[Federal Register Volume 87, Number 9 (Thursday, January 13, 2022)]
[Notices]
[Pages 2189-2190]
[FR Doc No: 2022-00500]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93934; File No. SR-NYSE-2020-96]

New York Stock Exchange LLC; Order Granting Petition for Review
and Scheduling Filing of Statements Regarding an Order Disapproving
Proposed Rule Change To Amend Its Rules Establishing Maximum Fee Rates
To Be Charged by Member Organizations for Forwarding Proxy and Other
Materials to Beneficial Owners

January 7, 2022.
    This matter comes before the Securities and Exchange Commission
(``Commission'') on petition to review the disapproval, pursuant to
delegated authority, of the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') proposed rule change (File No. SR-NYSE-2020-96) to amend
its rules establishing maximum fee rates to be charged by member
organizations for forwarding proxy and other materials to beneficial
owners.
    On December 15, 2020, the Commission issued a notice of filing of
the proposed rule change with the Commission pursuant to Section
19(b)(1) of the Securities Exchange Act

of 1934 (``Exchange Act'') \1\ and Rule 19b-4 \2\ thereunder.\3\ On
February 1, 2021, pursuant to Section 19(b)(2) of the Exchange Act,\4\
a longer time period was designated within which to act on the proposed
rule change.\5\ On March 18, 2021, proceedings were instituted under
Section 19(b)(2)(B) of the Exchange Act \6\ to determine whether to
approve or disapprove the proposed rule change.\7\ On June 11, 2021,
pursuant to Section 19(b)(2) of the Exchange Act,\8\ a longer time
period was designated for Commission action on the proceedings to
determine whether to approve or disapprove the proposed rule change.\9\
On August 18, 2021, after consideration of the record for the proposed
rule change, the Division of Trading and Markets (``Division''),
pursuant to delegated authority,\10\ issued an order disapproving the
proposed rule change (``Disapproval Order'').\11\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 90677 (December 15,
2020), 85 FR 83119 (December 21, 2020).
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 91025 (February 1,
2021), 86 FR 8420 (February 5, 2021).
    \6\ 15 U.S.C. 78s(b)(2)(B).
    \7\ See Securities Exchange Act Release No. 91359 (March 18,
2021), 86 FR 15734 (March 24, 2021).
    \8\ 15 U.S.C. 78s(b)(2).
    \9\ See Securities Exchange Act Release No. 92154 (June 11,
2021), 86 FR 32301 (June 17, 2021).
    \10\ 17 CFR 200.30-3(a)(12).
    \11\ See Securities Exchange Act Release No. 92700 (August 18,
2021), 86 FR 47351 (August 24, 2021).
---------------------------------------------------------------------------

    Pursuant to Rule 430 of the Commission's Rules of Practice,\12\ on
August 25, 2021, the Exchange filed a notice of intention to petition
for review of the Disapproval Order, and on September 1, 2021, the
Exchange filed a petition for review of the Disapproval Order. Pursuant
to Rule 431(e) of the Commission Rules of Practice,\13\ a notice of
intention to petition for review results in an automatic stay of the
action by delegated authority.
---------------------------------------------------------------------------

    \12\ 17 CFR 201.430.
    \13\ 17 CFR 201.431(e).
---------------------------------------------------------------------------

    Pursuant to Rule 431 of the Commission's Rules of Practice,\14\ the
Exchange's petition for review of the Disapproval Order is granted.
Further, the Commission hereby establishes that any party to the action
or other person may file a written statement in support of or in
opposition to the Disapproval Order on or before February 3, 2022.
---------------------------------------------------------------------------

    \14\ 17 CFR 201.431.
---------------------------------------------------------------------------

    For the reasons stated above, it is hereby:
    Ordered that the Exchange's petition for review of the Division's
action to disapprove the proposed rule change by delegated authority is
granted; and
    It is further ordered that any party or other person may file a
statement in support of or in opposition to the action made pursuant to
delegated authority on or before February 3, 2022.
    It is further ordered that the automatic stay of delegated action
pursuant to Commission Rule of Practice 431(e) is hereby discontinued.
    The order disapproving the proposed rule change (File No. SR-NYSE-
2020-96) shall remain in effect.

    By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00500 Filed 1-12-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: April 16, 2007 (Volume 72, Number 72)]
[Notices]
[Page 18981]
[DOCID:fr16ap07-69]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 2621-004]

Milliken and Company, Inc.; Notice of Intent To File License
Application, Filing of Pre-Application Document, and Approving Use of
the Traditional Licensing Process

April 10, 2007.
    a. Project No.: 2621-004.
    b. Date Filed: January 30, 2007.
    c. Submitted by: Milliken and Company, Inc.
    d. Name of Project: Pacolet River Hydroelectric Project.
    e. Location: The project is located on the Pacolet River, in
Spartanburg County, South Carolina.
    f. Filed Pursuant to: 18 CFR 5.5 and 5.6 of the Commission's
regulations.
    g. Potential Applicant Contact: Mr. Bryan Stone, Business Manager,
Lockhart Power Company, P.O. Box 10, 420 River Street, Lockhart, South
Carolina 29364,<PHONE_NUMBER>.
    h. FERC Contact: Lee Emery at<PHONE_NUMBER>; or e-mail at
<EMAIL_ADDRESS>
    i. Pursuant to 18 CFR 5.3(a)(2), Milliken and Company, Inc. filed
its Notice of Intent to File License Application using the Traditional
Licensing Process on January 30, 2007. With this notice, the Director
of the Office of Energy Projects, approves Milliken and Company, Inc.
request to use the Traditional Licensing Process.
    j. With this notice, we are initiating informal consultation with:
(a) The U.S. Fish and Wildlife Service and/or NOAA Fisheries under
section 7 of the Endangered Species Act and the joint agency
consultation thereunder at 50 CFR, Part 402; (b) NOAA Fisheries under
section 305(b) of the Magnuson-Stevens Fishery Conservation and
Management Act and implementing regulations at 50 CFR 600.920; and (c)
the South Carolina Historic Preservation Officer, as required by
section 106, National Historic Preservation Act, and the implementing
regulations of the Advisory Council on Historic Preservation at 36 CFR
800.2.
    k. With this notice, we are designating Milliken and Company, Inc.,
as the Commission's non-federal representative for carrying out
informal consultation, pursuant to section 7 of the Endangered Species
Act, section 305 of the Magnuson-Stevens Fishery Conservation and
Management Act, and section 106 of the National Historic Preservation
Act.
    l. Milliken and Company, Inc. filed a Pre-Application Document
(PAD) with the Commission, pursuant to 18 CFR 5.6 of the Commission's
regulations.
    m. The licensee states its unequivocal intent to submit an
application for a new license for Project No. 2197. Pursuant to 18 CFR
16.8, 16.9, and 16.10 each application for a new license and any
competing license applications must be filed with the Commission at
least 24 months prior to the expiration of the existing license. All
applications for license for this project must be filed by January 31,
2010.
    n. A copy of the PAD is available for review at the Commission in
the Public Reference Room or may be viewed on the Commission's Web site
(http://www.ferc.gov), using the ``eLibrary'' link. Enter the docket

number, excluding the last three digits in the docket number field to
access the document. For assistance, contact FERC Online Support at
<EMAIL_ADDRESS>or toll free at 1-866-208-3676, or for TTY,

at<PHONE_NUMBER>. A copy is also available for inspection and
reproduction at the address in paragraph h.
    Register online at http://ferc.gov/esubscribenow.htm to be notified

via e-mail of new filing and issuances related to this or other pending
projects. For assistance, contact FERC OnLine Support.

Kimberly D. Bose,
Secretary.
[FR Doc. E7-7161 Filed 4-13-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 87, Number 48 (Friday, March 11, 2022)]
[Rules and Regulations]
[Pages 13926-13930]
[FR Doc No: 2022-05295]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2021-0963; Project Identifier AD-2021-01026-T;
Amendment 39-21977; AD 2022-06-11]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for
certain The Boeing Company Model 777-200

and -300 series airplanes. This AD was prompted by reports of three
incidents involving in-flight fan blade failures on certain Pratt &
Whitney engines (``fan blades'' are also known as ``1st-stage low-
pressure compressor (LPC) blades''--these terms are used
interchangeably in this AD). This AD requires modifying the engine
inlet to withstand fan blade failure event loads. The FAA is issuing
this AD to address the unsafe condition on these products.

