 
section 305(b) requiring a filing.
    \47\ NRG Comments at 5-6.
---------------------------------------------------------------------------

    47. Like EPSA, NRG compares its requested blanket authorization to 
section 203 blanket authorizations.\48\ NRG states that allowing 
blanket waivers in the interlock context would still allow the 
Commission to rigorously police for the conduct that concerned Congress 
in 1935 (that companies under common control were entering into above 
market contracts and passing through those costs to retail customers), 
meet the plain language of the statute, and reduce the paperwork burden 
and regulatory burdens on regulated entities.\49\
---------------------------------------------------------------------------

    \48\ Id. at 6 (citing Blanket Authorization Under FPA Section 
203, Order No. 708, 122 FERC ] 61,156 (2008)).
    \49\ Id.
---------------------------------------------------------------------------

    48. Although NRG asserts that the Commission could provide for a 
blanket authorization as requested with no further notice because it is 
a ``logical outgrowth'' of the NOPR, NRG suggests that the Commission 
could also issue, out of an abundance of caution, a supplemental notice 
describing the blanket authorization.\50\
---------------------------------------------------------------------------

    \50\ Id. at 6-7.
---------------------------------------------------------------------------

b. Commission Determination
    49. We decline to create a blanket authorization for persons 
holding interlocking positions between affiliated companies without any 
captive customers. The current requirements impose minimal burdens, and 
the commenters have not made a sufficient case for granting their 
requested relief of a blanket authorization.
    50. The burden that would be avoided by a blanket authorization for 
individuals serving as officers or directors at multiple companies in a 
holding company system is minimal. Currently, in such scenarios, each 
individual must file only once--and then only a relatively minor 
submittal--for authorization (under Sec.  45.9 of the Commission's 
regulations), and then each individual needs to file only an annual 
report pursuant to FPA section 305(c) each April 30 thereafter,\51\ 
which describes any changes in his/her positions among the companies in 
the holding company system.
---------------------------------------------------------------------------

    \51\ Even if we were to grant the requested relief under FPA 
section 305(b), that would not relieve the persons holding such 
interlocks from the separate requirement to make an annual filing, 
the Form No. 561, under FPA section 305(c).
---------------------------------------------------------------------------

    51. In response to EPSA and NRG's comparison of an interlock 
blanket authorization to blanket authorizations in the FPA section 203 
context, we note that, although the Commission implemented blanket 
authorizations in the section 203 context, it was done in response to 
the Energy Policy Act of 2005, which revised FPA section 203 by adding 
FPA section 203(a)(5), which required the Commission to adopt 
procedures for the expeditious consideration of applications under that 
section.\52\ No similar circumstances exist here.
---------------------------------------------------------------------------

    \52\ Public Law 109-58, sec. 1289, 119 Stat. 594, 982 (2005); 
Order No. 669, 113 FERC ] 61,315 at PP 55-57.
---------------------------------------------------------------------------

4. Online Submission Process/Database for Interlock Filings
a. Comments
    52. Golden Spread and NRECA filed comments requesting the creation 
of an online submission process/database for interlock filings. Golden 
Spread requests that the Commission consider moving the interlocking 
directorate application, updating/supplementing, termination process, 
and annual Form No. 561 to an online submission process. Golden Spread 
argues that the current system is paper intensive and an online system 
could streamline compliance associated with parts 45 and 46 and would 
create an opportunity for more robust relational databases wherein the 
Commission would be better able to track compliance with its 
interlocking directorate program.\53\ Golden Spread and NRECA state 
that an online submission process/database would reduce regulatory 
burdens.\54\
---------------------------------------------------------------------------

    \53\ Golden Spread Comments at 5.
    \54\ Id.; NRECA Comments at 3.
---------------------------------------------------------------------------

b. Commission Determination
    53. We support modernizing our systems and processes. However, we 
will not propose a new submission process or database in this 
proceeding, but may consider the creation of an online process/database 
in the future.
5. Temporary Appointments
a. Comments
    54. Just Energy states that it is not uncommon for market 
participants to have to appoint, remove, or reappoint personnel to 
officer positions to accommodate routine business needs that are not 
always foreseeable or permanent. For example, Just Energy states that a 
company may need to make a person an officer in order to have signature 
authority for a transaction, or when someone is on medical leave. Just 
Energy requests that these administrative, ministerial, or temporary 
appointments not require any Commission approval or reporting, arguing 
that they do not pose the kinds of threats contemplated by Congress 
when it adopted section FPA 305(b), and are burdensome to both the 
Commission and to public utilities.\55\
---------------------------------------------------------------------------

