[Federal Register Volume 84, Number 87 (Monday, May 6, 2019)]
[Notices]
[Pages 19815-19820]
[FR Doc No: 2019-09147]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85755; File No. SR-OCC-2019-004]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of Proposed Rule Change Related to the Introduction of
a New Liquidation Cost Model in The Options Clearing Corporation's
Margin Methodology

April 30, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on April 18, 2019, the Options Clearing
Corporation (``OCC'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by OCC. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change is filed in connection with proposed
changes to OCC's Margins Methodology, Margin Policy, and Stress Testing
and Clearing Fund Methodology Description to add a risk-based
liquidation charge based on bid-ask spreads to adjust the value of
positions to account for the costs of liquidating a defaulting Clearing
Member's portfolio.
    The proposed changes to OCC's Margins Methodology, Margin Policy,
and Stress Testing and Clearing Fund Methodology Description are
contained in confidential Exhibits 5A-5C of the filing. Material
proposed to be added is marked by underlining and material proposed to
be deleted is marked by strikethrough text. OCC also has included a
summary of impact analysis of the proposed model changes in
confidential Exhibit 3. The proposed changes are described in detail in
Item II below.
    The proposed rule change is available on OCC's website at https://www.theocc.com/about/publications/bylaws.jsp. All terms with initial
capitalization that are not otherwise defined herein have the same
meaning as set forth in the OCC By-Laws and Rules.\3\
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    \3\ OCC's By-Laws and Rules can be found on OCC's public
website: http://optionsclearing.com/about/publications/bylaws.jsp.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, OCC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. OCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

(1) Purpose
Background
    OCC's margin methodology, the System for Theoretical Analysis and
Numerical Simulations (``STANS''), is OCC's proprietary risk management
system that calculates Clearing Member

margin requirements.\4\ STANS utilizes large-scale Monte Carlo
simulations to forecast price and volatility movements in determining a
Clearing Member's margin requirement.\5\ The STANS margin requirement
is calculated at the portfolio level of Clearing Member legal entity
marginable net positions tier account (tiers can be customer, firm, or
market marker) and consists of an estimate of a 99% 2-day expected
shortfall (``99% Expected Shortfall'') and an add-on for model risk
(the concentration/dependence stress test charge). The STANS
methodology is used to measure the exposure of portfolios of options
and futures cleared by OCC and cash instruments in margin collateral.
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    \4\ See Securities Exchange Act Release No. 53322 (February 15,
2006), 71 FR 9403 (February 23, 2006) (SR-OCC-2004-20). A detailed
description of the STANS methodology is available at http://optionsclearing.com/risk-management/margins/.
    \5\ See OCC Rule 601.
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    STANS margin requirements are comprised of the sum of several
components, each reflecting a different aspect of risk. The base
component of the STANS margin requirement for each account is obtained
using a risk measure known as 99% Expected Shortfall. Under the 99%
Expected Shortfall calculation, an account has a base margin excess
(deficit) if its positions in cleared products, plus all existing
collateral--whether of types included in the Monte Carlo simulation or
of types subjected to traditional ``haircuts''--would have a positive
(negative) net worth after incurring a loss equal to the average of all
losses beyond the 99% value at risk (or ``VaR'') point. This base
component is then adjusted by the addition of a stress test component,
which is obtained from consideration of the increases in 99% Expected
Shortfall that would arise from market movements that are especially
large and/or in which various kinds of risk factors exhibit perfect or
zero correlations in place of their correlations estimated from
historical data, or from extreme adverse idiosyncratic movements in
individual risk factors to which the account is particularly
exposed.\6\ STANS margin requirements are intended to cover potential
losses due to price movements over a two-day risk horizon; however, the
base and stress margin components do not cover the potential
liquidation costs OCC may incur in closing out a defaulted Clearing
Member's portfolio.\7\ Closing out positions in a defaulted Clearing
Member's portfolio could entail selling longs at bid price and covering
shorts at ask price. This means that additional liquidation costs may
need to take into account the bid-ask price spreads.
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    \6\ STANS margins may also include other add on charges, which
are considerably smaller than the base and stress test components,
and many of which affect only a minority of accounts.
    \7\ A liquidation cost model was introduced into STANS in 2012
as part of OCC's OTC clearing initiatives. The model is only applied
to long-dated options on the Standard & Poor's (``S&P'') 500 index
(``SPX'') that have a tenor of three-years or greater. See
Securities Exchange Act Release No. 34-70719 (October 18, 2013), 78
FR 63548 (October 24, 2013) (SR-OCC-2013-16). The existing
liquidation model for long-dated SPX options would be replaced by
this new model. OCC currently does not have any open interest in OTC
options. OCC does currently clear similar exchange traded long-dated
FLEX SPX options; however, these options make up less than 0.5% of
SPX options open interest.
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Proposed Changes
    OCC is proposing to enhance its margin methodology by introducing a
new model to estimate the liquidation cost for all options and futures,
as well as the securities in margin collateral. As noted above, closing
out positions of a defaulted Clearing Member in the open market could
entail selling longs at bid price and covering shorts at ask price.
These closing-out costs are currently not taken into account in STANS
for all options (with the exception of long-dated SPX index option
series, as noted above).\8\ Therefore, the purpose of the proposed
change is to add additional financial resources in the form of margin,
based on liquidation cost grids calibrated using historical stressed
periods, to guard against potential shortfalls in margin requirements
that may arise due to the costs of liquidating Clearing Member
portfolios in the event of a default. The liquidation cost charge would
be applied as an add-on to all accounts incurring a STANS margin
charge.
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    \8\ Id.
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    The proposed liquidation cost model calculates liquidation cost
based on risk measures, gross contract volumes and market bid-ask
spreads. In general, the proposed model would be used to calculate two
risk-based liquidation costs for a portfolio, Vega \9\ liquidation cost
(``Vega LC'') and Delta liquidation cost (``Delta LC''), using
``Liquidation Grids.'' \10\ Options products will incur both Vega and
Delta LCs while Delta-one \11\ products such as futures contracts,
Treasury securities and equity securities, will have only a Delta
charge.
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    \9\ The Delta and Vega of an option represent the sensitivity of
the option price with respect to the price and volatility of the
underlying security, respectively.
    \10\ ``Liquidation Grids'' would be comprised collectively of
Vega Liquidation Grids, Vega Notional Grids, Delta Liquidation
Grids, and Delta Notional Grids. Liquidation Grids are discussed in
more detail below in the Creation and Calibration of Liquidation
Grids section.
    \11\ ``Delta one products'' refer to products for which a change
in the value of the underlying asset results in a change of the
same, or nearly the same, proportion in the value of the product.
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    The proposed liquidation cost model described herein would include:
(1) The decomposition of the defaulter's portfolio into sub-portfolios
by underlying security; (2) the creation and calibration of Liquidation
Grids used to determine liquidation costs; (3) the calculation of the
Vega LC (including a minimum Vega LC charge) for options products; (4)
the calculation of Delta LCs for both options and Delta-one products;
(5) the calculation of Vega and Delta concentration factors; (6) the
calculation of volatility correlations for Vega LCs; (7) the
establishment of a STANS margin floor based on the liquidation cost;
and (8) conforming changes to OCC's Margin Policy and Stress Testing
and Clearing Fund Methodology Description.
    The new liquidation cost model would cover the following cleared
products in a Clearing Member's portfolio: Options on indices,
equities, Exchange Traded Funds (``ETFs'') and futures; FLEX options;
future contracts; Treasury securities; and stock loan and collateral
securities. The securities not included in STANS margin calculations
would not be covered by the new model.
    The proposed approach to calculating liquidation costs and the
conforming changes to OCC's Margin Policy are described in further
detail below.
1. Portfolio Decomposition and Creation of Sub-Portfolios
    For a portfolio consisting of many contracts and underlyings, the
proposed model would first divide (or decompose) the portfolio into
sub-portfolios by underlying security such that all contracts with the
same underlying are grouped into the same sub-portfolio. The Vega LC
and Delta LC are first calculated at a sub-portfolio level and then
aggregated to derive the final liquidation cost for the total
portfolio. All the option positions with the same fundamental
underlying would form one sub-portfolio because they share the same
risk characteristics. The equity index, index future and index ETFs
would all be categorized by the underlying index that is the basis for
the index, future, and ETF-underlying securities. The corresponding
options on the index, index future, and ETFs would therefore fall into
the same sub-portfolio. In addition, FLEX options on the same
underlying would be included in the same sub-portfolio of the regular
options. Similarly, cash products such

