Amendments to Codes of Conduct for Unbundled Sales Service and for Persons Holding Blanket Marketing Certificates, 72090-72094 [05-23405]
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72090
Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules
Authority for This Rulemaking
Title 49 of the United States Code
specifies the FAA’s authority to issue
rules on aviation safety. Subtitle I,
Section 106, describes the authority of
the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more
detail the scope of the Agency’s
authority.
We are issuing this rulemaking under
the authority described in Subtitle VII,
Part A, Subpart III, Section 44701,
‘‘General requirements.’’ Under that
section, Congress charges the FAA with
promoting safe flight of civil aircraft in
air commerce by prescribing regulations
for practices, methods, and procedures
the Administrator finds necessary for
safety in air commerce. This regulation
is within the scope of that authority
because it addresses an unsafe condition
that is likely to exist or develop on
products identified in this rulemaking
action.
Regulatory Findings
We have determined that this
proposed AD would not have federalism
implications under Executive Order
13132. This proposed AD would not
have a substantial direct effect on the
States, on the relationship between the
national Government and the States, or
on the distribution of power and
responsibilities among the various
levels of government.
For the reasons discussed above, I
certify that the proposed regulation:
1. Is not a ‘‘significant regulatory
action’’ under Executive Order 12866;
2. Is not a ‘‘significant rule’’ under the
DOT Regulatory Policies and Procedures
(44 FR 11034, February 26, 1979); and
3. Will not have a significant
economic impact, positive or negative,
on a substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
We prepared a regulatory evaluation
of the estimated costs to comply with
this proposed AD and placed it in the
AD docket. See the ADDRESSES section
for a location to examine the regulatory
evaluation.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation
safety, Safety.
The Proposed Amendment
Accordingly, under the authority
delegated to me by the Administrator,
the FAA proposes to amend 14 CFR part
39 as follows:
PART 39—AIRWORTHINESS
DIRECTIVES
1. The authority citation for part 39
continues to read as follows:
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Authority: 49 U.S.C. 106(g), 40113, 44701.
§ 39.13
[Amended]
2. The Federal Aviation
Administration (FAA) amends § 39.13
by adding the following new
airworthiness directive (AD):
Airbus: Docket No. FAA–2005–23142;
Directorate Identifier 2005–NM–154–AD.
Comments Due Date
(a) The FAA must receive comments on
this AD action by January 3, 2006.
Affected ADs
(b) None.
Applicability
(c) This AD applies to Airbus Model A319–
131, –132, and –133 airplanes; Model A320–
232 and –233 airplanes; and Model A321–
131 and –231 airplanes; certificated in any
category; as identified in Airbus All
Operators Telex (AOT) A320–71A1036,
Revision 1, dated June 28, 2005.
Unsafe Condition
(d) This AD results from a report that,
during modification of certain engine
forward mount assemblies of the left and
right engines done at an engine shop visit, an
incorrect torque was applied to the
attachment bolts. We are issuing this AD to
prevent structural failure of the secondary
load path of the forward engine mount,
which, if combined with failure of the
primary load path, could result in separation
of the engine from the airplane.
Compliance
(e) You are responsible for having the
actions required by this AD performed within
the compliance times specified, unless the
actions have already been done.
Note 1: For the purposes of this AD, a
detailed inspection is: ‘‘An intensive
examination of a specific item, installation,
or assembly to detect damage, failure, or
irregularity. Available lighting is normally
supplemented with a direct source of good
lighting at an intensity deemed appropriate.
Inspection aids such as mirror, magnifying
lenses, etc., may be necessary. Surface
cleaning and elaborate procedures may be
required.’’
Inspection and Corrective Action
(f) Perform a detailed inspection for cracks
or failure of the primary load path
components of the engine forward mount by
doing all the applicable actions in
accordance with the procedures in AOT
A320–71A1036, Revision 1, dated June 28,
2005. Do any corrective action before further
flight in accordance with the procedures in
the AOT. Perform the actions at the time
specified in paragraph (f)(1) or (f)(2) of this
AD, as applicable.
(1) For Model A321–131 and –231
airplanes: Do the inspection within 5 days
after the effective date of this AD.
(2) For Model A319–131, –132, and –133
airplanes: Do the inspection within 10 days
after the effective date of this AD.
(g) For all airplanes: At the applicable time
specified in paragraph (g)(1) or (g)(2) of this
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AD, remove, re-install, and re-torque each of
the attachment bolts of the engine forward
mount assembly in accordance with the
procedures in AOT A320–71A1036, Revision
1, dated June 28, 2005.
(1) If the inspection specified in paragraph
(f) of this AD was accomplished after the
effective date of this AD: Do the actions
within 2,250 flight cycles after accomplishing
the inspection.
(2) If the inspection specified in paragraph
(f) of this AD was accomplished before the
effective date of this AD: Do the actions
within 2,250 flight cycles after the effective
date of this AD.
Actions Accomplished Previously
(h) Inspections, adjustments or repairs
done before the effective date of this AD in
accordance with the procedures in AOT
A320–71A1036, dated June 27, 2005, are
acceptable for compliance with the
corresponding actions required by this AD.
No Reporting Required
(i) Although AOT A320–71A1036,
Revision 1, dated June 28, 2005, recommends
that inspection results be reported to the
manufacturer, this AD does not include that
requirement.
Alternative Methods of Compliance
(AMOCs)
(j)(1) The Manager, International Branch,
ANM–116, Transport Airplane Directorate,
FAA, has the authority to approve AMOCs
for this AD, if requested in accordance with
the procedures found in 14 CFR 39.19.
(2) Before using any AMOC approved in
accordance with § 39.19 on any airplane to
which the AMOC applies, notify the
appropriate principal inspector in the FAA
Flight Standards Certificate Holding District
Office.
Related Information
(k) French emergency airworthiness
directive UF–2005–117, dated June 29, 2005,
also addresses the subject of this AD.
Issued in Renton, Washington, on
November 18, 2005.
Kalene C. Yanamura,
Acting Manager, Transport Airplane
Directorate, Aircraft Certification Service.
[FR Doc. 05–23513 Filed 11–30–05; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 284
[Docket No. RM06–5–000]
Amendments to Codes of Conduct for
Unbundled Sales Service and for
Persons Holding Blanket Marketing
Certificates
November 21, 2005.
Federal Energy Regulatory
Commission, DOE.
AGENCY:
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Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules
ACTION:
Notice of proposed rulemaking.
SUMMARY: The Federal Energy
Regulatory Commission (Commission) is
proposing to amend its regulations
regarding the blanket certificates for
unbundled gas sales services held by
interstate natural gas pipelines and the
blanket marketing certificates held by
persons making sales for resale of gas at
negotiated rates in interstate commerce.
Specifically, the Commission proposes
to repeal sections of the Commission’s
regulations pertaining to codes of
conduct with respect to certain sales of
natural gas once we have issued final
regulations implementing the antimanipulation provisions of the Energy
Policy Act of 2005 and have
incorporated other aspects of such
regulations in appropriate Commission
orders, rules and regulations. The
Commission seeks public comment on
whether such regulations should be
repealed as proposed herein.
