[Federal Register Volume 80, Number 188 (Tuesday, September 29, 2015)]
[Proposed Rules]
[Pages 58382-58393]
[FR Doc No: 2015-24281]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM15-23-000]

Collection of Connected Entity Data From Regional Transmission
Organizations and Independent System Operators

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes
to amend its regulations to require each regional transmission
organization (RTO) and independent system operator (ISO) to
electronically deliver to the Commission, on an ongoing basis, data
required from its market participants that would; first identify the
market participants by means of a common alpha-numeric identifier; and
secondly list their ``Connected Entities,'' which includes entities
that have certain ownership, employment, debt, or contractual
relationships to the market participants, as specified in this NOPR;
and finally describe in brief the nature of the relationship of each
Connected Entity. Such information will assist screening and
investigative efforts to detect market manipulation, an enforcement
priority of the Commission. The initiative would also assist market
monitors for the RTOs and ISOs in their individual and joint
investigations of potential cross-market manipulation. Unless the RTOs
and ISOs request continuation of existing affiliate disclosure
requirements based on a particularized need, the Commission expects
that this new disclosure obligation will supplant all existing
affiliate disclosures requirements contained in the RTOs and ISOs
tariffs. The proposed definitional uniformity of the term ``Connected
Entity'' across all of the RTOs and ISOs may help ease compliance
burdens on market participants that are active in more than one RTO or
ISO, and that are now required to submit affiliate information that may
be unique to each of the organized markets in which they participate.

DATES: Comments on the proposed rule are due November 30, 2015.

ADDRESSES: Comments, identified by docket number, may be filed in the
following ways:
     Electronic Filing through http://www.ferc.gov. Documents
created electronically using word processing software should be filed
in native applications or print-to-PDF format and not in a scanned
format.
     Mail/Hand Delivery: Those unable to file electronically
may mail or hand-deliver comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Comment
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT:
David Pierce (Technical Information), Office of Enforcement, Federal
Energy Regulatory Commission, 888 First Street NE, Washington, DC
20426,<PHONE_NUMBER><EMAIL_ADDRESS>Kathryn Kuhlen (Legal Information), Office of Enforcement, Federal
Energy Regulatory Commission, 888 First Street NE, Washington, DC
20426,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    1. In this Notice of Proposed Rulemaking (NOPR), the Federal Energy
Regulatory Commission (Commission) proposes, pursuant to sections 222,
301(b), 307(a) and 309 of the Federal Power Act (FPA),\1\ to amend its
regulations to require each regional transmission organization (RTO)
and independent system operator (ISO) to electronically deliver to the
Commission, on an ongoing basis, data required from its market
participants that would: (i) Identify the market participants by means
of a common alpha-numeric identifier; (ii) list their ``Connected
Entities,'' which includes entities that have certain ownership,
employment, debt, or contractual relationships to the market
participants, as specified in this NOPR; and (iii) describe in brief
the nature of the relationship of each Connected Entity. The uniform
identification of market participants, together with the listing of
entities that comprise a network of common interests, would enhance the
Commission's efforts to detect and deter market manipulation, a central
objective of the Commission as identified in its FY 2014-2018 Strategic
Plan.\2\ Unless the RTOs and ISOs request continuation of existing
affiliate disclosure requirements based on a particularized need, the
Commission expects that this new disclosure obligation will supplant
all existing affiliate disclosures requirements contained in the RTOs
and ISOs tariffs.
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    \1\ 16 U.S.C. 824v, 825(b), 825f(a), 825(h).
    \2\ Federal Energy Regulatory Commission Strategic Plan FY 2014-
2018, Objective 1.2 (Mar. 2014), available at http://www.ferc.gov/about/strat-docs/FY-2014-FY-2018-strat-plan.pdf.
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    2. In the Strategic Plan, the Commission cited monitoring and
surveillance activities as a key function in meeting the objective of
detecting and deterring market manipulation.\3\ In recent years the
Commission has greatly enhanced its capabilities in this regard, having
developed automated screens of market activities and set up analytical
procedures to detect potential market manipulation. Understanding the
ownership, employment, debt, and contractual relationships of market
participants would provide context for such data, and help determine
whether there appears to be a legitimate business rationale for
seemingly anomalous trading patterns, or whether there may be market
manipulation, fraud, or abuse. This in turn will further the
Commission's goal of detecting and deterring possible market
manipulation. As we explain below, the existing affiliate disclosure
requirements do not appropriately enable the Commission to identify and
monitor these business relationships.
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    \3\ Id.
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I. Background

    3. Beginning in the late 1960s, the electric industry gradually
transformed itself from one populated by mostly self-sufficient
vertically integrated utilities compensated by cost-based rates, to

competitive markets characterized by open transmission access, partial
disaggregation of generation and transmission, and market-based
rates.\4\ Competitive markets brought with them the potential for
market manipulation, and Congress, acting in response to the abuses
characterizing the Western Energy Crisis of 2000-2001, passed the
Energy Policy Act of 2005 (EPAct 2005).\5\ This legislation, among
other things, gave the Commission authority to address market
manipulation, including the ability to assess substantial civil fines
and seek criminal penalties.\6\
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    \4\ Enhancement of Electricity Market Surveillance and Analysis
through Ongoing Electronic Delivery of Data from Regional
Transmission Organizations and Independent System Operators, Order
No. 760, 77 FR 26674 (May 7, 2012), FERC Stats. & Regs. ] 31,330, at
P 2 (2012).
    \5\ Pub. L. 109-58, 119 Stat. 594.
    \6\ See 16 U.S.C. 825o (criminal penalties); 16 U.S.C. 825o-1
(civil fines).
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    4. In 2012, utilizing the authority granted by Congress under the
FPA, the Commission expanded the tools available to staff to
investigate market activity for potential manipulation. In Order No.
771,\7\ the Commission required e-Tag Authors and Balancing Authorities
to ensure Commission access to their e-Tags. And in Order No. 760,\8\
the Commission required the RTOs and ISOs to electronically deliver to
the Commission, on a regular basis, their existing data relating to
physical and virtual offers and bids, market awards, resource outputs,
marginal cost estimates, shift factors, financial transmission rights,
internal bilateral contracts, uplift, and interchange pricing. These
orders have provided needed tools for staff to monitor market
activities.
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    \7\ Availability of E-Tag Information to Commission Staff, Order
No. 771, 77 FR 76367 (Dec. 28, 2012), FERC Stats. & Regs. ] 31,339
(2012), order on rehearing and clarification, 142 FERC ] 61,181
(2013).
    \8\ Order No. 760, FERC Stats. & Regs. ] 31,330 at PP 8-19.
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    5. The Commission has also been granted access by the Commodity
Futures Trading Commission (CFTC) to its Large Trader Report, and the
information contained therein has significantly added to the
Commission's ability to carry out its enforcement responsibilities. In
addition, on January 2, 2014, the Commission and the CFTC signed a new
Memorandum of Understanding (MOU) to share information in connection
with market surveillance and investigations into potential market
manipulation, fraud, or abuse.\9\ This MOU establishes procedures for
sharing information of mutual interest related to market surveillance
and investigative matters, while maintaining confidentiality and data
protection.\10\
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    \9\ Memorandum of Understanding Between the Commodity Futures
Trading Commission and the Federal Energy Regulatory Commission
Regarding Information Sharing and Treatment of Proprietary Trading
and Other Information (Jan. 2, 2014), available at http://www.ferc.gov/legal/mou/mou-ferc-cftc-info-sharing.pdf.
    \10\ Id.
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    6. Nonetheless, despite increased access to trading data, the
Commission cannot fully utilize this information in order to detect and
deter market manipulation because of uncertainty regarding the identity
of a given market participant, which may trade under different
identifiers in different markets and venues. The Commission also lacks
a clear window into the relationships between market participants and
other entities, which can be complex. Without an understanding of which
companies share ownership or debt interests, or who may function in key
employment or other contractual roles (such as asset management), it
can be difficult to ascertain which individuals or companies may
benefit from a given transaction or, indeed, who may be jointly
participating in a common course of conduct.
    7. Currently, each RTO and ISO requires market participants to
provide it with a list of the participant's affiliates.\11\ However,
requirements vary as to the nature of a reportable affiliate
relationship and the frequency for updating the information. In
addition, for purposes of ferreting out potential market manipulation,
it is important to explore relationships that extend beyond corporate
affiliation. Such additional relationships may involve contractual
relationships such as tolling and asset management agreements, or debt
structures that are convertible to ownership interests.
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    \11\ See, e.g., the following sections from the tariffs of the
RTOs/ISOs: California Independent System Operator Corporation
(CAISO): Section 39.9 and <IP_ADDRESS>.1 (for congestion revenue
rights); ISO New England Inc. (ISO-NE): Section I.3.5; Midcontinent
Independent System Operator, Inc. (MISO): Attachment L.1.A.5 (credit
application evaluation disclosure requirement), Attachment L.1.B.5
(ongoing credit evaluation disclosure requirement); New York
Independent System Operator, Inc. (NYISO): Section 2.15; PJM:
Section 216.2.1 (Interconnection customer affiliate disclosure
requirement), Attachment Q 1.A.5 (credit application evaluation
disclosure requirement), Attachment Q 1.B.5 (ongoing credit
evaluation disclosure requirement).
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    8. The existing affiliate disclosure rules do not provide the tools
necessary for the Commission to sufficiently monitor these increasingly
complex business relationships that impact our jurisdictional markets.
Thus, the Commission believes it is desirable to use a new term, one
that is free of any associations that have developed around the term
``affiliate,'' and one that is uniform across all of the RTOs and ISOs,
to describe a relationship of interest in probing for potential market
manipulation. We propose the term ``Connected Entity,'' and further
propose to make the definition of that term uniform across the
organized electric markets.