as equities and futures would be grouped in the same sub-category based
on their underlying symbols. All Treasury security positions would form
one sub-portfolio. The calculation of Vega LC and Delta LC for each
sub-portfolio is summarized in the next sections.
2. Creation and Calibration of Liquidation Grids
    A key element of the proposed liquidation cost model is the
``Liquidation Grids.'' The calculations of Vega LC and Delta LC involve
a number of liquidity-related quantities such as volatility bid-ask
spreads, price bid-ask spreads, Vega notional, and Delta notional. The
collection of these quantities would be used to create the following
Liquidation Grids.
    1. Vega Liquidation Grids (or volatility grids): The Vega
Liquidation Grids would represent the level of bid-ask spreads on the
implied volatility of option contracts for a given underlying. Since
the volatility spreads of option contracts vary by the Delta and tenor
of the option, OCC would divide the contracts into several Delta
buckets by tenor buckets.\12\ Each pair (Delta, tenor) is referred to
as a Vega bucket. For each bucket, an average volatility spread is
estimated and defined as the volatility grid for the bucket. The size
of grid would essentially represent the cost for liquidating one unit
of Vega risk in the bucket.
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    \12\ Initially, Vega Liquidation Grids would consist of 5 Delta
buckets by 5 tenor buckets, with a total of 25 pairs; however, the
Vega Liquidation Grids would be reviewed annually or at a frequency
determined by OCC's Model Risk Working Group (``MRWG'') and updated
as needed as determined by the MRWG. The MRWG is responsible for
assisting OCC's Management Committee in overseeing and governing
OCC's model-related risk issues and includes representatives from
OCC's Financial Risk Management department, Quantitative Risk
Management department, Model Validation Group, and Enterprise Risk
Management department.
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    2. Vega Notional Grid: The Vega Notional Grid of an underlying
security would be the average trading options volume weighted by the
Vega of all options on the given underlying. The size of Vega Notional
grids would indicate the average daily trading volume in terms of
dollar Vegas (i.e., the Vega multiplied by the volume of the option).
    3. Delta Liquidation Grid: The Delta liquidation grid would
represent an estimated bid-ask price spread (in percentage) on the
underlying.\13\ It represents the cost of liquidating one dollar unit
of the underlying security. The Delta liquidation grid for Treasury
securities represents bid-ask yield spreads, expressed in basis points.
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    \13\ Delta Liquidation Grids are comprised of several rows
representing liquidity categories for the underlying security
(initially 14 rows, subject to periodic review and modification) and
one column representing the cost of liquidating one dollar unit of
the underlying security. The Delta Liquidation Grids would be
reviewed annually or at a frequency determined by OCC's MRWG and
updated as needed as determined by the MRWG.
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    4. Delta Notional Grid: The Delta Notional grid of an underlying
security would represent the average trading volume in dollars of the
security.\14\
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    \14\ Delta Notional Grids are comprised of several rows
representing liquidity categories for the underlying security
(initially 14 rows, subject to periodic review and modification) and
one column representing the average trading volume in dollars of the
underlying security. The Delta Notional Grids would be reviewed
annually or at a frequency determined by OCC's MRWG and updated as
needed as determined by the MRWG.
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    Vega Notional Grids are calibrated at the security level; that is,
each individual underlying security would have its own Vega Notional.
The Delta Notional Grid and both Vega and Delta Liquidation Grids for
all underlying securities are estimated at the levels of a fixed number
of classes based on their liquidity level.\15\ All equity securities
would be divided, based on their membership in commonly used market
indices (including, but not limited to, the S&P 100 and 500 index) or
other market liquidity measurements, into liquidity classes (which may
include, but are not limited to, High Liquid Equities, Medium Liquid
Equities and Low Liquid Equities). Any new equity security would
generally default to the lowest liquidity classification unless
otherwise assigned to a higher liquidity classification when deemed
necessary. Major indices (e.g., SPX or the Cboe Volatility Index
(``VIX'')) may form their own index liquidity class, which may cover
indices, index ETFs, and index futures. In addition, sector ETFs, ETFs
on a major commodity (such as Gold, Crude/Natural Gas, Metals, and
Electricity), and Treasury ETFs would generally each form individual
classes of their own, subject to the availability of liquidation data.
Pursuant to the proposed Margins Methodology, these liquidity classes
would be reviewed annually or at a frequency determined by OCC's MRWG
and updated as needed, taking into consideration such factors
including, but not limited to, changes in membership of the S&P 100
index and S&P 500 index, listing and delisting of securities, and any
corporate actions on the existing securities.
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    \15\ Within the same liquidity group, the Vega Notional can vary
dramatically from name to name. Moreover, Vega risk can be much
greater than Delta risk. As a result, OCC would calculate Vega
Notionals at the security level as opposed to the liquidity level.
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    Because the bid-ask spreads can change daily, the use of spreads
from current market conditions could cause liquidation costs to
fluctuate dramatically with market volatility, especially during a
stressed market period. To mitigate this procyclicality issue,
Liquidation Grids would be calibrated from several historical stressed
periods, which are selected based on the history of VIX index levels
and would remain unchanged with time until a new stressed period is
selected and added to the calibrations in accordance with the
requirements of the proposed Margins Methodology.\16\
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    \16\ The Liquidation Grids will be reviewed annually or at a
frequency determined by the MRWG.
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3. Vega Liquidation Cost
Vega Liquidation Cost Calculation
    Vega LC is the main component of the proposed liquidation cost
model. For a simple option contract, the Vega LC would be its position
Vega multiplied by its respective bucket in the Vega Liquidation Grid.
The result is approximately equal to one half of the bid-ask price
spread. For a portfolio consisting of many contracts and underlyings,
the model first divides the portfolio into sub-portfolios by underlying
security such that all contracts with the same underlying are grouped
into the same sub-portfolio (as described above). The Vega LCs for sub-
portfolios are calculated first and then aggregated to derive the Vega
LC for the total portfolio.
    The Vega LC for a sub-portfolio, which consists of all the
contracts with the same underlying security, would be calculated in
several steps. First, the Liquidation Grids would be calibrated for
Vega ``buckets'' that consist of Delta bins by tenor bins as discussed
above. These Vega buckets are used to represent the volatility risk at
the different areas on the implied volatility surface. Next, the Vega
of each contract position in a given sub-portfolio would be calculated
and bucketed into one of the Vega buckets. The Vegas falling into the
same Vega bucket would then be netted. The Vega LC for each of the Vega
buckets is calculated as the net Vega multiplied by the Vega grid of
the buckets. Finally, the total liquidation cost for the sub-portfolio
would be aggregated from these bucket Vega LCs by using correlations
between the Vega buckets. Since the sub-portfolios are formed by the
fundamental equity or index underlying the option, the Vega LCs of
closely related but different

