Federal Register / Vol. 72, No. 12 / Friday, January 19, 2007 / Rules and Regulations

Federal Register / Vol. 72, No. 12 / Friday, January 19, 2007 / Rules and Regulations

Authority: 5 U.S.C. 301; 7 U.S.C.

163w(a)(1); 21 U.S.C. 346a(e)(1)(C); section

201 of Pub. L. 109–54; and 42 U.S.C. 300v–

1(b).

PART 46—[AMENDED]

§ 26.1506

Authority: 7 U.S.C. 135 et seq.; 15 U.S.C.

2601 et seq.; 33 U.S.C. et seq.; 42 U.S.C. 241,

242b, 243, 246, 300f, 300j–1, 300j–2, 300j–3,

1857 et seq., 6901 et seq., 7401 et seq., 9601

et seq.; OMB Circular A–110 (64 FR 54926,

October 8, 1999).

Authority: Section 103(b)(5) of the Clean

Air Act, as amended (42 U.S.C. 7403(b)(5));

sections 104(b)(5) and (g)(3)(B) of the Clean

Water Act, as amended (33 U.S.C. 1254(b)(5)

and (g)(3)(B)); section 1442 of the Safe

Drinking Water Act, as amended (42 U.S.C.

300j-1); section 8001 of the Solid Waste

Disposal Act, as amended (42 U.S.C. 6981);

section 10 of the Toxic Substances Control

Act, as amended (15 U.S.C. 2609); section 20

of the Federal Insecticide, Fungicide, and

Rodenticide Act, as amended (7 U.S.C. 136r);

sections 104(k)(6)and 311 of the

Comprehensive Environmental Response,

Compensation, and Liability Act (42 U.S.C.

9604(k)(6) and 42 U.S.C. 9660).

§ 30.13

■ 13. Section 46.130 is amended by

[Amended]

■ 2. Section 26.1506 is amended by

revising the citation ‘‘40 CFR Part 32’’

to read ‘‘2 CFR part 1532.’’

PART 30—[AMENDED]

■ 3. The authority citation for part 30

continues to read as follows:

[Amended]

revising twice the citation ‘‘40 CFR Part

32’’ to read ‘‘2 CFR part 1532.’’

Appendix to Part 30—[Amended]

■ 5. Appendix to part 30 is amended by

removing paragraph 8.

PART 32—[REMOVED]

continues to read as follows:

§ 46.130

* * * Names of individuals who are

excluded or disqualified are located in

the Excluded Parties List System

maintained by the General Services

Administration and currently located at

http://www.epls.gov.

§ 46.215

103–355, 108 Stat. 3327 (31 U.S.C. 6101

note); E.O. 11738 (3 CFR, 1973 Comp.,

p. 799); E.O. 12549 (3 CFR, 1986 Comp.,

p. 189); E.O. 12689 (3 CFR, 1989 Comp.,

p. 235) part 32 is removed.

■ 14. Section 46.215(c) is amended by

PART 80—[AMENDED]

Authority: 42 U.S.C. 7414, 7545, 7542, and

7610(a).

Authority: 42 U.S.C. 9601 et seq.

§ 80.65

[Amended]

[Amended]

■ 16. Section 80.65(f)(2)(iv) is amended

■ 8. Section 35.6055 is amended by

removing paragraphs(a)(3) and (a)(4)

and redesignating paragraphs (a)(5) and

(a)(6) as (a)(3) and (a)(4) respectively.

§ 35.6105

revising the citation ‘‘40 CFR Part 32’’

to read ‘‘2 CFR part 1532.’’

continues to read as follows:

continues to read as follows:

§ 35.6055

[Amended]

■ 15. The authority citation for part 80

■ 7. The authority citation for part 35

[Amended]

by revising the citation ‘‘40 CFR Part

32’’ to read ‘‘2 CFR part 1532.’’

■ 17. Section 80.65(f)(2)(v) is amended

by revising the citation ‘‘40 CFR Part

32’’ to read ‘‘2 CFR part 1532.’’

■ 9. Section 35.6105 is amended by

§ 80.125

removing paragraphs(a)(3) and (a)(4)

and redesignating paragraphs (a)(5) and

(a)(6) as (a)(3) and (a)(4) respectively.

■ 18. Section 80.125(e) is amended by

PART 36—[AMENDED]

■ 10. The authority citation for part 36

continues to read as follows:

Authority: 41 U.S.C. 701 et seq.

§ 36.510

[Amended]

revising the citation ‘‘40 CFR Part 32’’

to read ‘‘2 CFR part 1532.’’

[FR Doc. E7–641 Filed 1–18–07; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF ENERGY

Federal Energy Regulatory

Commission

18 CFR Part 358

[Docket No. RM07–6–000; Order No. 690]

Standards of Conduct for

Transmission Providers

Issued January 9, 2007.

AGENCY: Federal Energy Regulatory

Commission, DOE.

ACTION: Interim rule.

Debarment and suspension.

■ 6. Under authority Sec. 2455, Pub. L.

PART 35—[AMENDED]

[Amended]

■ 20. Section 1509.403 is amended by

■ 12. The authority citation for part 46

revising the second sentence to read as

follows:

■ 4. Section 30.13 is amended by

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1509.403

2427

[Amended]

revising the citation ‘‘40 CFR Part 32’’

to read ‘‘2 CFR part 1532.’’

Title 48 Federal Acquisition

Regulations System—Chapter XV—

Environmental Protection Agency

PART 1509—[AMENDED]

SUMMARY: This interim rule responds to

the decision of the United States Court

of Appeals for the District of Columbia

vacating and remanding the standards of

conduct rule, Order No. 2004, as it

relates to interstate natural gas

pipelines, in National Fuel Gas Supply

Corporation v. FERC, 468 F.3d 831 (D.C.

Cir. 2006). The court objected to the

Federal Energy Regulatory

Commission’s (Commission’s)

expansion of the prior standards of

conduct to include energy affiliates, and

vacated the entire rule as it relates to

natural gas pipelines. The interim rule

repromulgates the standards of conduct

that were not challenged before the

court on an interim basis while the

Commission considers how to respond

to the court’s decision on a permanent

basis.

EFFECTIVE DATE: This rule is effective

January 9, 2007.

FOR FURTHER INFORMATION CONTACT:

Deme Anas, Office of Enforcement,

Federal Energy Regulatory Commission,

888 First Street, NE., Washington, DC

20426. Telephone: (202) 502–8178. Email: demetra.anas@ferc.gov. Stuart

Fischer, Office of Enforcement, Federal

Energy Regulatory Commission, 888

First Street, NE., Washington, DC 20426.

Telephone: (202) 502–8517. E-mail:

stuart.fischer@ferc.gov.

SUPPLEMENTARY INFORMATION:

Before Commissioners: Joseph T. Kelliher,

Chairman; Suedeen G. Kelly, Marc Spitzer,

Philip D. Moeller, and Jon Wellinghoff.

■ 19. The authority citation for part

I. Introduction

■ 11. Section 36.510(c) is amended by

1509 continues to read as follows:

revising the citation ‘‘40 CFR Part 32’’

to read ‘‘2 CFR part 1532.’’

Authority: Sec. 205(c), 63 Stat. 390, as

amended, 40 U.S.C. 486(c).

