[Federal Register: February 29, 2008 (Volume 73, Number 41)]
[Rules and Regulations]
[Page 11003-11013]
[DOCID:fr29fe08-12]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 33

[Docket No. RM07-21-000; Order No. 708]

Blanket Authorization Under FPA Section 203

Issued February 21, 2008.
AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is
amending its regulations pursuant to section 203 of the Federal Power
Act (FPA) to provide for additional blanket authorizations under FPA
section 203(a)(1). These blanket authorizations will facilitate
investment in the electric utility industry and, at the same time,
ensure that public utility customers are adequately protected from any
adverse effects of such transactions.

DATES: Effective Date: This Final Rule will become effective March 31,
2008.

FOR FURTHER INFORMATION CONTACT:

Carla Urquhart (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426,<PHONE_NUMBER>
Roshini Thayaparan (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426,<PHONE_NUMBER>
David Hunger (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426,<PHONE_NUMBER>
Andrew P. Mosier, Jr. (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426,<PHONE_NUMBER>

SUPPLEMENTARY INFORMATION:

Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G.
Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff

    1. On July 20, 2007, the Commission issued a Notice of Proposed
Rulemaking \1\ to provide for an additional blanket authorization under
section 203(a)(1) of the Federal Power Act (FPA).\2\ After receiving
comments in response to the Blanket Authorization NOPR, the Commission
amends Part 33 of the Commission's regulations to add five blanket
authorizations under section 203(a)(1). In addition, this Final Rule
provides certain clarifications regarding the existing blanket
authorizations under section 203. Further, this Final Rule clarifies
the definitions of the terms ``affiliate'' and ``captive customers.''
These blanket authorizations and clarifications will facilitate
investment in the electric utility industry and, at the same time,
ensure that public utility customers are adequately protected from any
adverse effects of such transactions.
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    \1\ Blanket Authorization Under FPA Section 203, Notice of
Proposed Rulemaking, 72 FR 41640 (July 31, 2007), FERC Stats. &
Regs. ] 32,619 (2007) (Blanket Authorization NOPR).
    \2\ 16 U.S.C. 824b.
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I. Background

    2. The Energy Policy Act of 2005 \3\ expanded the scope of the
corporate transactions subject to the Commission's review under section
203 of the FPA. Among other things, amended section 203: (1) Expands
the Commission's review authority to include authority over certain
holding company mergers and acquisitions, as well as certain public
utility acquisitions of generating facilities; (2) requires that, prior
to approving a disposition under section 203, the Commission must
determine that the transaction would not result in inappropriate cross-
subsidization of non-utility affiliates or the pledge or encumbrance of
utility assets; \4\ and (3) imposes statutory deadlines for acting on
mergers and other jurisdictional transactions.
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    \3\ Energy Policy Act of 2005, Pub. L. 109-58, 1289, 119 Stat.
594, 982-83 (2005) (EPAct 2005).
    \4\ Section 203(a)(4) is not an absolute prohibition on the
cross-subsidization of a non-utility associate company or the pledge
or encumbrance of utility assets for the benefit of an associate
company. If the Commission determines that the cross-subsidization,
pledge or encumbrance will be consistent with the public interest,
the action may be permitted.
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    3. Through the Order No. 669 rulemaking proceeding, the Commission
promulgated regulations adopting certain modifications to 18 CFR 2.26
and Part 33 to implement amended section 203.\5\ The Commission also
provided blanket authorizations for certain transactions subject to
section 203. These blanket authorizations were crafted to ensure that
there is no harm to captive customers of franchised public utilities,
but sought to accommodate investments in the electric utility industry
and market liquidity. Some commenters in the rulemaking proceeding
argued that the Commission should have granted additional blanket
authorizations that would benefit the marketplace and not harm
customers. Other commenters argued that the Commission should adopt
additional generic rules to guard against inappropriate cross-
subsidization associated with the mergers. Yet other commenters argued
that the Commission should modify its competitive analysis for mergers,
which has been in place for 10 years. The Commission stated that it
would reevaluate these and other issues at a technical conference on
the Commission's section 203 regulations as well as certain issues
raised in the Order No. 667 rulemaking proceeding implementing the
Public Utility Holding Company Act of 2005 (PUHCA 2005).\6\
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    \5\ Transactions Subject to FPA Section 203, Order No. 669, 71
FR 1348 (Jan. 6, 2006), FERC Stats. & Regs. ] 31,200 (2005), order
on reh'g, Order No. 669-A, 71 FR 28422 (May 16, 2006), FERC Stats. &
Regs. ] 31,214 (2006), order on reh'g, Order No. 669-B, 71 FR 42579
(July 27, 2006), FERC Stats. & Regs. ] 31,225 (2006).
    \6\ EPAct 2005, Pub. L. 109-58, 1261, et seq., 119 Stat. 594,
972-78 (2005) (PUHCA 2005). See also Repeal of the Public Utility
Holding Company Act of 1935 and Enactment of the Public Utility
Holding Company Act of 2005, Order No. 667, 70 FR 75592 (Dec. 20,
2005), FERC Stats. & Regs. ] 31,197 (2005), order on reh'g, Order
No. 667-A, 71 FR 28446 (May 16, 2006), FERC Stats. & Regs. ] 31,213,
order on reh'g, Order No. 667-B, 71 FR 42750 (July 28, 2006), FERC
Stats. & Regs. ] 31,224 (2006), order on reh'g, Order No. 667-C, 72
FR 8277 (Feb. 26, 2007), 118 FERC ] 61,133 (2007). These issues
included matters related to inappropriate cross-subsidization and
pledges or encumbrance of utility assets, whether our current merger
policy should be revised, and whether additional exemptions,
different reporting requirements, or other regulatory action (under
PUHCA 2005 or the FPA or Natural Gas Act (NGA)) needed to be
considered.
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    4. On December 7, 2006, the Commission held a technical conference
(December 7 Technical Conference) to discuss several of the issues that
arose in the Order No. 667 and Order No. 669 rulemaking proceedings.
The December 7 Technical Conference discussed a range of topics. The
first panel discussed whether there are additional actions, under the
FPA or the NGA, that the Commission should take to supplement the
protections against cross-subsidization that were implemented in the
Order No. 667 and Order No. 669 rulemaking proceedings. The second
panel discussed whether,

and if so how, the Commission should modify its Cash Management Rule
\7\ in light of PUHCA 2005 and whether the Commission should codify
specific safeguards that must be adopted for cash management programs
and money pool agreements and transactions. The third panel discussed
whether modifications to the specific exemptions, waivers and blanket
authorizations set forth in the Order No. 667 and Order No. 669
rulemaking proceedings are warranted. Post-technical conference
comments were accepted.
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    \7\ Regulation of Cash Management Practices, Order No. 634, 68
FR 40500 (July 8, 2003), FERC Stats. & Regs. ] 31,145, revised,
Order No. 634-A, 68 FR 61993 (Oct. 31, 2003), FERC Stats. & Regs. ]
31,152 (2003) (Cash Management Rule).
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    5. On March 8, 2007, the Commission held a second technical
conference (March 8 Technical Conference) to discuss whether the
Commission's section 203 policy should be revised and, in particular,
whether the Commission's Appendix A merger analysis is sufficient to
identify market power concerns in today's electric industry market
environment. The first panel discussed whether the Appendix A analysis
is appropriate to analyze a merger's effect on competition, given the
changes that have occurred in the industry (e.g., the development of
Regional Transmission Organizations) and statutory changes (e.g., as a
result of the repeal of the Public Utility Holding Company Act of 1935
\8\ and new authorities given to the Commission in EPAct 2005 \9\). The
second panel assessed the factors the Commission uses in reviewing
mergers and the coordination between the Commission and other agencies
(including state commissions) with merger review responsibility.
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    \8\ 16 U.S.C. 79a et seq. (PUHCA 1935). EPAct 2005 repealed
PUHCA 1935. EPAct 2005, Pub L. No. 109-58, 1263.
    \9\ These include new authorities through amended FPA section
203 as well as PUHCA 2005.
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    6. On July 20, 2007, the Commission took three actions based on the
Commission's experience implementing amended FPA section 203 and PUHCA
2005, as well as the record from the Commission's December 7 and March
8 Technical Conferences regarding section 203 and PUCHA 2005. In this
docket, the Commission issued the Blanket Authorization NOPR, proposing
an additional blanket authorization for certain dispositions of
jurisdictional facilities under FPA section 203(a)(1) and seeking
comment on additional blanket authorizations under section 203. In
addition, in separate proceedings, the Commission issued a policy
statement providing additional guidance regarding the Commission's
section 203 authority \10\ and a notice of proposed rulemaking
proposing to codify restrictions on affiliate transactions between
franchised public utilities with captive customers and their market-
regulated power sales affiliates or non-utility affiliates.\11\
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    \10\ FPA Section 203 Supplemental Policy Statement, 72 FR 42277
(Aug. 2, 2007), FERC Stats. & Regs. ] 31,253 (2007) (Supplemental
Policy Statement), order on clarification and reconsideration, 122
FERC ] 61,157 (2008).
    \11\ Cross-Subsidization Restrictions on Affiliate Transactions,
72 FR 41644 (July 31, 2007), FERC Stats. & Regs. ] 32,618 (2007)
(Affiliate Transactions NOPR); see Cross-Subsidization Restrictions
on Affiliate Transactions, Order No. 707 122 FERC ] 61,155 (2008)
(Affiliate Transactions Final Rule).
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II. Blanket Authorization NOPR

