Interlocking Officers and Directors; Requirements for Applicants and Holders, 37450-37455 [2018-16463]
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37450
Proposed Rules
Federal Register
Vol. 83, No. 148
Wednesday, August 1, 2018
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Parts 45 and 46
[Docket No. RM18–15–000]
Interlocking Officers and Directors;
Requirements for Applicants and
Holders
Federal Energy Regulatory
Commission, DOE.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Commission proposes to
revise its regulations related to
interlocking officers and directors to
clarify and update the requirements for
both applicants and holders. In
particular, the Commission proposes to
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. The Commission also proposes to
revise its regulations to clarify its
position on late-filed applications and
informational reports. The Commission
further proposes to 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. Additionally, the
Commission proposes to revise its
regulations to state that applicants do
not need to list in their applications
public utilities that do not have officers
or directors. Next, the Commission
proposes to revise its regulations with
regard to public utilities owned by a
natural person. Finally, the Commission
proposes to update its regulations to
remove a section containing definitions
and phrases now rendered obsolete.
DATES: Comments are due October 1,
2018.
ADDRESSES: Comments, identified by
docket number, may be filed in the
following ways:
• Electronic Filing through https://
www.ferc.gov. Documents created
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SUMMARY:
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electronically using word processing
software should be filed in native
applications or print-to-PDF format and
not in a scanned format.
• Mail/Hand Delivery: Those unable
to file electronically may mail or handdeliver comments to: Federal Energy
Regulatory Commission, Secretary of the
Commission, 888 First Street NE,
Washington, DC 20426.
Instructions: For detailed instructions
on submitting comments and additional
information on the rulemaking process,
see the Comment Procedures Section of
this document.
FOR FURTHER INFORMATION CONTACT:
´
Amery Pore (Technical Information),
Office of Energy Market Regulation,
Federal Energy Regulatory
Commission, 888 First Street NE,
Washington, DC 20426, (202) 502–
6312
Mary Ellen Stefanou (Legal
Information), Office of the General
Counsel, Federal Energy Regulatory
Commission, 888 First Street NE,
Washington, DC 20426, (202) 502–
8989
SUPPLEMENTARY INFORMATION:
1. Section 305(b) of the Federal Power
Act (FPA) 1 prohibits individuals from
concurrently holding positions as an
officer or director of more than one
public utility; or concurrently holding
the positions of officer or director of a
public utility and of an entity
authorized by law to underwrite or
participate in the marketing of public
utility securities; 2 or concurrently
holding the positions of officer or
director of a public utility and a
company supplying electrical
equipment to such public utility, unless
the holding of such positions has been
authorized by the Commission upon a
showing that neither public nor private
interests will be adversely affected.3
Congress enacted section 305(b) to
prevent certain perceived abuses with
holding companies, including (1)
excessive charges to subsidiary public
utility companies resulting from the
lack of arm’s length bargaining or the
restraint of free and independent
U.S.C. 825d(b) (2012).
section 305(b)(2) of the FPA, 16 U.S.C.
825d(b)(2), exempts from this prohibition certain
interlocks between public utilities and a financial
institution that is authorized to underwrite or
participate in the marketing of public utility
securities.
3 16 U.S.C. 825d(b).
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2 However,
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competition; (2) allocation of charges for
goods and services among subsidiary
companies in different States so as to
frustrate State regulation; (3) control of
subsidiary public utility companies
through disproportionately small
investment resulting in account
practices, and rate, dividend and other
policies that complicated and
obstructed State regulation; and (4) a
general lack of economy of management
and operation of public utilities, a lack
of efficiency and adequacy of services or
a lack of effective public regulation and
a lack of economies in raising capital.4
2. The Commission implemented
Congress’ mandate in part 45 of the
Commission’s regulations.5 Consistent
with the statute, part 45 provides that an
application or informational filing be
filed, and authorization granted, before
a person may hold otherwise proscribed
interlocking positions. Part 46 of the
Commission’s regulations, which
implements section 305(c) of the FPA,6
describes the annual filing requirements
for those holding interlocking positions,
including the relevant definitions.
3. As described below, we propose
revisions to parts 45 and 46 of our
regulations.7
I. Discussion
4. On October 27, 2016, Commission
staff issued its 2016 Biennial Staff
Memo Concerning Retrospective
Analysis of Existing Rules,8 in which it
identified certain Commission
regulations as ripe for evaluation,
including 18 CFR part 45. The Edison
Electric Institute (EEI) submitted
comments in support of the
Commission’s suggested revisions to 18
4 Title I, Sec. 1, of the Public Utility Act of 1935
(49 Stat. 803, 15 U.S.C. 79a). Title I was the Public
Utility Holding Company Act of 1935. Title II
became Parts II and III of the Federal Power Act,
which include section 305(b).
5 18 CFR part 45 (2017).
6 16 U.S.C. 825d(c).