DATES: Comments are due January 3,
2006. Reply comments are due January
17, 2006.
ADDRESSES: Comments may be filed
electronically via the eFiling link on the
Commission’s Web site at https://
www.ferc.gov. Commenters unable to
file comments electronically must send
an original and 14 copies of their
comments to: Federal Energy Regulatory
Commission, Office of the Secretary,
888 First Street, NE., Washington, DC
20426. Refer to the Comment
Procedures section of the preamble for
additional information on how to file
comments.
FOR FURTHER INFORMATION CONTACT:
Frank Karabetsos, Office of General
Counsel, Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502–8133,
Frank.Karabetsos@ferc.gov.
SUPPLEMENTARY INFORMATION:
Introduction
1. In this Notice of Proposed
Rulemaking (NOPR), the Commission
seeks comments on whether to repeal
sections 284.288 and 284.403 of its
regulations,1 which requires that
pipelines and all sellers for resale
adhere to a code of conduct with respect
to certain sales of natural gas, as
implemented pursuant to Order No.
644.2 The central purpose of sections
1 18
CFR 284.288 and 284.403 (2005). Sections
284.288 and 284.403 of the Commission’s
regulations are provided in Attachment A hereto.
2 Amendments to Blanket Sales Certificates,
Order No. 644, 105 FERC ¶ 61,217 (2003), reh’g
denied 107 FERC ¶ 61,174; 68 FR 66,323 (Nov. 26,
2003); 18 CFR 284.288(a) and 284.403(a) (2003)
(Order No. 644). Order No. 644 is currently on
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284.288 and 284.403 of the
Commission’s regulations is to prohibit
market manipulation. In the Energy
Policy Act of 2005 (EPAct 2005),3
Congress enacted new section 4A of the
Natural Gas Act (NGA) which
specifically bars manipulation in
connection with the purchase or sale of
natural gas or transportation services
and authorizes the Commission to
promulgate rules and regulations
prohibiting market manipulation. In a
Notice of Proposed Rulemaking issued
October 20, 2005, the Commission has
proposed rules to implement the new
statutory anti-manipulation provisions.4
We propose repealing sections 284.288
and 284.403 of the Commission’s
regulations once we have issued final
regulations implementing the antimanipulation provisions of EPAct 2005
and have incorporated other aspects of
sections 284.288 and 284.403 of the
Commission’s regulations in appropriate
Commission orders, rules, and
regulations. We are also requesting
comment on whether sections 284.288
and 284.403 should be repealed
prospectively.
Background
2. On November 17, 2003, acting
pursuant to section 7 of the NGA, we
issued a final rule, Order No. 644,
amending blanket certificates for
unbundled gas sales services held by
interstate natural gas pipelines and
blanket marketing certificates held by
persons making sales for resale of
natural gas at negotiated rates in
interstate commerce. This rule requires
that pipelines that provide unbundled
natural gas sales service and all sellers
of natural gas for resale adhere to a code
of conduct with respect to natural gas
sales. The Commission determined that
in order to protect and maintain the
competitive natural gas market and to
continue its light-handed regulation of
the gas sales within its jurisdiction, it
was necessary to place additional
conditions on its grant of market-based
sales certificates. In formulating such
conditions to the market-based rate
certificates the Commission was
fulfilling its obligation to appropriately
monitor markets and to ensure that
market-based rates remain within the
zone of reasonableness required by the
NGA.5
appeal. See Cinergy Marketing & Trading, L.P. v.
FERC, No. 04–1168 et al. (D.C. Cir., appeal filed
April 28, 2004).
3 Energy Policy Act of 2005, Pub. L. 109–58, 119
Stat. 594 (2005).
4 Prohibition of Energy Market Manipulation, 113
FERC ¶ 61,067 (2005) (Prohibition of Energy Market
Manipulation NOPR).
5 105 FERC ¶ 61,217 at P 91 (2003).
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3. Under sections 284.288(a) and
284.403(a) of the Commission’s
regulations, a pipeline providing
unbundled natural gas sales service
under section 284.284, or any person
making natural gas sales for resale in
interstate commerce pursuant to section
284.402, ‘‘is prohibited from engaging in
actions or transactions that are without
a legitimate business purpose and that
are intended to or foreseeably could
manipulate market prices, market
conditions, or market rules for natural
gas.’’ Prohibited actions or transactions
include wash trades and collusion for
the purpose of market manipulation.6
4. Sections 284.288(b) and 284.403(b)
deal with reporting of transaction
information to price index publishers.
They require that if a seller reports
transaction data, the data be accurate
and factual, and not knowingly false or
misleading, and be reported in
accordance with the Commission’s
Policy Statement on price indices.7
Sections 284.288(b) and 284.403(b) also
require that sellers notify the
Commission of whether they report
transaction data to price index
publishers in accordance with the
Policy Statement, and to update any
changes in their reporting status.
5. Sections 284.288(c) and 284.403(c)
require that sellers retain for a minimum
three year period all data and
information upon which they billed the
prices charged for natural gas sales
made under their market-based sales
certificates or in transactions the prices
of which were reported to price index
publishers.
6. Sections 284.288(d)–(e) and
284.403(d)–(e) of the Commission’s
regulations are largely procedural in
nature. Specifically, sections 284.288(d)
and 284.403(d) deal with remedies for
violations of the codes of conduct
requirements set forth in preceding
paragraphs (a) through (c) of sections
284.288 and 284.403. Sections
284.288(e) and 284.403(e) deal with
time limits on complaints and
Commission enforcement of the codes of
conduct requirements.
7. At the same time that Order No.
644 was adopted for pipelines that
provide unbundled natural gas sales
service and holders of blanket certificate
authority that make sales for resale of
natural gas, the Commission also issued
an order to require wholesale sellers of
electricity at market-based rates to
6 18 CFR 284.288(a)(1)–(2) and 284.403(a)(1)–(2)
(2005).
7 Policy Statement on Natural Gas and Electric
Price Indices, 104 FERC ¶ 61,121 (2003).
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Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules
adhere to certain behavioral rules when
making sales of electricity.8
EPAct 2005 and Proposed New Rules
8. As noted, section 315 of EPAct
2005 amended the NGA to add a new
section 4A, which prohibits the use or
employment of ‘‘any manipulative or
deceptive device or contrivance’’ in
connection with the purchase or sale of
natural gas or the purchase or sale of
transportation services subject to the
jurisdiction of the Commission. In order
to implement the anti-manipulation
provisions of NGA section 4A, we
issued the Prohibition of Energy Market
Manipulation NOPR, proposing new
regulations (proposed Part 159
regulations) to make it unlawful for any
entity, directly or indirectly, in
connection with the purchase or sale of
natural gas or the purchase or sale of
transportation services subject to the
jurisdiction of the Commission (1) to
use or employ any device, scheme, or
artifice to defraud, (2) to make any
untrue statement of a material fact or to
omit to state a material fact necessary in
order to make the statements made, in
the light of the circumstances under
which they were made, not misleading,
or (3) to engage in any act, practice, or
course of business that operates or
would operate as a fraud or deceit upon
any person.9
9. In the Prohibition of Energy Market
Manipulation NOPR, we recognized that
sections 284.288(a) and 284.403(a) of
the Commission’s regulations also
prohibit manipulative conduct. We
noted that conduct that violates sections
284.288(a) or 284.403(a) and the
proposed Part 159 regulations will be
treated as one violation of antimanipulation rules, and that we will not
apply duplicative penalties for the same
conduct in the event that conduct were
to violate both sections 284.288(a) or
284.403(a) and the proposed Part 159
regulations. We also indicated that we
would seek comment on whether
sections 284.288(a) and 284.403(a) of
the Commission’s regulations should be
revised or repealed in light of the
proposed Part 159 regulations.