    7. In the Blanket Authorization NOPR, based on the record from the
technical conferences (including both oral and written comments) and
the Commission's experience under amended section 203 to date, the
Commission proposed to provide for a limited blanket authorization to
public utilities under section 203(a)(1). Under this limited blanket
authorization, a public utility would be pre-authorized to dispose of
less than 10 percent of its voting securities to a public utility
holding company but only if, after the disposition, the holding company
and any of its associate or affiliate companies in aggregate will own
less than 10 percent of the outstanding voting interests of that public
utility. The proposed limited blanket authorization would work in
conjunction with the blanket authorization granted to holding companies
under section 203(a)(2) in 18 CFR 33.1(c)(2)(ii).\12\ The Commission
noted that this proposed blanket authorization would not entirely
parallel the section 203(a)(2) authorization since the section
203(a)(2) authorization does not contain the ``in aggregate''
limitation. However, the Commission stated that this limitation would
provide better protection against possible transfer of control of a
public utility. The Commission sought comment on this limitation.
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    \12\ The section 203(a)(2) blanket authorization states that any
holding company in a holding company system that includes a
transmitting utility or an electric utility may purchase, acquire,
or take ``[a]ny voting security in a transmitting utility, an
electric utility company, or a holding company in a holding company
system that includes a transmitting utility or an electric utility
company if, after the acquisition, the holding company will own less
than 10 percent of the outstanding voting securities.'' 18 CFR
33.1(c)(2)(ii). Because a ``transmitting utility'' or ``electric
utility company'' may also be a ``public utility'' as defined in the
FPA, the public utility may need to obtain separate authorization
for the same transaction under FPA section 203(a)(1), which requires
authorization for public utilities to dispose of jurisdictional
facilities.
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    8. The Commission stated that the disposition of such limited
voting interests (less than 10 percent), with the proposed ``in
aggregate'' restriction and the existing reporting requirements
applicable to holding companies,\13\ will not harm competition or
captive customers. Moreover, the Commission stated this 10 percent
threshold is consistent with the definition of ``holding company''
under section 1262(8)(A) of PUHCA 2005. Under that definition, any
company that has the power to vote 10 percent or more of the securities
of a public utility company (or a holding company of a public utility
company) triggers holding company status and thus is presumed to raise
sufficient concerns about controlling influence over a subsidiary
public utility that regulatory oversight is needed. The Commission also
found the 10 percent threshold to be consistent with the blanket
authorization granted under section 203(a)(2) in the Order No. 669
rulemaking proceeding, under which holding companies are pre-authorized
to acquire up to 9.99 percent of voting securities of a public utility.
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    \13\ See, e.g., 18 CFR 33.1(c)(4) (requiring the filing of
Securities and Exchange Commission (SEC) Schedule 13D, Schedule 13G,
and Form 13F, if applicable); 18 CFR 35.42(a) (effective September
18, 2007, the effective date of Market-Based Rates For Wholesale
Sales Of Electric Energy, Capacity And Ancillary Services By Public
Utilities, Order No. 697, 72 FR 39903 (July 20, 2007), FERC Stats. &
Regs. ] 31,252 (2007)) (requiring a notification of any change in
status that would reflect a departure from the characteristics the
Commission relied upon in granting market-based rate authority); 18
CFR 366.4(a) (requiring Form FERC-65 (notification of holding
company status)).
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    9. The Commission further noted that, as part of the existing
``parallel'' blanket authorization under section 203(a)(2), the
Commission already requires the holding company to provide to the
Commission copies of any Schedule 13D, Schedule 13G and Form 13F at the
same time and on the same basis, as filed with the SEC in connection
with any securities purchased, acquired or taken pursuant to the
blanket authorization under section 203(a)(2) provided in Sec.
33.1(c)(2) of the Commission's regulations.\14\ Any person is required
to file a Schedule 13 notification with the SEC of an acquisition of
beneficial ownership of more than five percent of a class of equity
securities.\15\ Importantly, a Schedule 13G filer must acquire the
subject securities ``in the ordinary course of his business and not
with the purpose nor with the effect of changing or influencing the
control of the issuer,

nor in connection with or as a participant in any transaction having
such purpose or effect'' over entities whose securities it holds.\16\
Because the Commission already receives these filings from the holding
company, the Commission proposed not to require additional reporting on
the part of individual public utilities to duplicate the reporting of
information we are already getting about the same transaction. However,
the Commission sought comment on whether any additional reporting by
the public utility should be required.
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    \14\ 18 CFR 33.1(c)(4).
    \15\ 17 CFR 240.13d-1(a).
    \16\ 17 CFR 240.13d-1(b)(1)(i).
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    10. The Commission also sought comment on whether blanket
authorizations under section 203(a)(1) should be provided for the
transfer of securities by a public utility to a holding company granted
a blanket authorization under section 203(a)(2) in 18 CFR
33.1(c)(8),\17\ 33.1(c)(9),\18\ and 33.1(c)(10).\19\ In addition, the
Commission sought comment on whether it should grant a generic blanket
authorization under section 203(a)(1) for the acquisition or
disposition of a jurisdictional contract where neither the acquirer nor
transferor has captive customers and the contract does not convey
control over the operation of a generation or transmission facility.
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    \17\ 18 CFR 33.1(c)(8) (granting a blanket authorization under
section 203(a)(2) to a person that is a holding company solely with
respect to one or more exempt wholesale generators (EWGs), foreign
utility companies (FUCOs), or qualifying facilities (QFs) to acquire
the securities of additional EWGs, FUCOs, or QFs).
    \18\ 18 CFR 33.1(c)(9) (granting a conditional blanket
authorization under section 203(a)(2) to a holding company, or a
subsidiary of that company, that is regulated by the Board of
Governors of the Federal Reserve Bank or by the Office of the
Comptroller of the Currency, under the Bank Holding Company Act of
1956 as amended by the Gramm-Leach-Bliley Act of 1999).
    \19\ 18 CFR 33.1(c)(10) (granting a limited blanket
authorization under section 203(a)(2) to a holding company, or a
subsidiary of that company, for the acquisition of securities of a
public utility or a holding company that includes a public utility
for purposes of underwriting activities or hedging transactions).
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III. Procedural Matters

    11. The Blanket Authorization NOPR invited comments on the proposed
regulations. Comments on the Blanket Authorization NOPR were filed by:
American Public Power Association and National Rural Electric
Cooperative Association (APPA/NRECA); Edison Electric Institute (EEI);
Electric Power Supply Association (EPSA); Entergy Services, Inc.
(Entergy); Financial Institutions Energy Group (the Financial Group);
Mirant Corporation (Mirant); Modesto Irrigation District (Modesto); and
Oklahoma Corporation Commission (Oklahoma Commission).

IV. Discussion

    12. This Final Rule adopts the proposal in the Blanket
Authorization NOPR to pre-authorize a public utility to dispose of less
than 10 percent of its voting securities to a public utility holding
company if, after the disposition, the holding company and any
associate or affiliate companies in aggregate will own less than 10
percent of the outstanding voting interests of that public utility.
Based on comments to the Blanket Authorization NOPR, this Final Rule
also provides four additional blanket authorizations under section
203(a)(1). First, a public utility is granted a blanket authorization
under section 203(a)(1) to transfer its outstanding voting securities
to any holding company granted blanket authorization in Sec.
33.1(c)(8) if, after the transfer, the holding company and any of its
associate or affiliate companies in aggregate will own less than 10
percent of the outstanding voting interests of such public utility.
Second, a public utility is granted a blanket authorization under
section 203(a)(1) to transfer its outstanding voting securities to any
holding company granted blanket authorization in Sec.  33.1(c)(9).
Third, a public utility is granted a blanket authorization under
section 203(a)(1) to transfer its outstanding voting securities to any
holding company granted blanket authorization in Sec.  33.1(c)(10).
Fourth, a public utility is granted a blanket authorization under
section 203(a)(1) for the acquisition or disposition of a
jurisdictional contract where neither the acquirer nor transferor has
captive customers or owns or provides transmission service over
jurisdictional transmission facilities, the contract does not convey
control over the operation of a generation or transmission facility,
the parties to the transaction are neither affiliates nor associate
companies, and the acquirer is a public utility. In addition, this
Final Rule provides certain clarifications regarding the existing
blanket authorizations under section 203. Finally, this Final Rule
clarifies the definitions of the terms ``affiliate'' and ``captive
customers.''