II. Discussion

Need for Connected Entity Information

    9. The Commission employs a variety of screens to identify
anomalous trading. When it detects such anomalies, it attempts to
determine whether the behavior is legitimate market activity. It does
this in large part by analyzing the circumstances surrounding the
activity, including trading patterns and trader explanations. Some
patterns that have emerged to date are: limited risk or riskless
combinations of trades to enhance the value of a position or portfolio,
such as wash trades; repetitive, uneconomic physical trading or flows
to benefit a position; trading to affect the formation of an index
price; withholding physical generation to benefit a financial and/or
physical position; and using virtual bids to benefit a financial and/or
physical position.
    10. Rather than performing a trade or other action that results in
a direct benefit to itself, a market participant might instead take
actions that benefit another entity that bears a financial or legal
relationship to it. Entities under common control, whether by
ownership, beneficial interest, or contractual relationships, might
also collude to set prices by taking positions that together result in
a market manipulation. An understanding of these relationships is
crucial in exploring the design and possible purposes behind a trading
pattern, from which inferences of intent can be drawn and investigated.
The existing affiliate disclosure requirements imposed through the RTOs
and ISOs tariffs do not capture all of these business relationships.
    11. As evidence of intent is critical in establishing whether there
has been market manipulation,\12\ the Commission can better monitor and
protect the markets from wrongdoing if these relationships are fully
known.

Moreover, more complete information about these relationships will
reduce the number of informal inquiries in response to false positive
surveillance screen trips that may result from an incomplete picture of
market participants' incentive structures.
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    \12\ In Order No. 670, the Commission promulgated regulations 18
CFR 1c.1 and 1c.2, which prohibit manipulation in the natural gas
and electric energy markets. In that order, the Commission stated
that ``any violation of the Final Rule requires a showing of
scienter.'' Prohibition of Energy Market Manipulation, Order No.
670, FERC Stats. & Regs. ] 31,202, at P 52 (2006).
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Sources and Completeness of Connected Entity Information

    12. Although there are a few third-party sources of public
information that contain data about the affiliate relationships of
entities trading in the electric energy markets, their information and
manner of collection is insufficient for the Commission's market
monitoring responsibilities. These sources include vendors such as Dun
& Bradstreet, SNL Financial, and Ventyx. The primary service provided
by these companies is tracking trading information, not compiling
affiliate data, and their affiliate information is generally derived
from public sources that do not cover all market participants. Further,
whether such information is current or complete cannot be ascertained
from the listings. Nor do such listings include entities that are
connected by contractual relationships, rather than ownership. For all
these reasons, an up-to-date, reliable, and complete listing of
Connected Entities cannot be obtained from these third-party sources.
    13. Obtaining Connected Entity data from RTOs and ISOs leaves
unaddressed similar data from entities operating outside the organized
electric markets. However, the Commission has estimated, using Electric
Quarterly Report (EQR) data and existing affiliation information
gleaned from market-based rate filings and other available sources,
that approximately 90 percent of the reported wholesale sales of
electricity subject to the Commission's jurisdiction are made either by
market participants in one or more of the six RTOs and ISOs, or by
companies related by ownership to such a market participant.\13\
Therefore, access to Connected Entity data for all the market
participants in each of the RTOs and ISOs would provide most of such
data for all the transactions of interest in the Commission's electric
manipulation screening. We invite comment on the desirability and
feasibility of expanding our proposal to require the submission of
Connected Entity information from non-RTO/ISO market participants, and
on any difficulties commentators might perceive to exist in doing so.
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    \13\ These RTOs and ISOs are: ISO-NE., NYISO, PJM, MISO,
Southwest Power Pool, Inc., and CAISO. The Electric Reliability
Council of Texas is non-jurisdictional and not included in the
calculation. Staff determined this percentage by examining the
Electric Quarterly Reports, which must be filed by all public
utilities and by non-public utilities that trade above a de minimus
amount. See 18 CFR 35.10(b) (2015).
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    14. The Commission recognizes that this proposal would place
additional burden on market participants to implement the new reporting
requirement and to submit the Connected Entity information to the RTOs
and ISOs as proposed. However, we believe that the benefits of this
proposal will outweigh the additional burden imposed on market
participants. Moreover, as noted above, each of the six RTOs and ISOs
already requires its market participants to submit data identifying
certain affiliate relationships. It is possible that some, if not all,
market participants will be able to use its existing processes for
reporting affiliate information to the RTOs and ISOs to lessen the
burden of this proposed reporting. For market participants that are
active in more than one market, it is also possible that the burden of
making a uniform Connected Entity filing in all those markets, once the
initial implementation period is over, would be no greater than the
current burden of making multiple affiliate filings, each of which is
unique to its particular RTO or ISO. For participants in only one
market, we recognize that there will likely be an increase in the
administrative time needed for compliance. As for the RTOs and ISOs
themselves, we believe they would incur the initial implementation
costs required to make compliance filings to amend their tariffs to
conform the filed information to the new Commission standards, and
revising their collection processes to be consistent with those
standards.

Authority To Acquire Connected Entity Information

    15. The Commission has the authority to require the type of record
keeping and submittals contemplated in this NOPR. As discussed below,
the Commission's anti-manipulation authority under section 222 of the
FPA, taken together with its investigative authority under section
307(a) of the FPA, its administrative powers under section 309 of the
FPA, and its inspection and examination authority under section 301(b)
of the FPA, provides ample basis for accessing Connected Entity data.
    16. Section 222 of the FPA grants the Commission authority over the
prohibition of market manipulation in connection with the purchase or
sale of electric energy and transmission subject to the Commission's
jurisdiction.\14\ It also prohibits manipulation by ``any entity,''
including entities exempted from the Commission's rate-related
jurisdiction. Section 301(b) of the FPA provides that the Commission
shall at all times have access to, and the right to inspect and examine
all accounts and records of public utilities,\15\ which includes RTOs
and ISOs. Section 309 of the FPA grants the Commission the authority to
``perform any and all acts, and to prescribe, issue, make, amend, and
rescind such orders, rules and regulations as it may find necessary and
appropriate to carry out the provisions of [the FPA].'' \16\ And
section 307(a) of the FPA provides that the Commission has authority to
investigate any facts, conditions, practices, or matters it may deem
necessary or proper to determine whether any person, electric utility,
transmitting utility, or other entity may have violated or might
violate the FPA or the Commission's regulations.\17\ It also has
investigatory authority to aid in the enforcement of the FPA or the
Commission's regulations, or to obtain information about wholesale
electric energy sales or the transmission of electric energy in
interstate commerce.\18\ This investigatory authority is not limited to
a particular case or controversy, but allows an agency to ``investigate
merely on suspicion that the law is being violated, or even just
because it wants assurance that it is not.'' \19\
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    \14\ 16 U.S.C. 824v.
    \15\ 16 U.S.C. 825(b).
    \16\ 16 U.S.C. 825(h).
    \17\ 16 U.S.C. 825f(a).
    \18\ Id.
    \19\ United States v. Morton Salt, 338 U.S. 632, 642 (1950).
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    17. The Commission has already required the RTOs and ISOs to
provide this type of information to the Commission. Most notably, in
Order No. 760, the Commission required the RTOs and ISOs to
electronically deliver to it, on an ongoing basis, data relating to
physical and virtual offers and bids, market awards, resource outputs,
marginal cost estimates, shift factors, financial transmission rights,
internal bilateral contracts, uplift, and interchange pricing.\20\ The
information sought under this NOPR would typically be provided with
less frequency than that which the RTOs and ISOs submit under Order No.
760. And the submittal of Connected Entity data would be transmitted
through the same channels as the RTOs and ISOs already employ for Order
No. 760 data.
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    \20\ See Order No. 760, FERC Stats. & Regs. ] 31,330 at Summary.

