[Federal Register: May 28, 2009 (Volume 74, Number 101)]
[Rules and Regulations]
[Page 25410-25413]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28my09-11]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 33
[Docket No. RM07-21-002; Order No. 708-B]
Blanket Authorization Under FPA Section 203
Issued May 21, 2009.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule; order on reporting requirements for blanket
authorization under FPA Section 203.
-----------------------------------------------------------------------
SUMMARY: The Federal Energy Regulatory Commission (Commission) adopts
reporting requirements under the expanded blanket authorization
established in Order No. 708-A, which amends section 33.1(c)(12) of the
Commission's regulations.
DATES: Effective Date: These regulations are effective July 27, 2009.
FOR FURTHER INFORMATION CONTACT:
Noah Monick (Legal Information), Office of the General Counsel, Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426, (202) 502-8299.
Andrew Mosier (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426, (202) 502-6274.
Ronald Lafferty (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426, (202) 502-8026.
SUPPLEMENTARY INFORMATION:
Before Commissioners: Jon Wellinghoff, Chairman; Suedeen G. Kelly,
Marc Spitzer, and Philip D. Moeller.
[[Page 25411]]
Order on Reporting Requirements for Blanket Authorization Under FPA
Section 203
Order No. 708-B
Issued May 21, 2009.
1. In this order, the Federal Energy Regulatory Commission
(Commission) adopts reporting requirements that apply to the expanded
blanket authorization under Sec. 33.1(c)(12) of the Commission's
regulations,\1\ adopted in Order No. 708-A.\2\
---------------------------------------------------------------------------
\1\ 18 CFR 33.1(c)(12) (2008).
\2\ Blanket Authorization Under FPA Section 203, Order No. 708,
73 FR 11003 (Feb. 29, 2008), FERC Stats. & Regs. ] 31,265 (2008),
order on reh'g, Order No. 708-A, 73 FR 43066 (July 24, 2008), FERC
Stats. & Regs. ] 31,273 (2008).
---------------------------------------------------------------------------
I. Background
2. In Order No. 708, the Commission amended its regulations under
section 203 of the Federal Power Act (FPA) to provide for five
additional blanket authorizations under FPA section 203(a)(1).\3\ The
Commission found that the blanket authorizations would facilitate
investment in the electric utility industry and, at the same time,
ensure that public utility customers are adequately protected from any
adverse effects of such transactions. One of the additional blanket
authorizations provided that a public utility could transfer its
outstanding voting securities to any holding company granted blanket
authorizations in paragraph (c)(2)(ii) of Sec. 33.1 of the
Commission's regulations, if after the transfer, the holding company
and any of its associate or affiliate companies in aggregate would own
less than 10 percent of the outstanding voting interests of such public
utility. In adopting Sec. 33.1(c)(12) of the Commission's regulations,
the Commission rejected requests to extend the blanket authorization to
``any person,'' on the grounds that without increased reporting
requirements, any such extension would best be made on a case-by-case
basis.\4\ The Commission also rejected requests to expand the reporting
requirements applicable to the Commission's blanket authorizations
under Sec. 33.1 of the Commission's regulations.
---------------------------------------------------------------------------
\3\ 16 U.S.C. 824b(a)(1) (2006).
\4\ Order No. 708, FERC Stats. & Regs. ] 31,265 at P 20.
---------------------------------------------------------------------------
3. In Order No. 708-A, the Commission granted, in part, and denied,
in part, the requests for rehearing of Order No. 708. Among other
things, the Commission expanded the blanket authorization under Sec.
33.1(c)(12) of the Commission's regulations to authorize a public
utility to transfer its outstanding voting securities to ``any person''
other than a holding company if, after the transfer, such person and
any of its associate or affiliate companies will own less than 10
percent of the outstanding voting interests of such public utility. The
Commission stated that it would also adopt a reporting requirement for
entities transacting under that blanket authorization. In order to
properly tailor the additional reporting requirement, the Commission
also stated that it would issue a request for supplemental comments on
the narrow issue of the scope and form of the reporting requirements
under the expanded blanket authorizations under Sec. 33.1(c)(12) of
the Commission's regulations.