A. Proposed Blanket Authorizations

1. Scope of the Proposed Blanket Authorization
a. Comments
    13. APPA/NRECA, Mirant and the Oklahoma Commission support the
limited blanket authorization as proposed by the Commission. The
Oklahoma Commission states that the rule would allow utilities to
expedite business ventures, but warns that the Commission should use
terms in their plain and ordinary meanings to reduce any potential
ambiguity. It also recommends that the Commission consider language
that would allow state commissions to continue to receive notices of
any investigations of regulated public utility companies.
    14. In the Blanket Authorization NOPR, the Commission asked for
comments on the ``in aggregate'' limitation. APPA/NRECA support the
proposed aggregate ownership limitation, stating that it is needed to
help prevent the transfer of control of public utilities. They argue
that omitting the ``in aggregate'' limitation would allow a public
utility to sell less than 10 percent of its voting securities in
successive transfers to each of several affiliates or associate
companies (or even the same entity). APPA/NRECA further argues that
omitting the ``in aggregate'' limitation is not in the public interest
because, absent a case-by-case review, the Commission has no basis for
a finding that an indirect transfer of control of a public utility's
generation or transmission facilities to a single entity or to several
affiliated entities will not harm competition, captive customers, or
transmission customers.
    15. Mirant also supports the limited blanket authorization with the
``in aggregate'' limitation. It states that while this does not
completely parallel the blanket authorization granted in Order No. 669,
it is comparable enough to remedy the problem that exists when one
party must seek Commission review of the transaction.
    16. EEI and the Financial Group support the blanket authorization
with certain clarifications and recommendations. Specifically, the
Financial Group argues that the proposed less than 10 percent blanket
authorization under section 203(a)(1) should be expanded to include all
acquirers, not just holding companies. It asserts that if a disposition
of less than 10 percent of a public utility's voting securities to a
holding company raises no concerns with respect to control, markets, or
captive customers, then a disposition of less than 10 percent of a
public utility's voting securities to an entity that is not a holding
company should also raise no concerns. The Financial Group states that,
in the case of a disposition of less than 10 percent of the voting
securities of a public utility, the interest being disposed of does not
convey control and cannot harm markets or captive customers, so the
status of the acquirer--as a holding company, public utility, or an
entity

that is neither--should be irrelevant. It argues that requiring a
public utility to seek approval under section 203(a)(1) when disposing
of less than 10 percent of its voting securities to a non-holding
company would not serve any regulatory purpose, and adds needless costs
and delays to transactions that do not raise section 203 concerns.
    17. Similarly, EEI argues that the Commission should not limit its
proposed section 203(a)(1) blanket authorization to the entities
described in 18 CFR 33.1(c)(2)(ii). EEI states that Sec.
33.1(c)(2)(ii) only covers acquisitions by holding companies of
securities of a transmitting utility, electric utility company, or
holding company in a holding company system with such utilities. This,
EEI argues, excludes a broader class of public utilities as well as
non-holding company acquirers. It contends that the Commission would
reduce the regulatory burden and encourage investment without causing
harm ``by extending the new blanket authorization to cover
jurisdictional transfers of securities from the broader class of
`public utilities' to `any person' without the constraints contained in
[Sec. ] 33.1(c)(2)(ii).'' \20\
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    \20\ EEI Comments at 8.
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    18. As an additional matter, the Financial Group recommends that
the Commission clarify that the aggregate limitation only applies to
companies in a holding company system that are 10 percent or more owned
by the holding company or its subsidiaries. It argues that this should
be clarified by eliminating the reference to ``affiliate'' altogether
in the proposed definition. In the alternative, the Financial Group
argues that the Commission clarify that the term does not refer to the
PUHCA 2005 definition of affiliate, but rather to an entity that
controls, is controlled by, or is under common control with, another
entity (where control is rebuttably presumed to mean a voting interest
of 10 percent or more).
b. Commission Determination
    19. We will adopt the proposed blanket authorization without
modification. We will retain the ``in aggregate'' limitation so that,
after a disposition of a public utility's securities under the proposed
blanket authorization, the acquiring holding company and any associate
or affiliate companies ``in aggregate'' would own less than 10 percent
of the outstanding voting interests of that the public utility. As
commenters point out, the limitation helps to prevent a public utility
from transferring less than 10 percent of its voting securities in
successive transfers to each of several affiliate or associate
companies (or even the same entity), and thereby transferring control.
    20. We deny the Financial Group's and EEI's requests to expand the
blanket authorization to cover not only public utility dispositions of
securities to holding companies but also public utility dispositions of
securities to ``any persons.'' This request would expand the blanket
authorization proposed in the existing NOPR beyond its original intent,
which was to ensure that transactions qualifying under the section
203(a)(2) blanket authorization would not have to seek approval under
section 203(a)(1).\21\ In addition, limiting the blanket authorization
to holding companies allows the Commission to monitor these
dispositions for possible changes of control even when they fall under
the 10 percent threshold because of holding companies' preexisting
reporting requirements.\22\ If we were to expand the blanket
authorization to ``any person,'' we would need to establish appropriate
reporting requirements so that we could monitor transfers to non-
holding companies. This is important because, as we explained in the
Supplemental Policy Statement, although there is a presumption that
less than 10 percent of a utility's shares will not result in a change
of control, this presumption is rebuttable. In some instances, the
transfer of less than 10 percent of voting shares may constitute a
transfer of control.\23\ Accordingly, at this time we decline to expand
the proposed generic blanket authorization as requested EEI and the
Financial Group. However, we recognize that it could reduce regulatory
burdens and encourage investment to allow transfers of securities not
only to holding companies but to other ``persons'' and that such
transfers will not harm competition or customers as long as there is
sufficient ability to monitor possible changes in control of public
utilities. Therefore, the Commission is willing to consider such
blanket authorizations on a case-by-case basis if applicants can
propose sufficient reporting requirements to allow adequate monitoring
of possible changes in control and assure us that captive customers are
adequately protected.
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    \21\ See Blanket Authorization NOPR, FERC Stats. & Regs. ]
32,619 at P 9-11.
    \22\ See, e.g., 18 CFR 366.4; 18 CFR 366.23; 18 CFR parts 367-
68.
    \23\ See Supplemental Policy Statement, FERC Stats. & Regs. ]
31,253 at n.48.
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    21. We will also deny the Financial Group's suggestion to eliminate
the term ``affiliate'' from the proposed blanket authorization.
However, we clarify that the term affiliate for purposes of the blanket
authorization does not refer to the PUHCA 2005 definition of affiliate,
but rather, to the definition we adopt in the Affiliate Transactions
Final Rule issued concurrently with this Final Rule. As discussed in
the Affiliate Transactions Final Rule, we find it appropriate to
explicitly incorporate the PUHCA 1935 definition of affiliate for
EWGs.\24\ We also adopt the PUHCA 1935 definition of affiliate for non-
EWGs, but with adjustments to reflect our previously used 10 percent
voting interest threshold for non-EWGs and to eliminate certain
language not applicable or necessary in the context of the FPA.\25\
Accordingly, this definition applies for purposes of the blanket
authorizations adopted under section 203.
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    \24\ 16 U.S.C. 824m.
    \25\ See, e.g., Morgan Stanley Capital Group, Inc., 72 FERC ]
61,082, at 61,436-37 (1995).
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    22. Finally, with regard to the Oklahoma Commission's request for
language that would allow state commissions to continue to receive
notices of investigations of regulated public utilities, we note that
it previously has not been the practice of the Office of Enforcement to
inform state commissions of investigations that it is conducting.
    Section 1b.9 of our regulations requires that all investigative
proceedings shall be treated as non-public by the Commission and its
staff except to the extent that the Commission authorizes public
disclosure, the matter is made a matter of public record during an
adjudicatory proceeding, or disclosure is required under the Freedom of
Information Act.\26\ The Commission concludes that the disclosure of
such information could impede the willingness of market participants to
self-report and otherwise cooperate in investigations. As such, we
decline to grant the Oklahoma Commission's request.\27\
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    \26\ 18 CFR 1b.9.
    \27\ Our determination on this issue is also stated in the
concurrently-issued Notice of Proposed Rulemaking in Docket Nos.
AD07-7-000 and RM07-19-000 (Wholesale Competition in Regions with
Organized Electric Markets) with regard to releasing information to
state commissions on referrals by market monitoring units to the
Commission for investigation.
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2. Reconciling the Proposed Blanket Authorization With the Presumption
Provided in the Supplemental Policy Statement
a. Comments
    23. Both the Financial Group and EEI question whether the blanket
authorization is necessary in light of the

