Rm93-1-000 Nopr

Docket No. RM93-1-000 -1-

UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION

[18 CFR Part 365]

Filing Requirements and Ministerial Procedures
for Persons Seeking Exempt Wholesale Generator Status

(Docket No. RM93-1-000)

(November 10, 1992)

AGENCY:Federal Energy Regulatory Commission.

ACTION:Notice of proposed rulemaking.

SUMMARY: The Federal Energy Regulatory Commission (Commission)

is proposing regulations implementing section 32 of the Public

Utility Holding Company Act of 1935, as added by section 711 of

the Energy Policy Act of 1992. The proposed regulations would

establish the filing requirements and ministerial procedures for

persons seeking exempt wholesale generator status.

DATES: An original and 14 copies of written comments on the

proposed rule must be filed with the Commission by [insert date

30 days after date of publication in the Federal Register]. All

comments should reference Docket No. RM93-1-000.

ADDRESS: Comments should be addressed to:

Office of the Secretary
Federal Energy Regulatory Commission
825 North Capitol Street, N.E.
Washington, D.C. 20426

FOR FURTHER INFORMATION CONTACT:

James H. Douglass
Office of the General Counsel
Federal Energy Regulatory Commission
825 North Capitol Street, N.E.
Washington, D.C. 20426
Telephone: (202) 208-2143

Docket No. RM93-1-000 -2-

SUPPLEMENTARY INFORMATION: In addition to publishing the full

text of this document in the Federal Register, the Commission

also provides all interested persons an opportunity to inspect or

copy the contents of this document during normal business hours

in Room 3308, at 941 North Capitol Street, N.E., Washington, D.C.

20426. The Commission Issuance Posting System (CIPS), an

electronic bulletin board service, provides access to the texts

of formal documents issued by the Commission. CIPS is available

at no charge to the user and may be accessed using a personal

computer with a modem by dialing (202) 208-1397. To access CIPS,

set your communications software to use 300, 1200, or 2400 baud,

full duplex, no parity, 8 data bits and 1 stop bit. The full

text of this Notice of Proposed Rulemaking will be available on

CIPS for 10 days from the date of issuance. The complete text on

diskette in WordPerfect format may also be purchased from the

Commission's copy contractor, La Dorn Systems Corporation, also

located in Room 3308, 941 North Capitol Street, N.E., Washington,

D.C. 20426.UNITED STATES OF AMERICA 61 FERC #61,228

FEDERAL ENERGY REGULATORY COMMISSION

[18 CFR Part 365]

Filing Requirements and Ministerial Procedures

for Persons Seeking Exempt Wholesale Generator Status

(Docket No. RM93-1-000)

Docket No. RM93-1-000 -3-

(November 10, 1992)

AGENCY:Federal Energy Regulatory Commission.

ACTION:Notice of proposed rulemaking.

SUMMARY: The Federal Energy Regulatory Commission (Commission)

is proposing regulations implementing section 32 of the Public

Utility Holding Company Act of 1935, as added by section 711 of

the Energy Policy Act of 1992. The proposed regulations would

establish the filing requirements and ministerial procedures for

persons seeking exempt wholesale generator status.

DATES: An original and 14 copies of written comments on the

proposed rule must be filed with the Commission by [insert date

30 days after date of publication in the Federal Register]. All

comments should reference Docket No. RM93-1-000.

ADDRESS: Comments should be addressed to:

Office of the Secretary
Federal Energy Regulatory Commission
825 North Capitol Street, N.E.
Washington, D.C. 20426

FOR FURTHER INFORMATION CONTACT:

James H. Douglass
Office of the General Counsel
Federal Energy Regulatory Commission
825 North Capitol Street, N.E.
Washington, D.C. 20426
Telephone: (202) 208-2143

SUPPLEMENTARY INFORMATION: In addition to publishing the full

text of this document in the Federal Register, the Commission

also provides all interested persons an opportunity to inspect or

copy the contents of this document during normal business hours

Docket No. RM93-1-000 -4-

in Room 3308, at 941 North Capitol Street, N.E., Washington, D.C.