1. The Federal Energy Regulatory

Commission (Commission) is

promulgating interim standards of

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conduct regulations that govern the

relationship between natural gas

transmission providers and their

marketing affiliates to respond to the

decision of the United States Court of

Appeals for the District of Columbia

concerning the Standards of Conduct for

Transmission Providers under Order

No. 2004.1 In National Fuel Gas Supply

Corporation v. FERC (National Fuel),2

the court found that the Commission

did not support the standards of

conduct’s expansive definition of energy

affiliates and vacated Order Nos. 2004,

2004–A, 2004–B, 2004–C and 2004–D

(collectively referred to as Order No.

2004) as applied to natural gas

pipelines, and remanded the orders to

the Commission.3 Specifically, the court

rejected the Commission’s attempt to

extend the standards of conduct beyond

pipelines’ relationships with their

marketing affiliates to govern pipelines’

relationships with numerous nonmarketing affiliates, such as producers,

gatherers, and local distribution

companies (energy affiliates). In light of

this finding, the court found moot the

other issues raised on appeal.4

2. The purpose of this order is to

repromulgate the standards of conduct

not challenged in the National Fuel

appeal in the interim while the

Commission considers how to respond

to the court’s decision on a permanent

basis. To that end, the Commission

plans to issue a Notice of Proposed

Rulemaking (NOPR) in the very near

future. The interim rule will thus help

eliminate any uncertainty about how the

standards of conduct apply to natural

gas transmission providers while the

Commission develops a final rule.

3. The Commission believes that this

interim rule is consistent with the

court’s decision in National Fuel and

meets the standards for an interim rule

without notice and comment under the

Administrative Procedure Act as set out

in the court’s opinion in Mid-Tex

1 On November 25, 2003, the Commission added

Part 358 to the Commission’s regulations adopting

standards of conduct that apply uniformly to

natural gas and electric utility transmission

providers. Standards of Conduct for Transmission

Providers, Order No. 2004, FERC Stats. & Regs.,

Regulations Preambles ¶ 31,155 (2003), order on

reh’g, Order No. 2004–A, III FERC Stats. & Regs. ¶

31,161 (2004), 107 FERC ¶ 61,032 (2004), order on

reh’g, Order No. 2004–B, III FERC Stats. & Regs. ¶

31,166 (2004), 108 FERC ¶ 61,118 (2004), order on

reh’g, Order No. 2004–C, 109 FERC ¶ 61,325 (2004),

order on reh’g, Order No. 2004–D, 110 FERC ¶

61,320 (2005), vacated and remanded as it applies

to natural gas pipelines, National Fuel Gas Supply

Corporation v. FERC, 468 F.3d 831 (D.C. Cir. 2006).

2 National Fuel slip op. at 4 [published cite not

yet available].

3 National Fuel, slip op. at 4. Order No. 2004 was

not appealed as it applies to electric utility

transmission providers.

4 National Fuel, slip op. at 4.

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Electric Cooperative, Inc. v. FERC (MidTex).5 In Mid-Tex, the court reviewed

the Commission’s interim rule regarding

the construction work in progress

(CWIP) accounts for electric utilities

that had previously been vacated and

remanded by the court.6 Despite

objections to the interim CWIP rule, the

court upheld the interim rule as

consistent with the letter and spirit of

its previous ruling.7 The court

concluded that the Commission could

reasonably infer that should it become

necessary or proper to provide a

regulation prior to its full

reconsideration of the CWIP issue, it

may do so if it addresses the issues

raised by the court.8

4. The Mid-Tex court also concluded

that the Commission had good cause to

adopt an interim rule without prior

notice and comment.9 The

Administrative Procedure Act permits

rulemaking without prior notice and

comment when an agency ‘‘for good

cause * * * finds that notice and public

procedure are impracticable,

unnecessary, or contrary to the public

interest.’’ 10 In its order adopting the

interim rule regarding CWIP, the

Commission emphasized three factors

for foregoing prior notice and comment.

First, the Commission stressed both the

interim nature of the CWIP rule and the

ongoing public process in formulating a

permanent CWIP policy. Second, the

Commission observed that the

fundamental policy underlying the

CWIP had been accepted by the court.

Third, the Commission took notice that

an interim rule was needed to avoid

regulatory confusion.

5. Guided by the standards in MidTex, the Commission has structured this

interim rule in accordance with the

court’s decision in National Fuel while

the Commission conducts a public

notice and comment process for

promulgating a final rule. The

Commission has adhered to both the

letter and the spirit of the court’s

decision in National Fuel by fashioning

an interim rule under which the

standards of conduct do not apply to the

relationship between natural gas

transmission providers and energy

affiliates, which is the aspect of the

standards of conduct that the court

found infirm.

6. The issuance of this interim rule is

also consistent with the three factors

5 Mid-Tex Electric Cooperative, Inc. v. FERC, 822

F.2d 1123 (D.C. Cir. 1987).

6 Mid-Tex Electric Cooperative, Inc. v. FERC, 773

F.2d 327 (D.C. Cir. 1985).

7 Mid-Tex, at 1129–30.

8 Mid-Tex, at 1130.

9 Mid-Tex, at 1132.

10 5 U.S.C. 553(b)(3)(B) (2000).

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articulated in Mid-Tex for issuing an

interim rule without prior notice and

comment under the Administrative

Procedures Act. First, the Commission

stresses that the instant interim rule is

not intended to serve as a permanent

rule and that it is commencing a

rulemaking proceeding through the

issuance in the very near future of a

NOPR. Second, the interim rule follows

both the letter and spirit of the court’s

opinion in National Fuel because, for

natural gas pipelines, it eliminates the

provisions of Order No. 2004 that were

subject to appeal and instead adopts

provisions originally promulgated in

Order No. 497, which was upheld in

relevant part by the court in Tenneco

Gas v. FERC.11 Third, the Commission

needs to issue an interim rule to avoid

regulatory confusion. When the

Commission adopted Order No. 2004, it

rescinded the standards of conduct

promulgated by Order No. 497.12

Because National Fuel vacated Order

No. 2004 as applied to natural gas

transmission providers, there are no

existing regulations governing the

relationship between natural gas

transmission providers and their

marketing affiliates. This interim rule

repromulgates rules from Order No.

2004 that were not challenged on

appeal. With respect to provisions that

were challenged, as noted, the

Commission is temporarily re-adopting

the standards of conduct provisions

promulgated under Order No. 497.

Otherwise, there would be no rules in

place governing the relationship

between natural gas pipelines and their

affiliates—a situation which the

Commission believes would not be in

the public interest as such rules have for

almost two decades played an important

role in the agency’s program to ensure

non-discriminatory access by pipeline

customers to competitive wellhead

markets.

7. Accordingly, in this interim rule,

for natural gas transmission providers,

the Commission modifies the

11 Inquiry Into Alleged Anticompetitive Practices

related to Marketing Affiliates of Interstate

Pipelines, Order No. 497, 53 FR 223139 (1988),

FERC Stats. & Regs., Regulations Preambles 1986–

1990 ¶ 30,820 (1988); Order No. 497–A, order on

reh’g, 54 FR 52781 (1989), FERC Stats & Regs.,

Regulations Preambles 1986–1990 ¶ 30,868 (1989);

Order No. 497–B, order extending sunset date, 55

FR 53,291 (1990), FERC Stats. & Regs., Regulations

Preambles 1986–1990 ¶ 30,908 (1990); Order No.