DATES: This AD is effective April 15, 2022.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of April 15,
2022.

ADDRESSES: For Boeing service information identified in this AD,
contact Boeing Commercial Airplanes, Attention: Contractual & Data
Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA
90740-5600; telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com. For Pratt & Whitney service information
identified in this AD contact Pratt & Whitney Division, 400 Main
Street, East Hartford, CT 06118; phone:<PHONE_NUMBER>; email:
[email protected]; website: https://connect.prattwhitney.com. You
may view this service information at the FAA, Airworthiness Products
Section, Operational Safety Branch, 2200 South 216th St., Des Moines,
WA. For information on the availability of this material at the FAA,
call<PHONE_NUMBER>. It is also available at https://www.regulations.gov
by searching for and locating Docket No. FAA-2021-0963.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2021-0963; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this final rule, any
comments received, and other information. The address for Docket
Operations is U.S. Department of Transportation, Docket Operations, M-
30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue
SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Luis Cortez-Muniz, Aerospace Engineer,
Airframe Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des
Moines, WA 98198; phone and fax:<PHONE_NUMBER>; email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to certain The Boeing
Company Model 777-200 and -300 series airplanes. The NPRM published in
the Federal Register on December 28, 2021 (86 FR 73688). The NPRM was
prompted by reports of three incidents involving in-flight fan blade
failures on certain Pratt & Whitney engines. In the NPRM, the FAA
proposed to require modifying the engine inlet to withstand fan blade
failure event loads. The FAA is issuing this AD to address the
airplane-level implications of the unsafe condition of engine fan blade
failure. Fan blade failures can cause fan rotor imbalance and result in
fan blade fragments penetrating the inner and outer barrel of the
inlet. This condition, if not addressed could result in engine in-
flight shutdown, and could result in separation of the inlet, the fan
cowl doors, or the thrust reverser (T/R) cowl, or result in
uncontrolled engine fire. Separation of the inlet, the fan cowl doors,
or the T/R cowl could result in impact damage to the empennage and loss
of control of the airplane, or to the fuselage or windows with
potential injury to passengers; or it could result in significantly
increased aerodynamic drag causing fuel exhaustion or the inability to
maintain altitude above terrain during extended operations (ETOPS)
flights, either of which could result in a forced off-airport landing
and injury to passengers. Uncontrolled engine fire could result in loss
of control of the airplane.

Discussion of Final Airworthiness Directive

Comments

    The FAA received comments from The Air Line Pilots Association,
International (ALPA), and two Anonymous commenters who supported the
NPRM without change.
    The FAA received additional comments from five commenters,
including an Anonymous commenter, All Nippon Airways (ANA), Boeing,
Japan Airlines (JAL), and United Airlines (UAL). The following presents
the comments received on the NPRM and the FAA's response to each
comment.

Request To Clarify Certain Sentences in the Background Paragraph

    Boeing requested that the ``Background'' paragraph in the NPRM be
revised to clarify that the failed hydraulic pump shutoff valve was not
the direct cause of the uncontained engine fire. Boeing stated that
flight data indicates that while the hydraulic pump shutoff valve
failed to close, no hydraulic fluid was leaked from the system until
well after the engine fire initiated.
    Boeing proposed that two sentences in the ``Background'' paragraph
of the NPRM be revised to, ``Several flammable fluid lines, the engine
accessory gearbox, and T/R structure were fractured and an uncontained
engine fire occurred. The hydraulic pump shutoff valve failed to close
when the fire handle was pulled, contributing additional flammable
fluid to the T/R area.'' Boeing commented that the proposed wording
recognizes that the failure may have contributed additional flammable
fluid to the T/R area, but that it did not directly cause the
uncontained fire.
    The FAA agrees with the commenter's clarification and did not
intend to imply that the failed hydraulic pump shutoff valve was the
direct cause of the uncontained engine fire. However, the detailed
background information, which includes the sentences that the commenter
proposed for the ``Background'' paragraph, are not carried over into
the final rule. The FAA has not changed this final rule in this regard.

Request To Use Certain Service Information as a Method of Compliance

    ANA, an Anonymous commenter, Boeing, and UAL requested the use of
Boeing Alert Service Bulletin 777-71A0085 and Boeing Alert Service
Bulletin 777-71A0093, for doing the actions in paragraph (g) of the
proposed AD. Boeing stated that the description of the modification in
the proposed AD is vague.
    The FAA disagrees with allowing the use of Boeing Alert Service
Bulletin 777-71A0085 and Boeing Alert Service Bulletin 777-71A0093 for
the actions specified in paragraph (g) of this AD. The service
bulletins are not yet FAA-approved. However, under the provisions of
paragraph (j) of this AD, the FAA will consider requests for approval
of the use of the service bulletins if sufficient data are submitted to
substantiate that the service bulletins would provide an acceptable
level of safety.

Request To Add Certain Exceptions for Ferry Flights

    JAL requested that the FAA revise the AD to include certain
exceptions for ferry flights. JAL stated it is planning to ferry
affected airplanes to a storage point in the United States. JAL
commented that although the local

authority in Japan provides regulatory requirements for special flight
permissions which are similar to 14 CFR 21.197, the Japanese regulatory
requirements do not include ``to a point of storage'' language for the
purpose of the flights. JAL proposed to add the following wording to
paragraphs (c) and (g) of the proposed AD, ``except for ferry flights,
without passenger and cargo, of the airplanes on which the actions
specified in paragraphs (h)(1) and (2) of this AD have been done.''
    The FAA disagrees with revising paragraph (c) Applicability or
paragraph (g) Modification of this AD in response to JAL's comment.
Paragraph (i), Special Flight Permit, provides that special flight
permits, as described in 14 CFR 21.197 and 21.199, are permitted
provided that the actions in paragraphs (h)(1) and (2) of this AD have
first been accomplished. 14 CFR 21.197(a)(1) provides, in relevant
part, that a special flight permit may be issued for flying the
aircraft to a base where repairs, alterations, or maintenance are to be
performed, or to a point of storage. The requested change is already
permitted by this AD. The FAA did not change this AD as a result of
this comment.

Request To Change the Initial Compliance Time to Before Revenue Flight

    ANA requested that in paragraph (g) of the proposed AD, the FAA
update the initial compliance time of ``before further flight after the
effective date of this AD'' to ``before the next revenue flight'' to
clarify the ferry flight requirement.
    Similarly, JAL requested that in paragraph (g) of the proposed AD,
the FAA update the initial compliance time of ``before further flight
after the effective of this AD'' to ``before the next revenue flight''
or ``before further flight except the ferry flight without passenger
and cargos.''
    The FAA disagrees with revising the initial compliance time in
paragraph (g) of this AD as requested by ANA and JAL. The FAA has
determined it is necessary to require certain actions prior to any
flight, except as permitted in paragraph (h), Special Flight Permit, of
this AD.

Request To Provide a Threshold for the Special Flight Permit

    UAL requested that the FAA provide a threshold in paragraph (h)(1)
of the proposed AD for the flow path UT inspection. UAL stated that
omitting a compliance time in paragraph (h) of the proposed AD for the
special flight permits creates ambiguity regarding when and how often
the flow path UT inspection is required for special flight permits. UAL
suggested a threshold of 275 flight cycles since the last flow path UT
inspection.
    The FAA agrees to add a threshold of 275 cycles to paragraph (h)(1)
of this AD, which is specified in Pratt & Whitney Alert Service
Bulletin PW4G-112-A72-361, dated October 15, 2021. This allows
airplanes with 1st-stage LPC blades that have accumulated 275 cycles
since new or fewer to be eligible for a special flight permit.