underlying securities are allowed to net. For example, Vega LCs for SPX
and related indices, futures, and ETFs that are based on the S&P 500
index would be allowed 100% netting.
    The Vega LC for the total portfolio would be a similar correlation-
based sum of Vega LCs of all the sub-portfolios, taking into account
correlations between the products' implied volatility.\17\
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    \17\ See infra, Volatility Correlations section.
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Minimum Liquidation Cost
    Because the proposed model allows risk netting across closely
related option contracts, it is possible that a well-hedged option
strategy could result in a very small or zero liquidation cost. To
prevent this from happening, a minimum liquidation cost would be
introduced to the Vega liquidation charges. The minimum liquidation
cost for a sub-portfolio would be calculated as the gross number of
option contracts multiplied by a minimum cost per contract value.\18\
The minimum cost amount would be calculated for the entire portfolio
and would be used to floor the final total Vega LC. The proposal would
not apply a minimum cost for Delta LC due to the immaterial impact a
minimum Delta LC would have on the overall liquidation cost charge.
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    \18\ The minimum cost rate would initially be set as $2 per
contract, unless the position is long and the net asset value per
contract is less than $2. (For a typical option with a contract size
of 100, this would occur if the option was priced below 0.02.) This
value would be reviewed annually or at a frequency determined by
OCC's MRWG and recalibrated as needed over time.
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4. Delta Liquidation Cost
    In addition to Vega risk, the model also considers the Delta risk
presented in an entire portfolio. If a portfolio has positions in
either options, futures, equities, or Treasury securities, it will
contain some Delta risk. Under the proposed model, the liquidation cost
due to Delta risk in a sub-portfolio (as defined by the underlying)
would be approximated by the net dollar Delta of the sub-portfolio
multiplied by its respective bucket in the Delta Liquidation Grid.
    The proposed model would allow netting of Delta LC if the option
contracts, futures, or equity positions belong to or are related to a
top index (such as SPX or VIX). For example, in a portfolio, positions
in SPX-related options, options on futures, futures, or collateral have
their Delta LC netted.
    Under the proposed model, U.S. dollar Treasury bonds would form one
sub-portfolio. The Delta or DV01 (i.e., dollar value of one basis
point) of all the bonds would be calculated and bucketed into six tenor
buckets. For each bucket, the liquidation cost would be approximated by
the absolute value of the net DV01 of the bucket multiplied by the
Liquidation Grid (in basis points) in the corresponding tenor bucket.
The total liquidation cost for the Treasury security sub-portfolio
would then be a sum of the costs over all the buckets.
    The Delta LC for the total portfolio would be simple sum of the
Delta LCs over all sub-portfolios.
5. Concentration Charges
    In addition to Vega and Delta LCs, the proposed model also would
incorporate the potential risks involved in closing out large or
concentrated positions in a portfolio. The ``largeness'' of an option
position is typically measured in terms of Average Daily Volume
(``ADV''). The Vega volume or notional, defined as ``Vega-weighted
ADV,'' is also a relevant measure of options trading volume. Closing
out large or concentrated positions with one or more Vega notional may
either take longer to liquidate or demand wider spreads, and therefore
could incur additional cost. To cover this additional risk, the
proposed model would use Vega concentration factors (``Vega CF'') to
scale the Vega LC for option positions. The Vega CFs would be equal to
one for small positions that are less than one Vega notional, but may
be scaled up for large positions as a function of the size of the
positions. Similar to Vega CF, Delta concentration factors (``Delta
CF'') would be used to scale the Delta LC to account for the
concentration risk associated with large Delta positions.
6. Volatility Correlations
    Under the proposed model, the Vega LC for each underlying sub-
portfolio is calculated using correlations between the Vega buckets.
The correlation matrix from the most liquid product (SPX) would be used
as the base and would be scaled for other underlyings based on their
liquidity class. These would be calibrated from time periods that
overlap the stress periods used to calculate Liquidation Grids.
    To aggregate the liquidation cost at the portfolio level, the pair-
wise correlations of implied volatilities between different underlyings
are needed. OCC would use a single correlation value for all cross-
underlying correlations rather than a correlation matrix for all cross-
underlying correlations to simplify the calibration of the grids. To
account for potential errors that may arise from using a single
correlation value, OCC would calculate three single correlations
representing the minimum, average, and maximum correlation across the
liquidity class to determine three different Vega LCs. The highest of
these three Vega LCs would be used as the final Vega LC.
7. STANS Margin Floor
    The proposed liquidation costs would be added to the base and
stress margin components of STANS that are intended to cover the
potential losses due to price movements over a two-day risk horizon. In
certain cases, well-hedged portfolios may not experience any loss and
the resultant STANS margin requirement is close to zero or may even
become positive in some extreme cases. If the STANS requirement is
positive, this may result in a credit instead of a charge for the
Clearing Member. To account for the risk of potentially liquidating a
portfolio at current (instead of two-day ahead) prices, no credit from
the margin would be allowed so that the final margin requirement would
not be lower than the amount of the liquidation cost.
8. Margin Policy and Stress Testing and Clearing Fund Methodology
Description
    OCC also would make conforming changes to its Margin Policy and
Stress Testing and Clearing Fund Methodology Description to reflect the
inclusion of the new liquidation cost charge as an add-on charge to the
base STANS margin and how the liquidation cost charge add-on would be
incorporated in Clearing Fund shortfall calculations.\19\
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    \19\ The Stress Testing and Clearing Fund Methodology
Description would be revised to note that the shortfall of a
portfolio is calculated by offsetting its profit and loss (``PnL'')
in a stress scenario with its STANS margin assets, which include
base margin (i.e., 99% Expected Shortfall), excess net asset value
related to long option premium, any non-collateral-in-margins
haircut amounts, and various other Add-On Charges such as the
proposed liquidation cost charges. Since the cost of liquidation is
not considered in stress scenario PnL, a charge for liquidation
costs using the same values as calculated for margins is included in
shortfall calculations to ensure that the liquidation cost charge is
part of the required total credit financial resources.
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Clearing Member Outreach
    To inform Clearing Members of the proposed change, OCC has provided
overviews of its proposed liquidation cost model to the Financial Risk
Advisory Council (``FRAC''), a working group comprised of exchanges,
Clearing Members and indirect participants of OCC, and the OCC
Roundtable, which was established to bring Clearing Members, exchanges
and OCC together to discuss industry and operational issues,\20\ during
2016 and 2017. OCC