497–C, order extending sunset date, 47 FR 9 (1992),

FERC Stats. & Regs., Regulations Preambles 1991–

1996 ¶ 30934 (1991), reh’g denied, 47 FR 5815

(1992), 58 FERC ¶ 61,139 (1992); aff’d in part and

remanded in part sub nom. Tenneco Gas v. FERC,

969 F.2d 1187 (D.C. cir. 1992).

12 Order No. 2004, supra note 1, (in the

description of the revisions to Title 18 of the Code

of Federal Regulations).

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regulations originally promulgated by

Order No. 2004 consistent with the

court’s decision and issues appealed.

The interim regulations will make clear

that the standards of conduct apply to

the relationship between natural gas

transmission providers and marketing

affiliates, and that the standards of

conduct will not govern the relationship

between natural gas transmission

providers and their other energy

affiliates. Because Order No. 2004

defined marketing differently than

Order No. 497, the Commission is

revising the definition of marketing

consistent with Order No. 497.13

8. Although the court did not consider

petitioners’ appeals with respect to

specific sections of Part 358 as it

vacated Order No. 2004 based on the

lack of record support for the new

definition of energy affiliate, the interim

regulations will treat each of the

sections challenged on appeal as if the

court had held those sections infirm as

well. Specifically, for natural gas

transmission providers, the interim rule

will: (1) omit restrictions on shared risk

management activities and employees 14

and (2) revise the requirement to post all

discretionary acts.15 Also raised on

appeal were two issues discussed in the

preamble of Order No. 2004, but not

codified in regulatory text. Here, too,

although the court did not consider

these issues, the Commission will

incorporate into this preamble

modifications consistent with

petitioners’ appeals of Order No. 2004

as if the court had ruled in their favor.

Specifically, the Commission will (1)

allow natural gas transmission providers

to treat lawyers as permissibly shared

employees; and (2) not require newly

certificated natural gas pipeline

transmission providers to observe the

standards of conduct until they

commence transmission services.

9. In the very near future, the

Commission will issue a NOPR, which

will seek comments on adopting

permanent changes to Part 358

consistent with National Fuel. As a

result, the Commission expects that the

provisions in the interim rule will

remain in effect until we have

completed the rulemaking process for a

final rule for Standards of Conduct for

Transmission Providers. The

13 Since the standards of conduct will no longer

govern the relationship between natural gas

transmission providers and their energy affiliates,

this addresses the issue concerning the scope of the

energy affiliate exception for local distribution

companies appealed by National Fuel Gas

Distribution Corporation and National Fuel Gas

Supply raised in National Fuel.

14 18 CFR 358.4(a)(6) (2006).

15 18 CFR 385.5(c)(4) (2006).

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Commission further expects the process

for adopting a final rule to proceed

without delay.

II. Background

A. Order No. 2004

10. Prior to Order No. 2004, the

Commission had two separate sets of

regulations governing standards of

conduct for transmission providers. The

regulations applicable to natural gas

pipelines were issued in Order No. 497

in 1988,16 pursuant to the agency’s

statutory authority under sections 4 and

5 of the Natural Gas Act.17 In 1996, the

Commission issued Order No. 889,18

which created standards of conduct

regulations applicable to electric public

utilities under sections 205 and 206 of

the Federal Power Act.19 Both rules had

the same goal: To prevent transmission

providers from exercising their control

over transmission to engage in undue

discrimination or preference in favor of

their marketing affiliates over nonaffiliates. Both rules employed the same

general approach: Requiring employees

engaged in transmission services to

function independently from employees

of its marketing affiliates and imposing

prohibitions restricting transmission

providers from sharing certain

information with their marketing

affiliates.

11. In Order No. 2004, the

Commission revised the standards of

conduct so that one set of standards of

conduct applied uniformly to both

natural gas pipelines and electric public

utilities.20 The Commission also

expanded the coverage of the standards

of conduct to govern the relationships

between transmission providers and

energy affiliates.21 Previously, the

standards of conduct governed the

relationship between transmission

17 15 U.S.C. 717c and 717d (2000). See also

former 18 CFR part 161 (2003).

18 Open Access Same-Time Information System

(Formerly Real-Time Information Network) and

Standards of Conduct, Order No. 889, 61 FR 21737

(May 10, 1996), FERC Stats. & Regs., Regulations

Preambles 1991–1996 ¶ 31,035 (Apr. 24, 1996);

Order No. 889–A, order on reh’g, 62 FR 12484 (Mar.

14, 1997), FERC Stats. & Regs., Regulations

Preambles 1996–2000 ¶ 31,049 (Mar. 4, 1997);

Order No. 889–B, reh’g denied, 62 FR 64715 (Dec.

9, 1997), FERC Stats. & Regs., Regulations

Preambles 1996–2000 ¶ 31,253 (Nov. 25, 1997).

19 16 U.S.C. 824d and 824e (2000). See also

former 18 CFR 37.4 (2003).

20 Order No. 2004 at P 8.

21 The Commission defined energy affiliates as

any affiliate that is engaged or involved in

transmission transactions; manages or controls

pipeline capacity; buys, sells, trades or administers

natural gas in domestic energy or transmission

markets; and engages in financial transactions

relating to the sale or transmission of natural gas in

such markets. 18 CFR 358.3(d) (2006).

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providers and their marketing

affiliates.22

B. Matters Appealed

12. Five issues were appealed from

Order No. 2004: (1) Extension of the

standards of conduct to cover the

relationship between natural gas

transmission providers and their energy

affiliates under section 358.3(d); (2) the

scope of the restrictions on sharing risk

management employees between the

natural gas transmission providers and

their marketing/energy affiliates under

section 358.4(a)(6); (3) the scope of the

restrictions on sharing lawyers between

natural gas transmission providers and

their marketing/energy affiliates; (4) the

scope of the requirement that natural

gas transmission providers post all

discretionary acts under section

358.5(c)(4); and (5) the timing as to

when newly certificated pipelines

become subject to the standards of

conduct.

C. The Court’s Decision

13. In National Fuel, the court vacated

Order No. 2004 as applicable to natural

gas pipelines because of the expansion

of the standards of conduct to include

the new definition of energy affiliates.

The court explained that the

Commission relied on both theoretical

grounds and on record evidence to

justify this expansion. The court

concluded that the Commission’s record

evidence did not withstand scrutiny

and, thus, concluded the expansion was

arbitrary and capricious in violation of

the Administrative Procedure Act.23

The court vacated Order No. 2004 as

applicable to natural gas pipelines. In

light of this disposition, the court did

not address the other four issues raised

on appeal regarding Order No. 2004.

III. Discussion

16 See supra note 10.

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A. Partially Repromulgating Part 358

14. Much of Order No. 2004 codified

case-by-case exceptions that had

evolved during the implementation of

Order Nos. 497 and 889, which were

beneficial to the natural gas

transmission providers and not

appealed. Some of the provisions under

Order No. 2004 that were not challenged

on appeal included: codifying

exceptions to the independent

22 Under Order No. 497, marketing included

affiliates and business divisions engaged in making

sales for resale of natural gas in interstate commerce

(former 18 CFR 161.2(c)); and under Order No. 889,

marketing covered affiliates and business divisions

engaged in making sales for resale of electric energy

in interstate commerce (former 18 CFR 37.3(e)).