Request for an Additional Method of Compliance

    UAL requested that the FAA revise paragraph (h)(1) of the proposed
AD to add NPRM AD-2021-00830-E (86 FR 73699, December 28, 2021), as a
method of compliance for the flow path ultrasonic testing (UT)
inspection of the 1st-stage LPC blades.
    The FAA disagrees with the commenter's request. The method of
compliance in Pratt & Whitney Alert Service Bulletin PW4G-112-A72-361,
dated October 15, 2021, is the same as paragraph (i)(1) of NPRM AD-
2021-00830-E (86 FR 73699, December 28, 2021) and paragraph (h)(1) of
this AD. If the actions in the service information are accomplished,
the requirements in paragraph (h)(1) of this AD will have been met, and
therefore, no change to this AD has been made.

Request To Add Aircraft Maintenance Manual Task to Special Flight
Permit

    ANA and UAL requested that paragraph (h)(2) of the proposed AD
include Task 29-11-00-710-806 of the Boeing 777-200/300 Aircraft
Maintenance Manual as an acceptable method for accomplishing the
functional check of the left and right hydraulic pump shutoff valves.
    The FAA agrees with the commenter's request and has added Task 29-
11-00-710-806 of Boeing 777-200/300 Aircraft Maintenance Manual to the
``Other Related Service Information'' paragraph and to Note (1) to
paragraph (h)(2) of this AD as guidance for accomplishing the actions
required by paragraph (h)(2) of this AD.

Request To Delegate Alternative Methods of Compliance (AMOCs)

    UAL requested that if Boeing Alert Service Bulletin 777-71A0085 and
Boeing Alert Service Bulletin 777-71A0093 become an FAA-approved method
of compliance, the FAA should delegate The Boeing Company Organization
Designation Authorization (ODA) authority to approve structural related
AMOCs when deviations to the service documents are required.
    The FAA acknowledges UAL's request, however as stated previously,
the Boeing service bulletins are not yet FAA-approved, and therefore
ODA authority is not granted at this time. In the future, should the
service bulletins be approved as a method of compliance to this AD, the
FAA may consider ODA authority delegation for approval of structural-
related AMOCs for deviations to the approved method of compliance.

Additional Change Made to This AD

    In the process of preparing this final rule, the FAA noticed that
the unsafe condition statement could be improved regarding the initial
effects of the fan blade failure and the airplane level unsafe outcomes
that could result from each of those initial effects. Therefore, the
FAA has updated the unsafe condition statement in this AD to clarify
the specific causes and hazardous effects.

Conclusion

    The FAA reviewed the relevant data, considered any comments
received, and determined that air safety requires adopting this AD as
proposed. Except for minor editorial changes, and any other changes
described previously, this AD is adopted as proposed in the NPRM. None
of the changes will increase the economic burden on any operator.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Pratt & Whitney Alert Service Bulletin PW4G-112-
A72-361, dated October 15, 2021. This service information specifies
procedures for performing thermal acoustic image and ultrasonic testing
inspections of 1st-stage LPC blades. This service information is
reasonably available because the interested parties have access to it
through their normal course of business or by the means identified in
ADDRESSES.

Other Related Service Information

    The FAA reviewed Subtasks 26-21-00-200-018, 26-21-00-200-019, and
26-21-00-840-022, and Task 29-11-00-710-806, of Boeing 777-200/300
Aircraft Maintenance Manual, dated September 5, 2021. The service
information specifies procedures for performing a functional check of
the engine-driven pump shutoff valve.

Interim Action

    The FAA considers this AD to be an interim action. The manufacturer
is currently developing other actions that will address the unsafe
condition identified in this AD. Once these actions

are developed, approved, and available, the FAA might consider
additional rulemaking.

Costs of Compliance

    The FAA estimates that this AD affects 54 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Modification..........................  660 work-hours x $85 per        $362,560        $418,660     $22,607,640
                                         hour = $56,100.
----------------------------------------------------------------------------------------------------------------

    The FAA has received no definitive data on which to base the cost
estimates for the on-condition repairs that are part of the
modification specified in this AD.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

2022-06-11 The Boeing Company: Amendment 39-21977; Docket No. FAA-
2021-0963; Project Identifier AD-2021-01026-T.

(a) Effective Date

    This airworthiness directive (AD) is effective April 15, 2022.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to The Boeing Company airplanes, certificated in
any category, as specified in paragraphs (c)(1) and (2) of this AD.
    (1) Model 777-200 series airplanes equipped with Pratt & Whitney
PW4074, PW4074D, PW4077, PW4077D, PW4084D, PW4090, and PW4090-3
model turbofan engines.
    (2) Model 777-300 series airplanes equipped with Pratt & Whitney
PW4090 and PW4098 model turbofan engines.

(d) Subject

    Air Transport Association (ATA) of America Code 54, Nacelles/
pylons.

(e) Unsafe Condition

    This AD was prompted by reports of three incidents involving in-
flight fan blade failures on certain Pratt & Whitney engines. The
FAA is issuing this AD to address engine fan blade failure, which
could result in engine in-flight shutdown, and could result in
separation of the inlet, the fan cowl doors, or the thrust reverser
(T/R) cowl, or result in uncontrolled engine fire. Separation of the
inlet, the fan cowl doors, or the T/R cowl could result in impact
damage to the empennage and loss of control of the airplane, or to
the fuselage or windows with potential injury to passengers; or it
could result in significantly increased aerodynamic drag causing
fuel exhaustion or the inability to maintain altitude above terrain
during extended operations (ETOPS) flights, either of which could
result in a forced off-airport landing and injury to passengers.
Uncontrolled engine fire could result in loss of control of the
airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Modification

    Before further flight after the effective date of this AD,
modify the engine inlet to withstand fan blade failure event loads,
in accordance with a method approved by the Manager, Seattle ACO
Branch, FAA.

(h) Special Flight Permit

    Special flight permits, as described in 14 CFR 21.197 and
21.199, are permitted provided that the actions in paragraphs (h)(1)
and (2) of this AD have first been accomplished.
    (1) A flow path ultrasonic testing (UT) inspection of the 1st-
stage low-pressure compressor (LPC) blades for cracking has been
done within the last 275 cycles, as specified in the Accomplishment
Instructions, Part A--Initial Inspection of All LPC Fan Blades Prior
to their Return to Service, paragraph 1.A., of Pratt & Whitney Alert
Service Bulletin PW4G-112-A72-361, dated October 15, 2021, and the
1st-stage LPC blades have been found serviceable. This inspection is
not required for 1st-stage LPC blades with 275 cycles since new or
fewer.
    (2) A functional check of the left and right hydraulic pump
shutoff valves to ensure they close in response to the corresponding
engine fire handle input and all applicable corrective actions
(i.e., repair) within 10 days prior to flight.

    Note (1) to paragraph (h)(2):  Guidance for accomplishing the
actions required by paragraph (h)(2) of this AD can be found in the
``Engine-Driven Pump (EDP) Shutoff Valve Check'' (Subtasks 26-21-00-
200-018, 26-21-00-200-019, and 26-21-00-840-022, or Task 29-11-00-
710-806) of Boeing 777-200/300 Aircraft Maintenance Manual.

(i) Credit for Previous Actions

    This paragraph provides credit for the actions specified in
paragraph (h)(1) of this AD, if those actions were performed before
the effective date of this AD using the service information
specified in paragraph (i)(1), (2), or (3) of this AD.

    (1) Paragraph 2. of the Accomplishment Instructions of Pratt &
Whitney Special Instruction No. 85F-21, dated May 12, 2021, for a
flow path UT inspection.
    (2) Paragraph 1.a) of the Accomplishment Instructions of Pratt &
Whitney Special Instruction No. 130F-21, dated July 1, 2021, for a
flow path UT inspection.
    (3) Paragraph 2.a) of the Accomplishment Instructions of Pratt &
Whitney Special Instruction No. 130F-21, Revision A, dated July 28,
2021, for a flow path UT inspection.

(j) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle ACO Branch, FAA, has the authority to
approve AMOCs for this AD, if requested using the procedures found
in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request
to your principal inspector or responsible Flight Standards Office,
as appropriate. If sending information directly to the manager of
the certification office, send it to the attention of the person
identified in paragraph (k)(1) of this AD. Information may be
emailed to: [email protected].
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the responsible Flight Standards Office.

(k) Related Information

    (1) For more information about this AD, contact Luis Cortez-
Muniz, Aerospace Engineer, Airframe Section, FAA, Seattle ACO
Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax:
(206) 231-3958; email: [email protected].
    (2) Service information identified in this AD that is not
incorporated by reference is available at the addresses specified in
paragraphs (l)(3) and (4) of this AD.