7 18 CFR part 46. Section 305(c) of the FPA, as
relevant here, requires that any person holding
interlocking positions in both a public utility and
any of the entities listed in section 305(c)(2) of the
FPA file an annual report listing such interlocking
positions. 16 U.S.C. 825d(c). The Commission
implements section 305(c) in part 46 of its
regulations and through its FERC Form No. 561.
8 2016 Biennial Staff Memo Concerning
Retrospective Analysis of Existing Rules, Docket
No. AD12–6–002 (published Oct. 27, 2016) (81 FR
76542, Nov. 3, 2016).
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Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Proposed Rules
CFR part 45 and proposed additional
revisions.9
5. Based on our review of our
regulations, as well as our review of the
comments submitted by EEI, we propose
the following changes to the regulations
in part 45, as well as certain revisions
to part 46.
6. 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.10 However, in 1999,
Congress amended section 305(b)(2) of
the FPA to provide that an applicant for
certain interlocking positions is no
longer required to obtain Commission
authorization to hold such positions.11
As a result, the Commission proposes to
revise § 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,’’ 12
does not need Commission
authorization when:
(1) He/she 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 he/she 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 he/she 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 he/she holds the
position of officer or director;
(3) the public utility for which he/she
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 he/she 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.13
7. Sections 45.3 and 45.9 of the
Commission’s regulations require
applications and informational filings
9 See
Edison Electric Institute Comments, Docket
No. AD12–6–002 (Nov. 28, 2016).
10 18 CFR 45.2(b)(2).
11 See Public Law 106–102, sec. 737, 113 Stat.
1338, 1479 (1999).
12 18 CFR 45.2(b)(2).
13 See also 16 U.S.C. 825d(b)(2).
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be filed with the Commission before an
applicant holds any interlocking
positions within the purview of section
305. The Commission’s regulations
currently provide in § 45.3(a) that ‘‘latefiled applications will be denied’’ and
in § 45.9(b) that ‘‘[f]ailure to timely file
the informational report will constitute
a failure to satisfy this condition and
will constitute automatic denial.’’
8. The Commission expects its
regulations to be followed. However, the
Commission recognizes that good faith
errors and oversights may occasionally
result in the inadvertent violation of the
timing of section 305(b)’s filing
requirements. The Commission believes
that it is not 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 such
good faith errors and oversights alone.
Late-filed applications do not impede
the Commission’s ability to decide the
case. The statutory standard for
authorization to hold otherwiseproscribed interlocks requires the
Commission to determine whether the
holding of otherwise-proscribed
interlocks adversely affects neither
public nor private interests, and that
determination typically would not
depend solely on the date an applicant
happens to file.14 Nor would
applications that are filed late solely
due to good faith errors and oversights
implicate the abuses that Congress
attempted to prevent in promulgating
section 305. Further, denying late-filed
applications could cause unnecessary
inefficiencies for companies. Therefore,
the Commission proposes to delete the
above-quoted language, and to replace it
with language providing for
consideration of late-filed applications
for interlocking positions on a case-bycase basis.15
9. The Commission expects that
applicants will 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 section 305(b). In
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
U.S.C. 825d(b)(1).
public utilities whose officers and
directors are subject to the statutory directive in
section 305(b) to file, as regulated entities
themselves subject to and thus sensitive to the
requirements of the FPA, would be well-advised to
and should make every effort to ensure that their
officers and directors, in turn, act in accordance
with the statutory directives in section 305(b).
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15 The
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filed. The Commission would look
unfavorably on section 305(b)
applications where an applicant has not
been attentive to his/her obligation to
file for the required authorization.
10. The Commission proposes to
revise §§ 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 § 45.9(a) who may assume new or
different positions that are still among
those identified by § 45.9(a).16 For
example, a promotion within a holding
company system would not require an
interlock holder to file a notice of
change. Such changes in positions
among related public utilities are
already reported in the annual Form No.
561s, and separate filings under § 45.4
or § 45.5 are unnecessary. However, the
Commission clarifies that, for such
interlocking positions, a holder would
still be required to file a notice of
change when he/she no longer holds
any interlocking positions within the
scope of the statute and regulations. No
longer holding any interlocking
positions would constitute a ‘‘material
or substantial change.’’
11. The Commission proposes to
revise § 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. The Commission
recognizes the growing complexity of
corporate structures. Thus, in the
interest of reducing regulatory burdens,
the Commission proposes to eliminate
the requirement that applications under
part 45 list those public utilities that do
not have officers or directors.
12. The Commission proposes to
revise § 45.9 of its regulations to add the
word ‘‘person’’ when defining the
corporate relationships within the scope
of the automatic authorizations
addressed in § 45.9. The Commission
would thus recognize that public
utilities can be owned not just by a
corporate entity but by a natural person,
and the regulations should reflect this
possibility.