23 National Fuel at 4.

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functioning requirement; 24 revising

information sharing prohibitions to

reflect practical considerations 25 and

emergency circumstances; 26 codifying a

training requirement; 27 revising and

imposing new posting requirements to

improve transparency; 28 and requiring

the transmission providers to designate

a chief compliance officer.29

15. This interim rule maintains one

set of standards of conduct regulations

for both the natural gas and electric

utility industries. The Commission,

however, is only making changes

applicable to natural gas transmission

providers consistent with National Fuel.

Therefore, the interim rule makes

inapplicable to natural gas transmission

providers those portions of the

standards of conduct that the court

found unsupportable or that were

challenged on appeal. However, it also

repromulgates those sections that were

not appealed and not found infirm.

16. In response to several informal

inquiries, the Commission also clarifies

that waivers or exemptions that the

Commission issued under Order No.

2004 are not negatively impacted by the

National Fuel decision.

B. Natural Gas Transmission Providers

and Their Energy Affiliates

17. Because the court’s decision

focused on the Commission’s lack of

evidence to support expanding the

standards of conduct to govern the

relationship between natural gas

transmission providers and their energy

affiliates, the interim rule adds a new

provision stating that the standards of

conduct do not govern the relationship

between natural gas transmission

providers and their energy affiliates.

The effect of this change, along with the

modification to the definition of

marketing as discussed below, is that

the standards of conduct for natural gas

transmission providers will only govern

the relationship between a transmission

provider and its marketing affiliates,

consistent with the prior standards of

conduct before the adoption of Order

No. 2004. New section 358.1(e) reads as

follows:

The standards of conduct in this part do

not govern the relationship between a natural

gas Transmission Provider as defined in

§ 358.3(a)(2) and its Energy Affiliates.

C. New Definition of Marketing Affiliate

18. Order No. 2004 revised the

definition of marketing affiliate

previously codified by Order No. 497.

As a result, the interim rule will

promulgate regulations that mirror the

exceptions to the definition of

marketing that were found in Order No.

497.30 Specifically, a new provision at

section 358.3(l) provides as follows:

Marketing or brokering under section

358.3(e) means a sale of natural gas to any

person or entity by a seller that is not an

interstate pipeline, except when: (1) The

seller is selling gas solely from its own

production; (2) The seller is selling gas solely

from its own gathering or processing

facilities; or (3) The seller is an intrastate

natural gas pipeline or a local distribution

company making an on-system sale.

D. Sharing of Risk Management

Employees

19. Prior to Order No. 2004, the

standards of conduct were silent on

whether a transmission provider could

share risk management employees with

its marketing affiliates. In reviewing the

standards of conduct procedures

submitted by Vector Pipeline, however,

the Commission held that a natural gas

pipeline could not share risk

management employees if the functions

included assessing the creditworthiness

of a transmission customer.31

Subsequently, in Order No. 2004, the

Commission reiterated that holding and

permitted the sharing of risk

management employees provided that

they were not ‘‘engaged in transmission

functions or sales or commodity

functions with their Marketing or

Energy Affiliate.’’ 32 INGAA appealed

this issue.

20. As mentioned above, the court did

not address the risk management

exception in the independent

functioning requirement. Still, because

it was raised as an issue on appeal, the

Commission believes that to be faithful

to the court’s decision, section

358.4(a)(6) must be amended. Therefore,

the Commission is adding, on an

interim basis, a second sentence to that

section as follows:

This provision does not apply to

natural gas transmission providers.

E. Discretionary Tariff Provision

21. In Order No. 2004, the

Commission required the transmission

provider to maintain a log detailing the

circumstances and manner in which it

exercised discretion under any terms of

its tariff and post it on its OASIS or

internet Web site.33 The regulatory

language in Order No. 2004 was

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24 18 CFR 358.4 (2006).

25 18 CFR 358.5(b)(6) and (8) (2006).

30 Former 18 CFR 161.2(c) (2003).

26 18 CFR 358.4(a)(2) (2006).

31 Vector Pipeline, L.P., 97 FERC ¶ 61,085 (2001).

27 18 CFR 358.4(e)(5) (2006).

32 Order No. 2004 at P 112. See also 18 CFR

358.4(a)(6) (2006).

33 18 CFR 358.5(c)(4) (2006).

28 18 CFR 358.5(a) and (b) (2006).

29 18 CFR 358.4(e)(6) (2006).

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substantively identical to the

requirement under Order No. 889, but it

was different than the requirement

under Order No. 497. Former section

161.3(k) promulgated under Order No.

497 required a pipeline to maintain a

written log of waivers that the pipeline

grants with respect to tariff provisions

that provide for such discretionary

waivers and provide the log to any

person requesting it within 24 hours of

the request. On appeal, one of the

petitioners claimed that section

358.5(c)(4) was much broader than

former section 161.3(k), arguing that

there was a significant difference

between granting waivers of tariff

provisions that provide for such

discretionary waivers (former section

161.3(k)) and exercising discretion

under any terms of its tariff (section

358.5(c)(4)).

22. In response to the National Fuel

decision, on an interim basis, the

Commission is revising section

358.5(c)(4). First, we will make clear

that 358.5(c)(4) only applies to electric

public utility transmission providers

and, second, we will adopt the language

regarding discretionary waivers from

Order No. 497 for natural gas

transmission providers. Accordingly, we

adopt the following language at section

358.5(c)(4):

(i) Electric Transmission Providers must

maintain a written log, available for

Commission audit, detailing the

circumstances and manner in which they

exercised their discretion under any terms of

the tariff. The information contained in this

log is to be posted on the OASIS or Internet

Web site within 24 hours of when a

Transmission Provider exercises its

discretion under any terms of the tariff.

(ii) Natural gas Transmission Providers

must maintain a written log of waivers that

the natural gas Transmission Provider grants

with respect to tariff provisions that provide

for such discretionary waivers and provide

the log to any person requesting it within 24

hours of the request.

23. The Commission recognizes that

many natural gas transmission providers

have put in place procedures to post

information regarding discretionary

waivers on their Internet Web sites. Of

course, this is an acceptable means of

complying with the requirement in lieu

of providing the log to any person

requesting it within 24 hours of the

request.

F. Sharing of Lawyers

24. With respect to the sharing of

lawyers, under the Order No. 497

standards of conduct, lawyers were

treated as permissibly shared

employees.34 Order No. 2004 was silent

34 Order No. 497 at 31,142.

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as to the classification of lawyers. In

Order No. 2004–A, the Commission

clarified that a lawyer who participates

in transmission policy decisions on

behalf of a Transmission Provider

would be considered a transmission

function employee (and hence, not

permissibly shared).35 Additionally, the

Commission explained that lawyers may

provide legal or regulatory advice in

their traditional roles without becoming

transmission function employees,36 but,

an individual’s title of ‘‘lawyer’’ did not

automatically exempt him/her from the

independent functioning requirement.