(l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Pratt & Whitney Alert Service Bulletin PW4G-112-A72-361,
dated October 15, 2021.
    (ii) [Reserved]
    (3) For Boeing service information identified in this AD,
contact Boeing Commercial Airplanes, Attention: Contractual & Data
Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA
90740-5600; telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com. For Pratt & Whitney service information
identified in this AD contact Pratt & Whitney Division, 400 Main
Street, East Hartford, CT 06118; phone:<PHONE_NUMBER>; email:
[email protected]; website: https://connect.prattwhitney.com.
    (4) You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, [email protected], or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on March 4, 2022.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2022-05295 Filed 3-9-22; 4:15 pm]
BILLING CODE 4910-13-P


[Federal Register Volume 86, Number 244 (Thursday, December 23, 2021)]
[Notices]
[Pages 72958-72964]
[FR Doc No: 2021-27784]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RM22-5-000]

Rate Recovery, Reporting, and Accounting Treatment of Industry
Association Dues and Certain Civic, Political, and Related Expenses

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of inquiry.

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SUMMARY: In this Notice of Inquiry, the Federal Energy Regulatory
Commission (Commission) seeks comments on the rate recovery, reporting,
and accounting treatment of industry association dues and certain
civic, political, and related expenses. In addition, the Commission
seeks comments on the ratemaking implications of potential accounting
and reporting changes. The Commission also seeks comments on whether
additional transparency or guidance is needed with respect to defining
donations for charitable, social, or community welfare purposes.

DATES: Initial Comments are due February 22, 2022, and Reply Comments
are due March 23, 2022.

ADDRESSES: Comments, identified by docket number, may be filed in the
following ways. Electronic filing through http://www.ferc.gov, is
preferred.
     Electronic Filing: Documents must be filed in acceptable
native applications and print-to-PDF, but not in scanned or picture
format.
     For those unable to file electronically, comments may be
filed by USPS mail or by hand (including courier) delivery.
    [cir] Mail via U.S. Postal Service Only: Addressed to: Federal
Energy Regulatory Commission, Secretary of the Commission, 888 First
Street NE, Washington, DC 20426.
    [cir] Hand (including courier) delivery: Deliver to: Federal Energy
Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.
    The Comment Procedures Section of this document contains more
detailed filing procedures.

FOR FURTHER INFORMATION CONTACT:
Adam Pollock, (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426,<PHONE_NUMBER>, [email protected].
Neal Anderson, (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426,<PHONE_NUMBER>, [email protected].
Daniel Birkam, (Technical Information), Office of Enforcement, Federal
Energy Regulatory Commission, 888 First Street NE, Washington, DC
20426,<PHONE_NUMBER>, [email protected].

SUPPLEMENTARY INFORMATION:
    1. In this Notice of Inquiry (NOI), the Federal Energy Regulatory
Commission (Commission) seeks comments on the rate recovery, reporting,
and accounting treatment of industry association dues and certain
civic, political, and related expenses. In addition, the Commission
seeks comment on the ratemaking implications of potential accounting
and reporting changes. The Commission also seeks comments on whether
additional transparency or guidance is needed with respect to defining
donations for charitable, social, or community welfare purposes.
    2. First, we seek comments on the delineation of recoverable and
nonrecoverable industry association dues for rate purposes. Second, we
seek comments on increased transparency in

industry association expenses and segments of industry association dues
charged to utilities, in addition to comments on utilities' and
industry associations' expenses from civic, political, and related
activities. Finally, we seek comments on a framework for guidance
should the Commission determine action is necessary to further define
the recoverability of industry association dues charged to utilities
and/or utilities' expenses from civic, political, and related
activities.

I. Background

    3. The Commission has authority pursuant to the Federal Power Act
(FPA) and the Natural Gas Act (NGA) to determine whether a rate is
unjust, unreasonable, unduly discriminatory or preferential, and if the
Commission determines that the rate is unlawful, to establish a just
and reasonable replacement rate.\1\ The Commission also has the
authority to prescribe and maintain systems of accounts entitled
``Uniform System of Accounts'' for public utilities and licensees
subject to the provisions of the FPA, and natural gas companies under
the NGA,\2\ and the rules and regulations contained therein.\3\
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    \1\ 16 U.S.C. 824e(a); 15 U.S.C. 717d(a).
    \2\ 16 U.S.C. 825; 15 U.S.C. 717g; 18 CFR 101, 201 (2021).
    \3\ ``Utilities'' is used hereinafter to refer to both public
utilities as defined by FPA section 201(e) and natural gas companies
as defined by NGA section 2(6). This NOI does not contemplate any
changes to oil pipeline regulation under the Uniform System of
Accounts (USofA), because the instructions for oil pipelines differ
from those for utilities. The Uniform Systems of Accounts Prescribed
for Oil Pipeline Companies Subject to the Provisions of the
Interstate Commerce Act, 18 CFR 352 (2021), does not address
industry association dues or civic and political expenses.
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    4. The regulatory authority to modify rates, terms, and conditions
rests with the Commission where any rate, charge, or classification,
collected by any utility for any transmission, transportation, or sale
subject to the Commission's jurisdiction is unjust, unreasonable,
unduly discriminatory or preferential.\4\ The USofA contains accounts
to record the portions of industry association dues paid by utilities
as either operating or nonoperating in nature.\5\ The USofA gives
instructions on the separation of the expenses paid by utilities that
industry associations incur and bill to utilities into the appropriate
above the line (operating) and below the line (nonoperating)
accounts.\6\ For example, Account 930.2 (Miscellaneous and general
expenses), which includes the cost of labor and expenses incurred in
connection with the general management of the utility not provided for
elsewhere in the USofA, is considered above the line (i.e., generally
included in rate recovery) and covers industry association dues for
company memberships.\7\ Account 426.4 (Expenditures for certain civic,
political and related activities), which is used for costs for the
purpose of influencing public opinion with respect to the election or
appointment of public officials, referenda, legislation, or ordinances
or for the purpose of influencing the decisions of public officials, is
considered below the line (i.e., generally excluded from rate
recovery).\8\
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    \4\ 16 U.S.C. 824e(a); 15 U.S.C. 717d(a).
    \5\ 18 CFR 101, 201. Hereinafter, citations are made only to
part 101 of the Commission's regulations because they reflect the
same provisions as part 201 for the accounts discussed herein.
References to the USofA are to both part 101 and part 201 of the
Commission's regulations.
    \6\ See Delmarva Power & Light Co., 58 FERC ] 61,169, at 61,509
(1992) (The Commission ``has allowed utilities to allocate [Edison
Electric Institute (EEI)] contributions to wholesale customers only
to the extent the contributions are for research and development
programs to which wholesale customers themselves could not
contribute. However, that portion of EEI contributions used for
lobbying activities may not, under any circumstances, be included in
the utility's cost-of-service.'') (emphasis added). Typically, the
``line'' refers to the break between operating and nonoperating
income and expenses on the Statements of Income for the year. For
ratemaking purposes, the Commission has found that expenses above
the line are usually chargeable to the ratepayer because they
pertain solely to supplying a regulated utility service and are used
in determining rates. Expenses usually chargeable to the utility,
rather than ratepayers, appear below the line.
    \7\ 18 CFR 101, Account 930.2.
    \8\ 18 CFR 101, Account 426.4.
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    5. The Commission has not previously adopted a bright line rule or
specific guidelines that delineate between above the line and below the
line expenses for informing and influencing the public, including
industry association dues for such activities, instead allowing
utilities to determine the portion of their industry association dues
to include in above the line and below the line accounts, respectively,
based on information provided by the industry associations about their
activities and associated costs. The Commission relies on the principle
that the ``intended use and the reason behind the payment[ ]'' to
inform and influence the public dictates its accounting assignment.\9\
Although the Commission applies this principle to the accounting
treatment of utility expenditures, ``where the line between public
outreach and educational expenses and lobbying expenses is drawn has
not been clearly delineated.'' \10\ The Commission generally considers
the appropriate delineation between above the line and below the line
expenditures on a case-by-case basis given the facts presented.\11\ The
Commission's case-by-case application of the ``intended use'' and
``reason behind'' tests on expenditures incurred by industry
associations and borne by their utility members may have led to
stakeholder confusion as to what expenses are properly recoverable in
rates.\12\
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    \9\ Alaskan Nw. Nat. Gas Transp. Co., 19 FERC ] 61,218, at
61,429 (1982).
    \10\ Potomac-Appalachian Transmission Highline, LLC, Opinion No.
554, 158 FERC ] 61,050 (2017), order on compliance, 166 FERC ]
61,035 (2019), order on reh'g, Opinion 554-A, 170 FERC ] 61,050, at
P 79 (2020) (PATH) (citing ISO New England Inc., 117 FERC ] 61,070,
at P 40 (2006) (ISO New England), order on reh'g, 118 FERC ] 61,105
(2007) (ISO New England Rehearing), aff'd sub nom. Braintree Elec.
Light Dep't v. FERC, 550 F.3d 6 (D.C. Cir. 2008)).
    \11\ See, e.g., ISO New England, 117 FERC ] 61,070 at P 47 (``On
a number of occasions the Commission has found `lobbying' expenses
of any type to be non-recoverable, while on other occasions the
Commission has determined that even if the costs are related to
lobbying and should be recorded in Account 426.4, they are
appropriately recoverable from ratepayers, upon sufficient showing
that they were undertaken for the benefit of ratepayers.'').
    \12\ See N. Border Pipeline Co., 23 FERC ] 61,213, at 61,439
(1983) (``the distinction between influencing public opinion and
public relations activities lies in the intended use and reason
behind these payments''); see also PATH, 170 FERC ] 61,050 at P 79
(citing Potomac-Appalachian Transmission Highline, LLC, 152 FERC ]
63,025, at PP 30, 40 (2015)).
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    6. The Commission presumes that expenses recorded in above the
line, operating accounts may be recovered through rates, unless a
showing is made that the expense is nonoperating in nature and the
utility fails to rebut this showing. The Commission presumes that
expenses recorded in below the line, nonoperating accounts may not be
recovered in rates, without a further showing justifying such recovery
for ratemaking purposes. Thus, if a utility records amounts in Account
930.2, those expenses are presumptively recoverable, while costs
recorded in Account 426.4 are presumptively nonrecoverable.
    7. The Commission, as a part of its Office of Enforcement audit
program, and if within the scope of an audit, evaluates whether a
utility's classification of expenses between Accounts 930.2 and 426.4
complies with the USofA. Such audits of the classification of industry
association costs between above the line and below the line accounts
are limited to examination by the Commission of the recordkeeping and
accounting of industry association dues by member