Supplemental Policy Statement that creates a presumption of no transfer
of control for security transfers of under 10 percent of a company's
securities. They state that absent such a change in control, the
Commission has indicated that a sale of securities is not a transaction
subject to section 203(a)(1) jurisdiction. If that is the case, EEI
questions why there should be a blanket authorization covering security
transfers of up to 10 percent from utility companies to holding
companies.
    24. EEI also states that it assumes that the proposed blanket
authorization is meant to supplement and not modify other blanket
authorizations and clarifications so, for example, the new
authorization would apply as to securities transfers only in excess of
$10 million.
    25. Mirant contends that, absent the Blanket Authorization NOPR, no
pre-approval would be required from the Commission for a public utility
to transfer up to 10 percent of voting securities, though it recognizes
the ``possibility'' that there is a presumption that control could be
exercised over the management or policies of the public utility.
Accordingly, it states that the Commission should adopt the proposed
blanket authorization to remove the presumption that exists in the
Supplemental Policy Statement with respect to transfers of voting
securities from a public utility to a public utility holding company.
It further contends that the proposed blanket authorization will remove
the inconsistency in the filing requirements between holding companies
and public utilities.
b. Commission Determination
    26. The Commission provided guidance in the Supplemental Policy
Statement that a transfer of less than 10 percent would be rebuttably
presumed not to be a transfer of control in order to assist applicants
in determining the need for prior authorization under section 203, not
to define the scope or limit of our jurisdiction. We agree with
commenters that if there is no change in control of a public utility as
a result of the transfer of a public utility's securities, then the
public utility has not ``otherwise disposed'' of its jurisdictional
facilities under section 203(a)(1)(A) and no Commission authorization
is required. However, as the Commission stressed in the Supplemental
Policy Statement, we cannot make an ex ante determination regarding
what is control for purposes of the Commission's section 203 analysis
absent facts of a specific case. The circumstances that convey control
vary depending on a variety of factors, including the transaction
structure, the nature of voting rights and/or contractual rights and
obligations conveyed in the transaction. Because of the possibility
that transfers of up to 10 percent could result in a change in control,
the rebuttable presumption in the Supplemental Policy Statement and the
blanket authorization should help eliminate uncertainties. Moreover, we
view the ``in aggregate'' limitation in the blanket authorization as
important to ensure that companies do not circumvent section
203(a)(1)(A) through multiple dispositions of less than 10 percent.
    27. In response to EEI, we clarify that the new blanket
authorization in this Final Rule is meant to supplement and not modify
other blanket authorizations and clarifications in the Order No. 669
series. We also clarify that, consistent with the statute, it applies
only to section 203(a)(1)(A) transfers of securities of a value in
excess of $10 million.
3. Reporting Requirement
    28. In the Blanket Authorization NOPR, the Commission sought
comment on whether, in association with the proposed blanket
authorization, additional reporting by the public utility should be
required.
a. Comments
    29. Most commenters, including EEI, the Financial Group, Mirant,
and the Oklahoma Commission argue that the Commission should not impose
a reporting requirement associated with the proposed blanket
authorization. These commenters contend that no additional reporting
obligation is required because the relevant information will be
submitted by the holding company that is acquiring the securities.
    30. EEI argues that if the Commission expands the proposed blanket
authorization to cover jurisdictional transfer of securities by public
utilities to other entities, the Commission may wish to impose a
counterpart to the 18 CFR 33.1(c)(4) holding company reporting
requirement on the public utility, but should do so only for those
transactions not already covered by Sec.  33.1(c)(4).
    31. The Oklahoma Commission also argues that additional reporting
is not needed. However, the Oklahoma Commission proposes that the
relevant state commission be notified of additional reviews or requests
about individual public utilities' current acquisition information. The
Oklahoma Commission also urges the Commission to add language that
states that section 203 does not preempt applicable state law
concerning reporting requirements, which would further protect the
interest and authority of state commissions.
    32. In contrast, APPA/NRECA argue that the Commission should
require a public utility to report on all dispositions of its
securities undertaken pursuant to the blanket authorization. APPA/NRECA
argue that the reporting burden is minimal and that the Commission
should not have to (and, in fact, may not be able to) piece together
this information from existing reports.
b. Commission Determination
    33. We will not require additional reporting requirements at this
time. In the Blanket Authorization NOPR, the Commission proposed not to
impose additional reporting requirements because existing regulations
require the submission of schedules and forms that are also provided to
the SEC.\28\ While we agree with APPA/NRECA that additional reporting
requirements might provide greater efficiency to the Commission, at
this time we believe the potential reporting burden on public utilities
outweighs the possible efficiency gains.
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    \28\ For example, the Commission already requires the holding
company to provide to the Commission copies of any Schedule 13D,
Schedule 13G and Form 13F, at the same time and on the same basis,
as filed with the SEC in connection with securities purchased,
acquired or taken pursuant to the blanket authorization under
section 203(a)(2) provided in Sec.  33.1(c)(2) of the Commission's
regulations. 18 CFR 33.1(c)(4).
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    34. We clarify, as requested by the Oklahoma Commission, that
section 203 does not preempt applicable state law concerning reporting
requirements. With regard to the Oklahoma Commission's request that
state commissions be notified of additional reviews or requests about
individual public utilities' current acquisition information, to the
extent that such reviews or requests relate to an investigation, they
are subject to the Commission's rules governing investigations as
described supra. However, if the reviews or requests are made as the
result of a public inquiry, such notification may be made. For example,
the Commission's Division of Audits in the Office of Enforcement has
provided notice of public final audit reports of jurisdictional
companies to affected states. We continue to encourage our audits staff
to continue this practice.

B. Expansion of the Proposed Blanket Authorization

1. Blanket Authorization to ``Parallel'' Those Granted Under Section
203(a)(2)
a. Comments
    35. The Blanket Authorization NOPR also requested comments on
whether the proposed blanket authorization under section 203(a)(1)
should be extended to the transfer of securities by a public utility to
a holding company granted a blanket authorization: (1) Sec.  33.1(c)(8)
for a person that is a holding company solely with respect to owning
one or more EWGs, FUCOs, or QFs to acquire the securities of additional
EWGs, FUCOs, or QFs; (2) Sec.  33.1(c)(9) for a bank holding company or
subsidiary that is regulated by the Federal Reserve Board or
Comptroller of the Currency to acquire and hold an unlimited amount of
the securities of holding companies that include a transmitting utility
or an electric utility company if such acquisitions and holdings are in
the normal course of business and the securities are held for certain
identified purposes \29\; and (3) Sec.  33.1(c)(10) for a holding
company or subsidiary to acquire public utility or holding company
securities for underwriting or hedging purposes under certain
conditions.\30\
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    \29\ The securities must be held: (i) As a fiduciary; (ii) as
principal for derivatives hedging purposes incidental to the
business of banking and it commits not to vote such securities to
the extent they exceed 10 percent of the outstanding shares; (iii)
as collateral for a loan; or (iv) solely for purposes of liquidation
and in connection with a loan previously contracted for and owned
beneficially for a period of not more than two years, with the
following conditions and reporting requirement: The holding does not
confer a right to control, positively or negatively, through debt
covenants or any other means, the operation or management of the
public utility or public utility holding company, except as to
customary creditors' rights or as provided under the United States
Bankruptcy Code; and the parent holding company files with the
Commission on a public basis and within 45 days of the close of each
calendar quarter, both its total holdings and its holdings as
principal, each by class, unless the holdings within a class are
less than one percent of outstanding shares, irrespective of the
capacity in which they were held. 18 CFR 33.1(c)(9).
    \30\ For purposes of conducting underwriting activities, the
blanket authorization is subject to the condition that holdings that
the holding company or its subsidiary are unable to sell or
otherwise dispose of within 45 days are to be treated as holdings as
principal and thus subject to a limitation of 10 percent of the
stock of any class unless the holding company or its subsidiary has
within that period filed an application under FPA section 203 to
retain the securities and has undertaken not to vote the securities
during the pendency of such application; and the parent holding
company files with the Commission on a public basis and within 45
days of the close of each calendar quarter, both its total holdings
and its holdings as principal, each by class, unless the holdings
within a class are less than one percent of outstanding shares,
irrespective of the capacity in which they were held. For purposes
of engaging in hedging transactions, the blanket authorization is
subject to the condition that if such holdings are 10 percent or
more of the voting securities of a given class, the holding company
or its subsidiary shall not vote such holdings to the extent that
they are 10 percent or more. 18 CFR 33.1(c)(10).
---------------------------------------------------------------------------