4. In its request for rehearing, the Financial Institutions Energy
Group \5\ (Financial Group) proposed several conditions for the
reporting requirement. Financial Group proposed that within a specified
time following consummation of the transaction, the following
information be reported: (1) Names of all parties to the transaction;
(2) identification of both the pre-transaction and post-transaction
voting security holdings (and the percentage ownership) in the public
utility held by the acquirer and its associates or affiliate companies;
(3) the date the transaction was consummated; (4) identification of any
public utility or holding company affiliates of the parties to the
transaction; and (5) the same type of statement currently required
under Sec. 33.2(j)(1) of the Commission's regulations,\6\ which
describes Exhibit M to an FPA section 203 filing.
---------------------------------------------------------------------------
\5\ Financial Group consisted at the time of its comments on
September 22, 2008 of the following members: Bank of America, N.A.,
Barclays Bank PLC, CitiGroup Energy Inc., Credit Suisse Energy LLC
(a subsidiary of Credit Suisse), Deutsche Bank AG, J. Aron & Co. (a
subsidiary of The Goldman Sachs Group), JPMorgan Chase & Co., Lehman
Brothers Commodity Services Inc. (a subsidiary of Lehman Brothers
Holding Inc.), Merrill Lynch Commodities, Inc., Morgan Stanley
Capital Group Inc., Soci[eacute]t[eacute] G[eacute]n[eacute]rale,
and UBS Energy LLC (a subsidiary of UBS AG).
\6\ 18 CFR 33.2(j)(1).
---------------------------------------------------------------------------
5. On July 17, 2008, the Commission issued an order seeking
supplemental comments on the narrow issue of the scope and form of the
reporting requirements under the expanded blanket authorization. The
Commission sought comment on whether Financial Group's proposed
reporting requirement should be adopted, as proposed or modified. The
Commission requested that commenters who disagreed with the proposed
reporting requirement should explain why and propose alternative
reporting requirements. The Commission also sought comment as to
whether reports should be filed with the Commission on a quarterly
basis or on some other basis.
II. Comments
6. The Commission received one comment on the proposed reporting
requirements, from Financial Group. Financial Group states that the
Commission should adopt the reporting requirements it proposed earlier.
Financial Group argues that for transactions involving non-holding
companies, these requirements would give the Commission at least as
much comfort (if not greater comfort) with respect to possible changes
in control as the preexisting reporting requirements applicable to
holding companies. The information required in the reports, Financial
Group argues, will allow the Commission to determine whether there is a
change in control--the purpose for monitoring these types of
transactions.
7. With respect to the proposed requirement to include information
regarding cross-subsidization, Financial Group states that it does not
believe that this condition is necessary, but it does not object to the
inclusion of this condition if the Commission deems it necessary.
Financial Group notes that the transactions at issue presumptively do
not convey an ability to exercise control, so there should be no
concern about cross-subsidization for the Commission to consider. If
the Commission does require a statement regarding cross-subsidization,
Financial Group argues that this statement should not be required where
neither party to the transaction has captive customers.
8. Financial Group recommends that the Commission require the
reporting information on transactions covered by the blanket
authorization in section 33(c)(12) of the Commission's regulations to
be provided within 30 days after the end of the calendar quarter in
which the transactions occurred. This timeline would allow companies
who have made multiple transactions to make a combined filing that
would cover each of their transactions in the prior quarter. Such a
filing would be more efficient both for the filing party and for the
Commission's review. Financial Group requests that the Commission
affirm that the reporting requirement is not intended to be ongoing;
once a transaction has been reported there are no further reporting
requirements with respect to that transaction.
9. Accordingly, Financial Group suggests that a new section
33(c)(17) be added with respect to the reporting requirement for
transactions under the
[[Page 25412]]
blanket authorization, to state as follows:
A public utility granted blanket authorization under section
33.1(c)(12)(ii) to transfer its outstanding voting securities, and
the acquirer of such voting securities, shall within 30 days after
the end of the calendar quarter in which such transfer has occurred,
file with the Commission a report containing the following
information:
(i) The names of all parties to the transaction;
(ii) Identification of the pre- and post-transaction voting
security holdings (and percentage ownership) in the public utility
held by the acquirer and its associate or affiliate companies;
(iii) The date the transaction was consummated; and
(iv) Identification of any public utility or holding company
affiliates of the parties to the transaction.
III. Discussion
10. As the Commission stated in Order No. 708-A, the expansion of
the blanket authorization under 18 CFR 33.1(c)(12) to include ``any
person'' requires additional reporting so that the Commission and the
public may monitor the purchase and sale of securities under the
blanket authorization. We find that the reporting requirements proposed
by Financial Group provide adequate disclosure of trades made under the
blanket authorization, and we adopt them here. The information required
in these reports will allow the Commission to review the purchases of
both holding and non-holding companies to determine whether any further
action is required under Commission regulations.