utilities.\13\ Typically, the information available to audit staff
lacks detailed descriptions of the industry association's activities
for which members are charged. Also, a party to a utility's FPA section
205 rate case or NGA section 4 rate case may challenge the utility's
accounting classification and/or recovery of expenses by protesting the
utility's proposed rates. In addition, a complainant may file an FPA
section 206 complaint or an NGA section 5 complaint alleging that the
current rate treatment is unjust and unreasonable. For transmission
formula rates and certain other formula rates, stakeholders also have
the ability to file formal challenges before the Commission concerning
utilities' implementation of their formula rates following review of
annual updates.\14\
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    \13\ Unlike utilities, industry associations are not
jurisdictional entities and thus are not subject to the Commission's
accounting, record keeping, or reporting requirements. Moreover,
industry associations are not subject to the Commission audits
program.
    \14\ See, e.g., Pacific Gas & Elec. Co., 176 FERC ] 61,196, at P
15 (2021) (recognizing protest of the Cities of Anaheim, Azusa,
Banning, Colton, Pasadena, and Riverside, California). Utilities
with formula rates are required to demonstrate that amounts are
appropriately recorded through discovery (as part of an annual
update information sharing process) and upon request.
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    8. In a typical rate proceeding, opposing parties bear the burden
of raising an initial challenge of whether the company properly
designated expenses between above the line and below the line accounts,
or whether recovery of expenses appropriately booked to above the line
accounts is reasonable.\15\ A challenge with reviewing the accounting
of industry association dues--whether through the Commission's Office
of Enforcement audit program, or pursuant to a utility's rate case,
complaint proceedings, or formula rate challenges--is that utilities
typically have not required their industry association to provide more
than simple invoices and thus lack detailed information on the nature
of the association's activities for purposes of determining the
appropriate classification of costs into above the line and below the
line accounts.
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    \15\ See, e.g., PATH, 170 FERC ] 61,050 at PP 25-26 (noting that
PATH, in an FPA section 205 filing, booked certain costs to an above
the line account, but that certain participants subsequently argued
that the costs should instead be booked to Account 426.4).
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    9. On March 17, 2021, the Center for Biological Diversity filed a
petition for rulemaking, requesting that the Commission amend USofA
requirements relating to utility payments to industry associations
engaged in lobbying or other influence-related expenses.\16\ The CBD
Petition requested that the Commission amend the USofA to allocate all
industry association dues paid by utilities to Account 426.4 which
would highlight them for scrutiny, where ``the utility, not the
consumer, must bear the burden of proof to demonstrate an entitlement
to recover expenses from ratepayers.'' \17\ In response to the CBD
Petition, some commenters recommended that the Commission remove all
industry association dues from rates, whereas others suggested that
such a move was unnecessary because industry association dues were
properly allocated between recoverable and non-recoverable accounts and
contrary to the fundamental principles of accounting.
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    \16\ Center for Biological Diversity, Petition for Rulemaking to
Amend the Uniform System of Accounts' Treatment of Industry
Association Dues, Docket No. RM21-15-000, at 1 (filed Mar. 17, 2021)
(CBD Petition). The CBD Petition requested changes to the USofA for
both public utilities and natural gas companies. See id. at 4 n.9.
    \17\ Id. at 8 (quoting Potomac-Appalachian Transmission Highline
LLC, 152 FERC ] 63,025 at P 29); id. at 16 (citing 16 U.S.C.
824d(e)).
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II. Discussion

    10. We find it appropriate to initiate this NOI to: (i) Examine the
Commission's current policies and regulations governing the rate
recovery, reporting, and accounting treatment of industry association
dues and certain civic, political, and related expenses; and (ii)
identify potential changes that may be necessary to ensure that such
expenditures are appropriately accounted for under the USofA and that
recovery of these expenditures through Commission jurisdictional rates
is just and reasonable. First, the NOI outlines the accounts utilities
use to recover industry association dues. Second, we seek comments on
the delineation of recoverable and nonrecoverable industry association
dues for rate purposes. Third, we seek comments on increased
transparency on industry association activities and expenses; comments
on utilities' and industry associations' expenses from civic,
political, and related activities; and what, if any, steps to increase
transparency would assist the Commission in determining whether
recovery of industry association dues in rates is just and
reasonable.\18\ Finally, we seek comments on a framework for guidance
should we determine action is necessary to further define the
recoverability of industry association dues charged to utilities and/or
utilities' expenses from civic, political, and related activities.
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    \18\ Although the Commission has well-established precedent
disallowing the cost recovery of donations for charitable, social,
or community welfare purposes included in Account 426.1, we also
seek comment on whether additional transparency or guidance is
necessary to ensure such costs are appropriately treated for
accounting and rate recovery purposes. See, e.g., Ameren Ill. Co.,
169 FERC ] 61,147, at P 81 (2019).
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A. Cost Recovery and Current Accounting

