Federal Energy Regulatory Commission, Energy.
Notice of proposed rulemaking.
The Federal Energy Regulatory Commission is proposing to amend its regulations to clarify the time frame within which individuals must file applications for authorization to hold interlocking positions, and the information provided in certain informational reports required for automatic authorization of certain interlocking positions.
Comments are due June 6, 2005.
Comments may be filed electronically via the eFiling link on the Commission's Web site at
1. Section 305(b) of the Federal Power Act (FPA)
2. The Commission implemented Congress' mandate in part 45 of the Commission's regulations.
3. In this Notice of Proposed Rulemaking (NOPR), the Commission is proposing to clarify the time at which a person must apply for authorization to hold interlocking positions under section 305(b) of the FPA and part 45 of the Commission's regulations. Specifically, and as described more fully below, we propose to clarify in revised section 45.3 that persons are prohibited from holding interlocking positions prior to receiving authorization from the Commission, and that “holding” shall mean acting as, serving as, voting as, or otherwise performing or assuming the duties and responsibilities of the interlocking positions for which the authorization is requested. Similarly, we propose to clarify in revised section 45.9 when filings need to be made. Finally, we solicit comments on the continued waiver of the full requirements of part 45 for officers and directors of certain public utilities with market-based rate authority.
4. Section 305(b) of the FPA prohibits persons from concurrently holding positions as an officer or director of more than one public utility; or to hold 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;
5. In examining Congress' intent in enacting section 305(b) of the FPA, the Commission has explained that “among the evils sought to be eliminated by the enactment of section 305(b)” was “the lack of arm's length dealings between public utilities and organizations furnishing financial services or electrical equipment.”
6. While the statute requires prior authorization to hold otherwise proscribed interlocking positions, the regulations allow for applications to be filed up to 30 days after the fact and also do not expressly address how applications filed more than 30 days late should be treated.
7. Consistent with the statute's express direction as well as its underlying intent, the Commission proposes to clarify § 45.3 to provide that an application must be filed, and authorization granted, before a person may hold otherwise proscribed interlocking positions, and that late-filed applications will be denied.
8. In addition to clarifying § 45.3, the Commission also proposes to clarify § 45.9, which governs automatic authorization for certain interlocking positions. Section 45.9 of the Commission's regulations provides that a person seeking to hold the positions of (1) an officer or director of a public utility and officer or director of another public utility (or utilities), where the same holding company owns, directly or indirectly, wholly or in part, the other public utility, (2) an officer or director of two public utilities, if one utility is owned, wholly or in part, by the other and (3) an officer or director of more than one public utility, if such person is already authorized under part 45 to hold different positions where the interlock involves affiliated public utilities, may apply for “automatic authorization” to hold the interlocking positions.
9. The Commission proposes to address the issue of the timeliness of the informational filings for automatic authorization. Increasingly, the Commission is receiving informational reports under § 45.9 that are filed after the 30-day deadline specified for submitting the informational reports. While the Commission believes that the current regulation regarding automatic authorization is clear with regard to
10. The Commission provides certain persons with a waiver of the full requirements of part 45. An “abbreviated” filing requirement, with essentially “automatic authorization”, has developed in Commission orders granting market-based rates for certain public utilities. While the Commission has explained that it cannot waive the statutory requirements regarding authorization of interlocking positions, the Commission did lessen the filing requirements and permit the filing of an “abbreviated statement identifying any jurisdictional interlock.”
(a) Full name and business address; and
(b) All jurisdictional interlocks, identifying the affected companies and the positions held by that person.
11. Since the abbreviated filings only require the identification of affected companies and positions held by the applicant, there is no description in the abbreviated filing of what business the affected company is engaged in. This lack of information makes it difficult for the Commission to determine the nature of the interlock and how, if at all, it might adversely affect public or private interests. In addition, this abbreviated filing is not required before the person begins holding the interlocking position. Since the provisions of section 305(b) of the FPA are intended to be prophylactic in nature and prevent any harm from a person holding otherwise prohibited interlocking positions, the lack of timely information from these abbreviated filings can make it very difficult to determine if the interlock might adversely affect public or private interests.