The Commission stated that if lawyers

participate in transmission policy

decisions on behalf of transmission

providers, the Commission considers

that participation to be a transmission

function and the lawyers to be

transmission function employees.37

Following requests for clarification, the

Commission stated that lawyers may

provide legal or regulatory advice in

their traditional roles without becoming

transmission function employees, but to

the extent that lawyers conduct

transmission functions or are involved

in planning, directing or organizing

transmission functions, the lawyer’s

status as a ‘‘lawyer’’ does not exempt

him/her from also being a transmission

function employee.38

25. This issue was appealed. In light

of the court’s decision, the Commission

clarifies that participating in business

decisions by rendering legal advice does

not make a lawyer a transmission

function employee. Since this issue was

discussed in the preamble to Order No.

2004, there is no regulatory text to adopt

or revise. However, this clarification is

intended to provide direction to the

natural gas industry that the

Commission will treat lawyers as

permissibly shared employees for

natural gas transmission providers.

G. Timing of When a Natural Gas

Transmission Provider Becomes Subject

to the Standards of Conduct

26. Under Order No 497, a natural gas

transmission provider became subject to

the standards of conduct when the

transmission provider commenced

transportation transactions with its

marketing or brokering affiliate.39 In the

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35 Order No. 2004–A at P 157.

36 Section 358.3(j) defines transmission function

employee as an employee, contractor, consultant or

agent of a transmission provider who conducts

transmission system operations or reliability

functions, including, but not limited to, those who

are engaged in day-to-day duties and

responsibilities for planning, directing, organizing

or carrying out transmission-related operations.

37 Order No. 2004–A at P 157.

38 Order No. 2004–B at P 74.

39 Former 18 CFR 161.1 (2003).

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preamble of Order No. 2004, the

Commission stated that newly formed

transmission providers would become

subject to the standards of conduct

when the transmission providers begin

soliciting business or negotiating

contracts, as those are activities which

the Commission considers transmission

function activities. Since the timing of

applicability of the standards of conduct

was one of the items on appeal, the

Commission will treat this issue as if the

court had ruled against the Commission

on this issue. As a result, the

Commission will not require natural gas

transmission providers to observe the

standards of conduct until they

commence transportation transactions

with their marketing affiliates. Because

this issue was discussed in the preamble

to Order No. 2004, there is no regulatory

text to adopt or revise. However, in the

interim, the foregoing statement is

intended to provide direction to the

industry with respect to when the

Commission will consider natural gas

transmission providers subject to the

standards of conduct.

IV. Information Collection Statement

27. The Office of Management and

Budget (OMB) regulations require

approval of certain information

collection requirements imposed by

agency rules.40 Previously, the

Commission submitted to OMB the

information collection requirements

arising from the standards of conduct

adopted in Order No. 2004. OMB

approved those requirements.41 This

interim rule does not impose any

additional information collection

burden on industry participants.

28. The Commission is submitting

notification of the information

collection requirements imposed in the

Interim Rule to OMB for its review and

approval under section 3507(d) of the

Paperwork Reduction Act of 1995.42

Comments are solicited on the

Commission’s need for this information,

whether the information will have

practical utility, the accuracy of

provided burden estimates, ways to

enhance the quality, utility, and clarity

of the information to be collected, and

any suggested methods of minimizing

respondent’s burden, including the use

of automated information techniques.

29. OMB regulations require OMB to

approve certain information collection

requirements imposed by agency rule.

The Commission is submitting

40 5 CFR 1320.11 (2006).

41 Letter from OMB to the Commission (Jan. 20,

2004) (OMB Control Number 1902–0157); ‘‘Notice

of Action’’ letter from OMB to the Commission

(Jan. 20, 2004) (OMB Control Number 1902–0173).

42 44 U.S.C. 3507(d) (2000).

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2431

notification of this proposed rule to

OMB.

Title: FERC–592.

Action: Proposed Collection.

OMB Control No: 1902–0157.

Respondents: Business or other for

profit.

Frequency of Responses: On occasion.

Necessity of the Information: The

information is necessary to ensure that

all regulated transmission providers

treat all transmission customers in a

non-discriminatory basis.

Internal Review: The Commission has

reviewed the requirements pertaining to

natural gas pipelines and determined

the interim rule is necessary to avoid a

regulatory gap.

30. These requirements conform to

the Commission’s plan for efficient

information collection, communication,

and management within the natural gas

and electric public utility industries.

The Commission has assured itself, by

means of internal review, that there is

specific, objective support for the

burden estimates associated with the

information requirements.

31. 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

Chief Information Officer], phone: (202)

502–8415, fax: (202) 208–2425, e-mail:

Michael.miller@ferc.gov. Comments on

the requirements of the proposed rule

also may 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].

V. Environmental Analysis

32. 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.43 The Commission has

categorically excluded certain actions

from these requirements as not having a

significant effect on the human

environment.44 The action proposed

here falls within the categorical

exclusions provided in the

Commission’s regulations because this

rule is clarifying and corrective and

does not substantially change the effect

of the regulations being amended.45

43 Order No. 486, Regulations Implementing the

National Environmental Policy Act, 52 FR 47897

(Dec. 17, 1987), FERC Stats. & Regs. Preambles

1986–1990 ¶ 30,783 (1987).

44 18 CFR 380.4 (2006).

45 18 CFR 380.4(a)(2)(ii) and 380.4(a)(5) (2006).

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Therefore, an environmental assessment

is unnecessary and has not been

prepared in this rulemaking.

VI. Regulatory Flexibility Act

33. The Regulatory Flexibility Act of

1980 46 generally requires a description

and analysis of final rules that will have

significant economic impact on a

substantial number of small entities.

Because most transmission providers do

not fall within the definition of ‘‘small

entity,’’ 47 the Commission certifies that

this rule will not have a significant

economic impact on a substantial

number of small entities.

VII. Document Availability

34. 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.

35. 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.

36. User assistance is available for

eLibrary and the FERC’s website during

normal business hours from our Help

line at (202) 502–8222 or the Public

Reference Room at (202) 502–8371 Press

0, TTY (202) 502–8659. E-Mail the

Public Reference Room at

public.referenceroom@ferc.gov.

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VIII. Effective Date and Congressional

Notification

37. These regulations are effective on

date of issuance. 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. The Commission

will submit the interim rule to both

houses of Congress and the General

Accounting Office.48

46 5 U.S.C. 601–612 (2000).

47 See 5 U.S.C. 601(3) (2000).

48 5 U.S.C. 801(a)(1)(A) (2000).

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List of Subjects in 18 CFR Part 358

Electric power plants, Electric

utilities, Natural gas, Reporting and

recordkeeping requirements.

By the Commission.

Magalie R. Salas,

Secretary.

■ In consideration of the foregoing, the

Commission revises part 358, Chapter I,

Title 18, Code of Federal Regulations, to

read as follows.

PART 358—STANDARDS OF

CONDUCT

Sec.

358.1

358.2

358.3

358.4

358.5

Applicability.

General principles.

Definitions.

Independent functioning.

Non-discrimination requirements.

Authority: 15 U.S.C. 717–717w, 3301–

3432; 16 U.S.C. 791–825r, 2601–2645; 31

U.S.C. 9701; 42 U.S.C. 7101–7352.

§ 358.1

Applicability.