13. Finally, the Commission proposes
to update its regulations in part 46 to
remove § 46.2(b), because the
definitions were rendered obsolete as a
result of the enactment of the Energy
16 If an applicant has a pending application,
however, we would expect that the applicant would
supplement his/her application should a change
occur while the application is pending. In contrast,
as noted above, an applicant who has been granted
authorization and no longer has a pending
application is differently situated, and any change
in the positions held can be addressed in the next
Form No. 561.
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Policy Act of 2005 and the concurrent
repeal of the Public Utility Holding
Company Act of 1935.17 The
Commission notes that § 46.2(b)
currently references the definition of
‘‘holding company system’’ and
‘‘registered holding company system’’ in
the Public Utility Holding Company Act
(PUHCA) of 1935.18 However, the
Commission recognizes that the Energy
Policy Act of 2005 repealed the PUHCA
of 1935.19 Thus, the Commission
proposes to remove § 46.2(b). The
Commission also proposes to update
part 46 to change ‘‘Rural Electrification
Administration’’ to ‘‘Rural Utilities
Service’’ to reflect the name change of
that organization.
II. Information Collection Statement
14. The Paperwork Reduction Act
(PRA) 20 requires each federal agency to
seek and obtain Office of Management
and Budget (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 21
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 these collections of
information unless the collections of
information display a valid OMB
control number.
15. The revisions proposed in this
NOPR would clarify and update the
requirements 22 for those seeking and
holding interlocking positions. The
Commission anticipates that the
revisions, once effective, would reduce
regulatory burdens. The Commission
will submit the proposed reporting
requirements to OMB for its review and
approval under section 3507(d) of the
Paperwork Reduction Act.23
16. While the Commission expects
that the regulatory revisions proposed
herein will reduce the burdens on
affected entities, the Commission
nonetheless solicits public comments
regarding the accuracy of the burden
and cost estimates below.
17. Burden Estimate: 24 The estimated
burden and cost for the requirements
contained in this NOPR follow.
FERC FORM NO. 520
[Application for authority to hold interlocking directorate positions]
Number of
respondents
Annual
number of
responses
per
respondent
Total
number of
responses
Average burden
& cost per
response 25
Total annual
burden hours
(total annual
cost)
Cost per
respondent
($)
(1)
(2)
(1) * (2) = (3)
(4)
(3) * (4) = (5)
(5) ÷ (1)
16
500
100
1
1
1
16
500
100
50 hrs.; $3,950 ..........
8 hrs.; $632 ...............
0.25 hrs.; $19.75 .......
800 hrs.; $63,200 ......
4,000 hrs.; $316,000
25 hrs.; $1,975 ..........
Total ..........................
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Full ...................................
Informational ....................
Notice of Change .............
........................
........................
........................
....................................
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.
17 See Energy Policy Act of 2005, Public Law 109–
58, 1261–77, 119 Stat. 594, 972–78 (2005).
18 16 U.S.C. 79a et seq.
19 EPAct 2005, Public Law 109–58, 1263.
20 44 U.S.C. 3507(d).
21 5 CFR part 1320.
22 18 CFR parts 45 and 46.
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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
U.S.C. 3507(d).
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
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23 44
24 ‘‘Burden’’
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$3,950
632
19.75
........................
interlocking position for which the
applicant seeks authorization including,
but not limited to, a description of
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
25 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.
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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
proposing to revise its requirements and
no longer require a notice of change
when a person is merely changing
positions within a holding company
system. This proposal 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.
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III. Environmental Analysis
18. 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.26 We conclude that
neither an Environmental Assessment
nor an Environmental Impact Statement
is required for this NOPR under 380.4(a)
of the Commission’s regulations, which
provides a categorical exemption for
approval of ‘‘action under section [ ]
. . . 305 of the FPA relating to . . .
interlocking directorates, . . . .’’ 27
IV. Regulatory Flexibility Act
19. The Regulatory Flexibility Act of
1980 (RFA) 28 generally requires a
description and analysis of proposed
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.29
These standards are provided in the
SBA regulations at 13 CFR 121.201.30
20. This proposed rule, if adopted,
would 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.
21. 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.
26 Regulations Implementing the National
Environmental Policy Act, Order No. 486, FERC
Stats. & Regs. ¶ 30,783 (1987).
27 18 CFR 380.4(a)(16).
28 5 U.S.C. 601–12.
29 13 CFR 121.101.
30 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.
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Therefore the average annual cost for
each of the 616 respondents is $618.79.
That cost is not significant. More
importantly, this proposed rule reduces
industry cost by eliminating the need
for the filing of some notices of change.
22. The Commission certifies that this
proposed rule, if adopted, will not have
a significant economic impact on a
substantial number of small entities.
V. Comment Procedures
23. The Commission invites interested
persons to submit comments on the
matters and issues proposed in this
notice of proposed rulemaking to be
adopted, including any related matters
or alternative proposals that
commenters may wish to discuss.