12. Therefore, the Commission is examining the possibility of no longer granting a waiver of the full requirements of part 45 in its orders granting market-based rate authority. Rather, the Commission would require that for public utilities that receive authority to charge market-based rates, their officers and directors would still need to comply with the full requirements of part 45 and timely file any applications for Commission authorization to hold any interlocking positions that meet the requirements set forth in § 305(b) of the FPA. The Commission seeks comments.
13. It is important to note, however, that this proposal essentially to cease granting waivers of part 45 in orders granting market-based rate authority would not apply to those persons who may qualify for automatic authorization of their interlocking positions under § 45.9 of the Commission's regulations. Automatic authorization would remain unchanged should we cease to grant waivers of the full requirements of part 45 in orders granting market-based rate authority.
14. The following collection of information contained in this proposed rule has been submitted to the Office of Management and Budget (OMB) for review under § 3507(d) of the Paperwork Reduction Act of 1995.
Comments are solicited on the need for this information, whether the information will have practical utility, the accuracy of the provided burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods for minimizing respondent's burden, including the use of automated information techniques. The additional information the Commission proposes to require should have a minimal impact on the current reporting burden which is as follows:
Total Annual Hours for Collection (reporting + recordkeeping, if appropriate) = 1,450.
The applicant will not be penalized for failure to respond to this information collection unless the information collection displays a valid OMB control
15. Interested persons may obtain information on the information collection by contacting the following: Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, Attention: Michael Miller, Office of the Executive Director, Phone: (202) 502–8415, fax: (202) 273–0873, e-mail:
16. For submitting comments concerning the collection of information and the associated burden estimate, please send your comments to the contact listed above and to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503, Attention: Desk Officer for the Federal Energy Regulatory Commission, phone: (202) 395–4650, fax: (202) 395–7285.
17. 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.
18. The Regulatory Flexibility Act of 1980 (RFA)
19. The Commission does not believe that this proposed rule would have such an impact on small entities. Most persons affected by this proposed rule are officers or directors of companies that do not fall within the RFA's definition of a small entity. Further, the proposed rule does not substantially change the current requirements and regulations that persons who are officers and directors must comply with. Therefore, the Commission certifies that this rule will not have a significant economic impact on a substantial number of small entities.
20. The Commission invites comments on the matters and proposals in this notice, including any related matters or alternative proposals that commentors may wish to discuss. Comments are due June 6, 2005. Reply comments will be due 30 days thereafter. Comments must refer to Docket No. RM05–6–000, and must include the commentor's name, the organization they represent, if applicable, and their address in their comments. Comments may be filed either in electronic or paper format.
21. Comments may be filed electronically via the eFiling link on the Commission's Web site at
22. 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. Commentors on this proposal are not required to serve copies of their comments on other commentors.
23. In addition to publishing the full text of this document in the
24. From FERC's Home Page on the Internet, this information is available in the Federal Energy Regulatory Records Information System (FERRIS). The full text of this document is available on FERRIS in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in FERRIS, type the docket number excluding the last three digits of this document in the docket number field.
25. User assistance is available for FERRIS and the FERC's Web site during normal business hours from our Help line at (202) 502–8222 or the Public Reference Room at (202) 502–8371 Press 0, TTY (202) 502–8659. E-Mail the Public Reference Room at
Electric utilities; Reporting and recordkeeping requirements.
By direction of the Commission.
In consideration of the foregoing, the Commission proposes to amend part 45, Chapter I, Title 18,
1. The authority citation for part 45 is revised to read as follows:
16 U.S.C. 791a–825r, 2601–2645; 31 U.S.C. 9701; 42 U.S.C. 7101–7352; 3 CFR 142.
2. Section 45.3 is revised to read as follows:
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; late-filed applications will be denied. The term “holding”, as used in this section, 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.
3. In § 45.9, paragraph (b) is revised and paragraph (c)(5) is added to read as follows:
(b)
(c)
(5) The dates that the person assumed the duties and responsibilities of each position listed in paragraphs (c)(2) and (c)(3) of this section.