has also published Information Memos to all Clearing Members discussing
the proposed change.
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    \20\ The OCC Roundtable is comprised of representatives of the
senior OCC staff, participant exchanges and Clearing Members,
representing the diversity of OCC's membership in industry segments,
OCC-cleared volume, business type, operational structure and
geography.
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    Under the proposed liquidation cost model, each Clearing Member/
account would independently observe different levels of impact based on
the composition of their cleared portfolios. Based on OCC's analysis
to-date, directional portfolios containing more outright positions,
which are more typically associated with customer accounts, are most
likely to see the largest impact from the proposed liquidation cost
charges, while more well-hedged portfolios, such as market maker
accounts, would be less impacted (and are more likely to incur the
minimum liquidation cost charge). In the aggregate, OCC expects the
proposed liquidation cost charges to make up approximately 5-8% of
total risk margin charges, with customer accounts accounting for
roughly 60% of the proposed liquidation cost charges, and proprietary
accounts and market markers generating approximately 25% and 15% of the
proposed liquidation cost charges, respectively.
    Given the magnitude of expected changes in margins, OCC expects to
conduct an extended parallel implementation for Clearing Members prior
to implementation. Additionally, OCC will perform additional outreach
to the FRAC upon submission of its regulatory filings to remind
Clearing Members of the pending changes and direct outreach with those
Clearing Members that would be most impacted by the proposed change and
would work closely with such Clearing Members to coordinate the
implementation and associated funding for such Clearing Members
resulting from the proposed change.\21\
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    \21\ Specifically, OCC will discuss with those Clearing Members
how they plan to satisfy any increase in their margin requirements
associated with the proposed change.
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Implementation Timeframe
    OCC expects to implement the proposed changes no sooner than thirty
(30) days and no later than one hundred eighty (180) days from the date
that OCC receives all necessary regulatory approvals for the filings.
OCC will announce the implementation date of the proposed change by an
Information Memo posted to its public website at least two (2) weeks
prior to implementation.
(2) Statutory Basis
    OCC believes the proposed rule change is consistent with Section
17A of the Act \22\ and the regulations thereunder. Section
17A(b)(3)(F) of the Act,\23\ requires, among other things, that the
rules of a clearing agency be designed to promote the prompt and
accurate clearance and settlement of securities transactions and, to
the extent applicable, derivative agreements, contracts, and
transactions, to assure the safeguarding of securities and funds which
are in the custody or control of the clearing or agency or for which it
is responsible, and, in general, to protect investors and the public
interest. As described above, STANS margin requirements are comprised
of the sum of several components, each reflecting a different aspect of
risk. These margins are intended to cover the potential losses due to
price movements over a two-day risk horizon; however, the base and
stress margin components do not cover the potential liquidation cost
OCC may incur in closing out a defaulted Clearing Member's portfolio.
Closing out positions in a defaulted portfolio could entail selling
longs at bid price and covering shorts at ask price. This means that
additional liquidation costs may need to take into account the bid-ask
price spreads. The proposed liquidation cost model would calculate
liquidation costs for OCC's cleared products based on risk measures,
gross contract volumes and market bid-ask spreads. The proposed model
is designed to provide additional financial resources in the form of
margin, based on liquidation costs and current market prices, to guard
against potential shortfalls in margin requirements that may arise due
to the costs of liquidating Clearing Member portfolios. OCC uses the
margin it collects from a defaulting Clearing Member to protect other
Clearing Members from losses they cannot anticipate or control as a
result of such a default. As a result, OCC believes the proposed
changes would reduce the overall level of risk to OCC, its Clearing
Members, and the markets served by OCC. OCC believes that the proposed
rule change is therefore designed, in general, to promote the prompt
and accurate clearance and settlement of securities and derivatives
transactions, assure the safeguarding of securities and funds which are
in the custody or control of OCC or for which it is responsible, and
protect investors and the public interest in accordance with Section
17A(b)(3)(F) of the Act.\24\
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    \22\ 17 U.S.C. 78q-1.
    \23\ 17 U.S.C. 78q-1(b)(3)(F).
    \24\ Id.
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    Rule 17Ad-22(b)(2) \25\ requires, in part, that a registered
clearing agency that performs central counterparty services establish,
implement, maintain and enforce written policies and procedures
reasonably designed to use margin requirements to limit its credit
exposures to participants under normal market conditions and use risk-
based models and parameters to set margin requirements. As described
above, the proposed liquidation cost model is a risk-based model that
calculates liquidation cost based on risk measures, gross contract
volumes, and market bid-ask spreads. The proposed model is designed to
provide additional financial resources in the form of margin, based on
liquidation costs and current market prices, to guard against potential
shortfalls in margin requirements that may arise due to the costs of
liquidating Clearing Member portfolios, which currently are not taken
into account in STANS for all of OCC's cleared products. Accordingly,
the proposed risk-based model would be used to calculate margin
requirements designed to limit OCC's credit exposures to participants
under normal market conditions in a manner consistent with Rule 17Ad-
22(b)(2).\26\
---------------------------------------------------------------------------

    \25\ 17 CFR 240.17Ad-22(b)(2).
    \26\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(6)(i) \27\ further requires a covered clearing
agency that provides central counterparty services to establish,
implement, maintain and enforce written policies and procedures
reasonably designed to cover its credit exposures to its participants
by establishing a risk-based margin system that considers, and produces
margin levels commensurate with, the risks and particular attributes of
each relevant product, portfolio, and market. The proposed liquidation
cost model is a risk-based model that would calculate additional margin
charges designed to account for potential shortfalls in margin
requirements that may arise due to the costs of liquidating Clearing
Member portfolios by taking into consideration the risks and attributes
associated with relevant products and portfolios cleared by OCC (e.g.,
volatility bid-ask spreads, price bid-ask spreads, Vega notional, and
Delta notional). Accordingly, OCC believes the proposed changes are
consistent with Rule 17Ad-22(e)(6)(i).\28\
---------------------------------------------------------------------------

    \27\ 17 CFR 240.17Ad-22(e)(6)(i).
    \28\ Id.
---------------------------------------------------------------------------

    The proposed rule changes are not inconsistent with the existing
rules of

OCC, including any other rules proposed to be amended.

(B) Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Act \29\ requires that the rules of a
clearing agency not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act. OCC believes
that while the proposed rule change may have differing impacts on its
Clearing Members, it would not impose a burden on competition.
Moreover, OCC believes that any competitive impact imposed by the
proposed liquidation cost model would be necessary and appropriate in
furtherance of the purposes of Act.\30\ As noted above, under the
proposed liquidation cost model, each Clearing Member/account would
independently observe different levels of impact based on the
composition of their cleared portfolios. Based on OCC's analysis to-
date, directional portfolios containing more outright positions, which
are more typically associated with customer accounts, are most likely
to see the largest impact from the proposed liquidation cost charges,
while more well-hedged portfolios, such as market maker accounts, would
be less impacted (and are more likely to incur the minimum liquidation
cost charge). In the aggregate, OCC expects the proposed liquidation
cost charges to make up approximately 5-8% of total risk margin
charges, with customer accounts accounting for roughly 60% of the
proposed liquidation cost charges, and proprietary accounts and market
markers generating approximately 25% and 15% of the proposed
liquidation cost charges, respectively.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78q-1(b)(3)(I).
    \30\ Id.
---------------------------------------------------------------------------

    The proposed changes are primarily designed to allow OCC to
determine margin requirements that more accurately represent the risk
presented by the extra cost in liquidating a portfolio due to the bid-
ask spread. While the individual impact of the proposed changes will
vary and depend on the composition of the portfolio in question, the
proposed risk model enhancements are intended apply to all Clearing
Members to address potential liquidation costs that OCC may incur in
closing out a defaulted Clearing Member's portfolio. OCC does not
believe that the proposed rule change would unfairly inhibit access to
OCC's services or disadvantage or favor any particular user in
relationship to another user. Accordingly, OCC believes that any
competitive impact would be necessary and appropriate in furtherance of
the prompt and accurate clearance and settlement of securities
transactions, the safeguarding of securities and funds which are in the
custody or control of OCC or for which it is responsible, and in
general, the protection of investors and the public interest.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others

    Written comments on the proposed rule change were not and are not
intended to be solicited with respect to the proposed rule change and
none have been received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self- regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Exchange Act. Comments may be submitted
by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-OCC-2019-004 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-OCC-2019-004. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of OCC and on OCC's website at
https://www.theocc.com/about/publications/bylaws.jsp.
    All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-OCC-2019-004 and
should be submitted on or before May 28, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-09147 Filed 5-3-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 121 (Monday, June 24, 2019)]
[Notices]
[Pages 29583-29584]
[FR Doc No: 2019-13389]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. FAA-2019-30]

Petition for Exemption; Summary of Petition Received; Innova
Flight, LLC

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of Federal Aviation Regulations. The
purpose of this notice is to improve the public's awareness of, and
participation in, the FAA's exemption process. Neither publication of
this notice nor the inclusion or omission of information in the summary
is intended to affect the legal status of the petition or its final
disposition.