Discussion
10. Our goal is to provide firm but fair
enforcement of the statutes, orders,
rules, and regulations we administer. To
do so, it is important that our rules be
as clear as possible so that market
8 Investigation of Terms and Conditions of Public
Utility Market-Based Rate Authorizations, ‘‘Order
Amending Market-Based Rate Tariffs and
Authorizations,’’ 105 FERC ¶ 61,218 (2003), reh’g
denied, 107 FERC ¶ 61,175 (2004) at Appendix A.
9 The proposed Part 159 regulations are also
provided in Attachment A hereto.
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participants and entities subject to our
rules and regulations understand what
conduct is proscribed and can act
accordingly.10 We propose to repeal
sections 284.288 and 284.403 in light of
the proposed Part 159 regulations to
implement the new anti-manipulation
provisions contained in section 4A of
the NGA and of the Commission’s other
rules and regulations.11 All market
participants subject to sections 284.288
and 284.403 are ‘‘entities’’ subject to
EPAct 2005 and therefore will be subject
to the new regulations prohibiting
manipulation, deceit, and fraud in
connection with wholesale natural gas
transactions. Other aspects of sections
284.288 and 284.403 of the
Commission’s regulations either reflect
existing requirements or can be
incorporated into other rules, making it
unnecessary to retain the separate list of
rules in sections 284.288(a)–(e) and
284.403(a)–(e) of the Commission’s
regulations.
11. We think that repeal of sections
284.288 and 284.403 of the
Commission’s regulations will simplify
the Commission’s rules and regulations,
avoid confusion, and provide greater
clarity and regulatory certainty to the
industry. At the same time, we think
that the behaviors described in sections
284.288 and 284.403 of the
Commission’s regulations will still be
addressed through other rules and
regulations. We emphasize our belief
that repeal of sections 284.288 and
284.403 of the Commission’s regulations
is intended to take into account the
passage of EPAct 2005, which has
provided the Commission with
expanded anti-manipulation authority,
and to simplify and streamline the rules
and regulations sellers must follow, not
to eliminate beneficial rules governing
market behavior.
12. The heart of sections 284.288 and
284.403 of the Commission’s regulations
is subparagraph (a), prohibiting
manipulation. We recognize that there is
overlap between sections 284.288(a) and
284.403(a) of the Commission’s
regulations and the proposed Part 159
regulations. We are concerned that this
10 As discussed in the Prohibition of Energy
Market Manipulation NOPR (at P 14), section 4A of
the NGA, as added by section 315 of EPAct 2005,
and the proposed implementing rules are patterned
after section 10(b) of the Securities Exchange Act
of 1934 and related regulations, which provides a
level of certainty as to how the proposed rules will
operate that is not typically available.
11 Concurrently with this NOPR, we are issuing
an order pursuant to section 206 of the Federal
Power Act (FPA) in Docket No. EL06–16–000 to
consider similar changes to the Market Behavior
Rules, which are currently included in all public
utility sellers’ market-based rate tariffs and
authorizations.
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could cause unnecessary confusion and
regulatory uncertainty once the
proposed Part 159 regulations are in
place. It is our view that the scope of the
new statutory prohibition on
manipulation and the reach of the
proposed Part 159 regulations eliminate
the need for sections 284.288(a) and
284.403(a) of the Commission’s
regulations.
13. We recognize there are some
differences, but the differences do not
seem to require keeping sections
284.288 and 284.403 of the
Commission’s regulations once the new
Part 159 regulations are final.12 For
instance, there is a difference in the
standard of proof between sections
284.288(a) and 284.403(a) of the
Commission’s regulations and the
proposed Part 159 regulations. In new
section 4A of the NGA, Congress used
the terms ‘‘manipulative or deceptive
device or contrivance’’ and directed that
they be given the same meaning as used
in section 10b of the Securities
Exchange Act of 1934.13
Those terms have been interpreted to
require a showing of scienter, that is, an
intent to deceive, manipulate or
defraud.14 In other words, knowing,
intentional, or reckless conduct is
proscribed.15 In contrast, sections
284.288(a) and 284.403(a) of the
Commission’s regulations do not require
a showing of scienter, as they prohibit
actions or transactions that
‘‘foreseeably’’ could manipulate market
prices, conditions, or rules. The
‘‘foreseeably’’ requirement has
generated controversy and uncertainty,
however. We believe the use of a
scienter standard, given the precedent
in other regulatory contexts, will draw
a clearer line between acceptable and
prohibited behavior.
14. We also note that the new
authority granted to the Commission in
section 4A of the NGA and our
proposed Part 159 regulations governs
more transactions and more entities
12 The timing of proposed repeal is important. We
do not intend to leave any gap in our regulations
prohibiting manipulation of energy markets or other
requirements of sections 284.288 and 284.403 of the
Commission’s regulations.
13 15 U.S.C. 78j(b) (2005).
14 Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201
(1976).
15 Sundstrand Corp. v. Sun Chemical Corp., 553
F.2d 1033 (7th Cir. 1977), cert. denied, 434 U.S. 875
(1977) (defining recklessness in the section 10(b)
and Rule 10b–5 context as ‘‘a highly unreasonable
omission, involving not merely simple, or even
inexcusable negligence, but an extreme departure
from the standards of ordinary care, and which
presents a danger of misleading buyers or sellers
that is either known to the defendant or is so
obvious that the actor must have been aware of it.’’);
accord In Re Silicon Graphics Securities Litigation,
183 F.3d 970, 977 (9th Cir. 1999).
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Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules
than is the case for sections 284.288(a)
and 284.403(a) of the Commission’s
regulations, which covers only certain
natural gas sellers. More precisely,
Congress made the anti-manipulation
provisions of section 315 applicable to
‘‘any entity’’ and in connection with
both the purchase and sale of natural
gas, as well as the purchase or sale of
transportation services subject to our
jurisdiction. Sections 284.288(a) and
284.403(a) of the Commission’s
regulations, on the other hand, are
applicable only to a pipeline providing
unbundled natural gas sales service
under section 284.284, or any person
making natural gas sales for resale in
interstate commerce pursuant to section
284.402, a smaller subset of the entities
and types of transactions than those
subject to EPAct 2005 section 315
prohibition of manipulation.