(a) This part applies to any interstate

natural gas pipeline that transports gas

for others pursuant to subpart A of part

157 or subparts B or G of part 284 of this

chapter.

(b) This part applies to any public

utility that owns, operates, or controls

facilities used for the transmission of

electric energy in interstate commerce.

(c) This part does not apply to a

public utility Transmission Provider

that is a Commission-approved

Independent System Operator (ISO) or

Regional Transmission Organization

(RTO). If a public utility transmission

owner participates in a Commissionapproved ISO or RTO and does not

operate or control its transmission

facilities and has no access to

transmission, customer or market

information covered by § 358.5(b), it

may request an exemption from this

part.

(d) A Transmission Provider may file

a request for an exemption from all or

some of the requirements of this part for

good cause.

(e) The Standards of Conduct in this

part do not govern the relationship

between a natural gas Transmission

Provider as defined in § 358.3(a)(2) and

its Energy Affiliates.

§ 358.2

General principles.

(a) A Transmission Provider’s

employees engaged in transmission

system operations must function

independent from employees of its

Marketing and Energy Affiliates.

(b) A Transmission Provider must

treat all transmission customers,

affiliated and non-affiliated, on a nondiscriminatory basis, and must not

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operate its transmission system to

preferentially benefit its Marketing or

Energy Affiliates.

§ 358.3

Definitions.

(a) Transmission Provider means:

(1) Any public utility that owns,

operates or controls facilities used for

the transmission of electric energy in

interstate commerce; or

(2) Any interstate natural gas pipeline

that transports gas for others pursuant to

subpart A of part 157 or subparts B or

G of part 284 of this chapter.

(3) A Transmission Provider does not

include a natural gas storage provider

authorized to charge market-based rates

that is not interconnected with the

jurisdictional facilities of any affiliated

interstate natural gas pipeline, has no

exclusive franchise area, no captive

ratepayers and no market power.

(b) Affiliate means:

(1) Another person that controls, is

controlled by or is under common

control with, such person. An Affiliate

includes a division that operates as a

functional unit,

(2) For any exempt wholesale

generator, as defined under Section

32(a) of the Public Utility Holding

Company Act of 1935, as amended, the

same as provided in section 214 of the

Federal Power Act.

(c) Control (including the terms

‘‘controlling,’’ ‘‘controlled by,’’ and

‘‘under common control with’’) as used

in this part and § 250.16 of this chapter,

includes, but is not limited to, the

possession, directly or indirectly and

whether acting alone or in conjunction

with others, of the authority to direct or

cause the direction of the management

or policies of a company. A voting

interest of 10 percent or more creates a

rebuttable presumption of control.

(d) Energy Affiliate means an affiliate

of a Transmission Provider that:

(1) Engages in or is involved in

transmission transactions in U.S. energy

or transmission markets; or

(2) Manages or controls transmission

capacity of a Transmission Provider in

U.S. energy or transmission markets; or

(3) Buys, sells, trades or administers

natural gas or electric energy in U.S.

energy or transmission markets; or

(4) Engages in financial transactions

relating to the sale or transmission of

natural gas or electric energy in U.S.

energy or transmission markets.

(5) A local distribution company

division of an electric public utility

Transmission Provider shall be

considered the functional equivalent of

an Energy Affiliate, unless it qualifies

for the exemption in § 358.3(d)(6)(v).

(6) An Energy Affiliate does not

include:

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(i) A foreign affiliate that does not

participate in U.S. energy markets;

(ii) An affiliated Transmission

Provider or an interconnected foreign

affiliated natural gas pipeline that is

engaged in natural gas transmission

activities that are regulated by the state,

provincial or national regulatory boards

of the foreign country in which such

facilities are located.

(iii) A holding, parent or service

company that does not engage in energy

or natural gas commodity markets or is

not involved in transmission

transactions in U.S. energy markets;

(iv) An affiliate that purchases natural

gas or energy solely for its own

consumption. ‘‘Solely for its own

consumption’’ does not include the

purchase of natural gas or energy for the

subsequent generation of electricity.

(v) A State-regulated local distribution

company that acquires interstate

transmission capacity to purchase and

resell gas only for on-system sales, and

otherwise does not engage in the

activities described in §§ 358.3(d)(1),

(2), (3) or (4), except to the limited

extent necessary to support on-system

sales and to engage in de minimis sales

necessary to remain in balance under

applicable pipeline tariff requirements.

(vi) A processor, gatherer, Hinshaw

pipeline or an intrastate pipeline that

makes incidental purchases or sales of

de minimis volumes of natural gas to

remain in balance under applicable

pipeline tariff requirements and

otherwise does not engage in the

activities described in §§ 358.3(d)(1),

(2), (3) or (4).

(e) Marketing, sales or brokering

means a sale for resale of natural gas or

electric energy in interstate commerce.

Sales and marketing employee or unit

includes:

(1) An interstate natural gas pipeline’s

sales operating unit, to the extent

provided in § 284.286 of this chapter,

and

(2) A public utility Transmission

Provider’s energy sales unit, unless such

unit engages solely in bundled retail

sales.

(3) Marketing or sales does not

include incidental purchases or sales of

natural gas to operate interstate natural

gas pipeline transmission facilities.

(f) Transmission means natural gas

transportation, storage, exchange,

backhaul, or displacement service

provided pursuant to subpart A of part

157 or subparts B or G of part 284 of this

chapter; and electric transmission,

network or point-to-point service,

reliability service, ancillary services or

other methods of transportation or the

interconnection with jurisdictional

transmission facilities.

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(g) Transmission Customer means any

eligible customer, shipper or designated

agent that can or does execute a

transmission service agreement or can

or does receive transmission service,

including all persons who have pending

requests for transmission service or for

information regarding transmission.

(h) Open Access Same-time

Information System or OASIS refers to

the Internet location where a public

utility posts the information, by

electronic means, required by part 37 of

this chapter.

(i) Internet Web site refers to the

Internet location where an interstate

natural gas pipeline posts the

information, by electronic means,

required by §§ 284.12 and 284.13 of this

chapter.

(j) Transmission Function employee

means an employee, contractor,

consultant or agent of a Transmission

Provider who conducts transmission

system operations or reliability

functions, including, but not limited to,

those who are engaged in day-to-day

duties and responsibilities for planning,

directing, organizing or carrying out

transmission-related operations.

(k) Marketing Affiliate means an

Affiliate as that term is defined in

§ 358.3(b) or a unit that engages in

marketing, sales or brokering activities

as those terms are defined at § 358.3(e).

(l) Marketing or brokering under

§ 358.3(e) means a sale of natural gas to

any person or entity by a seller that is

not an interstate pipeline, except when:

(1) The seller is selling gas solely from

its own production;

(2) The seller is selling gas solely from

its own gathering or processing

facilities; or

(3) The seller is an intrastate natural

gas pipeline or a local distribution

company making an on-system sale.

§ 358.4

Independent functioning.

(a) Separation of functions. (1) Except

in emergency circumstances affecting

system reliability, the transmission

function employees of the Transmission

Provider must function independently

of the Transmission Provider’s

Marketing or Energy Affiliates’

employees.

(2) Notwithstanding any other

provisions in this section, in emergency

circumstances affecting system

reliability, a Transmission Provider may

take whatever steps are necessary to

keep the system in operation.