20426. The Commission Issuance Posting System (CIPS), an

electronic bulletin board service, provides access to the texts

of formal documents issued by the Commission. CIPS is available

at no charge to the user and may be accessed using a personal

computer with a modem by dialing (202) 208-1397. To access CIPS,

set your communications software to use 300, 1200, or 2400 baud,

full duplex, no parity, 8 data bits and 1 stop bit. The full

text of this Notice of Proposed Rulemaking will be available on

CIPS for 10 days from the date of issuance. The complete text on

diskette in WordPerfect format may also be purchased from the

Commission's copy contractor, La Dorn Systems Corporation, also

located in Room 3308, 941 North Capitol Street, N.E., Washington,

D.C. 20426.

UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION

Filing Requirements and ) Docket No. RM93-1-000
Ministerial Procedures for )
Persons Seeking Exempt )
Wholesale Generator Status )

NOTICE OF PROPOSED RULEMAKING

(November 10, 1992)

I. INTRODUCTION

The Federal Energy Regulatory Commission (Commission) is

issuing a Notice of Proposed Rulemaking (NOPR) seeking comment on

proposed regulations implementing section 32 of the Public

Utility Holding Company Act of 1935 (PUHCA), as added by section

711 of the Energy Policy Act of 1992 (Energy Act). 1/ The

proposed rule pertains to the filing requirements and ministerial

procedures for persons seeking exempt wholesale generator (EWG)

status.

Section 32(a) of PUHCA defines an EWG, and provides that in

order to qualify as an EWG, an applicant must file for a

determination by the Commission. The Commission is required to

render its determination of whether a person is an EWG within 60

days of the receipt of an application.

An EWG is a person determined by the Commission to be

engaged directly, or indirectly through one or more affiliates,

and exclusively in the business of owning and/or operating all or

1/ Pub. L. No. 102-486, 106 Stat. 2776 (1992). PUHCA section
32 permits an electric utility company or public utility
holding company to indirectly own and/or operate electric
generating facilities that are not integrated with their
utility systems.

Docket No. RM93-1-000 -2-

part of eligible facilities, as defined in PUHCA section 32, and

selling electric energy at wholesale. An EWG may sell power it

generates, as well as power generated by others. 2/ An

eligible facility may include transmission facilities used for

interconnection purposes to effect wholesale power sales. If any

retail rate associated with a facility was in effect at the time

of enactment of the Energy Act, 3/ each State commission having

retail rate jurisdiction must authorize the facility to be an

eligible facility. Certain hybrid facilities, as defined in

PUHCA section 32, may become eligible facilities pursuant to

approval of affected State commissions.

Section 32(a) provides that an applicant that has applied in

good faith for a determination of EWG status is deemed an EWG

until the Commission makes such determination.

The Commission is required to notify the Securities and

Exchange Commission (SEC) whenever it determines that a person is

an EWG.

The Commission is required to promulgate rules implementing

the procedure for determining EWG status within one year of the

date of enactment of the Energy Act.

The Commission invites interested parties to comment on the

matters raised in the proposed rule.

2/ The Joint Explanatory Statement of the Committee of
Conference provides: "The definition of an EWG has
been drafted to permit an EWG to sell wholesale power
that it has not generated itself." H.R. Conf. Rep. No.
1018, 102nd Cong., 2d. Sess. 388 (1992).

3/ The Energy Act was enacted on October 24, 1992.

Docket No. RM93-1-000 -3-

II. PUBLIC REPORTING BURDEN

The proposed rule, if adopted, would require persons seeking

a determination of EWG status to file for a determination by the

Commission. Applicants would be required to file with the

Commission: (1) a sworn statement attesting to any facts

presented to demonstrate eligibility for EWG status, and

attesting to any representation otherwise offered to demonstrate

eligibility for EWG status; (2) a brief description of the

facility or facilities which are or will be eligible facilities;

and (3) any necessary State commission orders.

The Commission is submitting the proposed reporting

requirements to the Office of Management and Budget (OMB) and

requesting that one hour be placed on the OMB inventory of

information collections. Because of the recent enactment of the

Energy Act and the undetermined number of persons who may seek

EWG status, the Commission is unable to provide estimates of

either the number of persons affected or the amount of time

required to comply with the proposed rule.