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Additional Benefits and Confidentiality of Connected Entity Data

    18. Establishing common identifiers and a uniform definition of
Connected Entity, as is proposed in this NOPR, would have the
additional benefit of assisting the RTO/ISO market monitors in their
responsibilities to oversee the markets. Market monitors could assess
cross-market transactions and compare their data with that produced by
their neighboring market monitors, assured that the data was accurate
and consistent.\21\
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    \21\ See Southwest Power Pool, Inc., 137 FERC ] 61,046 at P 19
(2011) (``[T]he Commission clarifies that Market Monitoring Units,
RTOs, and ISOs may communicate referral information with each other
across regions . . . The Commission strongly encourages this type of
communication, as long as reasonable precautions are taken to ensure
that all referral information remains non-public.''); see also New
York Independent System Operator, 136 FERC ] 61,116 (2011).
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    19. Understanding the relationship between connected entities can
be an important aspect of the Commission's ex post analysis, which is a
critical element of the market-based rate program. In Lockyer, the
Ninth Circuit cited with approval the Commission's dual requirement of
an ex ante finding of the absence of market power and sufficient post-
approval reporting requirements, finding that the Commission does not
rely on ex ante market forces alone in approving market-based rate
tariffs. In particular, the court found that the ongoing oversight and
timely reconsideration of market-based rate authorization under section
205 of the FPA enables the Commission to meet its statutory duty to
ensure that all rates are just and reasonable.\22\
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    \22\ Cal. ex rel. Lockyer v. FERC, 383 F.3d 1006 (9th Cir.
2004). See also Cal. v. FERC, 784 F.3d 1267 (9th Cir. 2015).
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    20. The Commission anticipates that submitting Connected Entity
data would not place market participants under increased risk in
relation to the disclosure of confidential or proprietary information.
Some of the information to be gathered by the RTOs and ISOs from
participants is already publicly available. This would include, in the
case of publicly-traded companies, data found in their Securities and
Exchange Commission (SEC) filings; in the case of contractual control
over a jurisdictional asset, the data would generally be available
through EQR reporting requirements. To the extent, however, that
Connected Entity information is not already public, we intend that the
collection of Connected Entity information be treated as non-public, to
the same extent as is Order No. 760 data and any other investigatory
material submitted under Part 1b of the Commission's regulations.\23\
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    \23\ 18 CFR part. 1b (2015).
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    21. Connected Entity information that is commercially sensitive,
such as all or part of the contractual arrangements among entities, may
satisfy the requirements of exemption 4 of the Freedom of Information
Act (FOIA), which protects ``trade secrets and commercial or financial
information obtained from a person [that is] privileged or
confidential.'' \24\ The non-public information to be gathered under
the proposed rule may also fall within the ambit of FOIA exemption 7,
which protects certain ``records and information compiled for law
enforcement purposes.'' \25\
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    \24\ 5 U.S.C. 552(b)(4); accord 18 CFR 388.107(d) (2015).
    \25\ 5 U.S.C. 552(b)(7); accord 18 CFR 388.107(g) (2015).
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Proposed Definition of a Connected Entity

    22. Over the years, the term ``affiliate'' has been used frequently
in tariffs and regulations, but not always with exactly the same
definition. The term has also usually centered on relationships
involving control by virtue of an ownership interest.\26\ However, in
carrying out the Commission's responsibility to oversee the markets for
possible market manipulation, other relations may be equally worthy of
examination. We thus propose an entirely new term, to be used in
connection with investigatory data gathered for the purposes identified
in this NOPR, that of ``Connected Entity.'' We propose to revise 18 CFR
35.28(g)(4) to define Connected Entity as follows:
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    \26\ See, e.g., 18 CFR 35.36(a)(9) (2015).
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    23. A Connected Entity, which includes natural persons, is one
which stands in one or more of the following relationships to a market
participant:
    a. An entity that directly or indirectly owns, controls, or holds
with power to vote, 10 percent or more of the ownership instruments of
the market participant, including but not limited to voting and non-
voting stock and general and limited partnership shares; or an entity
10 percent or more of whose ownership instruments are owned,
controlled, or held with power to vote, directly or indirectly, by a
market participant; or an entity engaged in Commission-jurisdictional
markets that is under common control with the market participant;
    b. The chief executive officer, chief financial officer, chief
compliance officer, and the traders of a market participant (or
employees who function in those roles, regardless of their titles);
    c. An entity that is the holder or issuer of a debt interest or
structured transaction that gives it the right to share in the market
participant's profitability, above a de minimis amount, or that is
convertible to an ownership interest that, in connection with other
ownership interests, gives the entity, directly or indirectly, 10
percent or more of the ownership instruments of the market participant;
or an entity 10 percent of more of whose ownership instruments could,
with the conversion of debt or structured products and in combination
with other ownership interests, be owned or controlled, directly or
indirectly, by a market participant; or
    d. Entities that have entered into an agreement with the market
participant that relates to the management of resources that
participate in Commission-jurisdictional markets, or otherwise relates
to operational or financial control of such resources, such as a
tolling agreement,\27\ an energy management agreement, an asset
management agreement,\28\ a fuel management agreement, an operating
management agreement, an energy marketing agreement, or the like.\29\
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    \27\ Tolling agreements are common in the energy industry, and
in essence function as leasing contracts or options on a generating
plant wherein the ``toller'' has the right to the plant output at
his or her discretion.
    \28\ Asset management agreements, in general, are contractual
relationships where a party agrees to manage fuel supply and
delivery arrangements, including transportation, for another party,
and to consume the electricity produced or share in some fashion in
the revenues from the sale of that electricity.
    \29\ As the Commission observed in Order No. 697, energy/asset
managers provide a variety of services, including, but not limited
to, operating generation plants (sometimes under tolling
agreements), acting as billing agents, bundling transmission and
power for customers, and scheduling transactions. Market-Based Rates
for Wholesale Sales of Electric Energy, Capacity and Ancillary
Services by Public Utilities, Order No. 697, FERC Stats. & Regs. ]
31,252, clarified, 121 FERC ] 61,260 (2007), order on reh'g, Order
No. 697-A, FERC Stats. & Regs. ] 31,268, clarified, 124 FERC ]
61,055, order on reh'g, Order No. 697-B, FERC Stats. & Regs. ]
31,285 (2008), order on reh'g, Order No. 697-C, FERC Stats. & Regs.
] 31,291 (2009), order on reh'g, Order No. 697-D, FERC Stats. &
Regs. ] 31,305 (2010), aff'd sub nom. Mont. Consumer Counsel v.
FERC, 659 F.3d 910 (9th Cir. 2011), cert. denied, 133 S. Ct. 26
(2012). Regardless of the label attached to a particular contract,
all such services would fall within the ambit of the reporting
requirement proposed in this NOPR.
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    We invite comment on the appropriate threshold for a de minimis
share of a company's profits.

Legal Entity Identifiers

    24. In the past, the Commission has considered methods to ensure
that there is no confusion as to the identification of entities subject
to its jurisdiction. For

example, it formerly required usage of the DUNS identification system
in EQR filing requirements. However, the Commission found that system
to be an imprecise tool for the purpose, and removed the requirement in
2012.\30\ At that same time, it considered various alternatives to the
use of DUNS numbers, but found none that would be adequate.\31\
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    \30\ Electricity Market Transparency Provisions of Section 220
of the Federal Power Act, Order No. 768, FERC Stats. & Regs. ]
31,336, at P 171 (2012); orders on reh'g and clarification, Order
No. 768-A, 143 FERC ] 61,054 (2013) and order on reh'g, Order No.
768-B, 150 FERC ] 61,075 (2015).
    \31\ Order No. 768, FERC Stats. & Regs. ] 31,336 at P 171.
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    25. However, a relatively new system is rapidly becoming the
globally accepted method to ensure accurate identification of legal
entities. That system involves the establishment of Legal Entity
Identifiers (LEIs), which are unique IDs assigned to single entities.
In this country, adoption of the LEI system has been accelerated in
response to the Dodd-Frank Act, which mandated initiatives to improve
the quality of financial data available to regulators and others.\32\
The Office of Financial Research (OFR), which was created under the
Dodd-Frank Act, is leading the effort to establish uniform LEIs and
several federal agencies involved in the regulation of financial
transactions have, or are in the process of, mandating the use of LEIs
for certain purposes. Among these are the CFTC and the SEC, which now
require their use for certain swaps-related activities.\33\
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    \32\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
12 U.S.C. 5301, at 5343 (a).
    \33\ See, e.g., 17 CFR 45.4, 45.6 (2015) (CFTC); Regulation
SBSR--Reporting and Dissemination of Security-Based Swap
Information, 80 FR 14564, 17 CFR part 242 (2015) (SEC) (published in
the Federal Register as a final rule on March 19, 2015, with an
effective date of May 18, 2015).
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    26. LEIs are issued by Local Operating Units (LOUs) of the Global
LEI System, and as of December 31, 2014, over 330,000 entities from 189
countries had obtained LEIs from 20 operational issuers endorsed by the
LEI Regulatory Oversight Committee (ROC). The Global LEI Foundation was
established in June of 2014 as a not-for-profit organization overseen
by the ROC to act as its operational arm, and which maintains a
centralized database of LEIs and corresponding reference data.
    27. Obtaining an LEI is relatively inexpensive (approximately $250,
with annual upkeep fees of approximately $150). Application is made by
a legal entity, such as a corporation or partnership, and the LOU
verifies authenticity of the entity by checking official governmental
records. It then assigns to it an LEI, a 20-digit alpha-numeric code
unique to that entity. A given alpha-numeric string is thus a permanent
identifier, and is also exclusive; that is, no other entity is assigned
that LEI, and the entity itself may not obtain another LEI.\34\
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    \34\ See the LEI ROC Web site for further information on the LEI
identifier system. The Legal Entity Identifier Regulatory Oversight
Committee--LEI ROC, http://www.leiroc.org.
---------------------------------------------------------------------------