    \55\ Just Energy Comments at 6.
---------------------------------------------------------------------------

b. Commission Determination
    55. We acknowledge that an exemption from the filing requirements 
for certain temporary appointments to interlocking positions reflects 
the reality of the world, where a position may be unexpectedly left 
vacant due to death, illness, etc. and a company must quickly appoint 
someone to temporarily fill the now-vacant position on an ``acting'' 
basis. We therefore find that a person seeking to hold an interlocking 
position covered by Sec.  45.2 that would otherwise require an 
automatic authorization filing under Sec.  45.9 may be appointed to 
fill the vacant position temporarily, for 90 days or less, without the 
necessity of seeking Commission approval or of reporting in, for 
example, Form No. 561. To implement this change, we add a new paragraph 
(c) to Sec.  45.1, as well as additional language to Sec.  45.9(b) that 
exempts a person holding a temporary interlocking position pursuant to 
the new Sec.  45.1(c) from the requirement to submit an informational 
report.
    56. We note that this temporary appointment exemption would, in 
practice, apply only in a narrow set of circumstances--where a person 
who has never held any interlock before is temporarily appointed to a 
position at an affiliate company. For example, a person serving as an 
officer of Utility A could be temporarily appointed as an officer of 
affiliated Utility B, which is part of the same holding company as 
Utility A, without the necessity of Commission approval or a reporting 
requirement such as the annual Form No. 561. In this example, if this 
person had previously been authorized to hold a non-temporary interlock 
between two or more affiliated utilities, this exemption for temporary 
positions would not be necessary; the person would already have been 
required to have made an initial automatic authorization filing under 
Sec.  45.9, and would only need to include this new appointment in his/
her annual Form No. 561.
    57. Finally, we note that a person cannot be re-appointed for 
multiple 90-day periods to the same interlocking position and still 
consider it a temporary position that continues to be exempt from the 
automatic authorization requirements. Under such circumstances, the 
individual who seeks to hold a position for more than 90 days

[[Page 7280]]

must seek the necessary authorization pursuant to the Commission's 
regulations.
6. Cost Estimates for Informational Filings and Notices of Change
a. Comments
    58. Just Energy, in asserting that it is costly and burdensome for 
individuals, and in many cases their employers, to comply with the 
rules as written, states that the Commission's estimates that 
informational filings cost $632.00 each, and that notices of change 
cost $19.25, are too low. In support, Just Energy asserts that: (1) 
Each filing must be customized to the individual; (2) the officer or 
director must verify the reportable positions; (3) a notary may be 
required for the attestation; (4) a corporate secretary may have to 
pull information on positions held to verify the submission; (5) 
corporate structure information may need to be pulled to verify that 
the ownership chain qualifies for an informational filing; (6) someone 
reviews the materials; (7) someone makes revisions to the filing; (8) 
someone collects signatures; and (9) someone makes the filing.\56\
---------------------------------------------------------------------------

    \56\ Id. at 3, n.4.
---------------------------------------------------------------------------

b. Commission Determination
    59. We disagree that we have underestimated the costs of 
informational filings and notices of change. We note that the cost 
estimates stated in the NOPR and in this final rule are estimates of 
average costs. While the costs of some informational filings and 
notices of change will be higher than the stated averages, some will 
also be less than the stated averages.

III. Information Collection Statement

    60. The collection of information contained in this final rule is 
subject to review by the Office of Management and Budget (OMB) under 
section 3507(d) of the Paperwork Reduction Act (PRA).\57\ The PRA 
requires each federal agency to seek and obtain 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 \58\ 
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 the collection of information 
unless the collection of information displays a valid OMB control 
number.
---------------------------------------------------------------------------

    \57\ 44 U.S.C. 3507(d).
    \58\ 5 CFR part 1320.
---------------------------------------------------------------------------

    61. The revisions enacted by this final rule would clarify and 
update the requirements \59\ for those seeking and holding interlocking 
positions. The Commission anticipates that the revisions, once 
effective, would reduce regulatory burdens. The Commission will submit 
the reporting requirements to OMB for its review and approval under 
section 3507(d) of the Paperwork Reduction Act.\60\
---------------------------------------------------------------------------

    \59\ 18 CFR parts 45, 46.
    \60\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    62. While the Commission expects that the regulatory revisions 
herein will reduce the burdens on affected entities, the Commission 
nonetheless solicits public comments regarding the accuracy of the 
burden and cost estimates below.
    63. Burden Estimate: \61\ The estimated burden and cost for the 
requirements contained in this final rule follow.
---------------------------------------------------------------------------

    \61\ ``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.
    \62\ 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.

