
[Federal Register Volume 81, Number 217 (Wednesday, November 9, 2016)]
[Proposed Rules]
[Pages 78756-78757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26540]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 33 and 35

[Docket Nos. RM09-16-000 and PL09-3-000]


Control and Affiliation for Purposes of Market-Based Rate 
Requirements Under the Federal Power Act

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Withdrawal of notice of proposed rulemaking and termination of 
rulemaking proceeding.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
withdrawing a notice of proposed rulemaking, which proposed to amend 
its regulations pursuant to the Federal Power Act to grant blanket 
authorizations to acquire 10 percent or more, but less than 20 percent 
of the outstanding voting securities of a public utility or holding 
company and amend the definitions of ``affiliate'' in the Commission's 
regulations. The Commission is also terminating a proceeding on the 
Electric Power Supply Association's petition requesting guidance.

DATES: The notice of proposed rulemaking published on January 28, 2010, 
at 75 FR 4498, is withdrawn as of November 9, 2016.

FOR FURTHER INFORMATION CONTACT: Regine Baus (Legal Information), 
Office of the General Counsel, Federal Energy Regulatory Commission, 
888 First Street NE., Washington, DC 20426, (202) 502-8757.

SUPPLEMENTARY INFORMATION: 
    1. On January 21, 2010, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) in this proceeding.\1\ For the reasons set forth 
below, we are exercising our discretion to withdraw the NOPR and 
terminate this rulemaking proceeding.
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    \1\ Control and Affiliation for Purposes of Market-Based Rate 
Requirements under Section 205 of the Federal Power Act and the 
Requirements of Section 203 of the Federal Power Act, FERC Stats. & 
Regs. ] 32,650 (2010) (NOPR).
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I. Background

    2. On September 2, 2008, the Electric Power Supply Association 
(EPSA) filed a petition requesting guidance regarding concepts of 
control and affiliation as they relate to Commission-jurisdictional 
transactions under sections 203 and 205 of the Federal Power Act 
(FPA).\2\ EPSA

[[Page 78757]]

specifically requested that, where an investor directly or indirectly 
acquires 10 percent or more but less than 20 percent of a public 
utility's outstanding voting securities and is eligible to file a 
statement of beneficial ownership with the Securities and Exchange 
Commission (SEC) on SEC Schedule 13G,\3\ such investment would not be 
deemed to result in a disposition of the public utility's 
jurisdictional facilities under FPA section 203(a)(1) or to result in 
affiliation with the public utility for purposes of the Commission's 
market-based rate requirements under FPA section 205.
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    \2\ Electric Power Supply Association, Petition for Guidance 
Regarding ``Control'' and ``Affiliation'', Docket No. EL08-87-000 
(filed Sept. 2, 2008) (Petition). The petition was originally 
docketed in Docket. No. EL08-87-000 but was subsequently redocketed 
in Docket No. PL09-3-000. Elec. Power Supply Ass'n, Notice 
Redocketing Proceeding, Docket Nos. EL08-87-000 and PL09-3-000 (Nov. 
5, 2008).
    \3\ Schedule 13G is filed with the SEC pursuant to section 13(d) 
of the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq. (1934 
Act), and the SEC's rules thereunder, by any person when such person 
has acquired beneficial ownership of more than five percent but less 
than 20 percent of the outstanding voting equity securities of a 
company that are registered under section 12 of and the 1934 Act and 
such person certifies that it has not acquired, and does not hold, 
such securities for the purpose of or with the effect of changing or 
influencing the control of the issuer. Amendments to Beneficial 
Ownership Reporting Requirements, File No. S7-16-96, 1998 SEC LEXIS 
63, at * 17 n. 20 (Jan. 12, 1998).
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    3. Commission staff held a workshop to address the issues raised by 
EPSA in its request. Comments were submitted in response to the 
workshop. In the course of considering the comments submitted and the 
discussions at the workshop, the Commission determined that the issues 
may call for more formal treatment and issued the NOPR in light of the 
comments and discussions.
    4. In the NOPR, in connection with EPSA's proposal to rely on the 
filing of SEC Schedule 13G to demonstrate conclusively that an investor 
will not control the public utility in which it has invested, the 
Commission stated that while it has relied on these filings, in 
conjunction with other conditions and reporting requirements in the 
past for various purposes, it believed the Commission could better 
fulfill its statutory responsibilities if it did not rely exclusively 
on the Schedule 13G. The Commission stated that the primary regulatory 
purpose behind the beneficial ownership disclosure requirements under 
section 13(d) of the 1934 Act is to provide companies and their 
shareholders with information about large accumulations of a company's 
stock and that the requirements of section 13(d) do not bar an investor 
from acquiring control of a company, which is of utmost importance to 
this Commission.\4\
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    \4\ See NOPR, FERC Stats. & Regs. ] 32,650 at P 35.
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    5. With these concerns in mind, the Commission provided an 
alternative proposal in the NOPR. The Commission first proposed to 
amend part 33 of its regulations to grant a blanket authorization under 
section 203(a)(2) of the FPA, as well as a parallel blanket 
authorization under section 203(a)(1), for acquisitions of 10 percent 
or more, but less than 20 percent of the outstanding voting securities 
of a public utility or holding company, where the acquiring company 
files a statement certifying that such securities were not acquired and 
not held for the purpose or with the effect of changing or influencing 
the control of the public utility and such acquiring company complies 
with certain conditions designed to limit its ability to exercise 
control (Affirmation). Under the proposed amendment to part 33, a 
public utility whose voting securities are acquired, directly or 
indirectly, in any such transaction would be exempt from the 
requirements of an ``affiliate'' in part 35. The Commission also 
proposed to amend subpart H and subpart I of part 35 of the 
Commission's regulations to define an ``affiliate'' of a specified 
company as any person that controls, is controlled by, or is under 
common control with such specified company.
    6. The Commission received several comments in response to the 
proposal in the NOPR. A number of commenters raised concerns about the 
scope of the proposal, including the content of the proposed 
Affirmation and the commitments that the Commission proposed an 
acquiring company would need to agree to. Commenters also raised 
concerns regarding implementation of the proposal.

II. Discussion

    7. Upon further consideration and after review of the comments 
received in response to the NOPR, we will withdraw the NOPR and 
terminate this proceeding. We also terminate the proceeding on EPSA's 
Petition requesting guidance in Docket No. PL09-3-000.
    8. As noted above, in the course of considering the discussions at 
the workshop to address the issues raised by EPSA in its Petition and 
the comments received following the workshop, the Commission determined 
that the issues may call for more formal treatment and issued the NOPR. 
We appreciate the feedback that the Commission received in response to 
the NOPR. As previously indicated, the comments submitted raised 
concerns regarding the scope and implementation of the proposal. Having 
considered these comments, we are persuaded to not seek to adopt the 
Affirmation and blanket authorization that the Commission originally 
proposed.
    9. As a result, we withdraw the NOPR and terminate this rulemaking 
proceeding. We also terminate the proceeding on EPSA's Petition 
requesting guidance in Docket No. PL09-3-000.

    By the Commission.
    Issued: October 28, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2016-26540 Filed 11-8-16; 8:45 am]
 BILLING CODE 6717-01-P