DATES: Comments on this petition must identify the petition docket
number and must be received on or before July 15, 2019.

ADDRESSES: Send comments identified by docket number FAA-2019-0243
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation, 1200 New Jersey Avenue SE, Room W12-140,
West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE, Washington, DC 20590-0001, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT posts
these comments, without edit, including any personal information the
commenter provides, to http://www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
http://www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE,
Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Nia Daniels,<PHONE_NUMBER>, Office of
Rulemaking, Federal Aviation Administration, 800 Independence Avenue
SW, Washington, DC 20591.
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC, on June 13, 2019.
Brandon Roberts,
Acting Executive Director, Office of Rulemaking.

Petition for Exemption

    Docket No.: FAA-2019-0243.
    Petitioner: Innova Flight, LLC.
    Sections of 14 CFR Affected: part 21, Subpart H; part 61;
Sec. Sec.  61.3; 61.113; 91.109(a); 91.119; 91.121; & 91.151(a).
    Description of Relief Sought: The proposed exemption, if granted,
would allow the petitioner to operate its Sandstorm unmanned aircraft
systems (UAS), weighing less than 85 pounds, in commercial operations
involving surveillance, training for air traffic control personnel for
UAS operations, and help develop standards for UAS simulation and
testing standards utilizing Sandstorm Longshot Technology. Operations
will be conducted within visual line of sight, under 400 feet AGL, and
only in airspace approved by the FAA through a Certificate of
Authorization or Waiver.

[FR Doc. 2019-13389 Filed 6-21-19; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 20 (Tuesday, January 30, 2018)]
[Notices]
[Pages 4211-4213]
[FR Doc No: 2018-01644]

-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2015-E-2082]

Determination of Regulatory Review Period for Purposes of Patent
Extension; Cardiomems HF Monitoring System

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA or the Agency) has
determined the regulatory review period for CARDIOMEMS HF MONITORING
SYSTEM and is publishing this notice of that determination as required
by law. FDA has made the determination because of the submission of an
application to the Director of the U.S. Patent and Trademark Office
(USPTO), Department of Commerce, for the extension of a patent which
claims that medical device.

DATES: Anyone with knowledge that any of the dates as published (see
the SUPPLEMENTARY INFORMATION section) are incorrect may submit either
electronic or written comments and ask for a redetermination by April
2, 2018. Furthermore, any interested person may petition FDA for a
determination regarding whether the applicant for extension acted with
due diligence during the regulatory review period by July 30, 2018. See
``Petitions'' in the SUPPLEMENTARY INFORMATION section for more
information.

ADDRESSES: You may submit comments as follows. Please note that late,
untimely filed comments will not be considered. Electronic comments
must be submitted on or before April 2, 2018. The https://www.regulations.gov electronic filing system will accept comments until
midnight Eastern Time at the end of April 2, 2018. Comments received by
mail/hand delivery/courier (for written/paper submissions) will be
considered timely if they are postmarked or the delivery service
acceptance receipt is on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for

information submitted, marked and identified, as confidential, if
submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2015-E-2082 for ``Determination of Regulatory Review Period for
Purposes of Patent Extension; CARDIOMEMS HF MONITORING SYSTEM.''
Received comments, those filed in a timely manner (see ADDRESSES), will
be placed in the docket and, except for those submitted as
``Confidential Submissions,'' publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m.
and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Dockets Management Staff. If you do not wish
your name and contact information to be made publicly available, you
can provide this information on the cover sheet and not in the body of
your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with Sec.  10.20 (21 CFR 10.20) and
other applicable disclosure law. For more information about FDA's
posting of comments to public dockets, see 80 FR 56469, September 18,
2015, or access the information at: https://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Beverly Friedman, Office of Regulatory
Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg.
51, Rm. 6250, Silver Spring, MD 20993-0002,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    The Drug Price Competition and Patent Term Restoration Act of 1984
(Pub. L. 98-417) and the Generic Animal Drug and Patent Term
Restoration Act (Pub. L. 100-670) generally provide that a patent may
be extended for a period of up to 5 years so long as the patented item
(human drug product, animal drug product, medical device, food
additive, or color additive) was subject to regulatory review by FDA
before the item was marketed. Under these acts, a product's regulatory
review period forms the basis for determining the amount of extension
an applicant may receive.
    A regulatory review period consists of two periods of time: A
testing phase and an approval phase. For medical devices, the testing
phase begins with a clinical investigation of the device and runs until
the approval phase begins. The approval phase starts with the initial
submission of an application to market the device and continues until
permission to market the device is granted. Although only a portion of
a regulatory review period may count toward the actual amount of
extension that the Director of USPTO may award (half the testing phase
must be subtracted as well as any time that may have occurred before
the patent was issued), FDA's determination of the length of a
regulatory review period for a medical device will include all of the
testing phase and approval phase as specified in 35 U.S.C.
156(g)(3)(B).
    FDA has approved for marketing the medical device CARDIOMEMS HF
MONITORING SYSTEM. CARDIOMEMS HF MONITORING SYSTEM is indicated for
wirelessly measuring and monitoring pulmonary artery pressure and heart
rate in New York Heart Association Class III heart failure patients who
have been hospitalized for heart failure in the previous year. The
hemodynamic data are used by physicians for heart failure management
and with the goal of reducing heart failure hospitalizations.
Subsequent to this approval, the USPTO received a patent term
restoration application for CARDIOMEMS HF MONITORING SYSTEM (U.S.
Patent No. 7,839,153) from CardioMEMS, Inc., and the USPTO requested
FDA's assistance in determining this patent's eligibility for patent
term restoration. In a letter dated October 15, 2015, FDA advised the
USPTO that this medical device had undergone a regulatory review period
and that the approval of CARDIOMEMS HF MONITORING SYSTEM represented
the first permitted commercial marketing or use of the product.
Thereafter, the USPTO requested that FDA determine the product's
regulatory review period.

II. Determination of Regulatory Review Period

    FDA has determined that the applicable regulatory review period for
CARDIOMEMS HF MONITORING SYSTEM is 2,786 days. Of this time, 1,525 days
occurred during the testing phase of the regulatory review period,
while 1,261 days occurred during the approval phase. These periods of
time were derived from the following dates:
    1. The date an exemption under section 520(g) of the Federal Food,
Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360j(g)) involving this
device became effective: October 13, 2006. FDA has verified the
applicant's claim that the date the investigational device exemption
required under section 520(g) of the FD&C Act for human tests to begin
became effective October 13, 2006.
    2. The date an application was initially submitted with respect to
the device under section 515 of the FD&C Act (21 U.S.C. 360e): December
15, 2010. The applicant claims December 14, 2010, as the date the
premarket approval application (PMA) for CARDIOMEMS HF MONITORING
SYSTEM (PMA P100045) was initially submitted. However, FDA records
indicate that PMA P100045 was submitted on December 15, 2010.
    3. The date the application was approved: May 28, 2014. FDA has
verified the applicant's claim that PMA P100045 was approved on May 28,
2014.
    This determination of the regulatory review period establishes the
maximum potential length of a patent extension. However, the USPTO
applies several statutory limitations in its calculations of the actual
period for patent extension. In its application for patent extension,
this applicant seeks 1,026 days of patent term extension.