    11. As discussed above, utilities record industry association dues
in two distinct accounts--Account 930.2 (Miscellaneous and general
expenses) for above the line expenses and Account 426.4 (Expenditures
for certain civic, political and related activities) for below the line
expenses.\19\ Account 930.2 captures industry association dues that are
operating in nature and therefore presumptively recoverable by
utilities. The account states that ``this account shall include the
cost of labor and expenses incurred in connection with the general
management of the utility not provided for elsewhere.'' \20\ The
illustrative list of expenses included in Account 930.2 includes
``industry association dues for company memberships.'' \21\
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    \19\ See supra notes 5, 7-8 and accompanying text.
    \20\ 18 CFR 101, Account 930.2.
    \21\ Id., Item 2.
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    12. Utilities may include certain portions of industry association
dues in Account 426.4, even though the definition of Account 426.4 does
not specifically reference industry association dues.\22\ This is
because Account 426.4 is defined to include ``miscellaneous expense
items which are nonoperating in nature but which are properly
deductible before determining total income before interest charges.''
\23\ Whereas a certain proportion of industry association dues may fall
under the operating cost category for miscellaneous general expenses,
the proportion of an industry association's costs for nonoperating
expenses is properly allocated to accounts in the Account 426 series.
Namely, Account 426.4 includes:
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    \22\ See Expenditures for Political Purposes--Amendment of
Account 426, Other Income Deductions, Unif. Sys. of Accounts, and
Report Forms Prescribed for Elec. Utils. and Licensees and Nat. Gas
Cos.--FPC Forms Nos. 1 and 2, Order No. 276, 30 FPC 1539 (1963).
    \23\ 18 CFR 101, Special Instructions--Accounts 426.1, 426.2,
426.3, 426.4, and 426.5.

expenditures for the purpose of influencing public opinion with
respect to the election or appointment of public officials,
referenda, legislation, or ordinances (either with respect to the
possible adoption of new referenda, legislation or ordinances or
repeal or modification of existing referenda, legislation or
ordinances) or approval, modification, or revocation of franchises;
or for the purpose of influencing the decisions of public

officials, but shall not include such expenditures which are
directly related to appearances before regulatory or other
governmental bodies in connection with the reporting utility's
---------------------------------------------------------------------------
existing or proposed operations.\24\

    \24\ 18 CFR 101, Account 426.4.
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    As described above, while recording costs in certain accounts
provides useful information to regulators, it is not necessarily
dispositive regarding recoverability.\25\ The Commission employs the
``intended use'' and ``reason behind'' the payment standard to
delineate costs incurred to inform or influence public opinion as
either operating or nonoperating.\26\ With regard to rate recovery, the
Commission has required utilities to record costs for lobbying, civic
engagement, public information campaigns, and the like to Account
426.4, except those costs that the utility demonstrates provide a
benefit to ratepayers, thus determining whether the costs are
recoverable or nonrecoverable.\27\
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    \25\ See supra P 6.
    \26\ The Commission has found that
    The distinction lies in the intended use and reason behind the
payments. Expenditures incurred to influence the opinion of the
public during the selection process have little or no benefit to the
ratepayers, and therefore must be borne by stockholders. Just and
reasonable expenditures incurred to keep the general public informed
on the progress of the project and other public relations activities
are proper expenses to be borne by ratepayers after operations
commence.
    Alaskan Nw. Nat. Gas Transp. Co., 19 FERC at 61,429 (emphasis
added).
    \27\ See Order No. 276, 30 FPC at 1540; Alaskan Nw. Nat. Gas
Transp. Co., 19 FERC at 61,428.
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    13. Questions 1 through 5 seek information regarding how industry
associations and their member utilities currently classify, record, and
recover industry association costs, the nature of costs incurred, and
dues assigned by industry associations. In particular, these questions
seek to clarify which industry association costs member utilities
currently book to Account 426.4 and which costs they book to Account
930.2. The responses to these questions may highlight cost categories
that utilities include in rate recovery, which may, in turn, require
further instruction from the Commission to ensure the proper rate
treatment.
    14. Questions 6 through 14 explore how much transparency for such
costs exists and potential ways to improve this transparency. Due to
the lack of transparency of industry association costs and the wide
variety of activities and their specific contexts, the ``intended use''
and ``reason behind'' standard is difficult to apply to industry
association dues and often requires case-by-case consideration.
    15. Questions 15 to 20 below are intended to inform whether
modifications to Commission regulations or additional guidance are
needed to ensure the proper classification of utility and industry
association costs between Accounts 426.4 and 930.2. The Commission has
noted that recording expenses in Account 426.4 ``simply means that
those costs are not presumed to be recoverable, shifting the burden on
the filing entity to demonstrate why such costs should be
recoverable.'' \28\ Further Commission instruction may reduce the
frequency of rate proceedings that review industry association dues and
help ensure that industry association dues are appropriately
categorized for recovery purposes.
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    \28\ ISO New England Rehearing, 118 FERC ] 61,105 at P 46.
---------------------------------------------------------------------------

B. Industry Association Dues

    16. We are considering whether to clarify the delineation of
recoverable and nonrecoverable industry association dues for rate
purposes.
    (Q1) The CBD Petition, in an example it argues is emblematic of
practices among other industry associations, asserts that during the
period when the EEI budget was subject to audits by the National
Association of Regulatory Utility Commissioners (NARUC), ``EEI was
spending up to 50% of its income on advocacy and lobbying efforts.''
\29\ The Solar Energy Industries Association contends that in at least
one instance, an investor owned utility's EEI invoice noted only 7% of
its membership dues related to influencing legislation. The investor-
owned utility therefore recorded 93% of its EEI dues to Account
930.2.\30\
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    \29\ CBD Petition at 11 (citing Ex. A, David Anderson et al.,
Paying for Utility Politics: How Utility Ratepayers are Forced to
Fund the Edison Electric Institute and Other Political
Organizations, Energy and Policy Institute, at 6 (2017) (``One of
the final audits from NARUC revealed that 50% of EEI's expenditures
went to the following categories: Legislative advocacy; regulatory
advocacy; advertising; marketing; public relations; legislative
policy research; regulatory policy research.'')). NARUC ended its
EEI budget audits over 10 years ago. See id.
    \30\ Solar Energy Industries Association, Comments in Support of
Petition, Docket No. RM21-15-000, at 4-5 (filed Apr. 26, 2021). A
copy of the 2006 invoice was attached to a pleading in Docket No.
ER18-1122-001. Ameren Services Company, Motion for Leave to Answer
and Answer, Docket No. ER18-1122-001, attach. EEI Invoice (filed
Feb. 11, 2020).
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    (a) For the three most recent fiscal years, what are the annual
dues charged to individual utilities for their membership in each
industry association for which utilities seek recovery in rates?
    (b) What percentage of industry association dues did industry
association utility members classify and book as operating and
nonoperating for the three most recent fiscal years?
    (c) What percentage of EEI dues did members classify as operating
and nonoperating in the last three years subject to a NARUC audit? What
are the reasons for any difference between these amounts and the
percentages in question 1?
    (Q2) What methodologies do industry associations use to apportion
industry association operating budgets into dues among member
companies? To what extent are industry association expenses assigned
and apportioned based on member classes or sectors and/or directly
assigned to specific members, and if so, what are the bases for such
assignment/apportionment and/or direct assignment?
    (Q3) What internal controls and accounting methodologies are used
by industry associations to track their costs generally and
specifically to determine how costs are billed to members? In addition:
    (a) What cost categories are used in budgetary and accounting
processes internal to industry associations to account for industry
association dues? What were the budgets by cost category for the three
most recent fiscal years?
    (b) What processes do industry associations use to derive and
inform utilities of their categorization of programs to allow the
utilities to apportion their dues among various accounting
classifications?
    (c) How do industry associations derive and inform all
jurisdictional companies of the portion of the total invoice payments
associated with lobbying, public outreach on legislative and regulatory
issues, and other categories of costs not recovered through rates?
    (d) To what extent is information of any such methodologies or the
underlying budgetary information shared with industry association
members?
    (Q4) To what extent do industry associations provide utilities with
estimated itemized expenses in dues invoices? To what extent do the
associations conduct reviews or other activities to determine and
evaluate the actual level of cost incurred related to influencing
legislation and lobbying expenses, and compare such actual levels to
the estimated percentages of such activities provided to jurisdictional
companies? What is the frequency and scope of such reviews or
activities and how were the results used? Please identify and explain
any substantial

impediments to, or industry association concerns with, providing
utilities detailed information on the percentage of the association's
charges attributable to civic, political, public outreach on
legislative and regulatory issues, and similar activities.
    (Q5) For industry associations, what is the nature of the
activities and associated costs that fall into the following
categories, and for each item, what percentage of the associated costs
is classified as operating expense by the utility members:
    (a) Engineering or reliability standards development;
    (b) Legislative affairs including: (i) Political contributions;
(ii) following legislative events and informing members; (iii)
preparation and research in connection with correspondence with
legislators, their staff, or legislative committees; and (iv)
correspondence with legislators, their staff, or legislative
committees;
    (c) Financial support of other organizations (list organizations
with corresponding contributions);
    (d) Public information or outreach related to: (i) Safety; (ii)
promotion of utilities; (iii) existing or potential state or federal
environmental regulations and/or laws; (iv) proceedings at FERC or
before other administrative agencies; or (iv) other subjects (describe
each element with corresponding expenditures);
    (e) Training for: (i) Employee safety; (ii) accounting; (iv)
planning; (v); reliability/resilience; (vi) market participation; and
(vii) other (describe each element with corresponding expenditure);
    (f) Regulatory affairs including: (i) Participation in regulatory
proceedings including listing each proceeding and its primary issue(s);
(ii) research conducted for regulatory proceedings; (iii) following
regulatory proceedings; (iv) informing members of regulatory
proceedings;
    (g) Meetings/conferences (to the extent not covered in the other
categories listed here);
    (h) Administrative costs including rents and other overhead; and
    (i) Other (describe each element with corresponding expenditure).