    28. We believe that the establishment of a reliable, standard
identification system will greatly benefit staff's ability to conduct
investigations of trading patterns in the energy markets. It appears to
us that the use of LEIs is the best method to achieve this goal. We
therefore propose that the RTOs and ISOs require their market
participants to obtain LEIs, and to report in their Connected Entity
Data filing their own LEI and the LEI of each of their Connected
Entities, if the Connected Entity has obtained one. However, the LEI
system is still relatively new, and we invite comments on the
feasibility of its use, on whether any other system besides LEIs would
be a preferable method of achieving uniform identification, and on
whether waivers might be appropriate in given situations.

III. Requirements for Collection of Connected Entity Data

    29. As part of this rulemaking, we propose to require the
submission from the RTOs and ISOs of Connected Entity information
pertaining to each of its market participants.\35\ To meet this
obligation, we propose that each RTO and ISO make a compliance filing
setting forth in its tariff the requirement that its market
participants submit to it a list of their Connected Entities, in the
format approved by the Commission. This list would include all of a
market participant's Connected Entities, as defined above. The
Connected Entities need not be engaged in activities in the same
markets as the market participant for their inclusion to be required.
The RTOs and ISOs would in turn transmit this information to the
Commission in its native format.
---------------------------------------------------------------------------

    \35\ For this purpose, the term ``market participant'' includes
all entities that participate in any of the various markets of the
RTO and ISO in question, whether as a seller or a buyer.
---------------------------------------------------------------------------

    30. As a condition of participating in any of the RTO/ISO markets,
the market participants would have to have on file with that RTO or ISO
their Connected Entity data, which must be updated within 15 days of a
change in status of the data. In addition, it would be a condition of
participation for each market participant to certify, on a yearly
basis, that its Connected Entities filed data is comprehensive and
accurate.
    31. We propose that the RTOs and ISOs include in their tariffs the
authority (although not the obligation) to audit market participants to
determine if their submitted Connected Entity data is accurate,
complete, and up to date. Commission staff may also from time to time
conduct audits for this purpose.
    32. As discussed above, we also propose that each market
participant be required to acquire an LEI, and include its own LEI and
the LEIs of each of its Connected Entities (if known) on its submitted
Connected Entity list.
    33. We further propose that the information requested be delivered
to the RTOs and ISOs in a form and manner acceptable to the Commission.
By way of illustration, we envision that the following formats for
submission of Connected Entity data would be mandated:
     A table that contains rows with columns identifying the
market participant by LEI, legal name, RTO or ISO, and RTO/ISO assigned
identifier, if any. If there is more than one RTO/ISO identifier, there
would be a separate row for each, with the preceding columns remaining
the same. If the market participant participates in more than one RTO
or ISO, there would be additional rows setting forth all the categories
mentioned for each RTO/ISO. Thus, a row would appear as follows
(columns separated by a star):

LEI of market participant (MP)* Legal Name of MP * RTO/ISO * RTO/ISO
Identifier of MP

     A table or tables that disclose the market participant's
relationships with each of its Connected Entities. Each row would
address a single Connected Entity and the type of relationship with the
market participant (ownership, employee, debt, contract). The LEI and
the legal name of the market participant would be placed in the first
two columns, respectively, and the LEI and the legal name of the
Connected Entity in the third and fourth columns, respectively, and the
type of relationship in the fifth column. For ownership, the date the
direct, indirect or beneficial ownership reached 10 percent would be
stated, as well as the total ownership as of the date of the report.
For employees, which might be set forth in a separate table, the full
legal name of the employee would be stated and the person's title and
date of hire. For debt, the date the debt was incurred would be stated,
and the debt holder and indebted party identified. For contracts, the
start and end date of the

contract would be stated as well as a brief descriptor of the contract
type (tolling, asset management, etc.). If there are multiple
relationships with the same Connected Entity, separate rows would be
used for each. Thus, a row would appear as follows:

LEI of MP * Legal Name of MP * LEI of Connected Entity * Legal Name of
Connected Entity * relationship type (ownership, employee, debt,
contract).

    This table would also provide, whether by footnote or other
reference means, a more detailed description of the particular
relationship given. For a contract, for instance, the major provisions
of the contract would be listed, such as effective date, term, renewal
provisions, and matters pertinent to the type of contract, such as heat
rate curve for a tolling agreement, the MW or MWh curves for a power
purchase agreement, together with identification of the generator or
plant involved, the nature of any output sharing, and the like.
    34. The repetition of cells necessitated by the foregoing format,
while it will make the document physically longer than might otherwise
be the case, is needed so that the appropriate pairing of entities can
be presented in a machine-readable manner. An appendix is included with
this NOPR to provide some examples of how these submittals might be
structured. We invite comments on formatting suggestions, as well as on
the substantive matters set forth in this Notice of Proposed
Rulemaking.
    35. Finally, we propose that in their compliance filings, RTOs and
ISOs list all affiliate information disclosure requirements. As we
anticipate that the Connected Entity submissions will provide the RTOs
and ISOs with as much and more information as they currently receive
from the existing affiliate disclosures, we propose eliminating all
existing affiliate disclosure requirements. However, if there is some
particularized need that would not be met by the Connected Entity
submissions, the RTOs and ISOs may request in their compliance filings
to retain any such disclosure requirements, in which case they would
need to include justifications for such retention. Insofar as possible,
duplicative information submission should be avoided. We also solicit
comments as to whether it would be feasible and more efficient for the
RTOs and ISOs to utilize the Connected Entities information that would
be submitted through this proposal for the same purposes that they
currently use the information provided through their existing affiliate
disclosure requirements. In particular, we solicit comments regarding
whether replacing existing affiliate disclosure requirements in the RTO
and ISO tariffs with the Connected Entity submission obligations will
adversely affect implementation of other provisions of the RTO and ISO
tariffs. If so, then how? Such comments may also address whether any
changes should be made to the data table formats to allow RTOs and ISOs
to utilize Connected Entities information for other purposes.