15. Additionally, it is our view that it
is not necessary to retain the explicit
prohibitions against certain conduct set
forth in sections 284.288(a)(1)–(2) and
284.403(a)(1)–(2) (wash trades and
collusion for the purpose of market
manipulation). These are examples of
prohibited manipulation, both of which
are manipulative or deceptive devices or
contrivances. Thus, both would be
barred by the proposed Part 159
regulations. For example, wash trades
would be devices or schemes to defraud
(proposed section 159.1(a)(1)). It is our
view that market participants are on
notice that wash trades and colluding to
manipulate are prohibited activities
under the proposed Part 159
regulations, subject to penalty and
remedial action.
16. Turning to the other
subparagraphs of sections 284.288 and
284.403 of the Commission’s
regulations, it appears that the
requirements imposed there either are
duplicative of other rules or regulations
or can be incorporated into other rules
of general applicability. For instance,
the first part of sections 284.288(b) and
284.403(b), requiring sellers to provide
accurate data to price index publishers
if the seller is reporting transactions to
such publishers, calls for accurate and
truthful representations. It is our view
that failure to do so would be a violation
of the proposed Part 159 regulations.
Sections 284.288(b) and 284.403(b) of
the Commission’s regulations also
include a requirement that sellers notify
the Commission of their price reporting
status and any changes in that status.
This does not appear elsewhere in our
current or proposed regulations. We
note, however, that price transparency
is also addressed by EPAct 2005, which
adds new section 23 to the NGA.
Section 23 gives us authority to
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promulgate rules and regulations
necessary to facilitate price
transparency. We intend to address
market transparency issues in a separate
proceeding, and anticipate that rules
adopted in that proceeding will address
the sections 284.288(b) and 284.403(b)
requirements for providing transaction
information to price index publishers
and informing the Commission of price
reporting status.
17. Sections 284.288(c) and 284.403(c)
requires sellers to maintain certain
records for a period of three years to
reconstruct prices charged for natural
gas. The Commission has a number of
specific record retention requirements
applicable to natural gas companies
subject to the jurisdiction of the
Commission in Part 225 of our
regulations.16 In many cases, these
requirements are for time periods longer
than three years. The Part 225
requirements are largely related to costof-service rate requirements, however.
We believe it is important that all
pipelines providing unbundled natural
gas sales service and all persons holding
blanket certificates making natural gas
sales for resale in interstate commerce
retain the data and information
described in sections 284.288(c) and
284.403(c) of the Commission’s
regulations. We intend to address this
retention requirement in the context of
our rules under the NGA, such that
there will be no gap in the retention
requirement. We believe that doing so
would eliminate the need to retain
sections 284.288(c) and 284.403(c) of
the Commission’s regulations.
18. If the Commission decides to
repeal sections 284.288(a)–(c) and
284.403(a)–(c) of its regulations, it is the
Commission’s view that sections
284.288(d) and 284.403(d) of the
Commissions’ regulations, dealing with
remedies, and sections 284.288(e) and
284.404(e), dealing with time limits on
complaints and Commission
enforcement, are largely procedural and
would become superfluous without the
underlying operative paragraphs and
therefore should be deleted.
19. In addition to simplifying our
codes of conduct rules, avoiding
confusion, and providing more
regulatory certainty, it is also our view
that a smooth transition from the
existing codes of conduct regulations to
the proposed Part 159 regulations and
other rules and regulations achieves our
original goal in adopting sections
284.288 and 284.403 of the
Commission’s regulations, that is, to
fulfill our obligation to ensure that
market-based rates remain within the
16 18
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zone of reasonableness required by the
NGA. In EPAct 2005, Congress has
provided broad and strong prohibitions
of market manipulation, and reliance on
rules implementing these statutory
prohibitions will likewise assure that
wholesale markets reflect competitive
forces and produce just and reasonable
rates.
20. We seek comment on whether
sections 284.288 and 284.403 of the
Commission’s regulations should be
repealed prospectively, including
responses to the following questions:
A. Are there any aspects of sections
284.288 and 284.403 of the
Commission’s regulations that should be
retained, or can all substantive
provisions of sections 284.288 and
284.403 of the Commission’s regulations
be reflected in the proposed Part 159
regulations and other Commission rules
and regulations?
B. Is there a need or basis for retaining
existing sections 284.288(a) and
284.403(a) of the Commission’s
regulations in light of the antimanipulation provisions set forth in the
proposed Part 159 regulations?
C. Should the affirmative defense of
‘‘legitimate business purpose’’ in
existing sections 284.288(a) and
284.403(a) of the Commission’s
regulations be retained in any form?
D. Is the requirement of sections
284.288(b) and 284.403(b) of the
Commission’s regulations to report
transaction information accurately, to
the extent a seller reports such
information to price index publishers,
necessary in light of the proposed Part
159 regulations?
21. We encourage responses to the
specific questions above as well as
additional relevant comments regarding
whether sections 284.288 and 284.403
of the Commission’s regulations should
be repealed.
Information Collection Statement
22. This proposed rule implements
the existing requirements as set forth in
section 4A of the NGA and does not
include new information requirements
under the provisions of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
Environmental Analysis
23. 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.17 The Commission has
17 Order No. 486, Regulations Implementing the
National Environmental Policy Act, 52 FR 47897
CFR Part 225 (2005).
Frm 00011
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Sfmt 4702
72093
Continued
E:\FR\FM\01DEP1.SGM
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72094
Federal Register / Vol. 70, No. 230 / Thursday, December 1, 2005 / Proposed Rules
categorically excluded certain actions
from these requirements as not having a
significant effect on the human
environment.18 The actions proposed
here fall within categorical exclusions
in the Commission’s regulations for
rules that are clarifying, corrective, or
procedural, for information gathering,
analysis, and dissemination, and for
sales, exchange, and transportation of
natural gas that requires no construction
of facilities.19 Therefore, an
environmental assessment is
unnecessary and has not been prepared
in this NOPR.
Regulatory Flexibility Act
24. The Regulatory Flexibility Act of
1980 (RFA) 20 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities.21 The Commission is not
required to make such analyses if a rule
would not have such an effect.
25. The Commission does not believe
that this proposed rule would have such
an impact on small entities. The
proposed rule merely repeals sections
284.288 and 284.403 of the
Commission’s regulations. Therefore,
the Commission certifies that this
proposed rule, if finalized, will not have
a significant economic impact on a
substantial number of small entities.
Comment Procedures
26. The Commission invites interested
persons to submit comments on the
matters and issues proposed in this
notice to be adopted, including any
related matters or alternative proposals
that commenters may wish to discuss.
Comments are due January 3, 2006.
Reply comments are due January 17,
2006. Comments must refer to Docket
No. RM06–5–000, and must include the
commenter’s name, the organization
they represent, if applicable, and their
address in their comments. Comments
(Dec. 17, 1987), FERC Stats. & Regs., Regulations
Preambles 1986–1990 ¶ 30,783 (1987).
18 18 CFR 380.4 (2005).