Comments are due October 1, 2018.
Comments must refer to Docket No.
RM18–15–000, and must include the
commenter’s name, the organization
they represent, if applicable, and their
address in their comments.
24. The Commission encourages
comments to be filed electronically via
the eFiling link on the Commission’s
website at https://www.ferc.gov. The
Commission accepts most standard
word processing formats. Documents
created electronically using word
processing software should be filed in
native applications or print-to-PDF
format and not in a scanned format.
Commenters filing electronically do not
need to make a paper filing.
25. Commenters that are not able to
file comments electronically must send
an original of their comments to:
Federal Energy Regulatory Commission,
Secretary of the Commission, 888 First
Street NE, Washington, DC 20426.
26. 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.
VI. Document Availability
27. 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 (https://
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.
28. 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
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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.
29. User assistance is available for
eLibrary and the Commission’s website
during normal business hours from the
Commission’s 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.
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.
■ 3. Revise § 45.3(a) to read as follows:
List of Subjects
§ 45.3
18 CFR Part 45
Electric utilities, Reporting and
recordkeeping requirements.
(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.
*
*
*
*
*
■ 4. Add § 45.4(c) to read as follows:
18 CFR Part 46
Antitrust, Electric utilities, Holding
companies, Reporting and
recordkeeping requirements.
By direction of the Commission.
Issued: July 19, 2018.
Kimberly D. Bose,
Secretary.
In consideration of the foregoing, the
Commission proposes to amend parts 45
and 46, chapter I, title 18, Code of
Federal Regulations, as follows.
PART 45—APPLICATION FOR
AUTHORITY TO HOLD INTERLOCKING
POSITIONS
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.
■
2. Add § 45.2(d) to read as follows:
§ 45.2
Positions requiring authorization.
sradovich on DSK3GMQ082PROD with PROPOSALS
*
*
*
*
*
(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
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16:34 Jul 31, 2018
Jkt 244001
§ 45.4
Timing of filing application.
Supplemental applications.
*
*
*
*
*
(c) Changes in interlocking positions
within the scope of § 45.9.
Notwithstanding paragraphs (a) and (b)
of this section, in the case of
interlocking positions that are identified
in § 45.9(a), a filing under this section
will not be required if the only change
to be reported is holding a different or
additional interlocking position which
is identified in § 45.9(a).
■ 5. Revise § 45.5(b) to read as follows:
§ 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 interlocking
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 30 days after any such
change occurs, give notice thereof to the
Commission setting forth the position,
PO 00000
Frm 00005
Fmt 4702
Sfmt 4702
corporation, and date of termination
therewith, or other material or
substantial change. In the case of
interlocking positions that are identified
in § 45.9(a), a notice of change under
this section will not be required if the
only change to be reported is holding a
different or additional interlocking
position which is identified in § 45.9(a).
*
*
*
*
*
■ 6. Revise § 45.8(c)(1) to read as
follows:
§ 45.8
Contents of application.
*
*
*
*
*
(c) * * *
(1) Name of utility, unless said utility
does not have officers or directors.
*
*
*
*
*
■ 7. Revise § 45.9(a)(1) and (b) to read as
follows:
§ 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;
*
*
*
*
*
(b) Conditions of authorization. As a
condition of authorization, any person
authorized to hold interlocking
positions under this section must
submit, prior to performing or assuming
the duties and responsibilities of the
position, an informational report in
accordance with paragraph (c) of this
section, unless that person is already
authorized to hold interlocking
positions of the type governed by this
section. 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
8. 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.
9. In § 46.2, revise paragraph (a),
remove and reserve paragraph (b), and
revise paragraphs (c) and (e) to read as
follows:
■
§ 46.2
Definitions.
*
*
*
*
*
(a) Public utility has the same
meaning as in section 201(e) of the
Federal Power Act. Such term does not
E:\FR\FM\01AUP1.SGM
01AUP1
Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Proposed Rules
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. 2018–16463 Filed 7–31–18; 8:45 am]
BILLING CODE 6717–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 721
[EPA–HQ–OPPT–2017–0366; FRL–9981–16]
RIN 2070–AB27
Significant New Use Rules on Certain
Chemical Substances
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
EPA is proposing significant
new use rules (SNURs) under the Toxic
Substances Control Act (TSCA) for 145
chemical substances which were the
subject of premanufacture notices
(PMNs). The chemical substances are
subject to Orders issued by EPA
pursuant to section 5(e) of TSCA. This
action would require persons who
intend to manufacture (defined by
statute to include import) or process any
of these 145 chemical substances for an
activity that is designated as a
significant new use by this rule to notify
EPA at least 90 days before commencing
that activity. The required notification
initiates EPA’s evaluation of the
sradovich on DSK3GMQ082PROD with PROPOSALS
SUMMARY:
VerDate Sep<11>2014
16:34 Jul 31, 2018
Jkt 244001
intended use within the applicable
review period. Persons may not
commence manufacture or processing
for the significant new use until EPA
has conducted a review of the
premanufacture notice, made an
appropriate determination on the
notification, and has taken such actions
as are required with that determination.