    36. EEI, the Financial Group and Mirant support extension of the
blanket authorizations. They generally argue that if holding company
acquisitions authorized by Sec.  33.1(c)(8), (c)(9) and (c)(10) pose no
concern warranting Commission review, counterpart public utility
transfers subject to the same constraints should also pose no concern.
They also argue that there is no benefit to the acquiring entity under
a blanket authorization under section 203(a)(2) unless there is a
reciprocal blanket authorization under section 203(a)(1).
    37. In addition, the Financial Group recommends that the Sec.
33.1(c)(8) blanket authorization be extended to companies that will
become holding companies only after the transaction has been
consummated (e.g., special purpose vehicles that are created to acquire
and hold the jurisdictional assets of another company) in order for
those companies to take advantage of the blanket. The Financial Group
also argues that the proposed blanket authorization under section
203(a)(1) should be extended so that a public utility can transfer an
unlimited amount of its securities to any entity that will acquire and
hold such securities for the four purposes enumerated in Sec.
33.1(c)(9). It asserts that the Commission has previously found in the
section 203(a)(2) context that these types of transactions cannot harm
competition or captive customers because the securities are being
transferred for reasons other than to exercise control over the public
utility. Thus, it argues, these transactions do not constitute a change
in control over a public utility, which is the core focus of section
203(a)(1). Similarly, with regard to Sec.  33.1(c)(10), the Financial
Group argues that the proposed blanket authorization under section
203(a)(1) should be extended to a public utility transferring its
securities to any entity.
    38. APPA/NRECA argue against granting a parallel blanket
authorization under section 203(a)(1) for a public utility to transfer
securities of EWGs, FUCOs or QFs (to parallel Sec.  33.1(c)(8)) or to
transfer securities to a non-bank holding company or its subsidiary for
purposes of engaging in hedging transactions (to parallel Sec.
33.1(c)(10)). They argue that preauthorizing an EWG or QF that is a
public utility to transfer all or any part of its securities to a
holding company would enable a public utility to transfer control of
its generation facilities to a holding company that already controls
another public utility without Commission scrutiny of the transaction
for competitive harm.
    39. Regarding the proposal for a section 203(a)(1) blanket
authorization to parallel Sec.  33.1(c)(10), APPA/NRECA state that
there is no basis for finding that transactions covered by this blanket
are consistent with the public interest even with the 10 percent voting
limitation imposed on the holding company.\31\ Further, they state that
``hedging transactions'' are not defined in the regulations or in the
NOPR, and there is no requirement that the acquiring company be in some
business other than the utility, power or energy business, and thus no
assurance that the hedging transaction is only incidental to the
holding company's main business.\32\ They recommend that, however, if
the Commission were to grant a further blanket authorization under
section 203(a)(1), it should contain a 10 percent ``in aggregate''
limitation.
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    \31\ Under Sec.  33.1(c)(10)(ii), a holding company or its
subsidiaries that acquire 10 percent or more of the voting
securities of a public utility or a holding company for hedging
transactions are limited to voting less than 10 percent of those
securities.
    \32\ APPA/NRECA note that these problems already exist in the
context of the blanket authorization under section 203(a)(2)
provided in 18 CFR 3.1(c)(10)(ii).
---------------------------------------------------------------------------

b. Commission Determination
    40. We will adopt the proposal to extend a blanket authorization
under section 203(a)(1) to a public utility in circumstances where a
holding company qualifies for, and the exercise of the blanket
authorization is for the purpose of facilitating the transactions
authorized under the Sec.  33.1(c)(8), 33.1(c)(9) or a 33.1(c)(10)
blanket authorization under section 203(a)(2).
    41. As to the blanket authorization to parallel Sec.  33.1(c)(8),
we will require that the transfer of securities by a public utility to
a holding company under that blanket be subject to the 10 percent ``in
aggregate'' limitation as in the proposed limited blanket authorization
described above. We recognize that the blanket authorization we adopt
in this Final Rule to facilitate transactions undertaken by holding
companies under Sec.  33.1(c)(8) does not precisely parallel the
section 203(a)(2) authorization since the section 203(a)(2)
authorization does not include the ``in aggregate'' limitation.
However, we believe this limitation will provide better protection
against possible transfer of control of a public utility and the
acquisition of generation market power by the

acquiring holding company without Commission approval.
    42. The Financial Group's request to extend the proposed section
203(a)(1) blanket to public utilities transferring securities to
entities that will become holding companies only after the transaction
has been consummated is moot because, as discussed above, the
``parallel'' 33.1(c)(8) blanket is restricted to cases where, after the
transfer, the holding company and any of its associate or affiliate
companies in aggregate will own less than 10 percent of the outstanding
voting interests of such public utility. Therefore, the scenario
presented by the Financial Group would not occur because an entity that
was not previously a holding company could not become a holding company
as a result of a transaction whereby the acquiring entity is limited to
owning less than 10 percent of the shares of the public utility.\33\
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    \33\ Transfers of securities that result in the acquiring
company holding less than 10 percent of the outstanding voting
shares of a public utility would have the presumption of not being a
change in control and, therefore, not requiring section 203(a)(1)
authorization. See Supplemental Policy Statement, FERC Stats. &
Regs. ] 31,253 at P 57.
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    43. As to the request for a blanket authorization under section
203(a)(1) to parallel that granted under section 203(a)(2) in Sec.
33.1(c)(9), we note that that authorization under section 203(a)(2)
applies only to acquisitions by bank holding companies or subsidiaries
that are regulated by the Federal Reserve Board or Comptroller of the
Currency (banks) of the securities of holding companies that include
transmitting utilities and electric utility companies if such
acquisitions and holdings are in the normal course of the acquiring
bank's business and are held for certain purposes. In some cases the
entity whose securities are acquired by the bank would have an
obligation under section 203(a)(1) to seek Commission review before
disposing of its securities. Typically, these cases would occur when
the disposing holding company is a public utility and is also the
issuer of the securities being acquired by the bank for those limited
circumstances set forth in Sec.  33.1(c)(9). As stated in Order No.
669-A, entities that are subject to the regulatory oversight of the
Federal Reserve Bank or the Comptroller of the Currency ``are likely to
be significantly constrained in their use of those securities so as to
not affect regulation, rates or competition under the FPA.'' \34\
Further, the Commission conditioned the authorization such that the
holding of the securities does not confer a right to control the
utility operation or management and required a quarterly reporting on
the securities so held by the bank. Accordingly, we will adopt the
proposal to extend the section 203(a)(1) blanket to a disposing holding
company that is also a public utility. Because the entities eligible
for the Sec.  33.1(c)(9) blanket authorization are already subject to
numerous conditions and reporting requirements, we do not believe
additional conditions are required.
---------------------------------------------------------------------------

    \34\ Order No. 669-A, FERC Stats. & Regs. 31,214 at P 124.
---------------------------------------------------------------------------

    44. With respect to the Financial Group's request that the section
203(a)(1) blanket authorization be extended so that a public utility
can transfer an unlimited amount of its securities to any entity that
will acquire and hold such securities for the four enumerated purposes
in Sec.  33.1(c)(9), we cannot be assured that protections such as
those that are in place for entities that are subject to the regulatory
oversight of the Federal Reserve Bank or the Comptroller of the
Currency would apply to entities that are not subject to such
regulatory oversight. Therefore, we will continue to evaluate requests
for blanket authorizations for entities that are not subject to
regulatory oversight by the Federal Reserve Bank or the Comptroller of
the Currency to acquire public utility securities, and for a public
utility to transfer securities to such entities, on a case-by-case
basis when such authorizations are needed.\35\
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    \35\ See Morgan Stanley, 121 FERC ] 61,060 (2007), clarified by,
122 FERC ]61,094 (2008); The Goldman Sachs Group, Inc., 121 FERC ]
61,059 (2007), clarified by, 122 FERC ] 61,005 (2008).
---------------------------------------------------------------------------

    45. As to the request for a blanket authorization under section
203(a)(1) to facilitate the transactions authorized under Sec.
33.1(c)(10), we grant an unlimited authorization for facilitating such
transactions under section 203(a)(1). In granting the blanket
authorization for the transactions for hedging purposes under section
203(a)(2), the Commission limited the voting ability of the entity
acquiring the securities. If the amount held is 10 percent or more of
the relevant class, the acquiring entity is limited to voting less than
10 percent of those securities. This existing condition on the party
acquiring the securities for hedging purposes should be adequate to
ensure that any disposing entity facilitating such transactions and
requiring authorization under section 203(a)(1) does not affect a
disposition or change in control of the issuer of the public utility
securities.\36\
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    \36\ Order No. 669-A, FERC Stats. & Regs. ] 31,214 at P 132.
---------------------------------------------------------------------------

2. Blanket Authorization as to Certain Jurisdictional Contracts
    46. In the Blanket Authorization NOPR, the Commission sought
comment as to whether the Commission should grant a blanket
authorization under section 203(a)(1) for the acquisition or
disposition of a jurisdictional contract where neither the acquirer nor
transferor has captive customers and the contract does not convey
control over the operation of a generation or transmission facility.
a. Comments
    47. The Commission received comments from: APPA/NRECA and Modesto
(referred to herein as Customers); EEI, EPSA and Mirant (referred to
herein as Sellers); and the Financial Group. Customers oppose the
blanket authorization, Sellers support it, and the Financial Group not
only supports it, but proposes expanding the blanket authorization.
    48. Customers argue that the proposal would not protect
transmission customers against cross-subsidization in the same way that
captive wholesale and retail power customers are protected. They
therefore propose narrowing the blanket authorization to cases where
``neither the acquirer nor the transferor has captive customers or owns
or provides transmission service over Commission-jurisdictional
facilities.'' \37\ They also argue that, even if revised to include the
situation where neither the acquirer nor the transferor has captive
customers or owns or provides transmission service over jurisdictional
transmission facilities, allowing an entity such as a power marketer or
independent power producer to transfer its book of jurisdictional power
sales contracts at any time and without the purchaser's consent (which
may or may not be expressly in the contract) would leave the purchaser
with no recourse other than a section 206 complaint and the burden of
proof and costs associated therewith. They maintain that purchasers
under the jurisdictional contract, even if not ``captive'' may be a
load-serving entity dependent on the contract for a reliable power
supply or to meet regulatory or contractual obligations. They also
maintain that a purchaser would have no say in the type of entity to
whom a seller would transfer contracts, creating the possibility that
the entity may not be a suitable counterparty based upon factors such
as creditworthiness or other financial criteria, or inexperience in

administering the functions contemplated in the subject contract. Some
Customers suggest that transfers may result in problems similar to the
mortgage-loan business.
---------------------------------------------------------------------------