11. With respect to the proposed disclosure requirement involving
cross-subsidization,\7\ we find that such a statement would be useful
for the Commission in reviewing trades. Accordingly, we will require
the disclosure report to include a statement either indicating that
neither party to the transaction has any captive customers, or
providing the information required in Sec. 33.2(j)(1) of the
Commission's regulations.\8\
---------------------------------------------------------------------------
\7\ Financial Group proposed that parties include in their
disclosure the same type of statement currently required under
section 33.2(j)(1), which describes Exhibit M to an FPA section 203
filing.
\8\ 18 CFR 33.2(j)(1).
---------------------------------------------------------------------------
12. Specifically, we will require that public utilities engaging in
transactions under the blanket authorization under 18 CFR 33.1(c)(12)
submit a report to the Commission within 30 days of the end of the
calendar quarter in which the transactions occurred. At this time, we
will not require continuing reporting requirements with respect to the
blanket authorization for a transaction once that transaction has been
reported. The following information, which will be codified under Sec.
33.1(c)(17) of the Commission's regulations, must be included in the
report:
Names of all parties to the transaction;
Identification of both the pre-transaction and post-
transaction voting security holdings (and the percentage ownership) in
the public utility held by the acquirer and its associate or affiliate
companies;
The date the transaction was consummated;
Identification of any public utility or holding company
affiliates of the parties to the transaction;
A statement on cross-subsidization of the same type as
currently required under section 33.2(j)(1) of the Commission's
regulations,\9\ which describes Exhibit M to an FPA section 203 filing.
---------------------------------------------------------------------------
\9\ 18 CFR 33.2(j)(1).
---------------------------------------------------------------------------
13. The required reports for this fiscal year should be filed
electronically under Docket HC09-8-000.
IV. Information Collection Statement
14. The Office of Management and Budget (OMB) regulations require
that OMB approve certain reporting and record keeping (information
collections) requirements imposed by agency rules.\10\ Therefore, the
Commission is submitting the information collection to OMB for review
and approval in accordance with section 3507(d) of the Paperwork
Reduction Act of 1995.\11\
---------------------------------------------------------------------------
\10\ 5 CFR 1320.12.
\11\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------
Burden Estimate: The public reporting burden for the reporting
requirements and the records retention requirement is as follows.
----------------------------------------------------------------------------------------------------------------
Number of Number of Hours per
Data collection FERC-519 respondents responses response Total
----------------------------------------------------------------------------------------------------------------
Reporting....................................... 20 1 1 20
---------------------------------------------------------------
Totals...................................... 20 1 1 20
----------------------------------------------------------------------------------------------------------------
Information Collection Costs: The Commission has projected the
average annualized cost of all respondents to be the following: 20
hours (reporting) @ $66 per hour = $1,320 for respondents. No capital
costs are estimated to be incurred by respondents.
Title: FERC-519(b), ``Blanket Authorization Transaction Report
under Section 203 FPA.''
Action: New collection.
OMB Control No: To be determined.
The applicant will not be penalized for failure to respond to this
information collection unless the information collection displays a
valid OMB control number or the Commission has provided justification
as to why the control number should not be displayed.
Respondents: Businesses or other for profit.
Frequency of Responses: On occasion.
Necessity of the Information: This order codifies a limited
reporting requirement for entities taking advantage of a blanket
authorization under FPA section 203(a)(1), which in turn provides for a
category of jurisdictional transactions under section 203(a)(1) for
which the Commission would not require applications seeking before-the-
fact approval. The information will enable the Commission and the
public to monitor transactions that occur under the 18 CFR 33.1(c)(12)
blanket authorization, as extended in Order No. 708-A.
Internal Review: The Commission has conducted an internal review of
the public reporting burden associated with the collection of
information and assured itself, by means of internal review, that there
is specific, objective support for its information burden estimate.
15. Interested persons may obtain information on the reporting
requirements by contacting: Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426 [Attention: Michael Miller,
Office of the Executive Director, Phone (202) 502-8415, fax (202) 273-
0873, e-mail: michael.miller@ferc.gov].
V. Environmental Analysis
16. Commission regulations require that an environmental assessment
or an environmental impact statement be
[[Page 25413]]
prepared for any Commission action that may have a significant adverse
effect on the human environment.\12\ No environmental consideration is
necessary for Commission action that involves information gathering,
analysis, and dissemination.\13\ Consequently, neither an environmental
impact statement nor an environmental assessment is required.