19 See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5),
380.4(a)(27) (2005).
20 5 U.S.C. 601–12 (2000).
21 The RFA definition of ‘‘small entity’’ refers to
the definition provided in the Small Business Act,
which defines a ‘‘small business concern’’ as a
business that is independently owned and operated
and that is not dominant in its field of operation.
15 U.S.C. 632 (2000). The Small Business Size
Standards component of the North American
Industry Classification System 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 years did not exceed 4 million
MWh. 13 CFR 121.201 (2004) (Section 22, Utilities,
North American Industry Classification System,
NAICS).
VerDate Aug<31>2005
14:46 Nov 30, 2005
Jkt 208001
may be filed either in electronic or
paper format. Comments may be filed
electronically via the eFiling link on the
Commission’s Web site at https://
www.ferc.gov. The Commission accepts
most standard word processing formats
and commenters may attach additional
files with supporting information in
certain other file formats. Commenters
filing electronically do not need to make
a paper filing. Commenters that are not
able to file comments electronically
must send an original and 14 copies of
their comments to: Federal Energy
Regulatory Commission, Office of the
Secretary, 888 First Street, NE.,
Washington, DC 20426.
27. All comments will be placed in
the Commission’s public files and may
be viewed, printed, or downloaded
remotely as described in the Document
Availability section below. Commenters
on this proposal are not required to
serve copies of their comments on other
commenters.
PART 284—CERTAIN SALES AND
TRANSPORTATION OF NATURAL GAS
UNDER THE NATURAL GAS POLICY
ACT OF 1978 AND RELATED
AUTHORITIES
1. The authority citation for part 284
continues to read as follows:
Authority: 15 U.S.C. 717–717w, 3301–
3432; 42 U.S.C. 7101–7532; 43 U.S.C. 1331–
1356.
§ 284.288
[Removed]
2. Remove § 284.288.
§ 284.403
[Removed]
3. Remove § 284.403.
[FR Doc. 05–23405 Filed 11–30–05; 8:45 am]
BILLING CODE 6717–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 55
Document Availability
[OAR–2004–0091; FRL–8000–1]
28. 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 (https://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.
29. From FERC’s Home Page on the
Internet, this information is available in
the eLibrary. The full text of this
document is available in the eLibrary
both in PDF and Microsoft Word format
for viewing, printing, and/or
downloading. To access this document
in eLibrary, type the docket number
excluding the last three digits of this
document in the docket number field.
User assistance is available for
eLibrary and the FERC’s Web site during
our normal business hours. For
assistance contact FERC Online Support
at FERCOnlineSupport@ferc.gov or tollfree at (866) 208–3676, or for TTY,
contact (202) 502–8659.
Outer Continental Shelf Air
Regulations Consistency Update for
California
List of Subjects in 18 CFR Part 284
Continental Shelf, Natural gas,
Reporting and recordkeeping
requirements.
By direction of the Commission.
Magalie R. Salas,
Secretary.
In consideration of the foregoing, the
Commission proposes to amend part
284, chapter I, title 18, Code of Federal
Regulations, as follows.
PO 00000
Frm 00012
Fmt 4702
Sfmt 4702
Environmental Protection
Agency (‘‘EPA’’).
ACTION: Proposed rule.
AGENCY:
SUMMARY: EPA is proposing to update a
portion of the Outer Continental Shelf
(‘‘OCS’’) Air Regulations. Requirements
applying to OCS sources located within
25 miles of States’ seaward boundaries
must be updated periodically to remain
consistent with the requirements of the
corresponding onshore area (‘‘COA’’), as
mandated by section 328(a)(1) of the
Clean Air Act, as amended in 1990 (‘‘the
Act’’). The portion of the OCS air
regulations that is being updated
pertains to the requirements for OCS
sources by the State of California and
South Coast Air Quality Management
District (South Coast AQMD). The
intended effect of approving the OCS
requirements for the State of California
and South Coast AQMD is to regulate
emissions from OCS sources in
accordance with the requirements
onshore. The change to the existing
requirements discussed below is
proposed to be incorporated by
reference into the Code of Federal
Regulations and is listed in the
appendix to the OCS air regulations.
DATES: Comments on the proposed
update must be received on or before
January 3, 2006.
ADDRESSES: Submit comments,
identified by docket number OAR–
2004–0091, by one of the following
methods:
E:\FR\FM\01DEP1.SGM
01DEP1
]]>Agencies
[Federal Register Volume 70, Number 230 (Thursday, December 1, 2005)]
[Proposed Rules]
[Pages 72090-72094]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-23405]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 284
[Docket No. RM06-5-000]
Amendments to Codes of Conduct for Unbundled Sales Service and
for Persons Holding Blanket Marketing Certificates
November 21, 2005.
AGENCY: Federal Energy Regulatory Commission, DOE.
[[Page 72091]]
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Federal Energy Regulatory Commission (Commission) is
proposing to amend its regulations regarding the blanket certificates
for unbundled gas sales services held by interstate natural gas
pipelines and the blanket marketing certificates held by persons making
sales for resale of gas at negotiated rates in interstate commerce.
Specifically, the Commission proposes to repeal sections of the
Commission's regulations pertaining to codes of conduct with respect to
certain sales of natural gas once we have issued final regulations
implementing the anti-manipulation provisions of the Energy Policy Act
of 2005 and have incorporated other aspects of such regulations in
appropriate Commission orders, rules and regulations. The Commission
seeks public comment on whether such regulations should be repealed as
proposed herein.
DATES: Comments are due January 3, 2006. Reply comments are due January
17, 2006.
ADDRESSES: Comments may be filed electronically via the eFiling link on
the Commission's Web site at https://www.ferc.gov. Commenters unable to
file comments electronically must send an original and 14 copies of
their comments to: Federal Energy Regulatory Commission, Office of the
Secretary, 888 First Street, NE., Washington, DC 20426. Refer to the
Comment Procedures section of the preamble for additional information
on how to file comments.
FOR FURTHER INFORMATION CONTACT: Frank Karabetsos, Office of General
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-8133, Frank.Karabetsos@ferc.gov.
SUPPLEMENTARY INFORMATION:
Introduction
1. In this Notice of Proposed Rulemaking (NOPR), the Commission
seeks comments on whether to repeal sections 284.288 and 284.403 of its
regulations,\1\ which requires that pipelines and all sellers for
resale adhere to a code of conduct with respect to certain sales of
natural gas, as implemented pursuant to Order No. 644.\2\ The central
purpose of sections 284.288 and 284.403 of the Commission's regulations
is to prohibit market manipulation. In the Energy Policy Act of 2005
(EPAct 2005),\3\ Congress enacted new section 4A of the Natural Gas Act
(NGA) which specifically bars manipulation in connection with the
purchase or sale of natural gas or transportation services and
authorizes the Commission to promulgate rules and regulations
prohibiting market manipulation. In a Notice of Proposed Rulemaking
issued October 20, 2005, the Commission has proposed rules to implement
the new statutory anti-manipulation provisions.\4\ We propose repealing
sections 284.288 and 284.403 of the Commission's regulations once we
have issued final regulations implementing the anti-manipulation
provisions of EPAct 2005 and have incorporated other aspects of
sections 284.288 and 284.403 of the Commission's regulations in
appropriate Commission orders, rules, and regulations. We are also
requesting comment on whether sections 284.288 and 284.403 should be
repealed prospectively.