III. Petitions

    Anyone with knowledge that any of the dates as published are
incorrect may submit either electronic or written comments and, under
21 CFR 60.24, ask for a redetermination (see DATES). Furthermore, as
specified in Sec.  60.30 (21 CFR 60.30), any interested person may
petition FDA for a determination regarding whether the applicant for
extension acted with due diligence

during the regulatory review period. To meet its burden, the petition
must comply with all the requirements of Sec.  60.30, including but not
limited to: Must be timely (see DATES), must be filed in accordance
with Sec.  10.20, must contain sufficient facts to merit an FDA
investigation, and must certify that a true and complete copy of the
petition has been served upon the patent applicant. (See H. Rept. 857,
part 1, 98th Cong., 2d sess., pp. 41-42, 1984.) Petitions should be in
the format specified in 21 CFR 10.30.
    Submit petitions electronically to https://www.regulations.gov at
Docket No. FDA-2013-S-0610. Submit written petitions (two copies are
required) to the Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    Dated: January 24, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-01644 Filed 1-29-18; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register: May 27, 2010 (Volume 75, Number 102)]
[Rules and Regulations]
[Page 29652-29653]
[DOCID:fr27my10-2]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2010-0028; Airspace Docket No. 10-AWP-1]

Amendment of Area Navigation Route Q-15; California

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This action amends Area Navigation Route Q-15 by modifying a
segment of the airway to provide adequate separation from restricted
area R-2508 Complex, CA. This action is necessary for the safety and
management of instrument flight rules (IFR) operations within the
National Airspace System (NAS).

DATES: Effective Date: 0901 UTC, July 29, 2010. The Director of the
Federal Register approves this incorporation by reference action under
1 CFR part 51, subject to the annual revision of FAA Order 7400.9 and
publication of conforming amendments.

FOR FURTHER INFORMATION CONTACT: Ken McElroy, Airspace and Rules Group,
Office of System Operations Airspace and AIM, Federal Aviation
Administration, 800 Independence Avenue, SW., Washington, DC 20591;
telephone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

History

    On February 24, 2010, the FAA published in the Federal Register a
notice of proposed rulemaking (NPRM) to amend Area Navigation Route Q-
15 in California (75 FR 8286). Interested parties were invited to
participate in this rulemaking effort by submitting written comments on
the proposal. No comments were received. With the exception for the
order of the points listed, (Q-15 route has been reversed to comply
with policy that odd numbered routes be described with the points
listed from South to North,) this amendment is the same as that
proposed in the NPRM.

The Rule

    This action amends Title 14 Code of Federal Regulations (14 CFR)
part 71 by replacing the DOBNE waypoint of Q-15 with the KENNO waypoint
to adequately provide the additional lateral separation from the
boundary of R-2508 and Q-15. The operational benefits of this change
will positively impact the day-to-day traffic flow on Q-15 within the
NAS.

    Area Navigation Routes are published in paragraph 2006 of FAA Order
7400.9T, dated August 27, 2009 and effective September 15, 2009, which
is incorporated by reference in 14 CFR 71.1. The Area Navigation Route
listed in this document would be subsequently published in the Order.
    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
Therefore, this regulation: (1) Is not a ``significant regulatory
action'' under Executive Order 12866; (2) is not a ``significant rule''
under Department of Transportation (DOT) Regulatory Policies and
Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant
preparation of a regulatory evaluation as the anticipated impact is so
minimal. Since this is a routine matter that will only affect air
traffic procedures and air navigation, it is certified that this rule,
when promulgated, will not have a significant economic impact on a
substantial number of small entities under the criteria of the
Regulatory Flexibility Act.
    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority.
    This rulemaking is promulgated under the authority described in
Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the
FAA is charged with prescribing regulations to assign the use of the
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it modifies an RNAV route in California.

Environmental Review

    The FAA has determined that this action qualifies for categorical
exclusion under the National Environmental Policy Act in accordance
with FAA Order 1050.1E, Environmental Impacts: Polices and Procedures,
paragraph 311a. This airspace action is not expected to cause any
potentially significant environmental impacts, and no extraordinary
circumstances exist that warrant preparation of an environmental
assessment.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

0
In consideration of the foregoing, the Federal Aviation Administration
amends 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for part 71 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854,
24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.9T,
Airspace Designations and Reporting Points, dated August 27, 2009 and
effective September 15, 2009, is amended as follows:

Paragraph 2006 Area Navigation Routes

* * * * *

Q-15 CHILY to LOMIA

 CHILY........................  Fix..............  (Lat. 34[deg]42'49''
                                                    N., long.
                                                    112[deg]45'42'' W.)
 DOVEE........................  Fix..............  (Lat. 35[deg]26'51''
                                                    N., long.
                                                    114[deg]48'01'' W.)
 BIKKR........................  WP...............  (Lat. 36[deg]34'00''
                                                    N., long.
                                                    116[deg]45'00'' W.)
 KENNO........................  WP...............  (Lat. 37[deg]17'53''
                                                    N., long.
                                                    117[deg]18'37'' W.)
 RUSME........................  WP...............  (Lat. 37[deg]29'39''
                                                    N., long.
                                                    117[deg]31'12'' W.)
 LOMIA........................  WP...............  (Lat. 39[deg]13'12''
                                                    N., long.
                                                    119[deg]06'23'' W.)

    Issued in Washington, DC, May 18, 2010.
Edith V. Parish,
Manager, Airspace and Rules Group.
[FR Doc. 2010-12402 Filed 5-26-10; 8:45 am]
BILLING CODE 4910-13-P


28. Revise Sec.  180.515 to read as follows:

Sec.  180.515  Markings.

    (a) When a tank car passes the required inspection and test with
acceptable results, the tank car facility must mark the date of the
inspection and test and the due date of the next inspection and test
qualified on the tank car in accordance with Appendix C of the AAR
Specifications for Tank Cars (IBR, see Sec.  171.7 of this subchapter).
When a tank car facility performs multiple inspections and tests at the
same time, one date may be used to satisfy the requirements of this
section. One date also may be shown when multiple inspections and test
have the same due date. Dates displayed on the ``consolidated stencil''
(see Appendix C of the AAR specifications for Tank Cars) take
precedence over dates modified, and not stenciled, pursuant to interval
adjustments for service equipment, linings, and granted alternative
inspection intervals.
    (b) Converted DOT 105, 109, 112, 114, or 120 class tank cars must
have the new specification and conversion date permanently marked in
letters and figures at least 0.95 cm (0.375 inch) high on the outside
of the manway nozzle or the edge of the manway nozzle flange on the
left side of the car. The marking may have the last numeral of the
specification number omitted (e.g., ``DOT 111A100W'' instead of ``DOT
111A100W1'').
    (c) When qualified within six months of installation and protected
from deterioration, the test date marking of a reclosing pressure
relief device is the installation date on the tank car.
    29. In Sec.  180.517, revise paragraph (a), paragraph (b)
introductory text, and paragraphs (b)(3). (4), and (7), and add
paragraph (b)(8) to read as follows:

Sec.  180.517  Reporting and record retention requirements.