---------------------------------------------------------------------------
\12\ Regulations Implementing National Environmental Policy Act,
Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. ]
30,783 (1987).
\13\ 18 CFR 380.4(a)(5).
---------------------------------------------------------------------------
VI. Regulatory Flexibility Act
17. The Regulatory Flexibility Act of 1980 (RFA) \14\ generally
requires either a description and analysis of a rule that will have a
significant economic impact on a substantial number of small entities
or a certification that the rule will not have a significant economic
impact on a substantial number of small entities. Most utilities to
which this reporting requirement applies would not fall within the
RFA's definition of small entity.\15\ Consequently, the Commission
certifies that this reporting requirement will not have a significant
economic impact on a substantial number of small entities.
---------------------------------------------------------------------------
\14\ 5 U.S.C. 601-12.
\15\ 5 U.S.C. 601(3), citing to section 3 of the Small Business
Act, 15 U.S.C. 632. Section 3 of the Small Business Act defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. The
Small Business Size Standards component of the North American
Industry Classification System (NAICS) defines a small electric
utility as one that, including its affiliates, is primarily engaged
in the generation, transmission, and/or distribution of electric
energy for sale and whose total electric output for the preceding
fiscal year did not exceed four million MWh. 13 CFR 121.201.
---------------------------------------------------------------------------
VII. Document Availability
18. 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 FERC's Home Page (http://www.ferc.gov) and in FERC'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.
19. From FERC'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.
20. User assistance is available for eLibrary and the FERC's Web
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or e-mail at
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at
public.referenceroom@ferc.gov.
VIII. Effective Date and Congressional Notification
21. These regulations are effective July 27, 2009. The Commission
has determined, with the concurrence of the administrator of the Office
of Information and Regulatory Affairs of OMB, that this rule is not a
``major rule'' as defined in section 351 of the Small Business
Regulatory Enforcement Fairness Act of 1996. The Commission will submit
this rule to both houses of Congress and the Government Accountability
Office.
List of Subjects in 18 CFR Part 33
Electric utilities, Reporting and recordkeeping requirements.
By the Commission.
Kimberly D. Bose,
Secretary.
0
In consideration of the foregoing, the Commission amends part 33,
Chapter I, Title 18 of the Code of Federal Regulations, as follows:
PART 33--APPLICATIONS UNDER FEDERAL POWER ACT SECTION 203
0
1. The authority citation for part 33 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; Pub. L. 209-58, 119 Stat. 594.
0
2. In Sec. 33.1, paragraph (c)(12) is revised and paragraph (c)(17) is
added to read as follows:
Sec. 33.1 Applicability, definitions, and blanket authorizations.
* * * * *
(c) * * *
(12) A public utility is granted a blanket authorization under
section 203(a)(1) of the Federal Power Act to transfer its outstanding
voting securities to:
(i) Any holding company granted blanket authorizations in paragraph
(c)(2)(ii) of this section if, after the transfer, the holding company
and any of its associate or affiliate companies in aggregate will own
less than 10 percent of the outstanding voting interests of such public
utility; or
(ii) Any person other than a holding company if, after the
transfer, such person and any of its associate or affiliate companies
in aggregate will own less than 10 percent of the outstanding voting
interests of such public utility, and within 30 days after the end of
the calendar quarter in which such transfer has occurred the public
utility notifies the Commission in accordance with paragraph (c)(17) of
this section.
* * * * *
(17) A public utility granted blanket authorization under paragraph
(c)(12)(ii) of this section to transfer its outstanding voting
securities shall, within 30 days after the end of the calendar quarter
in which such transfer has occurred, file with the Commission a report
containing the following information:
(i) The names of all parties to the transaction;
(ii) Identification of the pre- and post-transaction voting
security holdings (and percentage ownership) in the public utility held
by the acquirer and its associate or affilate companies;
(iii) The date the transaction was consummated;
(iv) Identification of any public utility or holding company
affiliates of the parties to the transaction; and
(v) A statement indicating that the proposed transaction will not
result in, at the time of the transaction or in the future, cross-
subsidization of a non-utility associate company or pledge or
encumbrance of utility assets for the benefit of an associate company
as required in Sec. 33.2(j)(1).
[FR Doc. E9-12381 Filed 5-27-09; 8:45 am]
BILLING CODE 6717-01-P