In addition to this notice of proposed
rulemaking, EPA is issuing the action as
a direct final rule elsewhere in this issue
of the Federal Register.
DATES: Comments must be received on
or before August 31, 2018.
ADDRESSES: Submit your comments,
identified by docket identification (ID)
number EPA–HQ–OPPT–2017–0366, by
one of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Do not submit electronically any
information you consider to be
Confidential Business Information (CBI)
or other information whose disclosure is
restricted by statute.
• Mail: Document Control Office
(7407M), Office of Pollution Prevention
and Toxics (OPPT), Environmental
Protection Agency, 1200 Pennsylvania
Ave. NW, Washington, DC 20460–0001.
• Hand Delivery: To make special
arrangements for hand delivery or
delivery of boxed information, please
follow the instructions at https://
www.epa.gov/dockets/contacts.html.
Additional instructions on
commenting or visiting the docket,
along with more information about
dockets generally, is available at https://
www.epa.gov/dockets.
FOR FURTHER INFORMATION CONTACT:
For technical information contact:
Kenneth Moss, Chemical Control
Division (7405M), Office of Pollution
Prevention and Toxics, Environmental
Protection Agency, 1200 Pennsylvania
Ave. NW, Washington, DC 20460–0001;
telephone number: (202) 564–9232;
email address: moss.kenneth@epa.gov.
For general information contact: The
TSCA-Hotline, ABVI-Goodwill, 422
South Clinton Ave., Rochester, NY
14620; telephone number: (202) 554–
1404; email address: TSCA-Hotline@
epa.gov.
In
addition to this Notice of Proposed
Rulemaking, EPA is issuing the action
as a direct final rule elsewhere in this
issue of the Federal Register. For further
information about the proposed
significant new use rules, please see the
information provided in the direct final
action, with the same title, that is
located in the ‘‘Rules and Regulations’’
SUPPLEMENTARY INFORMATION:
PO 00000
Frm 00006
Fmt 4702
Sfmt 4702
37455
section of this issue of the Federal
Register.
List of Subjects in 40 CFR Part 721
Environmental protection, Chemicals,
Hazardous substances, Reporting and
recordkeeping requirements.
Dated: July 19, 2018.
Jeffery T. Morris,
Director, Office of Pollution Prevention and
Toxics.
[FR Doc. 2018–15996 Filed 7–31–18; 8:45 am]
BILLING CODE 6560–50–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 622
[Docket No. 171128999–8625–01]
RIN 0648–BH43
Fisheries of the Caribbean, Gulf of
Mexico, and South Atlantic; Permit
Renewal Applications
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Proposed rule; request for
comments.
AGENCY:
NMFS proposes to make
administrative revisions to the renewal
process for Federal vessel permits,
licenses, and endorsements, and dealer
permits (hereafter referred to
collectively as permits) in the NMFS
Southeast Region. This proposed rule
would remove the regulatory
requirement that NMFS must mail a
renewal application to a permit holder
(vessel or dealer) whose Federal permit
is expiring. NMFS will continue to
provide notice of the upcoming
expiration date to the permit holder.
This proposed rule would also remove
the regulatory requirement that NMFS
must notify an applicant of any
deficiency in a renewal application only
through sending a letter via traditional
mail, such as through the U.S. Postal
Service, which would allow NMFS
expanded options for notifying permit
holders. The purpose of this proposed
rule is to reduce the administrative costs
and burden to NMFS of renewing
Federal permits, while still maintaining
the needed information and services to
the public.
DATES: Written comments must be
received by August 31, 2018.
ADDRESSES: You may submit comments
on the proposed rule identified by
SUMMARY:
E:\FR\FM\01AUP1.SGM
01AUP1
]]>Agencies
[Federal Register Volume 83, Number 148 (Wednesday, August 1, 2018)]
[Proposed Rules]
[Pages 37450-37455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16463]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 /
Proposed Rules
[[Page 37450]]
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Parts 45 and 46
[Docket No. RM18-15-000]
Interlocking Officers and Directors; Requirements for Applicants
and Holders
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Commission proposes to revise its regulations related to
interlocking officers and directors to clarify and update the
requirements for both applicants and holders. In particular, the
Commission proposes to 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. The Commission also proposes to revise its regulations to
clarify its position on late-filed applications and informational
reports. The Commission further proposes to 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.
Additionally, the Commission proposes to revise its regulations to
state that applicants do not need to list in their applications public
utilities that do not have officers or directors. Next, the Commission
proposes to revise its regulations with regard to public utilities
owned by a natural person. Finally, the Commission proposes to update
its regulations to remove a section containing definitions and phrases
now rendered obsolete.