Transmission Providers must report to

the Commission and post on the OASIS

or Internet Web site, as applicable, each

emergency that resulted in any

deviation from the standards of conduct,

within 24 hours of such deviation.

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(3) The Transmission Provider is

prohibited from permitting the

employees of its Marketing or Energy

Affiliates from:

(i) Conducting transmission system

operations or reliability functions; and

(ii) Having access to the system

control center or similar facilities used

for transmission operations or reliability

functions that differs in any way from

the access available to other

transmission customers.

(4) Transmission Providers are

permitted to share support employees

and field and maintenance employees

with their Marketing and Energy

Affiliates.

(5) Transmission Providers are

permitted to share with their Marketing

or Energy Affiliates senior officers and

directors who are not ‘‘Transmission

Function Employees’’ as that term is

defined in § 358.3(j). A Transmission

Provider may share transmission

information covered by § 385.5(a) and

(b) with its shared senior officers and

directors provided that they do not

participate in directing, organizing or

executing transmission system

operations or marketing functions; or act

as a conduit to share such information

with a Marketing or Energy Affiliate.

(6) Transmission Providers are

permitted to share risk management

employees that are not engaged in

Transmission Functions or sales or

commodity Functions with their

Marketing and Energy Affiliates. This

provision does not apply to natural gas

transmission providers.

(b) Identifying affiliates on the public

Internet. (1) A Transmission Provider

must post the names and addresses of

Marketing and Energy Affiliates on its

OASIS or Internet Web site.

(2) A Transmission Provider must

post on its OASIS or Internet Web site,

as applicable, a complete list of the

facilities shared by the Transmission

Provider and its Marketing and Energy

Affiliates, including the types of

facilities shared and their addresses.

(3) A Transmission Provider must

post comprehensive organizational

charts showing:

(i) The organizational structure of the

parent corporation with the relative

position in the corporate structure of the

Transmission Provider, Marketing and

Energy Affiliates;

(ii) For the Transmission Provider, the

business units, job titles and

descriptions, and chain of command for

all positions, including officers and

directors, with the exception of clerical,

maintenance, and field positions. The

job titles and descriptions must include

the employee’s title, the employee’s

duties, whether the employee is

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involved in transmission or sales, and

the name of the supervisory employees

who manage non-clerical employees

involved in transmission or sales.

(iii) For all employees who are

engaged in transmission functions for

the Transmission Provider and

marketing or sales functions or who are

engaged in transmission functions for

the Transmission Provider and are

employed by any of the Energy

Affiliates, the Transmission Provider

must post the name of the business unit

within the marketing or sales unit or the

Energy Affiliate, the organizational

structure in which the employee is

located, the employee’s name, job title

and job description in the marketing or

sales unit or Energy Affiliate, and the

employee’s position within the chain of

command of the Marketing or Energy

Affiliate.

(iv) The Transmission Provider must

update the information on its OASIS or

Internet Web site, as applicable,

required by §§ 358.4(b)(1), (2) and (3)

within seven business days of any

change, and post the date on which the

information was updated.

(v) The Transmission Provider must

post information concerning potential

merger partners as affiliates within

seven days after the potential merger is

announced.

(vi) All OASIS or Internet Web site

postings required by part 358 must

comply, as applicable, with the

requirements of § 37.6 or §§ 284.12(a)

and (c)(3)(v) of this chapter.

(c) Transfers. Employees of the

Transmission Provider, Marketing or

Energy Affiliates are not precluded from

transferring among such functions as

long as such transfer is not used as a

means to circumvent the Standards of

Conduct. Notices of any employee

transfers between the Transmission

Provider, on the one hand, and the

Marketing or Energy Affiliates on the

other, must be posted on the OASIS or

Internet Web site, as applicable. The

information to be posted must include:

the name of the transferring employee,

the respective titles held while

performing each function (i.e., on behalf

of the Transmission Provider, Marketing

or Energy Affiliate), and the effective

date of the transfer. The information

posted under this section must remain

on the OASIS or Internet Web site, as

applicable, for 90 days.

(d) Books and records. A

Transmission Provider must maintain

its books of account and records (as

prescribed under parts 101, 125, 201

and 225 of this chapter) separately from

those of its Energy Affiliates and these

must be available for Commission

inspections.

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(e) Written procedures. (1) By

February 9, 2004, each Transmission

Provider is required to file with the

Commission and post on the OASIS or

Internet Web site a plan and schedule

for implementing the standards of

conduct.

(2) Each Transmission Provider must

be in full compliance with the standards

of conduct by September 22, 2004.

(3) The Transmission Provider must

post on the OASIS or Internet Web site,

current written procedures

implementing the standards of conduct

in such detail as will enable customers

and the Commission to determine that

the Transmission Provider is in

compliance with the requirements of

this section by September 22, 2004 or

within 30 days of becoming subject to

the requirements of part 358.

(4) Transmission Providers will

distribute the written procedures to all

Transmission Provider employees and

employees of the Marketing and Energy

Affiliates.

(5) Transmission Providers shall train

officers and directors as well as

employees with access to transmission

information or information concerning

gas or electric purchases, sales or

marketing functions. The Transmission

Provider shall require each employee to

sign a document or certify electronically

signifying that s/he has participated in

the training.

(6) Transmission Providers are

required to designate a Chief

Compliance Officer who will be

responsible for standards of conduct

compliance.

§ 358.5

Non-discrimination requirements.

(a) Information access. (1) The

Transmission Provider must ensure that

any employee of its Marketing or Energy

Affiliate may only have access to that

information available to the

Transmission Provider’s transmission

customers (i.e., the information posted

on the OASIS or Internet Web site, as

applicable), and must not have access to

any information about the Transmission

Provider’s transmission system that is

not available to all users of an OASIS or

Internet Web site, as applicable.

(2) The Transmission Provider must

ensure that any employee of its

Marketing or Energy Affiliate is

prohibited from obtaining information

about the Transmission Provider’s

transmission system (including, but not

limited to, information about available

transmission capability, price,

curtailments, storage, ancillary services,

balancing, maintenance activity,

capacity expansion plans or similar

information) through access to

information not posted on the OASIS or

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Internet Web site or that is not

otherwise also available to the general

public without restriction.

(b) Prohibited disclosure. (1) An

employee of the Transmission Provider

may not disclose to its Marketing or

Energy Affiliates any information

concerning the transmission system of

the Transmission Provider or the

transmission system of another

(including, but not limited to,

information received from non-affiliates

or information about available

transmission capability, price,

curtailments, storage, ancillary services,

balancing, maintenance activity,

capacity expansion plans, or similar

information) through non-public

communications conducted off the

OASIS or Internet Web site, through

access to information not posted on the

OASIS or Internet Web site that is not

contemporaneously available to the

public, or through information on the

OASIS or Internet Web site that is not

at the same time publicly available.

(2) A Transmission Provider may not

share any information, acquired from

non-affiliated transmission customers or

potential non-affiliated transmission

customers, or developed in the course of

responding to requests for transmission

or ancillary service on the OASIS or

Internet Web site, with employees of its

Marketing or Energy Affiliates, except to

the limited extent information is

required to be posted on the OASIS or

Internet website in response to a request

for transmission service or ancillary

services.