    \37\ APPA/NRECA Comments at 13-14.
---------------------------------------------------------------------------

    49. Sellers support the blanket authorization provided that it
focuses only on transactions within the Commission's jurisdiction under
section 203, and would supplement and not override or otherwise limit
the proposed blanket authorization to parallel Sec.  33.1(c)(2)(ii) or
existing blanket authorizations. Sellers argue that with the stated
constraints, the acquisition or disposition should pose no competitive
or rate concerns or impacts on customers that would warrant case-by-
case approval because: (1) The transfer of a wholesale power contract
which does not provide for the control of generation or transmission
cannot affect horizontal or vertical market power; (2) the transfer of
a wholesale power contract to a party that does not have captive
customers cannot affect the rates of captive customers (and therefore
has no rate or cross-subsidization impacts); and (3) the transfer of a
wholesale power contract does not affect the Commission's ability to
regulate the contract or the parties to the transaction. Sellers assert
that there is no regulatory purpose served by requiring section 203
approval for these transactions and states that it is unaware of a
single instance where significant issues have been raised with respect
to requests for approval of wholesale power contracts of this type.
Further, Sellers argue that requiring pre-authorization in this
circumstance results in delays and costs.
    50. The Financial Group also supports the additional blanket
authorization. In addition, it suggests that the blanket authorization
not be limited to cases where the transferor also does not have captive
customers. The Financial Group argues that where a transferor has
captive customers, the issue is whether the transferor would be
transferring the contract at a below-market price, thereby depriving
its captive customers of the full value of the contract. However, where
the transacting parties are not affiliates, it should be assumed that
the transferor would seek market price, regardless of whether or not it
has captive customers. Accordingly, it proposes the following addition
to Sec.  33.1(c): ``Any public utility is granted a blanket
authorization under section 203(a)(1) of the Federal Power Act to
dispose of, transfer, or acquire a contract for the sale of electric
energy in interstate commerce where the contract does not convey
control over the operation of a generation or transmission facility,
the transferor and acquirer are not affiliated, and the acquirer does
not have captive customers.'' \38\
---------------------------------------------------------------------------

    \38\ Financial Group Comments at 18.
---------------------------------------------------------------------------

b. Commission Determination
    51. We adopt the proposed blanket authorization with modifications
to address commenters' concerns. We agree with Sellers that the
transfer of a wholesale power contract which does not provide for the
control of generation or transmission cannot affect horizontal or
vertical market power. We also agree that, with the modification
proposed by APPA/NRECA, the transfer of a wholesale power contract from
one party that does not have captive customers or owns or provides
transmission service over jurisdictional transmission facilities to
another party that also does not have captive customers or owns or
provides transmission service over jurisdictional transmission
facilities cannot affect the rates of captive customers or transmission
customers (and therefore has no rate or cross-subsidization impacts).
However, in at least one case involving a transfer from one affiliated
company to another, significant issues were raised with respect to
requests for section 203 approval of wholesale power contracts of this
type.\39\ Such transactions do not have the market discipline that is
present in arm's-length negotiations between unaffiliated parties.
Finally, Sellers' argument that the transfer of a wholesale power
contract would not affect the Commission's ability to regulate the
contract or the parties to the transaction ignores the possibility of
the contract being transferred to a non-jurisdictional entity, in which
case the Commission could lose the ability to regulate the contract or
parties to the contract. Therefore, we will adopt the blanket
authorization proposed in the Blanket Authorization NOPR, narrowing the
blanket to apply in cases where neither the acquirer nor the transferor
has captive customers or owns or provides transmission service over
jurisdictional transmission facilities, and adding the following
language to the end of the proposed blanket authorization: the parties
to the transaction are neither associate nor affiliate companies, and
the acquirer is a public utility.
---------------------------------------------------------------------------

    \39\ Mirant Corp., 111 FERC ] 61,425 (2005). Pursuant to its
bankruptcy reorganization, Mirant transferred power agreements with
PEPCO to a newly-formed entity within the corporate family.
---------------------------------------------------------------------------

    52. Customers argue that granting a blanket authorization for the
transfer of such jurisdictional contracts without the purchaser's
consent (which may or may not be expressly in the contract) would
result in the purchaser having no say in the type of entity to whom a
seller would transfer contracts, thus leaving the purchaser with no
recourse other than a section 206 complaint and the burden of proof and
costs associated therewith. We do not find that argument compelling
because a section 203 proceeding is unlikely to be the forum for a
purchaser to protect its interest under a contractual arrangement. The
Commission has stated that contractual provisions are beyond the scope
of a section 203 proceeding.\40\ Based on our experience, as discussed
above, the transfer of such contracts, with the additional conditions
on the purchaser and acquirer of the contracts also discussed above,
would not adversely affect competition, rates or regulation, and would
not result in cross-subsidization, and therefore would be consistent
with the public interest. Moreover, whether the contracts were being
transferred pursuant to a blanket authorization or an individual
section 203 authorization, purchasers would be able to protect their
interests by exercising any relevant contractual provisions and, if
necessary, by filing a section 206 complaint. Thus, granting the
blanket authorization does not adversely affect a purchaser's ability
to protect its interests.
---------------------------------------------------------------------------

    \40\ See, e.g., American Electric Power Service Corporation, 107
FERC ] 61,209, at P 17 (2004).
---------------------------------------------------------------------------

    53. We decline to adopt the Financial Group's proposal to expand
the blanket authorization to cover cases where the transferor does have
captive customers but the acquirer does not. We agree with the
Financial Group that, presumably, the transferor would seek market
price regardless of whether or not it has captive customers. However,
captive customers of the transferor would not necessarily receive the
benefit from such transactions and could be faced with paying higher
rates due to increased costs for replacement power.

C. New Requests for Clarification and/or Blanket Authorizations

1. Blanket Authorization Under Section 203(a)(1) for Public Utility
Sales of Non-Voting Securities
a. Comments
    54. EEI argues that the Commission should disclaim jurisdiction
under section 203(a)(1) over public utility sales of non-voting
securities. EEI argues that such an authorization would parallel the
authorization in 18 CFR 33.1(c)(2)(i) for holding companies to acquire
non-voting securities, if the acquisition does not transfer control.

b. Commission Determination
    55. We agree that if a non-voting security does not convey control,
its transfer is not jurisdictional under the ``or otherwise dispose''
provision in section 203(a)(1)(A).\41\ As the Commission stated in the
Supplemental Policy Statement, and has recently held in case-specific
requests for blanket authorizations under section 203(a)(1),\42\
transactions that do not transfer control of a public utility or
jurisdictional facilities do not fall within the ``otherwise dispose''
language of section 203(a)(1)(A) and thus do not require approval under
section 203(a)(1)(A).\43\ If a non-voting security conveys control
(e.g., through veto rights or some other means), our requirements
regarding transfers of control apply.
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    \41\ We note that the situation is different under section
203(a)(2). Jurisdiction over acquisitions of securities under
section 203(a)(2) attaches whether or not there is a transfer of
control if the acquisition is over $10 million.
    \42\ Supplemental Policy Statement, FERC Stats. & Regs. ] 31,253
at P 37; see, e.g., Legg Mason, Inc., 121 FERC ] 61,061, at P 18
(2007).
    \43\ This does not affect a public utility's responsibilities
under sections 203(a)(1)(C) or 203(a)(1)(D), which apply to public
utilities' acquisitions of public utility securities and generating
facilities.
---------------------------------------------------------------------------

2. Clarification Regarding a Public Utility's Transfer of Securities to
Its Holding Companies
a. Comments
    56. EEI argues that the Commission should clarify that a public
utility that is a subsidiary of a holding company may transfer its own
securities to that holding company without a separate authorization as
a counterpart to the 18 CFR 33.1(c)(2)(iii) authorization for holding
companies to acquire such securities. EEI argues that because the
holding company acquisition of such securities (which is inherently
part of what it means to be a holding company) can result in no change
of control, the Commission lacks jurisdiction.
b. Commission Determination
    57. We find that a public utility that is the subsidiary of a
single holding company may transfer its own securities to that holding
company without a separate authorization under section 203(a)(2) for
holding companies to acquire such securities. Where a single holding
company system already has control of a subsidiary public utility, the
transfer of securities from that public utility to the holding company
would not be a change in control.\44\
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    \44\ Our determination here does not affect any separate
requirement that the public utility may have under section 204 of
the FPA regarding the issuance of securities. 16 U.S.C. 824c.
---------------------------------------------------------------------------