---------------------------------------------------------------------------
\1\ 18 CFR 284.288 and 284.403 (2005). Sections 284.288 and
284.403 of the Commission's regulations are provided in Attachment A
hereto.
\2\ Amendments to Blanket Sales Certificates, Order No. 644, 105
FERC ] 61,217 (2003), reh'g denied 107 FERC ] 61,174; 68 FR 66,323
(Nov. 26, 2003); 18 CFR 284.288(a) and 284.403(a) (2003) (Order No.
644). Order No. 644 is currently on appeal. See Cinergy Marketing &
Trading, L.P. v. FERC, No. 04-1168 et al. (D.C. Cir., appeal filed
April 28, 2004).
\3\ Energy Policy Act of 2005, Pub. L. 109-58, 119 Stat. 594
(2005).
\4\ Prohibition of Energy Market Manipulation, 113 FERC ] 61,067
(2005) (Prohibition of Energy Market Manipulation NOPR).
---------------------------------------------------------------------------
Background
2. On November 17, 2003, acting pursuant to section 7 of the NGA,
we issued a final rule, Order No. 644, amending blanket certificates
for unbundled gas sales services held by interstate natural gas
pipelines and blanket marketing certificates held by persons making
sales for resale of natural gas at negotiated rates in interstate
commerce. This rule requires that pipelines that provide unbundled
natural gas sales service and all sellers of natural gas for resale
adhere to a code of conduct with respect to natural gas sales. The
Commission determined that in order to protect and maintain the
competitive natural gas market and to continue its light-handed
regulation of the gas sales within its jurisdiction, it was necessary
to place additional conditions on its grant of market-based sales
certificates. In formulating such conditions to the market-based rate
certificates the Commission was fulfilling its obligation to
appropriately monitor markets and to ensure that market-based rates
remain within the zone of reasonableness required by the NGA.\5\
---------------------------------------------------------------------------
\5\ 105 FERC ] 61,217 at P 91 (2003).
---------------------------------------------------------------------------
3. Under sections 284.288(a) and 284.403(a) of the Commission's
regulations, a pipeline providing unbundled natural gas sales service
under section 284.284, or any person making natural gas sales for
resale in interstate commerce pursuant to section 284.402, ``is
prohibited from engaging in actions or transactions that are without a
legitimate business purpose and that are intended to or foreseeably
could manipulate market prices, market conditions, or market rules for
natural gas.'' Prohibited actions or transactions include wash trades
and collusion for the purpose of market manipulation.\6\
---------------------------------------------------------------------------
\6\ 18 CFR 284.288(a)(1)-(2) and 284.403(a)(1)-(2) (2005).
---------------------------------------------------------------------------
4. Sections 284.288(b) and 284.403(b) deal with reporting of
transaction information to price index publishers. They require that if
a seller reports transaction data, the data be accurate and factual,
and not knowingly false or misleading, and be reported in accordance
with the Commission's Policy Statement on price indices.\7\ Sections
284.288(b) and 284.403(b) also require that sellers notify the
Commission of whether they report transaction data to price index
publishers in accordance with the Policy Statement, and to update any
changes in their reporting status.
---------------------------------------------------------------------------
\7\ Policy Statement on Natural Gas and Electric Price Indices,
104 FERC ] 61,121 (2003).
---------------------------------------------------------------------------
5. Sections 284.288(c) and 284.403(c) require that sellers retain
for a minimum three year period all data and information upon which
they billed the prices charged for natural gas sales made under their
market-based sales certificates or in transactions the prices of which
were reported to price index publishers.
6. Sections 284.288(d)-(e) and 284.403(d)-(e) of the Commission's
regulations are largely procedural in nature. Specifically, sections
284.288(d) and 284.403(d) deal with remedies for violations of the
codes of conduct requirements set forth in preceding paragraphs (a)
through (c) of sections 284.288 and 284.403. Sections 284.288(e) and
284.403(e) deal with time limits on complaints and Commission
enforcement of the codes of conduct requirements.
7. At the same time that Order No. 644 was adopted for pipelines
that provide unbundled natural gas sales service and holders of blanket
certificate authority that make sales for resale of natural gas, the
Commission also issued an order to require wholesale sellers of
electricity at market-based rates to
[[Page 72092]]
adhere to certain behavioral rules when making sales of electricity.\8\
---------------------------------------------------------------------------
\8\ Investigation of Terms and Conditions of Public Utility
Market-Based Rate Authorizations, ``Order Amending Market-Based Rate
Tariffs and Authorizations,'' 105 FERC ] 61,218 (2003), reh'g
denied, 107 FERC ] 61,175 (2004) at Appendix A.
---------------------------------------------------------------------------
EPAct 2005 and Proposed New Rules
8. As noted, section 315 of EPAct 2005 amended the NGA to add a new
section 4A, which prohibits the use or employment of ``any manipulative
or deceptive device or contrivance'' in connection with the purchase or
sale of natural gas or the purchase or sale of transportation services
subject to the jurisdiction of the Commission. In order to implement
the anti-manipulation provisions of NGA section 4A, we issued the
Prohibition of Energy Market Manipulation NOPR, proposing new
regulations (proposed Part 159 regulations) to make it unlawful for any
entity, directly or indirectly, in connection with the purchase or sale
of natural gas or the purchase or sale of transportation services
subject to the jurisdiction of the Commission (1) to use or employ any
device, scheme, or artifice to defraud, (2) to make any untrue
statement of a material fact or to omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, or (3) to
engage in any act, practice, or course of business that operates or
would operate as a fraud or deceit upon any person.\9\
---------------------------------------------------------------------------
\9\ The proposed Part 159 regulations are also provided in
Attachment A hereto.
---------------------------------------------------------------------------
9. In the Prohibition of Energy Market Manipulation NOPR, we
recognized that sections 284.288(a) and 284.403(a) of the Commission's
regulations also prohibit manipulative conduct. We noted that conduct
that violates sections 284.288(a) or 284.403(a) and the proposed Part
159 regulations will be treated as one violation of anti-manipulation
rules, and that we will not apply duplicative penalties for the same
conduct in the event that conduct were to violate both sections
284.288(a) or 284.403(a) and the proposed Part 159 regulations. We also
indicated that we would seek comment on whether sections 284.288(a) and
284.403(a) of the Commission's regulations should be revised or
repealed in light of the proposed Part 159 regulations.