DATES: Comments are due October 1, 2018.
ADDRESSES: Comments, identified by docket number, may be filed in the
following ways:
Electronic Filing through https://www.ferc.gov. Documents
created electronically using word processing software should be filed
in native applications or print-to-PDF format and not in a scanned
format.
Mail/Hand Delivery: Those unable to file electronically
may mail or hand-deliver comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE,
Washington, DC 20426.
Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Comment
Procedures Section of this document.
FOR FURTHER INFORMATION CONTACT:
Amery Por[eacute] (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, (202) 502-6312
Mary Ellen Stefanou (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, (202) 502-8989
SUPPLEMENTARY INFORMATION:
1. Section 305(b) of the Federal Power Act (FPA) \1\ prohibits
individuals from concurrently holding positions as an officer or
director of more than one public utility; or concurrently holding the
positions of officer or director of a public utility and of an entity
authorized by law to underwrite or participate in the marketing of
public utility securities; \2\ or concurrently holding the positions of
officer or director of a public utility and a company supplying
electrical equipment to such public utility, unless the holding of such
positions has been authorized by the Commission upon a showing that
neither public nor private interests will be adversely affected.\3\
Congress enacted section 305(b) to prevent certain perceived abuses
with holding companies, including (1) excessive charges to subsidiary
public utility companies resulting from the lack of arm's length
bargaining or the restraint of free and independent competition; (2)
allocation of charges for goods and services among subsidiary companies
in different States so as to frustrate State regulation; (3) control of
subsidiary public utility companies through disproportionately small
investment resulting in account practices, and rate, dividend and other
policies that complicated and obstructed State regulation; and (4) a
general lack of economy of management and operation of public
utilities, a lack of efficiency and adequacy of services or a lack of
effective public regulation and a lack of economies in raising
capital.\4\
---------------------------------------------------------------------------
\1\ 16 U.S.C. 825d(b) (2012).
\2\ However, section 305(b)(2) of the FPA, 16 U.S.C. 825d(b)(2),
exempts from this prohibition certain interlocks between public
utilities and a financial institution that is authorized to
underwrite or participate in the marketing of public utility
securities.
\3\ 16 U.S.C. 825d(b).
\4\ Title I, Sec. 1, of the Public Utility Act of 1935 (49 Stat.
803, 15 U.S.C. 79a). Title I was the Public Utility Holding Company
Act of 1935. Title II became Parts II and III of the Federal Power
Act, which include section 305(b).
---------------------------------------------------------------------------
2. The Commission implemented Congress' mandate in part 45 of the
Commission's regulations.\5\ Consistent with the statute, part 45
provides that an application or informational filing be filed, and
authorization granted, before a person may hold otherwise proscribed
interlocking positions. Part 46 of the Commission's regulations, which
implements section 305(c) of the FPA,\6\ describes the annual filing
requirements for those holding interlocking positions, including the
relevant definitions.
---------------------------------------------------------------------------
\5\ 18 CFR part 45 (2017).
\6\ 16 U.S.C. 825d(c).
---------------------------------------------------------------------------
3. As described below, we propose revisions to parts 45 and 46 of
our regulations.\7\
---------------------------------------------------------------------------
\7\ 18 CFR part 46. Section 305(c) of the FPA, as relevant here,
requires that any person holding interlocking positions in both a
public utility and any of the entities listed in section 305(c)(2)
of the FPA file an annual report listing such interlocking
positions. 16 U.S.C. 825d(c). The Commission implements section
305(c) in part 46 of its regulations and through its FERC Form No.
561.
---------------------------------------------------------------------------
I. Discussion
4. On October 27, 2016, Commission staff issued its 2016 Biennial
Staff Memo Concerning Retrospective Analysis of Existing Rules,\8\ in
which it identified certain Commission regulations as ripe for
evaluation, including 18 CFR part 45. The Edison Electric Institute
(EEI) submitted comments in support of the Commission's suggested
revisions to 18
[[Page 37451]]
CFR part 45 and proposed additional revisions.\9\
---------------------------------------------------------------------------
\8\ 2016 Biennial Staff Memo Concerning Retrospective Analysis
of Existing Rules, Docket No. AD12-6-002 (published Oct. 27, 2016)
(81 FR 76542, Nov. 3, 2016).
\9\ See Edison Electric Institute Comments, Docket No. AD12-6-
002 (Nov. 28, 2016).
---------------------------------------------------------------------------
5. Based on our review of our regulations, as well as our review of
the comments submitted by EEI, we propose the following changes to the
regulations in part 45, as well as certain revisions to part 46.
6. 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.\10\ However, in 1999, Congress amended section 305(b)(2) of
the FPA to provide that an applicant for certain interlocking positions
is no longer required to obtain Commission authorization to hold such
positions.\11\ As a result, the Commission proposes 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,'' \12\ does
not need Commission authorization when:
---------------------------------------------------------------------------
\10\ 18 CFR 45.2(b)(2).