III. DISCUSSION

The Energy Act amends PUHCA to create a category of power

producers known as exempt wholesale generators (EWGs). Persons

seeking to become an EWG must file an application with the

Commission. Persons that are granted EWG status will not be

considered electric utility companies under section 2(a)(3) of

PUHCA, and will be exempt from regulation under PUHCA. 4/ The

4/ PUHCA Section 32(e).

Docket No. RM93-1-000 -4-

proposed rule would establish the filing requirements and

ministerial procedures for persons seeking EWG status.

The proposed rule would create a new Subchapter T, Part 365

under Title 18, Chapter I of the Code of Federal Regulations.

The terms used in the proposed rule would have the same

meaning as they have under PUHCA, as amended by the Energy Act,

except that the term "Commission" would refer to the Federal

Energy Regulatory Commission.

The Commission requests comments in this rulemaking

concerning whether to create a separate fee category for

applications for EWG status. Until the Commission issues a final

rule in this proceeding, the Commission will not require

applicants seeking a determination of EWG status to pay a filing

fee.

Pursuant to a Notice of Proposed Rulemaking issued in Docket

No. RM92-17-000 on October 15, 1992, the Commission has requested

public comment concerning the broader issue of annual charges and

filing fees. Elimination of Certain Filing Fees in Parts 346 and

381, 57 Fed. Reg, 48,005 (Oct. 21, 1992), IV FERC Stats & Regs #

32,488 (1992). EWGs that become public utilities will be charged

annual charges under Part 382 of the existing regulations, and

thus the cost of administering section 32 for public-utility EWGs

will be recovered. Therefore, the Commission's preliminary view

is that a separate filing fee category should be created

applicable only to EWGs that will not, upon the sale of electric

energy at wholesale, become public utilities as defined in

Docket No. RM93-1-000 -5-

section 201(e) of the Federal Power Act, 16 U.S.C. 824(e), i.e.

non-public utility EWGs. Such a filing fee structure would be

similar to that presently applicable to requests for

certification of qualifying status for cogeneration facilities

and small power production facilities. See 18 CFR 381.505.

Comments received in this rulemaking concerning whether EWG

applicants should be charged a filing fee and, if so, the

specifics of such fee, will be placed in the record in Docket No.

RM92-17-000.

Under the proposed rule, applicants would file sworn

statements with the Commission. The Commission would review the

applications and determine whether the sworn statements contain

sufficient information to establish that the applicant meets the

statutory requirements for EWG status. The proposed rule would

require a person seeking EWG status (applicant) to file: (1) a

sworn statement attesting to any facts presented to demonstrate

eligibility for EWG status, and attesting to any representation

otherwise offered to demonstrate eligibility for EWG status; (2)

a brief description of the facility or facilities which are or

will be eligible facilities 5/ owned and/or operated by the

applicant and related transmission interconnection components,

any lease arrangements involving the facility and any public

utility companies, and any electric utility company that is an

affiliate company or associate company of the applicant; and (3)

5/ Pursuant to PUHCA section 32 an eligible facility may
include a portion of a facility.

Docket No. RM93-1-000 -6-

any necessary specific State commission determinations required

under PUHCA sections 32(c) and (d). 6/

As of November 6, 1992, the Commission has received three

applications for EWG status. See Commonwealth Atlantic Limited

Partnership, Docket No. EG93-1-000; Doswell Limited Partnership,

Docket No. EG93-2-000; Hartwell Energy Limited Partnership,

Docket No. EG93-3-000. While the Secretary has noticed these

filings, see 18 C.F.R. # 2.1 (1992), there is no requirement in

the Energy Act that the Commission do so. Further, the

Commission intends to limit its consideration of any submissions

that might be made in response to such notices to the limited

purpose of determining the adequacy of the factual

representations made to satisfy the statutory criteria. Given

the narrow focus of the Commission's inquiry under section 32, it

would not be appropriate to allow persons to raise issues that

fall outside the purview of the statutorily-fixed determination,

e.g., by objecting to the financeability of a facility or to the

environmental consequences of its being built or operated. (Cf.

Sugarloaf Citizens Association v. FERC, 959 F.2d 508 (4th Cir.

1992).) Accordingly, the Commission requests comments concerning

whether EWG applications should be noticed and if so, what

purpose such notice would serve under the ministerial

responsibilities of the Commission established in section

32(a)(1) of PUHCA as created by section 711 of the Energy Act.