3. Clarification Regarding the Internal Corporate Reorganization
Blanket Authorization
a. Comments
    58. EEI asks the Commission to discuss and/or revise the internal
corporate reorganization blanket authorization under 18 CFR 33.1(c)(6)
\45\ to clarify that non-traditional public utilities with market-based
rates should not be considered traditional public utilities merely by
ownership of incidental transmission facilities.\46\
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    \45\ This is a blanket authorization under both sections
203(a)(1) and section 203(a)(2) for internal corporation
reorganizations that do not result in the reorganization of a
traditional public utility that has captive customers or that owns
or provides transmission service over jurisdictional transmission
facilities, and that do not present cross-subsidization issues. 18
CFR 33.1(c)(6).
    \46\ EEI notes that it is not proposing to expand the blanket
authorization for internal corporate reorganizations to cover the
transfer of assets from one non-traditional public utility
subsidiary to another, as such proposal was rejected in the
Supplemental Policy Statement.
---------------------------------------------------------------------------

    59. EEI states that while the Commission has clarified that the
blanket authorization in 18 CFR 33.1(c)(6) allows ``upstream''
reorganizations of ``non-traditional public utilities,'' the blanket
authorization does not allow the reorganization of a traditional public
utility. EEI states that to qualify as a non-traditional public utility
under the language of Sec.  33.1(c)(6), the entity may not ``own or
provide transmission service over jurisdictional transmission
facilities.''
    60. According to EEI, because many non-traditional utilities,
including EWGs and others with market-based rates, own some incidental
jurisdictional transmission facilities (e.g., step-up transformers),
the blanket authorization rule for internal corporate reorganizations
may unnecessarily restrict the reorganization of what otherwise would
clearly be a non-traditional public utility. EEI argues that ownership
of step-up transformers or other incidental transmission facilities
should not change the fact that case-by-case approval by the Commission
is unnecessary for the reorganization of such otherwise non-traditional
utilities with no captive customers and whose reorganization would pose
no cross-subsidization issues and would not change the ultimate control
of the entities.
b. Commission Determination
    61. We grant EEI's request for clarification. The term
``traditional public utility,'' as used in the Order No. 669 rulemaking
proceeding was taken from prior Commission orders where the term was
used to refer to utilities with franchised service territories.\47\ In
the Notice of Proposed Rulemaking prior to issuance of Order No. 669,
the Commission further noted that, ``[i]n the context of considering
cross-subsidization or affiliate abuse concerns associated with power
transactions between public utility affiliates, the Commission has
differentiated between utility activities and non-utility activities
according to whether they were being conducted by a public utility with
captive wholesale or retail customers served under cost-based rates
(sometimes described as a `traditional public utility').'' \48\ In
Order No. 669, the Commission continued to implicitly define
traditional utility as a public utility with wholesale or retail
customers served under cost-based regulation.\49\ Thus, EWGs and other
utilities that do not have franchised service territories are not
considered to be ``traditional public utilities'' in the first
instance, and therefore, their ownership of merely incidental
transmission facilities does not make such a utility a traditional
public utility by virtue of its ownership of those facilities.
---------------------------------------------------------------------------

    \47\ See, e.g., Sierra Pacific Power Co., 95 FERC ] 61,193, at
61,178-79 (2001).
    \48\ Transactions Subject to FPA Section 203, Notice of Proposed
Rulemaking, FERC Stats. & Regs. ] 32,589, at P 43 (2005). In Order
No. 669, the Commission continued to define ``traditional public
utility'' as those with wholesale or retail customers served under
cost-based regulation. Order No. 669, FERC Stats. & Regs. ] 31,200
at P 169.
    \49\ Order No. 669, FERC Stats. & Regs. ] 31,200 at P 169.
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D. Clarification of the Definition of ``Captive Customer''

    62. In considering the comments in this docket, in response to the
Affiliate Transactions NOPR and on rehearing of the Market-Based Rate
Final Rule, and in reviewing the use of the definition of captive
customers in our other rules, we believe it appropriate to modify the
definition of captive customers to make explicit what was only implicit
in our earlier rules--that the definition is intended to apply to
customers served by a franchised public utility under cost-based
regulation. Accordingly, the Commission will revise the definition of
captive customers in 18 CFR 33.1(b)(5) to mean any wholesale or retail
electric energy customers served by a franchised public utility under
cost-based regulation.

V. Information Collection Statement

    63. The Office of Management and Budget's (OMB) regulations require
that OMB approve certain information collection and data retention

requirements imposed by agency rules.\50\ The information collection
requirements in this Final Rule are identified under the Commission's
data collection, FERC-519, ``Applications Under Federal Power Act
Section 203.'' Under section 3507(d) of the Paperwork Reduction Act of
1995,\51\ the reporting requirements in this rulemaking will be
submitted to OMB for review.
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    \50\ 5 CFR 1320.
    \51\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    64. The ``public protection'' provisions of the Paperwork Reduction
of 1995 require each agency to display a currently valid control number
and inform respondents that a response is not required unless the
information collection displays a valid OMB control number on each
information collection or provides a justification as to why the
information collection control number cannot be displayed. In the case
of information collections published in regulations, the control number
is to be published in the Federal Register.
    Public Reporting Burden: As the Commission stated in the Blanket
Authorization NOPR, the regulations should have a minimal impact on the
current reporting burden associated with an individual application, as
they do not substantially change the filing requirements with which
section 203 applicants must currently comply. Further, the Commission
does not expect the total number of section 203 applications under
amended section 203 to increase, but rather expects the total number of
section 203 applications to decrease. This is because the regulations
provide categories of jurisdictional transactions for which the
Commission would not require applications seeking before-the-fact
approval. This would reduce the burden on the electric industry because
it will reduce the number of applications that need to be made to the
Commission. The Commission received eight comments on the Blanket
Authorization NOPR and no entity specifically addressed the
Commission's information collection statement.
    The Commission is submitting a copy of this Final Rule to OMB for
review and approval. In their notice of November 28, 2007, OMB took no
action on the Blanket Authorization NOPR, instead deferring their
approval until review of the Final Rule.
    Title: FERC-519, ``Application Under the Federal Power Act, Section
203.''
    Action: Revised Collection.
    OMB Control No: 1902-0082.
    The applicant will not be penalized for failure to respond to this
information collection unless the information collection displays a
valid OMB control number or the Commission has provided justification
as to why the control number should not be displayed.
    Respondents: Businesses or other for profit.
    Frequency of Responses: N/A.
    Necessity of the Information: This Final Rule codifies limited
blanket authorizations under FPA section 203(a)(1), providing for
categories of jurisdictional transactions under section 203(a)(1) for
which the Commission would not require applications seeking before-the-
fact approval.
    Internal Review: The Commission has conducted an internal review of
the public reporting burden associated with the collection of
information and assured itself, by means of internal review, that there
is specific, objective support for its information burden estimate.
    65. Interested persons may obtain information on the reporting
requirements by contacting: Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC, 20426 [Attention: Michael Miller,
Office of the Executive Director, Phone<PHONE_NUMBER>, fax (202) 273-
0873, e-mail<EMAIL_ADDRESS>Comments on the requirements of
the Final Rule may also be sent to the Office of Information and
Regulatory Affairs, Office of Management and Budget, Washington, DC
20503 [Attention: Desk Officer for the Federal Energy Regulatory
Commission, fax<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>
VI. Environmental Analysis

    66. 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.\52\ The
Commission has categorically excluded certain actions from this
requirement as not having a significant effect on the human
environment.\53\ The Final Rule is categorically excluded as it
``do[es] not substantially change the effect of legislation or
regulations being amended'' and addresses actions under section
203.\54\ Accordingly, no environmental assessment is necessary and none
has been prepared in this Final Rule.
---------------------------------------------------------------------------

    \52\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. &
Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \53\ 18 CFR 380.4.
    \54\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(16).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act

    67. The Regulatory Flexibility Act of 1980 (RFA) \55\ generally
requires a description and analysis of Final Rules that will have
significant economic impact on a substantial number of small
entities.\56\ However, the RFA does not define ``significant'' or
``substantial.'' Instead, the RFA leaves it up to an agency to
determine the effect of its regulations on small entities.
---------------------------------------------------------------------------

    \55\ 5 U.S.C. 601-12.
    \56\ The RFA definition of ``small entity'' refers to the
definition provided in the Small Business Act, which defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. 15
U.S.C. 632. The Small Business Size Standards component of the North
American Industry Classification System defines a small electric
utility as one that, including its affiliates, is primarily engaged
in the generation, transmission, and/or distribution of electric
energy for sale and whose total electric output for the preceding
fiscal year did not exceed 4 million MWh. 13 CFR 121.201.
---------------------------------------------------------------------------

    68. Most filing companies regulated by the Commission do not fall
within the RFA's definition of small entity.\57\ Moreover, as noted
above, this Final Rule codifies blanket authorizations under FPA
section 203(a)(1), providing for categories of jurisdictional
transactions under section 203(a)(1) for which the Commission would not
require before-the-fact approval. Thus, filing requirements are reduced
by the rule. Therefore, the Commission certifies that the Final Rule
will not have a significant economic impact on a substantial number of
small entities. As a result, no regulatory flexibility analysis is
required.
---------------------------------------------------------------------------

    \57\ 5 U.S.C. 601(3), citing to section 3 of the Small Business
Act, 15 U.S.C. 632. Section 3 of the Small Business Act defines a
``small-business concern'' as a business which is independently
owned and operated and which is not dominant in its field of
operation.
---------------------------------------------------------------------------

VIII. Document Availability

    69. 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 FERC's Home Page (http://www.ferc.gov) and in FERC's
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m.
Eastern time) at 888 First Street, NE., Room 2A, Washington DC 20426.
    70. From FERC'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.
    71. User assistance is available for eLibrary and the FERC's Web
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or e-mail at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. E-mail the Public Reference Room at
<EMAIL_ADDRESS>
IX. Effective Date and Congressional Notification

    72. These regulations are effective March 31, 2008. The Commission
has determined, with the concurrence of the Administrator of the Office
of Information and Regulatory Affairs of OMB, that this rule is not a
``major rule'' as defined in section 351 of the Small Business
Regulatory Enforcement Fairness Act of 1996.