C. Increased Transparency

    17. We are considering whether increased transparency into industry
association costs may improve public knowledge into industry
association dues and therefore ensure the just and reasonable recovery
of industry association dues.
    (Q6) What mechanisms currently exist for stakeholders to examine
the costs and activities of industry associations?
    (Q7) Do industry associations disclose the nature of their costs
and activities in any state regulatory proceedings? If yes, please
provide citations.
    (Q8) Have any industry associations been the subject of audits by
any regulatory bodies? If yes, please provide a summary of the purpose
and findings of the audit(s).
    (Q9) What, if any, additional transparency is needed for
stakeholders to evaluate the reasonableness of industry association
costs that are recovered through rates?
    (Q10) If additional transparency is needed for stakeholders, should
any transparency requirements for industry association costs be limited
to certain rates, such as electric transmission and natural gas
transportation rates, in light of the potentially larger costs
involved, or should they apply to all types of rates (e.g., power sales
agreements, reactive power, and sale of electricity)?
    (Q11) Specific to the electric industry, should any transparency
requirements for industry association costs be limited to investor-
owned utilities or should they also apply to municipal utilities and
rural electric cooperatives who recover costs for Commission-
jurisdictional service?
    (Q12) Industry associations rely on certain cost categories to
enable utilities to determine what portion of their industry
association dues are properly recovered from ratepayers and what costs
are borne by shareholders. Please describe any additional or
alternative cost categories to those in Question 5, above, that
industry associations or their members should disclose to provide
sufficient transparency.
    (Q13) What specific methods to enhance transparency of industry
association costs should the Commission consider? For each of the
following methods to enhance transparency, as well as others you may
identify, please explain whether and how much would they (a) improve
transparency; (b) impose burdens on industry associations and/or their
members; (c) help ensure that utility rates are just and reasonable:
    (a) Utilities that seek to recover dues must possess detailed data
that sufficiently explains such costs within their books and records,
and such amounts must be subject to Commission audits, similar to that
requested in Question 5, above;
    (b) limit a utility's ability to seek and obtain recovery of
industry association dues to industry associations that publicly
disclose detailed cost data, similar to that requested in Question 5,
above; and/or
    (c) utilities must include in their FPA section 205 stated rate
filings and their supporting workpapers to their formula rate annual
updates, information similar to that requested in Question 5, above?
    (Q14) If the Commission imposed a requirement, such as one of those
discussed in Question 13, above, should that requirement be limited to
associations whose dues per utility exceed a certain minimum monetary
threshold and, if so, what threshold?
    18. We also seek comments on whether increased transparency into
donations for charitable, social, or community welfare purposes is
needed to improve public knowledge of such costs and therefore ensure
just and reasonable treatment of donations or other charitable
contributions.
    (Q15) What, if any, additional transparency is needed for
stakeholders to evaluate whether donations for charitable, social, or
community welfare purposes are treated appropriately for ratemaking
purposes?

D. Guidance

    19. We are considering whether the Commission should provide
further guidance related to: (i) Defining recoverable/nonrecoverable
industry association costs for rate purposes; (ii) clarifying how
certain ``grey area'' costs should be booked to accounts and treated in
rates; and/or (iii) modifying Commission policies and instituting
potential regulations with respect to costs that may currently be
recoverable, but that the Commission may find should no longer be
recovered.
    (Q16) Do utilities currently base the amount of their costs
recoverable through rates on (i) the USofA, specifically the
definitions in Accounts 930.2 and 426.4, (ii) the Internal Revenue
Service (IRS) definition of lobbying, (iii) some other basis, or (iv)
some combination thereof? What percentage of dues would be considered
recoverable for each the four options for the most recent fiscal year?
    (Q17) What material differences, if any, are there between industry
association costs considered nonoperating per the definition of Account
426.4 and industry association costs that may be deducted for tax
purposes based on the Internal Revenue Code or IRS regulations? What
are examples of such activities and expenditures?
    (Q18) For what, if any, industry association costs is the
classification as operating or nonoperating through utility rates
unclear and ambiguous? Please describe any such ``gray areas.''

    (Q19) The Commission currently allows all costs related to
regulatory interventions and litigation by both utilities and industry
associations to be recorded to above the line accounts. Further,
Account 426.4 provides as an exception to the political advocacy
activities utilities are required to report in that below the line
account, namely, ``expenditures which are directly related to
appearances before regulatory or other governmental bodies in
connection with the reporting utility's existing or proposed
operations.'' \31\ What is the appropriate scope of this exemption for
utilities and, by extension, their industry associations? Are there
types of appearances before regulatory or governmental bodies for which
the related expenditures should be excluded from rates, and if so, on
what basis?
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    \31\ 18 CFR 101, Account 426.4 (stating that this subaccount
``shall not include . . . expenditures which are directly related to
appearances before regulatory or other governmental bodies in
connection with the reporting utility's existing or proposed
operations.'').
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    (Q20) Please provide examples as to what, if any, costs for
    (a) information campaigns carried out by industry associations are
currently recoverable in utility member rates;
    (b) information campaigns carried out by industry associations are
currently recoverable in rates that the Commission should exclude from
recovery in rates either by clarifying or revising its existing
regulations;
    (c) gifts, grants, donations, payments, dues, or contributions to
other organizations by either utilities or industry associations are
currently recoverable and should not be recoverable in utility member
rates; and
    (d) conferences or trainings are carried out by industry
associations for which the Commission should prohibit from recovery in
rates, and on what basis.
    (Q21) Please describe any other guidance that the Commission should
provide with respect to the rate recovery of industry association dues
or utilities' civic, political, and related expenses.
    (Q22) Please indicate whether there are any above the line,
operating accounts other than Account 930.2 in which expenses related
to civic, political, public outreach, and similar activities may be
recorded (e.g., accounts pertaining to advertising costs) and, if so,
what issues the Commission should consider with respect to those
accounts.

III. Comment Procedures

    20. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be adopted, including
any related matters or alternative proposals that commenters may wish
to discuss. Comments are due February 22, 2022, and Reply Comments are
due March 23, 2022. Comments must refer to Docket No. RM22-5-000, and
must include the commenter's name, the organization they represent, if
applicable, and their address in their comments. All comments will be
placed in the Commission's public files and may be viewed, printed, or
downloaded remotely as described in the Document Availability section
below. Commenters on this proposal are not required to serve copies of
their comments on other commenters.
    21. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software must be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    22. Commenters that are not able to file comments electronically
may file an original of their comment by USPS mail or by courier-or
other delivery services. For submission sent via USPS only, filings
should be mailed to: Federal Energy Regulatory Commission, Office of
the Secretary, 888 First Street NE, Washington, DC 20426. Submission of
filings other than by USPS should be delivered to: Federal Energy
Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.