6/ See PUHCA Sections 32(c) and 32(d)(2).

Docket No. RM93-1-000 -7-

The proposed rule specifies that the Commission must act

within 60 days of receipt of an application. Applications that

do not meet the requirements of the proposed rule set forth in

proposed section 365.3 will be rejected. Under the proposed

rule, if the Commission does not act within 60 days, the

application is deemed to have been granted.

Section 711 of the Energy Act amends PUHCA, not the Federal

Power Act. Since there are no rehearing requirements in PUHCA,

Commission action under proposed section 365.5 will be final

action and will not be subject to rehearing.

The rule requires the Secretary of the Commission to notify

the SEC whenever an application for EWG status is granted.

IV. REGULATORY FLEXIBILITY CERTIFICATION STATEMENT

The Regulatory Flexibility Act 7/ requires rulemakings to

either contain a description and analysis of the impact the rule

will have on small entities or to certify that the rule will not

have a significant economic impact on a substantial number of

small entities. The proposed rule codifies the filing

requirements contained in section 32 of PUHCA. The filing

requirements are minimal and will not have a significant economic

impact on small entities. Moreover, persons that qualify for EWG

status will enjoy the substantial benefit of being exempt from

regulation under PUHCA. Consequently, the Commission certifies

that the proposed rule will not have a significant economic

impact on a substantial number of small entities.

7/ 5 U.S.C. 601-612.

Docket No. RM93-1-000 -8-

V. ENVIRONMENTAL STATEMENT

Commission regulations require that an environmental

assessment or an environmental impact statement be prepared for

any Commission action that may have a significant adverse effect

on the human environment. 8/ The Commission has categorically

excluded certain actions from this requirement as not having a

significant effect on the human environment. 9/ No

environmental consideration is necessary for the promulgation of

a rule that is clarifying, corrective, or procedural or that does

not substantially change the effect of legislation or regulations

being amended. 10/ The proposed rule does not substantially

change the effect of the underlying legislation. Accordingly, no

environmental consideration is necessary.

VI. INFORMATION COLLECTION STATEMENT

The Office of Management and Budget's (OMB) regulations

11/ require that OMB approve certain information collection

requirements imposed by an agency. The information collection

requirements in this proposed rule would require certain

information from persons seeking EWG status.

8/ Regulations Implementing National Environmental Policy Act,
52 Fed. Reg. 47,897 (Dec. 17, 1987), FERC Stats. and Regs. #
30,783 (1987).

9/ 18 CFR 380.4.

10/ 18 CFR 380.4(a)(2)(ii).

11/ 5 CFR 1320.12, as authorized by P.L. 96-511, 44 U.S.C.
Chapter 35, the Paperwork Reduction Act of 1980.

Docket No. RM93-1-000 -9-

The information collection requirement affected by the

proposed rule is FERC-598 "Certification for Entities Seeking

Exempt Wholesale Generator Status." The Commission would use the

information collected to determine whether an application meets

the statutory requirements for EWG status. The information will

assist the Commission in carrying out the provisions of section

32 of PUHCA and section 711 of the Energy Act. The respondents

providing the information will consist of persons owning and/or

operating eligible facilities.

The Commission is submitting notification of the proposed

rule to OMB. Interested persons may obtain information on the

reporting requirements by contacting the Federal Energy

Regulatory Commission, 941 North Capitol Street, N.E.,

Washington, DC 20426 [Attention: Michael Miller, Information

Policy and Standards Branch, (202) 208-1415]. Comments on the

requirements of the proposed rule can also be sent to the Office

of Information and Regulatory Affairs of OMB [Attention: Desk

Officer for Federal Energy Regulatory Commission].

VII. PUBLIC COMMENT PROCEDURES

The Commission invites interested persons to submit written

comments on the matters proposed in this Notice of Proposed

Rulemaking. An original and 14 copies of the comments must be

filed with the Commission no later than [insert date 30 days

after date of publication in the Federal Register]. Comments

should be submitted to the Office of the Secretary, Federal

Docket No. RM93-1-000 -10-

Energy Regulatory Commission, 825 North Capitol Street, N.E.,

Washington, DC 20426, and should refer to Docket No. RM93-1-000.