                                                                    FERC Form No. 520
                                         [Application for authority to hold interlocking directorate positions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Annual number                                              Total annual burden
                                        Number of     of responses    Total number of    Average burden & cost   hours (total annual        Cost per
                                       respondents   per respondent      responses         per response \62\            cost)            respondent ($)
                                                (1)             (2)    (1) * (2) = (3)  (4)...................  (3) * (4) = (5)......          (5) / (1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
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).
    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

[[Page 7281]]

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 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 revising its requirements and, among other things, will 
no longer require a notice of change when a person is merely changing 
positions within a holding company system. This change 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: DataClearance@ferc.gov, 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: oira_submission@omb.eop.gov. Please refer to FERC-520, OMB 
Control No. 1902-0083 in your submission.

IV. Environmental Analysis

    64. 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.\63\ We 
conclude that neither an Environmental Assessment nor an Environmental 
Impact Statement is required for this final rule under Sec.  380.4(a) 
of the Commission's regulations, which provides a categorical exemption 
for actions under section 305 of the FPA relating to interlocking 
directorates.\64\
---------------------------------------------------------------------------

    \63\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. 
& Regs. ] 30,783 (1987).
    \64\ 18 CFR 380.4(a)(16).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    65. The Regulatory Flexibility Act of 1980 (RFA) \65\ generally 
requires a description and analysis of final 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.\66\ These 
standards are provided in the SBA regulations at 13 CFR 121.201.\67\
---------------------------------------------------------------------------

    \65\ 5 U.S.C. 601-612.
    \66\ 13 CFR 121.101.
    \67\ 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.
---------------------------------------------------------------------------

    66. This final rule will 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.
    67. 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 final rule reduces industry cost by eliminating the 
need for the filing of some notices of change.
    68. The Commission certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities.

VI. Document Availability

    69. 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.
    70. 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.
    71. User assistance is available for eLibrary and the Commission's 
website during normal business hours from FERC 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.

VII. Effective Date and Congressional Notification

    72. These regulations are effective May 3, 2019. The Commission has 
determined that this rule is not a ``major rule'' as defined in section 
351 of the

[[Page 7282]]

Small Business Regulatory Enforcement Fairness Act of 1996.

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 the Commission.

    Issued: February 21, 2019.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission amends 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. Amend Sec.  45.1 by revising paragraph (a)(3) and adding paragraph 
(c) to read as follows:

Sec.  45.1  Applicability; who must file.

    (a) * * *
    (3) Officer or director of a public utility and of any company 
supplying electrical equipment to such public utility.
* * * * *
    (c) Notwithstanding paragraphs (a) and (b) of this section, any 
person may temporarily hold an interlocking position described in Sec.  
45.2 for no more than 90 days within a twelve-month period without 
applying for Commission authorization under Sec.  45.8 and without 
complying with the requirements for authorization under Sec.  45.9.

0
3. Amend Sec.  45.2 by adding paragraph (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
4. 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
5. Amend Sec.  45.4 by adding paragraph (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 qualify for automatic authorization 
pursuant to Sec.  45.9(a), a filing under this section will not be 
required if the only changes to be reported are holding different or 
additional interlocking positions that would qualify for automatic 
authorization pursuant to Sec.  45.9(a).

0
6. 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 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 60 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 qualify for automatic authorization pursuant to Sec.  45.9(a), a 
notice of change under this section will not be required if the only 
change to be reported is a resignation or withdrawal from fewer than 
all positions held between or among affiliated public utilities, a 
reelection or reappointment to a position that was previously 
authorized, or holding a different or additional interlocking position 
that would qualify for automatic authorization pursuant to Sec.  
45.9(a).
* * * * *

0
7. 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
8. Revise Sec.  45.9(a)(1) and (3) 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;
* * * * *
    (3) Officer or director of more than one public utility, if such 
officer or director is already authorized under this part to hold 
positions as officer or director of those or any other public utilities 
where the interlock involves affiliated public utilities.
    (b) Conditions of authorization. (1) As a condition of 
authorization, any person eligible to seek authorization to hold 
interlocking positions under this section must submit, prior to 
performing or assuming the duties and responsibilities of the position, 
an informational report

[[Page 7283]]

in accordance with paragraph (c) of this section, unless that person:
    (i) Is already authorized to hold interlocking positions of the 
type governed by this section;
    (ii) Is exempt from filing an informational report pursuant to 
Sec.  45.4; or
    (iii) Will hold a temporary interlocking position pursuant to Sec.  
45.1(c).
    (2) 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
9. 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
10. Amend Sec.  46.2 by revising paragraph (a), removing and reserving 
paragraph (b), and revising 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 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. 2019-03419 Filed 3-1-19; 8:45 am]
BILLING CODE 6717-01-P