IV. Information Collection Statement

    36. The collections of information contained in this proposed rule
are being submitted to the Office of Management and Budget (OMB) for
review under section 3507(d) of the Paperwork Reduction Act of 1995, 44
U.S.C. 3507(d). We solicit comments on the Commission's need for this
information, whether the information will have practical utility, the
accuracy of the provided burden estimates, ways to enhance the quality,
utility, and clarity of the information to be collected, and any
suggested methods for minimizing respondents' burden, including the use
of automated information techniques. Respondents subject to the filing
requirements of this proposed rule will not be penalized for failing to
respond to these collections of information unless the collections of
information display a valid OMB control number.
    37. The proposed rule does not require entities other than RTOs/
ISOs to report information to the Commission. The RTOs/ISOs will gather
the required data from the market participants directly. However, we
include burden estimates not only for RTOs/ISOs but also for market
participants and Connected Entities.\36\
---------------------------------------------------------------------------

    \36\ The estimated hourly cost (salary plus benefits) provided
in this section are based on the figures for May 2014 posted by the
Bureau of Labor Statistics for the Utilities sector (available at
http://www.bls.gov/oes/current/naics2_22.htm#13-0000). The hourly
estimates for salary plus benefits are: Legal (code 23-0000),
$129.87, computer and mathematical (code 15-0000), $58.25,
information systems manager (code 11-3021), $94.55, IT security
analyst (code 15-1122), $63.55, auditing and accounting (code 13-
2011), $51.11, information and record clerk (Referred to as
administrative work in the body) (code 43-4199), $37.50.
---------------------------------------------------------------------------

    38. We recognize that there will be an initial implementation
burden associated with providing the Commission the requested data.
This includes submitting a compliance filing to the Commission. We
estimate 30 hours for each RTO/ISO to prepare the filing at a cost of
$3,896 per filer.
    39. Each RTO and ISO already submits electronic market data to the
Commission in accordance with Order No. 760. We propose that these same
channels be used to handle the relatively small increase in data
submission proposed under this rulemaking. RTO/ISO staff will need to
add additional tables to their databases and make provisions for those
tables to be included in regular transmissions. We estimate eight hours
for each RTO/ISO to make these additions at an average cost of $624 per
filer.\37\
---------------------------------------------------------------------------

    \37\ The following weightings were applied to estimate the
average hourly cost (salary plus benefits) of $78.00; legal staff,
1/6, information systems manager, 1/6, computer and mathematical, 1/
3, information security analyst, 1/3.
---------------------------------------------------------------------------

    40. Each RTO/ISO will also need to modify its current process for
accepting information from market participants. We estimate 320 person-
hours (costs weighted as previously described) for each RTO/ISO to make
these changes at an average cost of $24,960 each.
    41. Incremental, ongoing maintenance costs for RTOs/ISOs are
assumed to be minimal. We estimate maintenance to require 40 person-
hours per year at an average annual cost per RTO/ISO of $3,120.
    42. This NOPR also proposes that RTOs/ISOs have the option to audit
market participants to verify the accuracy and completeness of their
submissions. If each of the six RTOs/ISOs chooses to audit an average
of 10 market participants per year, we estimate this to require 40
hours per audit for a total annual auditing burden per RTO/ISO of 400
hours and annual cost of $20,444.
    43. Market participants, through their affiliate disclosures,
already submit information about some of their Connected Entities to
the RTOs/ISOs. This proposed rule enlarges the information to be
collected and standardizes its format. It is estimated that for multi-
market participants, the additional cost of initial compliance and the
ongoing costs of maintaining that information will be somewhat offset
by the savings of standardization across the several RTOs/ISOs. This
NOPR proposes that market participants obtain and maintain an LEI,
which we understand currently costs about $250 to obtain and $150 per
year thereafter to maintain. While there will be an initial
implementation burden associated with providing the RTOs/ISOs the
requested data, these costs may vary widely from participant to
participant largely in proportion to the size of the entity. Since the
data related to the Connected Entity is information readily available
to the market participant, the costs of

gathering the data is expected to be largely administrative in nature
with some minimal review by legal staff.\38\ We estimate that the
average market participant will initially require four hours to
register for an LEI and to collect, standardize, and provide the
requested data to the RTO/ISO. We estimate the four hours of burden to
cost $168 annually per market participant. (The cost of obtaining and
maintaining the LEI is separate.)
---------------------------------------------------------------------------

    \38\ Using the average hourly cost of salary plus benefits
provided above, the following weightings were applied to estimate
the average hourly cost of $42.12: 95 percent information and record
clerk, 5 percent legal.
---------------------------------------------------------------------------

    44. The proposed rule requires market participants to update and
submit Connected Entity data after material changes and annually. We
estimate that this ongoing burden will require less time than the
initial collection but may occur more than once per year. We estimate
three hours for each market participant to maintain their LEI
registration and to collect, update, standardize, and transmit the
requested data to the RTO/ISO. This burden would be largely
administrative (95 percent) with some minimal review by legal staff (5
percent). We estimate the total burden to be $126 per participant.
    45. Market participants or Connected Entities may, from time to
time, seek to confirm the accuracy of information concerning them that
has been submitted to an RTO/ISO by other market participants. We
conservatively estimate that one-fourth of market participants and
Connected Entities will seek to confirm such information. Such
confirmations would be largely administrative (95 percent) with some
minimal review by legal staff (5 percent). We estimate that these
confirmations will take approximately one hour for an average burden of
$42 per market participant or Connected Entity seeking confirmation.
Connected entities may also respond to requests for information from
market participants. We estimate that each Connected Entity will spend
one hour responding to these requests. Such responses would be largely
administrative (95 percent) with some minimal review by legal staff (5
percent). We estimate that this activity will take approximately one
hour for an average burden of $42 per Connected Entity.
    46. The following table summarizes the estimated burden and cost
increases rounded to the nearest dollar in FERC-921, due to the
proposed rule:
[GRAPHIC] [TIFF OMITTED] TP29SE15.000

    47. The table above contains estimates of the number of market
participants and the number of Connected Entities per market
participant. We estimate that there are 6,000 market participants in
the RTO/ISO markets, based on an

analysis of data submitted by the RTOs/ISOs in accordance with Order
No. 760. We estimate the number of Connected Entities to be an
additional 9,000 companies, based on an analysis of data from Ventyx, a
third party vendor which supplies ownership information about market
participants.
    Information Collection Costs: We estimate the initial and ongoing
cost of compliance with the NOPR's proposed requirements for each type
of respondent as follows:

RTO/ISO

    [cir] Initial Burden: 358 hours, $29,480.
    [cir] Ongoing Burden (starting year one): 560 hours, $32,924.

Market Participant

    [cir] Initial Burden: 4 hours, $168 plus $250 to acquire LEI.
    [cir] Ongoing Burden (starting year two): 5 hours, $201, plus $150
to maintain LEI.

Connected Entity

    [cir] Ongoing Burden (starting year one): 1.25 hours, $53.

    Title: FERC-921,\39\ Ongoing Electronic Delivery of RTO/ISO Data.
---------------------------------------------------------------------------

    \39\ OATT compliance filings (like the one-time compliance
filing here) are normally included under FERC-516 (OMB Control No.
1902-0096). However, the reporting requirements (including the
compliance filing) contained in this proposed rule in Docket No.
RM15-23-000 will be included in FERC-921.
---------------------------------------------------------------------------

    Action: Proposed revisions to existing information collection.
    OMB Control No.: 1902-0257.
    Respondents for this Rulemaking: RTOs and ISOs; market
participants; Connected Entities.
    Frequency of Information: Initial implementation, compliance
filing, and periodic updates (at least annually).
    48. Necessity of Information: As wholesale electricity markets
continue to develop and evolve, new opportunities arise for anti-
competitive or manipulative behavior. The Commission's market
monitoring and surveillance capabilities and associated data
requirements must keep pace with market developments and evolve along
with the markets. The data discussed in this NOPR will allow the
Commission to more effectively identify and address such behavior; to
identify ineffective market rules; to better inform Commission policies
and regulations; and thus to help ensure just and reasonable rates.
    49. Internal Review: The Commission has made a preliminary
determination that the proposed revisions are necessary to keep pace
with ever-changing possibilities for anti-competitive or manipulative
behavior and to better inform Commission policies and regulations, and
thus to ensure that rates are just and reasonable. The Commission has
assured itself, by means of its internal review, that there is
specific, objective support for the burden estimate associated with the
information requirements.
    50. Interested persons may obtain information on the reporting
requirements by contacting the Federal Energy Regulatory Commission,
Office of the Executive Director, 888 First Street NE., Washington, DC
20426 [Attention: Ellen Brown, email<EMAIL_ADDRESS>phone:
(202) 502-8663, fax:<PHONE_NUMBER>].
    51. Comments concerning the information collections proposed in
this NOPR, and the associated burden estimates, should be sent to the
Commission in this docket and may also be sent to the Office of
Management and Budget, Office of Information and Regulatory Affairs,
Washington, DC 20503 (Attention: Desk Officer for the Federal Energy
Regulatory Commission). For security reasons, comments should be sent
by email to OMB at the following email address:
<EMAIL_ADDRESS>Please reference FERC-921 and OMB Control
No. 1902-0257 in your submission.