Discussion
10. Our goal is to provide firm but fair enforcement of the
statutes, orders, rules, and regulations we administer. To do so, it is
important that our rules be as clear as possible so that market
participants and entities subject to our rules and regulations
understand what conduct is proscribed and can act accordingly.\10\ We
propose to repeal sections 284.288 and 284.403 in light of the proposed
Part 159 regulations to implement the new anti-manipulation provisions
contained in section 4A of the NGA and of the Commission's other rules
and regulations.\11\ All market participants subject to sections
284.288 and 284.403 are ``entities'' subject to EPAct 2005 and
therefore will be subject to the new regulations prohibiting
manipulation, deceit, and fraud in connection with wholesale natural
gas transactions. Other aspects of sections 284.288 and 284.403 of the
Commission's regulations either reflect existing requirements or can be
incorporated into other rules, making it unnecessary to retain the
separate list of rules in sections 284.288(a)-(e) and 284.403(a)-(e) of
the Commission's regulations.
---------------------------------------------------------------------------
\10\ As discussed in the Prohibition of Energy Market
Manipulation NOPR (at P 14), section 4A of the NGA, as added by
section 315 of EPAct 2005, and the proposed implementing rules are
patterned after section 10(b) of the Securities Exchange Act of 1934
and related regulations, which provides a level of certainty as to
how the proposed rules will operate that is not typically available.
\11\ Concurrently with this NOPR, we are issuing an order
pursuant to section 206 of the Federal Power Act (FPA) in Docket No.
EL06-16-000 to consider similar changes to the Market Behavior
Rules, which are currently included in all public utility sellers'
market-based rate tariffs and authorizations.
---------------------------------------------------------------------------
11. We think that repeal of sections 284.288 and 284.403 of the
Commission's regulations will simplify the Commission's rules and
regulations, avoid confusion, and provide greater clarity and
regulatory certainty to the industry. At the same time, we think that
the behaviors described in sections 284.288 and 284.403 of the
Commission's regulations will still be addressed through other rules
and regulations. We emphasize our belief that repeal of sections
284.288 and 284.403 of the Commission's regulations is intended to take
into account the passage of EPAct 2005, which has provided the
Commission with expanded anti-manipulation authority, and to simplify
and streamline the rules and regulations sellers must follow, not to
eliminate beneficial rules governing market behavior.
12. The heart of sections 284.288 and 284.403 of the Commission's
regulations is subparagraph (a), prohibiting manipulation. We recognize
that there is overlap between sections 284.288(a) and 284.403(a) of the
Commission's regulations and the proposed Part 159 regulations. We are
concerned that this could cause unnecessary confusion and regulatory
uncertainty once the proposed Part 159 regulations are in place. It is
our view that the scope of the new statutory prohibition on
manipulation and the reach of the proposed Part 159 regulations
eliminate the need for sections 284.288(a) and 284.403(a) of the
Commission's regulations.
13. We recognize there are some differences, but the differences do
not seem to require keeping sections 284.288 and 284.403 of the
Commission's regulations once the new Part 159 regulations are
final.\12\ For instance, there is a difference in the standard of proof
between sections 284.288(a) and 284.403(a) of the Commission's
regulations and the proposed Part 159 regulations. In new section 4A of
the NGA, Congress used the terms ``manipulative or deceptive device or
contrivance'' and directed that they be given the same meaning as used
in section 10b of the Securities Exchange Act of 1934.\13\
---------------------------------------------------------------------------
\12\ The timing of proposed repeal is important. We do not
intend to leave any gap in our regulations prohibiting manipulation
of energy markets or other requirements of sections 284.288 and
284.403 of the Commission's regulations.
\13\ 15 U.S.C. 78j(b) (2005).
---------------------------------------------------------------------------
Those terms have been interpreted to require a showing of scienter,
that is, an intent to deceive, manipulate or defraud.\14\ In other
words, knowing, intentional, or reckless conduct is proscribed.\15\ In
contrast, sections 284.288(a) and 284.403(a) of the Commission's
regulations do not require a showing of scienter, as they prohibit
actions or transactions that ``foreseeably'' could manipulate market
prices, conditions, or rules. The ``foreseeably'' requirement has
generated controversy and uncertainty, however. We believe the use of a
scienter standard, given the precedent in other regulatory contexts,
will draw a clearer line between acceptable and prohibited behavior.
---------------------------------------------------------------------------
\14\ Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201 (1976).
\15\ Sundstrand Corp. v. Sun Chemical Corp., 553 F.2d 1033 (7th
Cir. 1977), cert. denied, 434 U.S. 875 (1977) (defining recklessness
in the section 10(b) and Rule 10b-5 context as ``a highly
unreasonable omission, involving not merely simple, or even
inexcusable negligence, but an extreme departure from the standards
of ordinary care, and which presents a danger of misleading buyers
or sellers that is either known to the defendant or is so obvious
that the actor must have been aware of it.''); accord In Re Silicon
Graphics Securities Litigation, 183 F.3d 970, 977 (9th Cir. 1999).
---------------------------------------------------------------------------
14. We also note that the new authority granted to the Commission
in section 4A of the NGA and our proposed Part 159 regulations governs
more transactions and more entities
[[Page 72093]]
than is the case for sections 284.288(a) and 284.403(a) of the
Commission's regulations, which covers only certain natural gas
sellers. More precisely, Congress made the anti-manipulation provisions
of section 315 applicable to ``any entity'' and in connection with both
the purchase and sale of natural gas, as well as the purchase or sale
of transportation services subject to our jurisdiction. Sections
284.288(a) and 284.403(a) of the Commission's regulations, on the other
hand, are applicable only to a pipeline providing unbundled natural gas
sales service under section 284.284, or any person making natural gas
sales for resale in interstate commerce pursuant to section 284.402, a
smaller subset of the entities and types of transactions than those
subject to EPAct 2005 section 315 prohibition of manipulation.
15. Additionally, it is our view that it is not necessary to retain
the explicit prohibitions against certain conduct set forth in sections
284.288(a)(1)-(2) and 284.403(a)(1)-(2) (wash trades and collusion for
the purpose of market manipulation). These are examples of prohibited
manipulation, both of which are manipulative or deceptive devices or
contrivances. Thus, both would be barred by the proposed Part 159
regulations. For example, wash trades would be devices or schemes to
defraud (proposed section 159.1(a)(1)). It is our view that market
participants are on notice that wash trades and colluding to manipulate
are prohibited activities under the proposed Part 159 regulations,
subject to penalty and remedial action.
16. Turning to the other subparagraphs of sections 284.288 and
284.403 of the Commission's regulations, it appears that the
requirements imposed there either are duplicative of other rules or
regulations or can be incorporated into other rules of general
applicability. For instance, the first part of sections 284.288(b) and
284.403(b), requiring sellers to provide accurate data to price index
publishers if the seller is reporting transactions to such publishers,
calls for accurate and truthful representations. It is our view that
failure to do so would be a violation of the proposed Part 159
regulations.
Sections 284.288(b) and 284.403(b) of the Commission's regulations
also include a requirement that sellers notify the Commission of their
price reporting status and any changes in that status. This does not
appear elsewhere in our current or proposed regulations. We note,
however, that price transparency is also addressed by EPAct 2005, which
adds new section 23 to the NGA. Section 23 gives us authority to
promulgate rules and regulations necessary to facilitate price
transparency. We intend to address market transparency issues in a
separate proceeding, and anticipate that rules adopted in that
proceeding will address the sections 284.288(b) and 284.403(b)
requirements for providing transaction information to price index
publishers and informing the Commission of price reporting status.