    (a) Certification and representation. Each owner of a specification
tank car must retain the certificate of construction (AAR Form 4-2) and
related papers certifying that the manufacture of the specification
tank car identified in the documents is in accordance with the
applicable specification. The builder's signature on the certificate of
construction, and the marking of the tank car with the tank
specification is the representation that all of the appropriate
inspections and tests were successfully performed to qualify the tank
for use. The owner must retain the documents throughout the period of
ownership of the specification tank car and for one year thereafter.
Upon a change of ownership, the requirements in Section 1.3.15 of the
AAR Specifications for Tank Cars (IBR, see Sec.  171.7 of this
subchapter) apply. The builder of the car or a facility performing work
on the car may retain copies of relevant records.
    (b) Inspection and test reporting. Each tank car that is inspected
and tested as specified in Sec.  180.509 must have a written report, in
English, prepared according to this paragraph. For qualification
inspections and tests performed after initial service, marking the tank
car with the specification (or retaining the specification marking on
the tank) is the representation that all of the appropriate inspections
and tests were successfully performed to qualify the car for continued
use. The report may be created and retained electronically, but, upon
request by FRA for a copy of the report, it must be made

available in common readable form. The owner must retain a copy of the
inspection and test reports until successfully completing the next
inspection and test of the same type. The inspection and test report
must include the following:
* * * * *
    (3) Tank car reporting mark and number;
    (4) Tank car specification;
* * * * *
    (7) The name and address of the tank car facility and the name and
signature of inspector; and
    (8) The unique code (station stencil) identifying the facility.
    30. Add Appendix D to Part 180 to read as follows:

Appendix D to Part 180--Hazardous Materials Corrosive to Tanks or
Service Equipment

    This list contains materials identified either by proper
shipping name in 49 CFR 172.101 or shipped under an ``n.o.s.''
shipping description that, under certain conditions, can corrode
carbon steel tanks or service equipment at a rate that will reduce
the design level of reliability and safety of the tank or equipment
to an unsafe level before the next qualification. Materials
identified on this list are considered corrosive to the tank or
service equipment.
    While every effort was made to identify materials deemed
corrosive to the tank or service equipment, owners and operators are
cautioned that this list may not be inclusive. Tank car owners and
operators are reminded of their duty to ensure that no in-service
tank will deteriorate below the specified minimum thickness
requirements in this subchapter. See Sec.  180.509(f)(3). In
addition, FRA states a tank car owner must designate an interior
coating or lining appropriately based on their knowledge of the
chemical and not rely simply on this list. Regarding future
thickness tests, this list may also be modified based on an analysis
of the test results by the car owner, the Department of
Transportation, or the Association of American Railroads' Tank Car
Committee.

Hazardous Materials Table Proper Shipping Names (See Sec.  172.101)

Acetic acid, glacial or Acetic acid solution
Aluminum chloride, solution
Arsenic acid, liquid
Arsenic acid, solid
Butyric acid
Ferric chloride, solution
Fertilizer ammoniating solution (Nitrogen fertilizer solution)
Fluoroboric acid
Fluorosilicic acid
Formaldehyde, solutions, flammable
Formaldehyde, solutions
Hydrobromic acid
Hydrochloric acid Hydrochloric acid solution
Hydrofluoric acid and Sulfuric acid mixtures
Hydrofluoric acid
Hydrogen peroxide and peroxyacetic acid mixtures, stabilized
Hydrogen, peroxide, aqueous solutions
Hydrogen peroxide, stabilized or Hydrogen peroxide aqueous
solutions, stabilized
Hypochlorite solutions
Methyl methacrylate monomer, stabilized
Nitric acid
Phenyl phosphorus dichloride
Phenyl phosphorus thiodichloride
Phosphoric acid solution
Phosphoric acid, solid
Phosphorus trichloride (Phosphorus chloride)
Sodium chlorate
Sodium chlorate, aqueous solution
Sodium hydrosulfide
Sulfur, molten
Sulfuric acid
Sulfuric acid, fuming
Sulfuric acid, spent
Zinc chloride, anhydrous
Zinc chloride, solution

Materials Transported Under an ``N.O.S.'' Description

Benzoic acid (Environmentally hazardous substance, liquid, n.o.s.,
(RQ 5,000 pounds)
Bisulphites, aqueous solution, n.o.s. (Ammonium bisulfide)
Black liquor (Corrosive liquids, n.o.s. (contains sulfuric acid))
Calcium lignosulfonate (not regulated under this subchapter)
Hexanoic acid (Corrosive liquids, n.o.s. (contains hexanoic acid))
Lignin liquor (not regulated under this subchapter)
Lithium chloride (not regulated under this subchapter)
Sodium polyacrylate (not regulated under this subchapter)
Titanium sulfate solution (Corrosive liquids, n.o.s. (contains
sulfuric acid))
White liquor (not regulated under this subchapter)

    Issued in Washington, DC, on August 10, 2011 under authority
delegated in 49 CFR part 106.
R. Ryan Posten,
Senior Director for Hazardous Materials Safety.
[FR Doc. 2011-20863 Filed 8-17-11; 8:45 am]
BILLING CODE 4910-60-P


[Federal Register Volume 86, Number 95 (Wednesday, May 19, 2021)]
[Notices]
[Pages 27080-27081]
[FR Doc No: 2021-10540]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No.10934-000]

Sugar River Hydro II, LLC; Notice of Authorization for Continued
Project Operation

    The current license for the Sugar River II Project (project) is
held by Sugar River Hydro II, LLC (Sugar River Hydro) under Project No.
10934. The project is located on the Sugar River, in Sullivan County,
New Hampshire. On April 30, 2019, Sugar River Hydro filed a letter
stating that it is not filing an application to relicense the project.
On May 8, 2019, the Commission, pursuant to 18 CFR 16.25(a), issued a
notice soliciting potential new applicants for the project, which
provided until August 6, 2019 for potential applicants to submit a pre-
application document (PAD) and notice of intent (NOI). In response to
the solicitation notice, New Hampshire Renewable Resources, LLC (New
Hampshire Renewable) filed a PAD and NOI to relicense the Sugar River
II Project, pursuant to 18 CFR 5.5 and 5.6 of the Commission's
regulations. Commission staff assigned Project No. 15003 for the
licensing proceeding initiated by New Hampshire Renewable's filing. On
February 8, 2021, New Hampshire Renewable filed an application for a
subsequent license for the Sugar River II Project pursuant to

the Federal Power Act (FPA) and the Commission's regulations
thereunder.
    The license for Project No. 10934 was issued for a period ending
April 30, 2021. Section 15(a)(1) of the FPA, 16 U.S.C. 808(a)(1),
requires the Commission, at the expiration of a license term, to issue
from year-to-year an annual license to the then licensee(s) under the
terms and conditions of the prior license until a new license is
issued, or the project is otherwise disposed of as provided in section
15 or any other applicable section of the FPA. If the project's prior
license waived the applicability of section 15 of the FPA, then, based
on section 9(b) of the Administrative Procedure Act, 5 U.S.C. 558(c),
and as set forth at 18 CFR 16.21(a), if the licensee of such project
has filed an application for a subsequent license, the licensee may
continue to operate the project in accordance with the terms and
conditions of the license after the minor or minor part license
expires, until the Commission acts on its application. If the licensee
of such a project has not filed an application for a subsequent
license, then it may be required, pursuant to 18 CFR 16.21(b), to
continue project operations until the Commission issues someone else a
license for the project or otherwise orders disposition of the project.
    If the project is subject to section 15 of the FPA, notice is
hereby given that an annual license for Project No. 10934 is issued to
Sugar River Hydro for a period effective May 1, 2021 through April 30,
2022 or until the issuance of a new license for the project or other
disposition under the FPA, whichever comes first. If issuance of a new
license (or other disposition) does not take place on or before April
30, 2022, notice is hereby given that, pursuant to 18 CFR 16.18(c), an
annual license under section 15(a)(1) of the FPA is renewed
automatically without further order or notice by the Commission, unless
the Commission orders otherwise.
    If the project is not subject to section 15 of the FPA, notice is
hereby given that Sugar River Hydro is authorized to continue operation
of the Sugar River II Project, until such time as the Commission acts
on the application for a subsequent license.