(3) If an employee of the Transmission

Provider discloses information in a

manner contrary to the requirements of

§ 358.5(b)(1) and (2), the Transmission

Provider must immediately post such

information on the OASIS or Internet

Web site.

(4) A non-affiliated transmission

customer may voluntarily consent, in

writing, to allow the Transmission

Provider to share the non-affiliated

customer’s information with a

Marketing or Energy Affiliate. If a nonaffiliated customer authorizes the

Transmission Provider to share its

information with a Marketing or Energy

Affiliate, the Transmission Provider

must post notice on the OASIS or

Internet Web site of that consent along

with a statement that it did not provide

any preferences, either operational or

rate-related, in exchange for that

voluntary consent.

(5) A Transmission Provider is not

required to contemporaneously disclose

to all transmission customers or

potential transmission customers

information covered by § 358.5(b)(1) if it

relates solely to a Marketing or Energy

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Federal Register / Vol. 72, No. 12 / Friday, January 19, 2007 / Rules and Regulations

Affiliate’s specific request for

transmission service.

(6) A Transmission Provider may

share generation information necessary

to perform generation dispatch with its

Marketing and Energy Affiliate that does

not include specific information about

individual third party transmission

transactions or potential transmission

arrangements.

(7) Neither a Transmission Provider

nor an employee of a Transmission

Provider is permitted to use anyone as

a conduit for sharing information

covered by the prohibitions of

§§ 358.5(b)(1) and (2) with a Marketing

or Energy Affiliate. A Transmission

Provider may share information covered

by §§ 358.5(b)(1) and (2) with employees

permitted to be shared under

§§ 358.4(a)(4), (5) and (6) provided that

such employees do not act as a conduit

to share such information with any

Marketing or Energy Affiliates.

(8) A Transmission Provider is

permitted to share information

necessary to maintain the operations of

the transmission system with its Energy

Affiliates.

(c) Implementing tariffs. (1) A

Transmission Provider must strictly

enforce all tariff provisions relating to

the sale or purchase of open access

transmission service, if these tariff

provisions do not permit the use of

discretion.

(2) A Transmission Provider must

apply all tariff provisions relating to the

sale or purchase of open access

transmission service in a fair and

impartial manner that treats all

transmission customers in a nondiscriminatory manner, if these tariff

provisions permit the use of discretion.

(3) A Transmission Provider must

process all similar requests for

transmission in the same manner and

within the same period of time.

(4) (i) Electric Transmission Providers

must maintain a written log, available

for Commission audit, detailing the

circumstances and manner in which

they exercised their discretion under

any terms of the tariff. The information

contained in this log is to be posted on

the OASIS or Internet website within 24

hours of when a Transmission Provider

exercises its discretion under any terms

of the tariff.

(ii) Natural gas Transmission

Providers must maintain a written log of

waivers that the natural gas

Transmission Provider grants with

respect to tariff provisions that provide

for such discretionary waivers and

provide the log to any person requesting

it within 24 hours of the request.

(5) The Transmission Provider may

not, through its tariffs or otherwise, give

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17:42 Jan 18, 2007

Jkt 211001

preference to its Marketing or Energy

Affiliate, over any other wholesale

customer in matters relating to the sale

or purchase of transmission service

(including, but not limited to, issues of

price, curtailments, scheduling, priority,

ancillary services, or balancing).

(d) Discounts. Any offer of a discount

for any transmission service made by

the Transmission Provider must be

posted on the OASIS or Internet Web

site contemporaneous with the time that

the offer is contractually binding. The

posting must include: the name of the

customer involved in the discount and

whether it is an affiliate or whether an

affiliate is involved in the transaction,

the rate offered; the maximum rate; the

time period for which the discount

would apply; the quantity of power or

gas upon which the discount is based;

the delivery points under the

transaction; and any conditions or

requirements applicable to the discount.

The posting must remain on the OASIS

or Internet Web site for 60 days from the

date of posting.

[FR Doc. E7–659 Filed 1–18–07; 8:45 am]

BILLING CODE 6717–01–P

DEPARTMENT OF HOMELAND

SECURITY

Bureau of Customs And Border

Protection

19 CFR Part 123

Required Advance Electronic

Presentation of Cargo Information for

Truck Carriers: ACE Truck Manifest

AGENCY: Customs and Border Protection,

Department of Homeland Security.

ACTION: Notice.

SUMMARY: Pursuant to section 343(a) of

the Trade Act of 2002 and implementing

regulations, truck carriers and other

eligible parties are required to transmit

advance electronic truck cargo

information to the Bureau of Customs

and Border Protection (CBP) through a

CBP-approved electronic data

interchange. In a previous notice, CBP

designated the Automated Commercial

Environment (ACE) Truck Manifest

System as the approved interchange and

announced that the requirement that

advance electronic cargo information be

transmitted through ACE would be

phased in by groups of ports of entry.

The previous notice identified the first

group of ports where use of the ACE

Truck Manifest System is mandated.

This notice announces the second group

of land border ports that will require

truck carriers to file electronic manifests

PO 00000

Frm 00015

Fmt 4700

Sfmt 4700

2435

through the ACE Truck Manifest

System.

DATES: Trucks entering the United

States through land border ports of entry

in the states of California, Texas, and

New Mexico will be required to transmit

the advance information through the

ACE Truck Manifest system effective

April 19, 2007.

FOR FURTHER INFORMATION CONTACT: Mr.

James Swanson, via e-mail at

james.d.swanson@dhs.gov.

SUPPLEMENTARY INFORMATION:

Background

Section 343(a) of the Trade Act of

2002, as amended (the Act; 19 U.S.C.

2071 note), required that CBP

promulgate regulations providing for the

mandatory transmission of electronic

cargo information by way of a CBPapproved electronic data interchange

(EDI) system before the cargo is brought

into or departs the United States by any

mode of commercial transportation (sea,

air, rail or truck). The cargo information

required is that which is reasonably

necessary to enable high-risk shipments

to be identified for purposes of ensuring

cargo safety and security and preventing

smuggling pursuant to the laws enforced

and administered by CBP.

On December 5, 2003, CBP published

in the Federal Register (68 FR 68140) a

final rule to effectuate the provisions of

the Act. In particular, a new § 123.92 (19

CFR 123.92) was added to the

regulations to implement the inbound

truck cargo provisions. Section 123.92

describes the general requirement that,

in the case of any inbound truck

required to report its arrival under

§ 123.1(b), if the truck will have

commercial cargo aboard, CBP must

electronically receive certain

information regarding that cargo

through a CBP-approved EDI system no

later than 1 hour prior to the carrier’s

reaching the first port of arrival in the

United States. For truck carriers arriving

with shipments qualified for clearance

under the FAST (Free and Secure Trade)

program, § 123.92 provides that CBP

must electronically receive such cargo

information through the CBP-approved

EDI system no later than 30 minutes

prior to the carrier’s reaching the first

port of arrival in the United States.

ACE Truck Manifest Test

On September 13, 2004, CBP

published a notice in the Federal

Register (69 FR 55167) announcing a

test allowing participating Truck Carrier

Accounts to transmit electronic manifest

data for inbound cargo through ACE,

with any such transmissions

automatically complying with advance

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