\11\ See Public Law 106-102, sec. 737, 113 Stat. 1338, 1479
(1999).
\12\ 18 CFR 45.2(b)(2).
---------------------------------------------------------------------------
(1) He/she 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 he/she 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
he/she 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 he/she holds the position of officer or director;
(3) the public utility for which he/she 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 he/
she 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.\13\
---------------------------------------------------------------------------
\13\ See also 16 U.S.C. 825d(b)(2).
---------------------------------------------------------------------------
7. Sections 45.3 and 45.9 of the Commission's regulations require
applications and informational filings be filed with the Commission
before an applicant holds any interlocking positions within the purview
of section 305. The Commission's regulations currently provide in Sec.
45.3(a) that ``late-filed applications will be denied'' and in Sec.
45.9(b) that ``[f]ailure to timely file the informational report will
constitute a failure to satisfy this condition and will constitute
automatic denial.''
8. The Commission expects its regulations to be followed. However,
the Commission recognizes that good faith errors and oversights may
occasionally result in the inadvertent violation of the timing of
section 305(b)'s filing requirements. The Commission believes that it
is not 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 such good faith
errors and oversights alone. Late-filed applications do not impede the
Commission's ability to decide the case. The statutory standard for
authorization to hold otherwise-proscribed interlocks requires the
Commission to determine whether the holding of otherwise-proscribed
interlocks adversely affects neither public nor private interests, and
that determination typically would not depend solely on the date an
applicant happens to file.\14\ Nor would applications that are filed
late solely due to good faith errors and oversights implicate the
abuses that Congress attempted to prevent in promulgating section 305.
Further, denying late-filed applications could cause unnecessary
inefficiencies for companies. Therefore, the Commission proposes to
delete the above-quoted language, and to replace it with language
providing for consideration of late-filed applications for interlocking
positions on a case-by-case basis.\15\
---------------------------------------------------------------------------
\14\ 16 U.S.C. 825d(b)(1).
\15\ 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 and thus sensitive to the
requirements of the FPA, would be well-advised to and should make
every effort to ensure that their officers and directors, in turn,
act in accordance with the statutory directives in section 305(b).
---------------------------------------------------------------------------
9. The Commission expects that applicants will 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 section 305(b). In 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.
The Commission would look unfavorably on section 305(b) applications
where an applicant has not been attentive to his/her obligation to file
for the required authorization.
10. The Commission proposes 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).\16\ For example, a promotion within a holding company system
would not require an interlock holder to file a notice of change. 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. However, the Commission clarifies
that, for such interlocking positions, a holder would still be required
to file a notice of change when he/she no longer holds any interlocking
positions within the scope of the statute and regulations. No longer
holding any interlocking positions would constitute a ``material or
substantial change.''
---------------------------------------------------------------------------
\16\ If an applicant has a pending application, however, we
would expect that the applicant would supplement his/her application
should a change occur while the application is pending. In contrast,
as noted above, an applicant who has been granted authorization and
no longer has a pending application is differently situated, and any
change in the positions held can be addressed in the next Form No.
561.
---------------------------------------------------------------------------
11. The Commission proposes 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. The Commission recognizes the growing complexity of
corporate structures. Thus, in the interest of reducing regulatory
burdens, the Commission proposes to eliminate the requirement that
applications under part 45 list those public utilities that do not have
officers or directors.
12. The Commission proposes 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 would thus recognize that public utilities can be
owned not just by a corporate entity but by a natural person, and the
regulations should reflect this possibility.
13. Finally, the Commission proposes 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
[[Page 37452]]
Policy Act of 2005 and the concurrent repeal of the Public Utility
Holding Company Act of 1935.\17\ The Commission notes that Sec.
46.2(b) currently references the definition of ``holding company
system'' and ``registered holding company system'' in the Public
Utility Holding Company Act (PUHCA) of 1935.\18\ However, the
Commission recognizes that the Energy Policy Act of 2005 repealed the
PUHCA of 1935.\19\ Thus, the Commission proposes to remove Sec.
46.2(b). The Commission also proposes to update part 46 to change
``Rural Electrification Administration'' to ``Rural Utilities Service''
to reflect the name change of that organization.
---------------------------------------------------------------------------
\17\ See Energy Policy Act of 2005, Public Law 109-58, 1261-77,
119 Stat. 594, 972-78 (2005).
\18\ 16 U.S.C. 79a et seq.
\19\ EPAct 2005, Public Law 109-58, 1263.
---------------------------------------------------------------------------
II. Information Collection Statement
14. The Paperwork Reduction Act (PRA) \20\ requires each federal
agency to seek and obtain Office of Management and Budget (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 \21\ 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 these collections of
information unless the collections of information display a valid OMB
control number.