    Dated: May 13, 2021.
Kimberly D. Bose,
Secretary.
[FR Doc. 2021-10540 Filed 5-18-21; 8:45 am]
BILLING CODE 6717-01-P


RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 870 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 871 2010  Base Case 2004 Page 872 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements Page 873 2010  Base Case 2004 Page 874 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 875 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements CC01 Coal To CC CC01 Coal To CC Page 876 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements CC01 Coal To CC CC02 Coal To CC RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 877 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 878 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 879 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 880 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 881 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements SCR2 SCR HNC1 SNCR SCR2 SCR RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 882 2010  Base Case 2004 SCR1 SCR SCR1 SCR Page 883 2010  Base Case 2004 Page 884 2010  Base Case 2004 Page 885 2010  Base Case 2004 Page 886 2010  Base Case 2004 SCR2 SCR SCR2 SCR RET1 CT Early Retirements RET1 CT Early Retirements Page 887 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 888 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 889 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 890 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 891 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements ML01 Scrubber ML01 Scrubber RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 892 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements SCR1 SCR RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 893 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements ML02 Scrubber RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 894 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 895 2010  Base Case 2004 Page 896 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements OC03 O/ G To CC RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 897 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements SCR1 SCR SCR1 SCR SCR1 SCR SCR1 SCR OC03 O/ G To CC OC03 O/ G To CC RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 898 2010  Base Case 2004 ML01 Scrubber RL01 Scrubber & SCR ML01 Scrubber ML01 Scrubber SNR1 SNCR RL01 Scrubber & SCR RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements OC03 O/ G To CC OC03 O/ G To CC Page 899 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RD01 Scrubber & SCR ML02 Scrubber ML02 Scrubber SNR1 SNCR SCR2 SCR SCR1 SCR1 SCR SCR SCR1 SCR1 SCR SCR RL01 Scrubber & SCR SCR1 SCR1 SCR SCR RL01 Scrubber & SCR SNR1 SNCR SNR1 SNCR SNR1 SNCR RL01 Scrubber & SCR RL01 Scrubber & SCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR LD02 Scrubber SNR1 SNCR SNR1 SNCR SCR1 SCR1 SCR SCR SCR1 SCR1 SCR SCR SCR1 SCR1 SCR SCR SCR1 SCR1 SCR SCR LD01 Scrubber RET3 Oil/ Gas Early Retirements Page 900 2010  Base Case 2004 RL01 Scrubber & SCR SNR1 SNCR SNR1 SNCR RL01 Scrubber & SCR Page 901 2010  Base Case 2004 SCR1 SCR SCR1 SCR Page 902 2010  Base Case 2004 SCR2 SCR SCR2 SCR SCR1 SCR Page 903 2010  Base Case 2004 SCR2 SCR SCR2 SCR SCR2 SCR SCR2 SCR Page 904 2010  Base Case 2004 Page 905 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements Page 906 2010  Base Case 2004 Page 907 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 908 2010  Base Case 2004 SNR1 SNCR Page 909 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 910 2010  Base Case 2004 SCR1 SCR SCR1 SCR Page 911 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 912 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements OC03 O/ G To CC RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements SNR1 SNCR RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 913 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements SNR1 SNCR Page 914 2010  Base Case 2004 SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR Page 915 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 916 2010  Base Case 2004 SCN1 SNCR  O/ G Steam RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements SCO1 SCR  O/ G Steam Page 917 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 918 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 919 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 920 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 921 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 922 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements SCR1 SCR SCR1 SCR SCR1 SCR SCR1 SCR Page 923 2010  Base Case 2004 LO01 Scrubber RET1 CT Early Retirements Page 924 2010  Base Case 2004 RET1 CT Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SCR2 SCR SCR2 SCR SCR2 SCR SCR2 SCR Page 925 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements OC03 O/ G To CC RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements OC03 O/ G To CC OC03 O/ G To CC RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements OC03 O/ G To CC OC03 O/ G To CC gy with Close coupled and Separated OFA ( Tangentially fired units only)

Page 926 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 927 2010  Base Case 2004 Page 928 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 929 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR RET1 CT Early Retirements RET1 CT Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 930 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR SNR1 SNCR RET1 CT Early Retirements Page 931 2010  Base Case 2004 RET4 Coal Early Retirements RET4 Coal Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 932 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 933 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 934 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements Page 935 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements Page 936 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 937 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 938 2010  Base Case 2004 Page 939 2010  Base Case 2004 Page 940 2010  Base Case 2004 Page 941 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 942 2010  Base Case 2004 RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements Page 943 2010  Base Case 2004 RET2 CC Early retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 944 2010  Base Case 2004 RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements Page 945 2010  Base Case 2004 RET2 CC Early retirements RET2 CC Early retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 946 2010  Base Case 2004 Page 947 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 948 2010  Base Case 2004 Page 949 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements Page 950 2010  Base Case 2004 Page 951 2010  Base Case 2004 Page 952 2010  Base Case 2004 Page 953 2010  Base Case 2004 Page 954 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 955 2010  Base Case 2004 RET2 CC Early retirements RET2 CC Early retirements RET2 CC Early retirements Page 956 2010  Base Case 2004 Page 957 2010  Base Case 2004 Page 958 2010  Base Case 2004 RET1 CT Early Retirements Page 959 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 960 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements SCR1 SCR SCR1 SCR RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 961 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements ML02 SCR1 Scrubber SCR ( Tangentially fired units only)

RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 962 2010  Base Case 2004 ML02 Scrubber Page 963 2010  Base Case 2004 tom boilers only)

Page 964 2010  Base Case 2004 SCR1 SCR ired units only)

RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 965 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements Page 966 2010  Base Case 2004 tom boilers only) tom boilers only) tom boilers only)

SCR1 SCR SCR1 SCR Page 967 2010  Base Case 2004 LD01 Scrubber gy with Close coupled and Separated OFA ( Tangentially fired units only)

RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements SCR1 SCR SCR1 SCR Page 968 2010  Base Case 2004 ML01 Scrubber ML01 Scrubber RO01 Scrubber & SCR RO01 Scrubber & SCR Page 969 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 970 2010  Base Case 2004 SCR1 SCR SCR1 SCR SCR1 SCR SCR1 SCR RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 971 2010  Base Case 2004 Page 972 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 973 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements Page 974 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements SNR1 SNCR SNR1 SNCR Page 975 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 976 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 977 2010  Base Case 2004 RET1 CT Early Retirements Page 978 2010  Base Case 2004 Page 979 2010  Base Case 2004 Page 980 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 981 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements Page 982 2010  Base Case 2004 RET3 Oil/ Gas Early Retirements Page 983 2010  Base Case 2004 RET1 CT Early Retirements Page 984 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 985 2010  Base Case 2004 Page 986 2010  Base Case 2004 Page 987 2010  Base Case 2004 tom boilers only)

Page 988 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 989 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements SCR2 SCR SCR2 SCR SCR1 SCR SCR1 SCR RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 990 2010  Base Case 2004 LD02 Scrubber LD02 Scrubber RET3 Oil/ Gas Early Retirements RET3 Oil/ Gas Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 991 2010  Base Case 2004 RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements RET1 CT Early Retirements Page 992 2010  Base Case 2004 SNR1 SNCR SNR1 SNCR Page 993 2010  Base Case 2004 SCR1 SCR SCR1 SCR SCR1 SCR SCR1 SCR Page 994 2010  Base Case 2004 gy with Close coupled and Separated OFA ( Tangentially fired units only)