V. Environmental Analysis

    52. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\40\ The
Commission has categorically excluded certain actions from these
requirements as not having a significant effect on the human
environment.\41\ The actions proposed here fall within a categorical
exclusion in the Commission's regulations, i.e., they involve
information gathering, analysis, and dissemination.\42\ Therefore,
environmental analysis is unnecessary and has not been performed.
---------------------------------------------------------------------------

    \40\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897, FERC Stats. & Regs. ]
30,783 (1987).
    \41\ 18 CFR 380.4 (2015).
    \42\ See 18 CFR 380.4(a)(5).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act

    53. The Regulatory Flexibility Act of 1980 (RFA) \43\ generally
requires a description and analysis of proposed rules that will have
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a rule and that minimize any
significant economic impact on a substantial number of small entities.
The Small Business Administration's (SBA) Office of Size Standards is
responsible for the definition of a small business.\44\ These standards
are provided on the SBA Web site.\45\ We reviewed the SBA's current
size standards with respect to the three classes of entities covered in
the proposed rule: RTOs/ISOs, market participants, and their Connected
Entities.
---------------------------------------------------------------------------

    \43\ 5 U.S.C. 601-12.
    \44\ 13 CFR 121.101 (2015).
    \45\ U. S. Small Business Administration, Table of Small
Business Size Standards Matched to North American Industry
Classification System Codes (effective July 14, 2014), available at
https://www.sba.gov/sites/default/files/Size_Standards_Table.pdf.
---------------------------------------------------------------------------

    54. The SBA classifies an entity as an electric utility if it is
primarily engaged in the transmission, generation and/or distribution
of electric energy for sale. Under this definition, RTOs/ISOs are
considered electric utilities. The size criterion for a small electric
utility is having 500 or fewer employees.\46\ Since every RTO and ISO
has more than 500 employees, none are small entities.\47\
---------------------------------------------------------------------------

    \46\ 13 CFR 121.101 (Sector 22, Utilities). Of note, the SBA
recently revised its size standard for electric utilities (effective
January 22, 2014) from a standard based on megawatt hours to one
based on the number of employees, including affiliates.
    \47\ For five of the RTOs/ISOs, full-time employee estimates are
based on human resources reports published on the Web site of each
RTO/ISO. For the sixth RTO/ISO, the full-time employee estimate was
obtained from the Chief Financial Officer.
---------------------------------------------------------------------------

    55. Market participants and their Connected Entities are likely to
be in several market sectors and therefore subject to a variety of SBA
size standards. We have identified a broad cross-section of the most
likely SBA market sectors for participants and their Connected
Entities. Industries in these subsectors include utilities, oil and gas
production, mining, finance, and leasing. Among these sectors, there
are various criteria and thresholds for determining whether a business
is small, but the numbers of employees do not exceed 1,000, and the
revenues do not exceed $38.5 million.\48\
---------------------------------------------------------------------------

    \48\ 13 CFR 121.101.
---------------------------------------------------------------------------

    56. While many market participants and Connected Entities are some
of the largest businesses in the United States (for example, large
electric utilities and commercial banks), other market participants,
such as individual power plants or small trading firms, would qualify
as small under the SBA standards. It is difficult to estimate the size
of all the entities affected by this proposed rule since many of
smaller entities may be privately held with little public information
available. However,

if every market participant and Connected Entity identified above were
assumed to be small under SBA standards, a substantial number of small
businesses, as many as 15,000, would be impacted by this proposed rule.
    57. The economic impact of this proposed rule is directly related
to the complexity of the organization, that is, the more entities to
which a company is related, the more information that must be reported.
The data from Ventyx indicates that complexity of this type correlates
with the organization's size: larger entities will have more reportable
relationships than smaller ones. Therefore, it is reasonable to believe
that the cost of complying for small entities will be significantly
less than the cost for large ones. The analysis of connectedness based
on Ventyx data suggests that, on average, each market participant has
1.5 Connected Entities. However, this average likely overstates the
number of connections for small entities since the analysis also found
the median number of connections to be zero. This is also intuitively
correct since concentrations of connections are typical only for large
organizations.\49\ This analysis indicates that if an entity is truly
small and its connections are related to its size, the number of
Connected Entities that it would need to report is likely to be zero or
one.
---------------------------------------------------------------------------

    \49\ In our analysis, the top 100 most connected market
participants, almost all of which are not considered small, account
for 20 percent of all relationships.
---------------------------------------------------------------------------

    58. Using these assumptions, we estimate that small businesses will
be required to report few, if any, Connected Entity relationships. We
estimate the initial burden for small companies to be $418 \50\ with an
annual maintenance burden of $213.\51\ According to SBA guidance, the
determination of significance of impact ``should be seen as relative to
the size of the business, the size of the competitor's business, and
the impact the regulation has on larger competitors.'' \52\ Based on
the above analysis, the reporting requirements proposed in this NOPR
should not have a significant economic impact on a substantial number
of small entities.
---------------------------------------------------------------------------

    \50\ This includes the initial LEI registration ($250) plus four
hours of largely administrative work (95 percent) with some minimal
review by legal staff (5 percent). ($168, at $42.12 per hour (salary
plus benefits)).
    \51\ This includes annual LEI maintenance fee ($150) plus 1.5
hours of largely administrative work (95 percent) with some minimal
review by legal staff (5 percent) ($63 at $42.12 per hour (salary
plus benefits)).
    \52\ U.S. Small Business Administration, A Guide for Government
Agencies How to Comply with the Regulatory Flexibility Act, at 18
(May 2012), available at https://www.sba.gov/sites/default/files/advocacy/rfaguide_0512_0.pdf.
---------------------------------------------------------------------------

VII. Comment Procedures

    59. 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 November 30, 2015. Comments must refer to
Docket No. RM15-23-000, include the commenter's name, the organization
they represent, if applicable, and their address in their comments.
    60. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    61. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
    62. 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.

VIII. Document Availability

    63. 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) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A,
Washington DC 20426.
    64. 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.
    65. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from the Commission's Online
Support at<PHONE_NUMBER> (toll free at 1-866-208-3676) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
List of Subjects in 18 CFR Part 35

    Electric power rates, Electric utilities, Reporting and
recordkeeping requirements.

    By direction of the Commission. Commissioner LaFleur is concurring
with a separate statement attached.

    Dated: September 17, 2015.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend
18 CFR part 35 to read as follows:

PART 35--FILING OF RATE SCHEDULES AND TARIFFS

0
1. The authority citation for part 35 continues to read as follows:

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42
U.S.C. 7101-7352.

0
2. Amend Sec.  35.28 by revising paragraph (g)(4) to read as follows:

Sec.  35.28  Non-discriminatory open access transmission tariff.

* * * * *
    (g) * * *
    (4) Electronic delivery of data. Each Commission-approved regional
transmission organization and independent system operator must
electronically deliver to the Commission, on an ongoing basis and in a
form and manner acceptable to the Commission, data related to the
markets that the regional transmission organization or independent
system operator administers. The submittal shall include information
concerning each market participant's Connected Entities, together with
the Legal Entity Identifiers of the market participants and their
Connected Entities (if known), as submitted to the regional
transmission organization or independent system operator by the market
participants. Connected Entity is defined as follows:
    (i) An entity that directly or indirectly owns, controls, or holds
with power to vote, 10 percent or more of the ownership instruments of
the market participant, including but not limited to voting and non-
voting stock and general and limited partnership shares; or an entity
10 percent or more of whose ownership instruments are owned,
controlled, or held with power to vote,

directly or indirectly, by a market participant; or an entity engaged
in Commission-jurisdictional markets that is under common control with
the market participant;
    (ii) The chief executive officer, chief financial officer, chief
compliance officer, and the traders of a market participant (or
employees who function in those roles, regardless of their titles);
    (iii) An entity that is the holder or issuer of a debt interest or
structured transaction that gives it the right to share in the market
participant's profitability, above a de minimus amount, or that is
convertible to an ownership interest that, in connection with other
ownership interests, gives the entity, directly or indirectly, 10
percent or more of the ownership instruments of the market participant;
or an entity 10 percent of more of whose ownership instruments could,
with the conversion of debt or structured products and in combination
with other ownership interests, be owned or controlled, directly or
indirectly, by a market participant; or
    (iv) Entities that have entered into an agreement with the market
participant that relates to the management of resources that
participate in Commission-jurisdictional markets, or otherwise relates
to operational or financial control of such resources, such as a
tolling agreement, an energy management agreement, an asset management
agreement, a fuel management agreement, an operating management
agreement, an energy marketing agreement, or the like.
* * * * *

Appendix: Table Structures for Connected Entity Reporting

    The proposed rule requires RTOs and ISOs to submit tables
identifying market participants by their Legal Entity Identifier
(LEI), any RTO/ISO specific identifiers, and designated
relationships between those market participants and their connected
entities. The body of the proposed rule describes the relationships
to be reported; this appendix suggests the structure of the tables
that would be suitable for compliance.