All written comments will be placed in the Commission's

public files and will be available for inspection in the

Commission's Public Reference Room at 941 North Capitol Street

N.E., Washington, DC 20426, during regular business hours.

List of Subjects

18 CFR Part 365

Electric power
Exempt wholesale generators
Reporting and recordkeeping requirements

In consideration of the foregoing, the Commission proposes

to add Subchapter T, Part 365 to Title 18, Chapter I of the Code

of Federal Regulations, as set forth below.

By direction of the Commission.

( S E A L )

Linwood A. Watson, Jr.,
Acting Secretary.

Docket No. RM93-1-000 -11-

SUBCHAPTER T - REGULATIONS UNDER SECTION 32 OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935

PART 365 -- FILING REQUIREMENTS AND MINISTERIAL PROCEDURES FOR
PERSONS SEEKING EXEMPT WHOLESALE GENERATOR STATUS

Sec.

365.1 Purpose.

365.2 Definitions.

365.3 Contents of application and procedure for filing.

365.4 Effect of Filing.

365.5 Commission action.

365.6 Notification of Commission Action to the Securities and

Exchange Commission.

Authority: Public Utility Holding Company Act of 1935, 15

U.S.C. 79; 106 Stat. 2776 (1992).

# 365.1 Purpose.

The purpose of Part 365 is to implement section 32 of the

Public Utility Holding Company Act of 1935, as added by section

711 of the Energy Policy Act of 1992.

# 365.2 Definitions.

(a) For the purpose of this part terms will have the same

meaning as defined in the Public Utility Holding Company Act of

1935, as amended by the Energy Policy Act of 1992, except as

provided in subsection (b).

(b) For the purpose of this part:

Docket No. RM93-1-000 -12-

(1) "Commission" means the Federal Energy Regulatory

Commission; and

(2) "Receipt of an application" means the date that the

Commission receives the application and the applicable filing

fee, if any.

# 365.3 Contents of application and procedure for filing.

(a) A person seeking status as an exempt wholesale

generator (applicant) must file with the Commission, and serve on

the Securities and Exchange Commission, the following:

(1) A sworn statement attesting to any facts or

representations presented to demonstrate eligibility for EWG

status, including:

(A) A representation that the applicant is engaged

directly, or indirectly through one or more affiliates, and

exclusively in the business of owning or operating, or both

owning and operating, all or part of one or more eligible

facilities and selling electric energy at wholesale; and

(B) Any exceptions for foreign sales of power at retail.

(2) A brief description of the facility or facilities which

are or will be eligible facilities owned and/or operated by the

applicant including:

(A) The related transmission interconnection components;

(B) Any lease arrangements involving the facilities and

public utility companies; and

(C) Any electric utility company that is an affiliate

company or associate company of the applicant.

Docket No. RM93-1-000 -13-

(b) If a rate or charge for, or in connection with, the

construction of a facility described in (a)(2), or for electric

energy produced by a facility described in (a)(2) (other than any

portion of a rate or charge which represents recovery of the cost

of a wholesale rate or charge), was in effect under the laws of

any State on October 24, 1992, or if any portion of a facility

described in (a)(2) is owned or operated by an electric utility

company that is an affiliate or associate company of the

applicant, the applicant must also file a copy of a specific

determination from every State commission having jurisdiction

over any such rate or charge, or if the rate or charge is a rate

or charge of an affiliate of a registered holding company, a

specific determination from every State commission having

jurisdiction over the retail rates and charges of the affiliates

of the registered holding company, that allowing the facility to

be an eligible facility (1) will benefit consumers, (2) is in the

public interest, and (3) does not violate State law.

# 365.4 Effect of Filing.

A person applying in good faith for a Commission

determination of exempt wholesale generator status will be deemed

to be an exempt wholesale generator from the date of receipt of

the application until the date of Commission action pursuant to #

365.5.

Docket No. RM93-1-000 -14-

# 365.5 Commission action.

If the Commission has not issued an order granting or

denying an application within 60 days of receipt of the

application, the application will be deemed to have been granted.

# 365.6 Notification of Commission action to the Securities and
Exchange Commission.

The Secretary of the Commission will notify the Securities

and Exchange Commission whenever a person is determined to be an

exempt wholesale generator.