17. Sections 284.288(c) and 284.403(c) requires sellers to maintain
certain records for a period of three years to reconstruct prices
charged for natural gas. The Commission has a number of specific record
retention requirements applicable to natural gas companies subject to
the jurisdiction of the Commission in Part 225 of our regulations.\16\
In many cases, these requirements are for time periods longer than
three years. The Part 225 requirements are largely related to cost-of-
service rate requirements, however. We believe it is important that all
pipelines providing unbundled natural gas sales service and all persons
holding blanket certificates making natural gas sales for resale in
interstate commerce retain the data and information described in
sections 284.288(c) and 284.403(c) of the Commission's regulations. We
intend to address this retention requirement in the context of our
rules under the NGA, such that there will be no gap in the retention
requirement. We believe that doing so would eliminate the need to
retain sections 284.288(c) and 284.403(c) of the Commission's
regulations.
---------------------------------------------------------------------------
\16\ 18 CFR Part 225 (2005).
---------------------------------------------------------------------------
18. If the Commission decides to repeal sections 284.288(a)-(c) and
284.403(a)-(c) of its regulations, it is the Commission's view that
sections 284.288(d) and 284.403(d) of the Commissions' regulations,
dealing with remedies, and sections 284.288(e) and 284.404(e), dealing
with time limits on complaints and Commission enforcement, are largely
procedural and would become superfluous without the underlying
operative paragraphs and therefore should be deleted.
19. In addition to simplifying our codes of conduct rules, avoiding
confusion, and providing more regulatory certainty, it is also our view
that a smooth transition from the existing codes of conduct regulations
to the proposed Part 159 regulations and other rules and regulations
achieves our original goal in adopting sections 284.288 and 284.403 of
the Commission's regulations, that is, to fulfill our obligation to
ensure that market-based rates remain within the zone of reasonableness
required by the NGA. In EPAct 2005, Congress has provided broad and
strong prohibitions of market manipulation, and reliance on rules
implementing these statutory prohibitions will likewise assure that
wholesale markets reflect competitive forces and produce just and
reasonable rates.
20. We seek comment on whether sections 284.288 and 284.403 of the
Commission's regulations should be repealed prospectively, including
responses to the following questions:
A. Are there any aspects of sections 284.288 and 284.403 of the
Commission's regulations that should be retained, or can all
substantive provisions of sections 284.288 and 284.403 of the
Commission's regulations be reflected in the proposed Part 159
regulations and other Commission rules and regulations?
B. Is there a need or basis for retaining existing sections
284.288(a) and 284.403(a) of the Commission's regulations in light of
the anti-manipulation provisions set forth in the proposed Part 159
regulations?
C. Should the affirmative defense of ``legitimate business
purpose'' in existing sections 284.288(a) and 284.403(a) of the
Commission's regulations be retained in any form?
D. Is the requirement of sections 284.288(b) and 284.403(b) of the
Commission's regulations to report transaction information accurately,
to the extent a seller reports such information to price index
publishers, necessary in light of the proposed Part 159 regulations?
21. We encourage responses to the specific questions above as well
as additional relevant comments regarding whether sections 284.288 and
284.403 of the Commission's regulations should be repealed.
Information Collection Statement
22. This proposed rule implements the existing requirements as set
forth in section 4A of the NGA and does not include new information
requirements under the provisions of the Paperwork Reduction Act of
1995 (44 U.S.C. 3501 et seq.).
Environmental Analysis
23. 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.\17\ The
Commission has
[[Page 72094]]
categorically excluded certain actions from these requirements as not
having a significant effect on the human environment.\18\ The actions
proposed here fall within categorical exclusions in the Commission's
regulations for rules that are clarifying, corrective, or procedural,
for information gathering, analysis, and dissemination, and for sales,
exchange, and transportation of natural gas that requires no
construction of facilities.\19\ Therefore, an environmental assessment
is unnecessary and has not been prepared in this NOPR.
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\17\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. &
Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
\18\ 18 CFR 380.4 (2005).
\19\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27)
(2005).
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Regulatory Flexibility Act
24. The Regulatory Flexibility Act of 1980 (RFA) \20\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small
entities.\21\ The Commission is not required to make such analyses if a
rule would not have such an effect.
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\20\ 5 U.S.C. 601-12 (2000).
\21\ The RFA definition of ``small entity'' refers to the
definition provided in the Small Business Act, which defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. 15
U.S.C. 632 (2000). The Small Business Size Standards component of
the North American Industry Classification System 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 years did not exceed 4 million MWh. 13 CFR 121.201
(2004) (Section 22, Utilities, North American Industry
Classification System, NAICS).
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25. The Commission does not believe that this proposed rule would
have such an impact on small entities. The proposed rule merely repeals
sections 284.288 and 284.403 of the Commission's regulations.
Therefore, the Commission certifies that this proposed rule, if
finalized, will not have a significant economic impact on a substantial
number of small entities.
Comment Procedures
26. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be adopted, including
any related matters or alternative proposals that commenters may wish
to discuss. Comments are due January 3, 2006. Reply comments are due
January 17, 2006. Comments must refer to Docket No. RM06-5-000, and
must include the commenter's name, the organization they represent, if
applicable, and their address in their comments. Comments may be filed
either in electronic or paper format. Comments may be filed
electronically via the eFiling link on the Commission's Web site at
https://www.ferc.gov. The Commission accepts most standard word
processing formats and commenters may attach additional files with
supporting information in certain other file formats. Commenters filing
electronically do not need to make a paper filing. Commenters that are
not able to file comments electronically must send an original and 14
copies of their comments to: Federal Energy Regulatory Commission,
Office of the Secretary, 888 First Street, NE., Washington, DC 20426.
27. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.
Document Availability
28. 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 (https://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.
29. From FERC's Home Page on the Internet, this information is
available in the eLibrary. The full text of this document is available
in the eLibrary both in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
User assistance is available for eLibrary and the FERC's Web site
during our normal business hours. For assistance contact FERC Online
Support at FERCOnlineSupport@ferc.gov or toll-free at (866) 208-3676,
or for TTY, contact (202) 502-8659.
List of Subjects in 18 CFR Part 284
Continental Shelf, Natural gas, Reporting and recordkeeping
requirements.
By direction of the Commission.
Magalie R. Salas,
Secretary.
In consideration of the foregoing, the Commission proposes to amend
part 284, chapter I, title 18, Code of Federal Regulations, as follows.
PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES
1. The authority citation for part 284 continues to read as
follows:
Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7532;
43 U.S.C. 1331-1356.
Sec. 284.288 [Removed]
2. Remove Sec. 284.288.
Sec. 284.403 [Removed]
3. Remove Sec. 284.403.
[FR Doc. 05-23405 Filed 11-30-05; 8:45 am]
BILLING CODE 6717-01-P