Companies Table

    The first table will indicate in which markets each entity and
Connected Entity (or entities) participates as well as any and all
market identifiers used by those entities in each market. The
columns of the table will contain at least the standard company
name, LEIs, and market identifiers for all Connected Entities in a
given submission. Each row will associate an LEI with a company
name, market, and market identifier. In some cases, entities will
trade using different market identifiers in the same market, in
which case the entity will add a row for every market and for each
unique market identifier used by that company. In the case where
multiple entities are using the same market identifier, this can be
indicated in a similar manner. If a Connected Entity does not
participate in jurisdictional markets, then no market identifier is
available and is not required.
    Here is a sample table indicating the cases described above

------------------------------------------------------------------------
                                                              Market
   Standard  company name           LEI         Market      identifier
------------------------------------------------------------------------
ACME Energy.................             001  MISO                328502
ACME Energy.................             001  PJM               00034253
ACME Energy.................             001  PJM               00098345
ACME Renewables.............             002  PJM               00034253
Smith Company...............             123  NYISO<PHONE_NUMBER>
Johnson Inc.................             999  None                  None
------------------------------------------------------------------------

    [ssquf] Standard Company Name: The full name of the company
which conforms in spelling and punctuation to all previous filings
done by or on behalf of the same company.
    [ssquf] Legal Entity Identifier (LEI): The unique alpha-numeric
identifier conforming to ISO 17442:2012 assigned to the legal
entity.
    [ssquf] Market: Standard code for jurisdictional markets: PJM,
NYISO, MISO, SPP, CAISO, ISONE, NON-RTO, None (i.e., does not
participate in any electric markets).
    [ssquf] Market Identifier: Market identifiers are the alpha-
numeric codes used by markets to associate a market participant with
their bids, offers, and settlements.

Connected Entities

    Connected Entities are those entities which are related to the
reporting entity by (a) ownership or control, (b) key employees, (c)
debt holders or issuers, or (d) contractual relationships. Since
employee identification is significantly different from that of non-
person entities, a subtable for employee information is suggested
and described below.

Employees

    The key employee positions to be included will be set forth in
the RTOs/ISOs tariff, in conformity with the final adopted
Commission regulation. The employee table will indicate the
designated employees who are employed by each organization, their
reportable roles, and the period of time they have held those
positions. Persons employed by multiple entities will be indicated
with multiple rows for different companies.
    Reportable roles that are jointly filled (e.g. Co-CEO) should be
indicated as such (same company, same job but different employees).
Employees who are no longer in reportable roles shall have at least
one filing where the end date is not null. Employees changing
reportable roles for a given company will appear twice in at least
one filing (made in a timely manner): one row will indicate an end
date for the employee/role and another row will contain a start date
for a different reportable role. Individual employees filling
multiple reportable roles will be indicated with multiple rows, one
for each role.

--------------------------------------------------------------------------------------------------------------------------------------------------------
    Standard  company name            LEI           First name           Middle             Last              Role          Start date       End date
--------------------------------------------------------------------------------------------------------------------------------------------------------
ACME Energy...................             001  Jane.............  Doe..............  Smith...........  Trader..........      2010/01/01
ACME Energy...................             001  Jim..............  William..........  Jones...........  CEO.............      2009/01/03      2015/01/01
ACME Energy...................             001  Jim..............  William..........  Jones...........  Chairman........      2015/01/01
ACME Renewables...............             002  Aaron............  Jerome...........  Case............  CEO.............      2012/05/01
Smith Company.................             123  Xavier...........  Horatio..........  Martin..........  CEO.............      2007/01/01
Johnson Inc...................             999  Jane.............  Doe..............  Smith...........  CEO.............      2010/06/01
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The column definitions are self-explanatory.

Relationships

    The relationships table is intended to provide a map (or graph)
to the remaining three types of Connected Entities of the market
participant, which include both its corporate family as well as
outside entities

connected by debt or contractual relationships. The relationships to
be included are described in the body of the Notice of Proposed
Rulemaking.

Relationship

    Relationships should be classified based on the broad categories
defined above. Relationships may fall into the following general
categories (omitting employees, category (b), who are reported in a
separate subtable):

 owns (a)
 controls (a)
 has voting power (a)
 is under common control with (a)
 other ownership or control relationship with (a)
 owns debt of (c)
 owns convertible debt of (c)
 has a structured transaction with (c)
 other debt relationship with (c)
 has a management agreement with (d)
 has an operating agreement with (d)
 has a marketing agreement with (d)
 has a tolling agreement with (d)
 has a fuel management agreement with (d)
 other kind of agreement with (d).

    Contractual agreements between two parties regarding a third party
should be entered as a multilateral relationship as described below.

Relationship Description

    Each table will include a field for the filing entity to summarize
any pertinent relationship details which may not be captured in the
standardized fields.

Simple Relationship Structures

    A relatively straightforward corporate family of three companies
that all participate in MISO and PJM might be as follows:
[GRAPHIC] [TIFF OMITTED] TP29SE15.001

    If C owns A and C controls B, the entity and relationships tables
would be reported as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                Market
                      Standard company name                             LEI           Market        identifier
----------------------------------------------------------------------------------------------------------------
A...............................................................             001            MISO            0001
B...............................................................             002            MISO            0002
C...............................................................             003            MISO            0003
A...............................................................             001             PJM             ABC
B...............................................................             002             PJM             BCD
C...............................................................             003             PJM             DCE
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                                                                Relationship
            LEI 1                   LEI 2        Relationship      Start date       End date       description
----------------------------------------------------------------------------------------------------------------
003..........................             001  OWNS (a)........      2015/12/04  ..............  Wholly owned
                                                                                subsidiary.
003..........................             002  CONTROLS (a)....      2015/02/01  ..............  Exercises
                                                                                discretion
                                                                                over key
                                                                                market
                                                                                functions.
----------------------------------------------------------------------------------------------------------------

    In the event several Connected Entities are market participants in
the same RTO or ISO, a combined filing of the structural relationships,
but not the debt and contracts, could be made, disclosing on one form
all of the connected entities. In such case, each Connected Entity must
consent to the combined filing and verify the accuracy of the
information.

More Complex Structures

    Relationships within the electric industry can be very complex. The
illustrated method of reporting pairwise relationships based on LEIs
extends to relationships of arbitrary complexity.
[GRAPHIC] [TIFF OMITTED] TP29SE15.002

------------------------------------------------------------------------
                  Standard company name                         LEI
------------------------------------------------------------------------
A.......................................................             001
B.......................................................             002
C.......................................................             003
D.......................................................             004
E.......................................................             005
F.......................................................             006
G.......................................................             007
H.......................................................             008
------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                                                                Relationship
            LEI 1                   LEI 2        Relationship      Start date       End date       description
----------------------------------------------------------------------------------------------------------------
003..........................             001  OWNS (a)........      2015/12/04  ..............  Wholly owned
                                                                                subsidiary.
003..........................             002  CONTROLS (a)....      2015/02/01  ..............  Exercises
                                                                                discretion
                                                                                over key
                                                                                market
                                                                                functions.
001..........................             002  HAS A TOLLING         2010/01/01      2020/01/01  1 will provide
                                                AGREEMENT WITH                                    raw materials
                                                (c).                                              to 2 under an
                                                                                agreement that
                                                                                2 will return
                                                                                electricity at
                                                                                a specified
                                                                                heat rate.
001..........................             004  OWNS (a)........      2011/05/02  ..............  Wholly-owned
                                                                                subsidiary.
001..........................             005  OWNS (a)........      2000/01/05  ..............  Wholly-owned
                                                                                subsidiary.

005..........................             006  HAS A FUEL            2005/01/01  ..............  Procures gas
                                                MANAGEMENT                                        and transport
                                                AGREEMENT WITH                                    on behalf of
                                                (d).                                              2.
006..........................             007  OWNS (a)........      2005/01/01  ..............  Wholly-owned
                                                                                subsidiary
006..........................             008  HAS AN ASSET          2001/10/01  ..............  Manages fleet
                                                MANAGEMENT                                        operations.
                                                AGREEMENT WITH
                                                (d).
004..........................             007  HAS AN ENERGY         2010/01/01      2015/01/01  Fee-based
                                                MARKETING                                         marketing
                                                AGREEMENT WITH                                    agreement of
                                                (d).                                              the energy
                                                                                produced by
                                                                                2's assets.
----------------------------------------------------------------------------------------------------------------

    The entity in the LEI 1 column is understood to be the entity on
the left hand side of the relationship and the entity in the LEI 2
column is understood to be the entity on the right hand side.