List of Subjects in 18 CFR Part 33

    Electric utilities, Reporting and recordkeeping requirements,
Securities.

    By the Commission.
Kimberly D. Bose,
Secretary.

0
In consideration of the foregoing, the Commission amends Part 33,
Chapter I, Title 18, Code of Federal Regulations, to read as follows:

PART 33--APPLICATIONS UNDER FEDERAL POWER ACT SECTION 203.

0
1. The authority citation for part 33 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; Pub. L. 109-58, 119 Stat. 594.

0
2. In Sec.  33.1, paragraph (b)(5) is revised to read as follows:

Sec.  33.1  Applicability, definitions, and blanket authorizations.

* * * * *
    (b) * * *
    (5) For purposes of this part, the term captive customers means any
wholesale or retail electric energy customers served by a franchised
public utility under cost-based regulation.

0
3. In Sec.  33.1, paragraphs (c)(12) through (c)(15) are added to read
as follows:

Sec.  33.1  Applicability, definitions, and blanket authorizations.

* * * * *
    (c) * * *
    (12) A public utility is granted a blanket authorization under
section 203(a)(1) of the Federal Power Act to transfer its outstanding
voting securities to any holding company granted blanket authorizations
in paragraph (c)(2)(ii) of this section if, after the transfer, the
holding company and any of its associate or affiliate companies in
aggregate will own less than 10 percent of the outstanding voting
interests of such public utility.
    (13) A public utility is granted a blanket authorization under
section 203(a)(1) of the Federal Power Act to transfer its outstanding
voting securities to any holding company granted blanket authorization
in paragraph (c)(8) of this section if, after the transfer, the holding
company and any of its associate or affiliate companies in aggregate
will own less than 10 percent of the outstanding voting interests of
such public utility.
    (14) A public utility is granted a blanket authorization under
section 203(a)(1) of the Federal Power Act to transfer its outstanding
voting securities to any holding company granted blanket authorization
in paragraph (c)(9) of this section.
    (15) A public utility is granted a blanket authorization under
section 203(a)(1) of the Federal Power Act to transfer its outstanding
voting securities to any holding company granted blanket authorization
in paragraph (c)(10) of this section.
    (16) A public utility is granted a blanket authorization under
section 203(a)(1) of the Federal Power Act for the acquisition or
disposition of a jurisdictional contract where neither the acquirer nor
transferor has captive customers or owns or provides transmission
service over jurisdictional transmission facilities, the contract does
not convey control over the operation of a generation or transmission
facility, the parties to the transaction are neither associate nor
affiliate companies, and the acquirer is a public utility.

 [FR Doc. E8-3812 Filed 2-28-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 85, Number 140 (Tuesday, July 21, 2020)]
[Notices]
[Pages 44071-44072]
[FR Doc No: 2020-15702]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OW-2019-0675; FRL 10012-35-OW]

Extension of Public Comment Period: Draft Ambient Water Quality
Criteria Recommendations for Lakes and Reservoirs of the Conterminous
United States: Information Supporting the Development of Numeric
Nutrient Criteria

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of availability; extension of comment period.

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SUMMARY: The United States Environmental Protection Agency (EPA) is
extending the comment period for the Draft Ambient Water Quality
Criteria Recommendations for Lakes and Reservoirs of the Conterminous
United States: Information Supporting the Development of Numeric
Nutrient Criteria, published in the Federal Register on May 22, 2020.
In response to stakeholder requests, the comment period will be
extended for an additional 30 days, from July 21, 2020 to August 20,
2020.

DATES: The comment period for the notice of availability published May
22, 2020 (85 FR 31184), is extended. The EPA must receive comments on
or before August 20, 2020.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OW-
2019-0675, to the Federal eRulemaking Portal: https://www.regulations.gov. Follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or withdrawn. EPA
may publish any comment received to its public docket. Do not submit
electronically any information you consider to be Confidential Business
Information (CBI) or other information whose disclosure is restricted
by statute. Multimedia submissions (audio, video, etc.) must be
accompanied by a written comment. The written comment is considered the
official comment and should include discussion of all points you wish
to make. EPA will generally not consider comments or comment contents
located outside of the primary submission (i.e., on the web, cloud, or
other file sharing system). For additional submission methods, the full
EPA public comment policy, information about CBI or multimedia
submissions, and general guidance on making effective comments, please
visit http://www2.epa.gov/dockets/commenting-epa-dockets.
    Out of an abundance of caution for members of the public and our
staff, the EPA Docket Center and Reading Room was closed to public
visitors on March 31, 2020, to reduce the risk of transmitting COVID-
19. Our Docket Center staff will continue to provide remote customer
service via email, phone, and webform. We encourage the public to
submit comments via https://regulations.gov, as there is a temporary
suspension of mail delivery to the EPA, and no hand deliveries are
currently accepted. For further information on the EPA Docket Center
services and the current status, please visit us online at https://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: Lester Yuan, Health and Ecological
Criteria Division, Office of Water (Mail Code 4304T), Environmental
Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460;
telephone number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: On May 22, 2020 (85 FR 31184), EPA announced
the availability of the Draft Ambient Water Quality Criteria
Recommendations for Lakes and Reservoirs of the Conterminous United
States: Information Supporting the Development of Numeric Nutrient
Criteria, and opened a 60-day public review and comment period to
solicit scientific views, data, and information regarding the science
and technical approach used in the derivation of these draft ambient
water quality criteria recommendations for lakes and reservoirs.
    The original deadline to submit comments was July 21, 2020. This

action extends the comment period for 30 days. Written comments must
now be received by August 20, 2020. The draft methods and other
supporting materials may also be viewed and downloaded from EPA's
website at https://www.epa.gov/nutrient-policy-data/draft-ambient-water-quality-criteria-recommendations-lakes-and-reservoirs.

Deborah Nagle,
Director, Office of Science and Technology.
[FR Doc. 2020-15702 Filed 7-20-20; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 81, Number 146 (Friday, July 29, 2016)]
[Proposed Rules]
[Page 49911]
[FR Doc No: 2016-17813]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2016-0129; FRL-9949-64-Region 4]

Air Plan Approval; Alabama: Volatile Organic Compounds

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve a revision to the Alabama State Implementation Plan submitted
by the Alabama Department of Environmental Management on October 26,
2015. The revision modifies the definition of ``volatile organic
compounds'' (VOC). Specifically, the revision adds three compounds to
the list of those excluded from the VOC definition on the basis that
these compounds make a negligible contribution to tropospheric ozone
formation. This action is being taken pursuant to the Clean Air Act.

DATES: Written comments must be received on or before August 29, 2016.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2016-0129 at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. EPA may publish any comment
received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e. on the Web, Cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Richard Wong, Air Regulatory
Management Section, Air Planning and Implementation Branch, Air,
Pesticides and Toxics Management Division, U.S. Environmental
Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia
30303-8960. Mr. Wong can be reached via telephone at<PHONE_NUMBER> or
via electronic mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In the Rules and Regulations section of this
Federal Register, EPA is approving the State's implementation plan
revision as a direct final rule without prior proposal because the
Agency views this as a noncontroversial submittal and anticipates no
adverse comments. A detailed rationale for the approval is set forth in
the direct final rule. If no adverse comments are received in response
to this rule, no further activity is contemplated. If EPA receives
adverse comments, the direct final rule will be withdrawn and all
public comments received will be addressed in a subsequent final rule
based on this proposed rule. EPA will not institute a second comment
period on this document. Any parties interested in commenting on this
document should do so at this time.

    Dated: July 15, 2016.
Heather McTeer Toney,
Regional Administrator, Region 4.
[FR Doc. 2016-17813 Filed 7-28-16; 8:45 am]
 BILLING CODE 6560-50-P