---------------------------------------------------------------------------
\20\ 44 U.S.C. 3507(d).
\21\ 5 CFR part 1320.
---------------------------------------------------------------------------
15. The revisions proposed in this NOPR would clarify and update
the requirements \22\ for those seeking and holding interlocking
positions. The Commission anticipates that the revisions, once
effective, would reduce regulatory burdens. The Commission will submit
the proposed reporting requirements to OMB for its review and approval
under section 3507(d) of the Paperwork Reduction Act.\23\
---------------------------------------------------------------------------
\22\ 18 CFR parts 45 and 46.
\23\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------
16. While the Commission expects that the regulatory revisions
proposed herein will reduce the burdens on affected entities, the
Commission nonetheless solicits public comments regarding the accuracy
of the burden and cost estimates below.
17. Burden Estimate: \24\ The estimated burden and cost for the
requirements contained in this NOPR follow.
---------------------------------------------------------------------------
\24\ ``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
FERC Form No. 520
[Application for authority to hold interlocking directorate positions]
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Annual number
Number of of responses Total number Average burden & cost per Total annual burden hours Cost per
respondents per respondent of responses response \25\ (total annual cost) respondent ($)
(1) (2) (1) * (2) = (4)........................ (3) * (4) = (5)............ (5) / (1)
(3)
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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
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Total..................... .............. .............. .............. ........................... 4,825 hrs.; $381,175....... ..............
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Title: FERC-520 (Application for Authority to Hold Interlocking
Directorate Positions).
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\25\ 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.
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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 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
[[Page 37453]]
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 proposing to revise its requirements and no longer
require a notice of change when a person is merely changing positions
within a holding company system. This proposal 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: [email protected], 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: [email protected]. Please refer to FERC-520, OMB
Control No. 1902-0083 in your submission.
III. Environmental Analysis
18. 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.\26\ We
conclude that neither an Environmental Assessment nor an Environmental
Impact Statement is required for this NOPR under 380.4(a) of the
Commission's regulations, which provides a categorical exemption for
approval of ``action under section [ ] . . . 305 of the FPA relating to
. . . interlocking directorates, . . . .'' \27\
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\26\ Regulations Implementing the National Environmental Policy
Act, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
\27\ 18 CFR 380.4(a)(16).
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IV. Regulatory Flexibility Act
19. The Regulatory Flexibility Act of 1980 (RFA) \28\ generally
requires a description and analysis of proposed 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.\29\ These
standards are provided in the SBA regulations at 13 CFR 121.201.\30\
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\28\ 5 U.S.C. 601-12.
\29\ 13 CFR 121.101.
\30\ 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.
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20. This proposed rule, if adopted, would 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.
21. 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 proposed rule reduces industry cost by eliminating
the need for the filing of some notices of change.
22. The Commission certifies that this proposed rule, if adopted,
will not have a significant economic impact on a substantial number of
small entities.
V. Comment Procedures
23. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice of proposed rulemaking
to be adopted, including any related matters or alternative proposals
that commenters may wish to discuss. Comments are due October 1, 2018.
Comments must refer to Docket No. RM18-15-000, and must include the
commenter's name, the organization they represent, if applicable, and
their address in their comments.
24. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's website at https://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
25. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE,
Washington, DC 20426.
26. 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.
VI. Document Availability
27. 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 (https://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.
28. 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
[[Page 37454]]
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.
29. User assistance is available for eLibrary and the Commission's
website during normal business hours from the Commission's Online
Support at 202-502-6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202)502-8659. Email the Public Reference Room at
[email protected].
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 direction of the Commission.
Issued: July 19, 2018.
Kimberly D. Bose,
Secretary.
In consideration of the foregoing, the Commission proposes to amend
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. Add Sec. 45.2(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
3. 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
4. Add Sec. 45.4(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 are identified in Sec. 45.9(a), a
filing under this section will not be required if the only change to be
reported is holding a different or additional interlocking position
which is identified in Sec. 45.9(a).
0
5. 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 interlocking 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 30 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 are identified in Sec. 45.9(a), a notice of change under this
section will not be required if the only change to be reported is
holding a different or additional interlocking position which is
identified in Sec. 45.9(a).
* * * * *
0
6. 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
7. Revise Sec. 45.9(a)(1) 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;
* * * * *
(b) Conditions of authorization. As a condition of authorization,
any person authorized to hold interlocking positions under this section
must submit, prior to performing or assuming the duties and
responsibilities of the position, an informational report in accordance
with paragraph (c) of this section, unless that person is already
authorized to hold interlocking positions of the type governed by this
section. 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
8. 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
9. In Sec. 46.2, revise paragraph (a), remove and reserve paragraph
(b), and revise 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
[[Page 37455]]
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. 2018-16463 Filed 7-31-18; 8:45 am]
BILLING CODE 6717-01-P