IV. Document Availability

    23. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://www.ferc.gov). At
this time, the Commission has suspended access to the Commission's
Public Reference Room due to the President's March 13, 2020
proclamation declaring a National Emergency concerning the Novel
Coronavirus Disease (COVID-19).
    24. From the Commission's Home Page on the internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
    25. User assistance is available for eLibrary and the Commission's
website during normal business hours from the Commission's Online
Support at<PHONE_NUMBER> (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
[email protected].
    By direction of the Commission. Commissioner Danly is dissenting
with a separate statement to be issued at a later date. Commissioner
Christie is concurring with a separate statement attached. Commissioner
Phillips is not participating.

    Issued: December 16, 2021.
Kimberly D. Bose,
Secretary.

United States of America Federal Energy Regulatory Commission

Rate Recovery, Reporting, and Accounting Treatment of Industry
Association Dues and Certain Civic, Political, and Related Expenses
Docket No. RM22-5-000
(Issued December 16, 2021)

Christie, Commissioner, concurring:

    1. I concur with today's order instituting a Notice of Inquiry
(NOI) related to the treatment of industry association dues and certain
civic, political, and related expenses. The NOI asks a number of
important questions regarding transparency and current accounting
practices that will assist this Commission in ensuring that rates paid
by consumers are just and reasonable. I write separately because I
respectfully disagree with any suggestion that First Amendment rights
are implicated, much less threatened, by this inquiry.
    2. The Supreme Court of the United States has ruled that commercial
speech by corporations and other business entities is protected by the
First Amendment,\1\ and that political speech by such entities is
likewise protected.\2\ It is also true that spending on protected
speech is inextricably part of such speech and is thus protected as
well.\3\
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    \1\ See 44 Liquormart v. Rhode Island, 517 U.S. 484 (1996).
    \2\ See Citizens United v. Federal Election Commission, 558 U.S.
310 (2010).
    \3\ Id.; see also Buckley v. Valeo, 424 U.S. 1 (1976).
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    3. That said, the questions raised in this NOI are not related to
whether a corporation or other business entity is allowed to spend
money in the exercise of its First Amendment right to free speech or
``to petition the government

for a redress of grievances'' \4\ (a/k/a ``lobbying''). They can.
Neither is it aimed at suppressing or burdening the protected speech of
some limited subset of trade associations. Rather, the central question
here is the same one present in so many of the cases before an economic
regulator such as FERC, and that is the less headline-grabbing, albeit
critically important, question: Who pays?
---------------------------------------------------------------------------

    \4\ U.S. Const. Adt. 1.
---------------------------------------------------------------------------

    4. Relevant to the ``who pays?'' question is the type of business.
A business in a competitive market has a First Amendment right to spend
its own money on speech, including lobbying the legislators who pass
laws that affect it. These activities may be aimed at rent-seeking
through regulation or subsidies (or seeking protection from other
special interests' rent-seeking). James Madison made it clear in The
Federalist No. 10 that special interests (``factions'') would always
seek to gain advantage at the expense of others through the political
process; but it was also Madison who authored the First Amendment that
protected the freedom of all to pursue their interests in the public
arena, and left it up to (hopefully) public-spirited legislators--
elected by the public--to protect the public interest from the special
interests (including those claiming to represent the public interest)
and their rent-seeking behavior.
    5. Privately-owned businesses get funds from two primary sources:
(i) Investors who put up capital; and (ii) customers who purchase its
goods and/or services. A company that holds a state-granted and state-
protected monopoly franchise is fundamentally different, however, from
a business in a competitive market, not in its First Amendment rights,
but in how it can pay for certain activities. Unlike the business in a
competitive market whose customers voluntarily choose to purchase its
products over the products of its competitors, the state-protected
monopoly gets its money from captive customers who have no choice but
to purchase, for example, electrical power, a vital necessity of modern
life, from the monopoly. The state-protected monopoly is also
guaranteed recovery of its prudent costs incurred to serve the public
(hence the term ``public service company,'' or ``public service
corporation,'' defined terms typically applicable to public utilities
under many state laws).\5\ The question asked herein, therefore, is
which of its costs should be charged to investors, who have voluntarily
invested in the company, and which to captive customers, who have no
choice but to purchase an essential product such as electricity from
it.\6\
---------------------------------------------------------------------------

    \5\ See, e.g., Va. Code Sec.  56-1 et seq.
    \6\ This analysis applies to privately-owned companies, not
publicly-owned or government-owned providers or co-operatives.
---------------------------------------------------------------------------

    6. Nothing keeps the monopoly from spending money on First
Amendment protected speech, including lobbying legislators and related
public-relations activities, but its investors should pay those costs,
not captive customers.\7\ That is the issue implicated by this NOI,
which seeks to better understand whether costs permitted to be ``above
the line'' (chargeable to customers) and those required to be ``below
the line'' (chargeable to investors) for privately-owned companies are
being treated as such on a transparent and consistent basis.
---------------------------------------------------------------------------

    \7\ Legal fees are a more complicated matter.
---------------------------------------------------------------------------

    7. While in a typical rate proceeding, the opposing parties bear
the initial burden of challenging the accounting or rate treatment of
``above the line'' or ``below the line'' expenses, under section 205 of
the Federal Power Act, the ultimate burden has always been on the
regulated public utility to demonstrate the justness and reasonableness
of its proposed rate. Based on the record before us, and the Commission
audit staff's own experience, it may be that the Commission, customers,
and other interested parties are not able to access the information
necessary to determine whether the costs included in a jurisdictional
utility's rates are appropriately classified. The questions raised in
the NOI relate to issues squarely within, and essential to, the
Commission's jurisdictional responsibilities to ensure just and
reasonable rates.
    8. Let me also emphasize: It may well be that the Commission's
existing rules, regulations and precedent are sufficient to ensure the
just and reasonable allocation of such costs, but it is worth
reviewing. As always with energy regulation, the devil is in the
details.
    9. On a more specific topic, I also support asking whether it is
time to clarify our regulations or further codify what is now
established primarily through Commission precedent, i.e., not allowing
a monopoly to recover from customers the costs of its contributions and
grants to charitable and civic organizations. Giving away other
people's money is not altruism.
    For these reasons, I respectfully concur.

Mark C. Christie,
Commissioner.

[FR Doc. 2021-27784 Filed 12-22-21; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 219 (Tuesday, November 13, 2012)]
[Rules and Regulations]
[Pages 67562-67563]
[FR Doc No: 2012-27496]

=======================================================================
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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 4, 5, 16, 33, 34, 35, 157, 348, 375, 385 and 388

[Docket No. RM12-2-000; Order No. 769]

 Filing of Privileged Materials and Answers to Motions;
Correction

AGENCY: Federal Energy Regulatory Commission. DOE.

ACTION: Final rule; correction.

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SUMMARY: The Federal Energy Regulatory Commission is correcting a

final rule that appeared in the Federal Register of October 29, 2012
(77 FR 65463). In this final rule, the Commission is revising its rules
and regulations relating to the filing of privileged material in
keeping with the Commission's efforts to comply with the Paperwork
Reduction Act, the Government Paperwork Elimination Act and the E-
Government Act of 2002.

DATES: The effective date of this rule is December 28, 2012.

FOR FURTHER INFORMATION CONTACT:
Christopher Cook (Technology/Procedural Information), Office of the
Executive Director, Federal Energy Regulatory Commission, 888 First
Street NE., Washington, DC 20426, Telephone:<PHONE_NUMBER>;
Richard M. Wartchow (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, Telephone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Need for Correction

    In Federal Register Document 2012-26126 of October 29, 2012 (77 FR
65463); the final rule entitled ``Filing of Privileged Materials and
Answers to Motions'' erroneously stated in the preamble that the Model
Protective Order was developed by the Commission ``Office of
Administrative Litigation'' instead of ``Office of Administrative Law
Judges''.

Correction

    On page 65466, footnote 25; remove the title ``Office of
Administrative Litigation'' and add in its place ``Office of
Administrative Law Judges''
    On page 65468, in the third sentence of paragraph 29; remove the
title ``Office of Administrative Litigation'' and add in its place
``Office of Administrative Law Judges''.
    On page 65468, in the second sentence of paragraph 36; remove the
title ``Office of Administrative Litigation'' and add in its place
``Office of Administrative Law Judges''.

    Dated: November 5, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-27496 Filed 11-9-12; 8:45 am]
BILLING CODE 6717-01-P