Multiple Relationships

    In some cases there may be multiple relationships between two
market participants. Multiple relationships can be filed as follows:
[GRAPHIC] [TIFF OMITTED] TP29SE15.003

----------------------------------------------------------------------------------------------------------------
                     LEI 1                           LEI 2                Relationship             Other fields
----------------------------------------------------------------------------------------------------------------
001...........................................             002  OWNS............................  ..............
001...........................................             002  CONTROLS........................  ..............
----------------------------------------------------------------------------------------------------------------

Multilateral Relationships

    Multilateral relationships have three or more parties. Such
relationships are reportable using a relationship identification field,
as long as all pairwise relationships that are party to the
relationship are reported and each multilateral relationship is
assigned a unique relationship identifier. The relationship identifier
will be assigned by the reporting entity, each reportable relationship
will have a unique relationship identifier, the identifier will be a
numeric sequence (i.e. no names, no punctuation, etc.), and when
possible, relationship identifiers should be consistent between
filings.
[GRAPHIC] [TIFF OMITTED] TP29SE15.004

----------------------------------------------------------------------------------------------------------------
                 LEI 1                       LEI 2            Relationship          Contract ID    Other fields
----------------------------------------------------------------------------------------------------------------
003...................................             002  CONTRACT................               1  ..............
003...................................             001  CONTRACT................               1  ..............
002...................................             001  CONTRACT................               1  ..............
----------------------------------------------------------------------------------------------------------------

    These fields can be used to report any number of participants,
contracts, or relationships, regardless of complexity.
UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION
Collection of Connected Entity Data from Regional Transmission
Organizations and Independent System Operators
(Issued September 17, 2015)
    LaFLEUR, Commissioner, concurring: Today's order proposes to amend
the Commission's regulations by establishing a newly defined term,
``Connected Entity,'' and to require the collection of information
regarding Connected Entities, to allow the Commission to better monitor
complex business relationships that could be utilized to engage in
manipulative conduct in our jurisdictional markets. I support this
proposal because it is important that the Commission, in accordance
with our statutory mandate, have the tools to protect customers from
manipulative behavior, and the collection of this information would
assist the Commission with that effort.
    However, the Commission should always consider carefully whether
the benefits offered by new compliance obligations outweigh the burdens
that will be faced by market participants. I believe that the
requirements in the Noticed of Proposed Rulemaking would create a
significant new reporting regime for all market participants, as well
as the RTOs and ISOs. I therefore encourage market participants to
submit comments on today's proposed rulemaking that address the
benefits of this proposed regulation, as well as the incremental costs
or burdens that would be created by this new reporting requirement. I
will carefully consider these issues as I decide whether to support the
final rule.
    Accordingly, I respectfully concur.

Cheryl A. LaFleur,
Commissioner.
[FR Doc. 2015-24281 Filed 9-28-15; 8:45 am]
 BILLING CODE 6717-01-P


Comment Info: =================

General Comment:This document concerns pages 3150 through 3348 of BMI France response to an information collection request.


[Federal Register Volume 87, Number 147 (Tuesday, August 2, 2022)]
[Notices]
[Pages 47220-47221]
[FR Doc No: 2022-16499]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2022-D-0490]

Policy Regarding N-acetyl-L-cysteine; Guidance for Industry;
Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of availability.

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

SUMMARY: The Food and Drug Administration (FDA or we) is announcing the
availability of a final guidance for industry entitled ``Policy
Regarding N-acetyl-L-cysteine.'' The guidance explains our intent to
exercise enforcement discretion with respect to the sale and
distribution of certain products that contain N-acetyl-L-cysteine (NAC)
and are labeled as dietary supplements. This enforcement discretion
policy applies to products that would be lawfully marketed dietary
supplements if NAC were not excluded from the definition of ``dietary
supplement'' and that are not otherwise in violation of the Federal
Food, Drug, and Cosmetic Act (FD&C Act).

DATES: The announcement of the guidance is published in the Federal
Register on August 2, 2022.

ADDRESSES: You may submit either electronic or written comments on FDA
guidances at any time as follows:

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-2022-D-0490 for ``Policy Regarding N-acetyl-L-cysteine: Guidance
for Industry.'' Received comments 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,<PHONE_NUMBER>.
     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
our 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 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.govinfo.gov/content/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,<PHONE_NUMBER>.
    You may submit comments on any guidance at any time (see 21 CFR
10.115(g)(5)).
    Submit written requests for single copies of the guidance to the
Office of Dietary Supplement Programs, Center for Food Safety and
Applied Nutrition, Food and Drug Administration, 5001 Campus Dr.,
College Park, MD 20740. Send two self-addressed adhesive labels to
assist that office in processing your request. See the SUPPLEMENTARY
INFORMATION section for electronic access to the guidance.

FOR FURTHER INFORMATION CONTACT: Lisa Bieniek, Center for Food Safety
and Applied Nutrition, Office of Dietary Supplements and Programs (HFS-
810), Food and Drug Administration, 5001 Campus Dr., College Park, MD
20740,<PHONE_NUMBER>; or Lauren Baham, Center for Food Safety and
Applied Nutrition, Office of Regulations and Policy (HFS-024), Food and
Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-
2378.

SUPPLEMENTARY INFORMATION:

I. Background

    We are announcing the availability of a guidance for industry
entitled ``Policy Regarding N-acetyl-L-cysteine: Guidance for
Industry.'' We are issuing this guidance consistent with our good
guidance practices regulation (21 CFR 10.115). The guidance represents
the current thinking of FDA on this topic. It does not establish any
rights for any person and is not binding on FDA or the public. You can
use an alternative approach if it satisfies the requirements of the
applicable statutes and regulations.
    In the Federal Register of April 22, 2022 (87 FR 24170), we made
available a draft guidance for industry entitled ``Policy Regarding N-
acetyl-L-cysteine: Draft Guidance for Industry,'' which explained our
intent to exercise enforcement discretion with respect to the sale and
distribution of certain products that contain NAC and are labeled as
dietary supplements. In the draft guidance, we explained FDA determined
that, under section

201(ff)(3)(B)(i) of the FD&C Act (21 U.S.C. 321(ff)(3)(B)(i)), NAC is
excluded from the dietary supplement definition because NAC was
approved as a new drug before it was marketed as a dietary supplement
or as a food. We described that FDA denied two citizen petitions
requesting that we conclude that NAC is not excluded from the
definition of dietary supplement under section 201(ff)(3)(B) of the
FD&C Act.
    In addition, we described that one citizen petition asked FDA to
issue a regulation that would determine NAC to be lawful under the FD&C
Act. We described that we have not yet reached a final decision on this
request, but are considering initiating rulemaking under section
201(ff)(3)(B) of the FD&C Act to permit the use of NAC in or as a
dietary supplement (i.e., to provide by regulation that NAC is not
excluded from the definition of dietary supplement). If, among other
considerations, we do not identify safety-related concerns as we
continue our review of the available data and information, we are
likely to propose a rule providing that NAC is not excluded from the
definition of dietary supplement.
    We gave interested parties an opportunity to submit comments by May
23, 2022, to ensure their comments would be considered before we began
work on the final version of the guidance. We received comments on the
draft guidance that misinterpreted the guidance as converting NAC into
a ``drug'' under the FD&C Act. Our guidance does not convert NAC into a
``drug'' under the FD&C Act. Rather, our guidance states our intent to
exercise enforcement discretion with respect to the sale and
distribution of certain products that contain NAC and are labeled as
dietary supplements. We also received comments that supported our
intent to exercise enforcement discretion with respect to the sale and
distribution of certain products that contain NAC and are labeled as
dietary supplements, as well as comments that supported possible
notice-and-comment rulemaking to allow the use of NAC in or as a
dietary supplement. After careful review and consideration of the
comments to the draft guidance, we are finalizing the guidance without
substantive change.
    As discussed in the guidance, the enforcement discretion policy
applies to products that would be lawfully marketed dietary supplements
if NAC were not excluded from the definition of ``dietary supplement''
and that are not otherwise in violation of the FD&C Act. Unless we
identify safety-related concerns during our ongoing review, FDA intends
to exercise enforcement discretion until either of the following
occurs: we complete notice-and-comment rulemaking to allow the use of
NAC in or as a dietary supplement (if we move forward with such
proceedings), or we deny the citizen petition's request for rulemaking.
Should we determine that this enforcement discretion policy is no
longer appropriate, we will withdraw or revise this guidance in
accordance with 21 CFR 10.115.
    The guidance announced in this notice finalizes the draft guidance,
dated April 2022.

II. Paperwork Reduction Act of 1995

    FDA concludes that this guidance contains no collection of
information. Therefore, clearance by the Office of Management and
Budget under the Paperwork Reduction Act of 1995 is not required.

III. Electronic Access

    Persons with access to the internet may obtain the guidance at
either https://www.fda.gov/FoodGuidances, https://www.fda.gov/CosmeticGuidances, https://www.fda.gov/regulatory-information/search-fda-guidance-documents, or https://www.regulations.gov. Use the FDA
website listed in the previous sentence to find the most current
version of the guidance.

    Dated: July 27, 2022.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2022-16499 Filed 8-1-22; 8:45 am]
BILLING CODE 4164-01-P