Proposed Rules. Notice of proposed special conditions
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/register/2007/04/26/07-2068A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
BILLING CODE 3510-22-S 72 80 Thursday April 26, 2007 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 25 [Docket No. NM373 Special Conditions No. 25-07-09-SC] Special Conditions: Boeing Model 787-8 Airplane; Composite Fuselage In-Flight Fire/Flammability Resistance AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed special conditions. SUMMARY: This notice proposes special conditions for the Boeing Model 787-8 airplane.
This airplane will have novel or unusual design features when compared to the state of technology envisioned in the airworthiness standards for transport category airplanes. The fuselage of the Boeing Model 787-8 series airplane will be made of composite materials rather than conventional aluminum. While the regulations include flame propagation standards for some materials commonly found in inaccessible areas of the airplane, they do not yet incorporate standards for materials used to construct the fuselage.
Therefore, special conditions are needed to address this design feature. These proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. Additional special conditions will be issued for other novel or unusual design features of the Boeing Model 787-8 airplanes. DATES: Comments must be received on or before June 11, 2007. ADDRESSES:
Comments on this proposal may be mailed in duplicate to: Federal Aviation Administration, Transport Airplane Directorate, Attention: Rules Docket (ANM-113), Docket No. NM373, 1601 Lind Avenue SW., Renton, Washington 98057-3356; or delivered in duplicate to the Transport Airplane Directorate at the above address. All comments must be marked Docket No. NM373. Comments may be inspected in the Rules Docket weekdays, except Federal holidays, between 7:30 a.m. and 4 p.m. FOR FURTHER INFORMATION CONTACT:
Jeff Gardlin, FAA, Airframe/Cabin Safety, ANM-115, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)227-2136; facsimile
(425)227-1320. SUPPLEMENTARY INFORMATION: Comments Invited The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments. We will file in the docket all comments we receive as well as a report summarizing each substantive public contact with FAA personnel concerning these proposed special conditions. The docket is available for public inspection before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this notice between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays. We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change the proposed special conditions based on comments we receive. If you want the FAA to acknowledge receipt of your comments on this proposal, include with your comments a pre-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you. Background On March 28, 2003, Boeing applied for an FAA type certificate for its new Boeing Model 787-8 passenger airplane. The Boeing Model 787-8 airplane will be an all-new, two-engine jet transport airplane with a two-aisle cabin. The maximum takeoff weight will be 476,000 pounds, with a maximum passenger count of 381 passengers. Type Certification Basis Under provisions of 14 CFR 21.17, Boeing must show that Boeing Model 787-8 airplanes (hereafter referred to as “the 787”) meet the applicable provisions of 14 CFR part 25, as amended by Amendments 25-1 through 25-117, except §§ 25.809(a) and 25.812, which will remain at Amendment 25-115. If the Administrator finds that the applicable airworthiness regulations do not contain adequate or appropriate safety standards for the 787 because of a novel or unusual design feature, special conditions are prescribed under provisions of 14 CFR 21.16. In addition to the applicable airworthiness regulations and special conditions, the 787 must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of part 36. In addition, the FAA must issue a finding of regulatory adequacy pursuant to section 611 of Public Law 92-574, the “Noise Control Act of 1972.” Special conditions, as defined in § 11.19, are issued in accordance with § 11.38 and become part of the type certification basis in accordance with § 21.17(a)(2). Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, the special conditions would also apply to the other model under provisions of § 21.101. Novel or Unusual Design Features In-flight fires have originated in inaccessible areas of aircraft where thermal/acoustic insulation located adjacent to the aluminum aircraft skin has been the path for flame propagation and fire growth. Although these insulation materials were required to comply with the basic “Bunsen burner” requirement of title 14 Code of Federal Regulations
(CFR)sections 25.853(a) and 25.855(d), these incidents revealed unexpected flame spread along the insulation film covering material of the thermal/acoustic insulation. In all cases, the ignition source was relatively modest and, in most cases, was electrical in origin (for example an electrical short circuit, arcing caused by chafed wiring, or a ruptured ballast case). In September 2003, in an effort to limit use of materials that sustain or propagate a fire in inaccessible areas, the FAA promulgated 14 CFR 25.856(a), which requires that thermal/acoustic insulation material installed in the fuselage meet newly developed flame propagation test requirements. That rule was Amendment 25-111. These requirements were developed to address a realistic fire threat. We consider that threat generally applicable to the 787. Conventional aluminum fuselage material does not contribute to in-flight fire propagation. As a result, there are no standards that address in-flight fire safety of the fuselage structure itself. The 787 will make extensive use of composite materials in the fabrication of the majority of the • Wing, • Fuselage skin, • Stringers, • Spars, and • Most other structural elements of all major sub-assemblies of the airplane. As a result of this extensive use of a new construction material, the fuselage cannot be assumed to have the fire resistance previously afforded by aluminum during the in-flight fire scenario mentioned above. These proposed special conditions would require that the 787 provide the same level of in-flight survivability as a conventional aluminum fuselage airplane. This includes its thermal/acoustic insulation meeting requirements of § 25.856(a). Resistance to flame propagation must be shown, and all products of combustion that may result must be evaluated for toxicity and found acceptable. Applicability As discussed above, these proposed special conditions are applicable to the 787. Should Boeing apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design features, these proposed special conditions would apply to that model as well under the provisions of § 21.101. Conclusion This action affects only certain novel or unusual design features of the 787. It is not a rule of general applicability, and it affects only the applicant that applied to the FAA for approval of these features on the airplane. List of Subjects in 14 CFR Part 25 Aircraft, Aviation safety, Reporting and recordkeeping requirements. The authority citation for these Special Conditions is as follows: Authority: 49 U.S.C. 106(g), 40113, 44701, 44702, 44704. The Proposed Special Conditions Accordingly, the Administrator of the Federal Aviation Administration
(FAA)proposes the following special conditions as part of the type certification basis for the Boeing Model 787-8 airplane. In addition to the requirements of 14 CFR 25.853(a) governing material flammability, the following special conditions apply: The 787 composite fuselage structure must be shown to be resistant to flame propagation under the fire threat used to develop 14 CFR 25.856(a). If products of combustion are observed beyond the test heat source, they must be evaluated and found acceptable. Issued in Renton, Washington, on April 18, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-7840 Filed 4-25-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28016; Directorate Identifier 2006-NM-227-AD] RIN 2120-AA64 Airworthiness Directives; Learjet Model 31, 31A, 35, 35A (C-21A), 36, 36A, 55, 55B, and 55C Airplanes, and Model 45 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for certain Learjet Model 31, 31A, 35, 35A (C-21A), 36, 36A, 55, 55B, and 55C airplanes, and Model 45 airplanes. This proposed AD would require inspecting for unsealed gaps on the pylon side of the engine firewall and cleaning/sealing any unsealed gap; and, for certain airplanes, inspecting for unsealed gaps of the pylon trailing edge and cleaning/sealing any gap. This proposed AD results from a report that unsealed gaps (penetration points) of the engine firewall were discovered during production. We are proposing this AD to prevent penetration of flammable liquids or fire through the engine firewall into the engine pylon, which could lead to fire inside the airplane. DATES: We must receive comments on this proposed AD by June 11, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Learjet, Inc., One Learjet Way, Wichita, Kansas 67209-2942, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: James Galstad, Aerospace Engineer, Systems and Propulsion Branch, ACE-116W, FAA, Wichita Aircraft Certification Office, 1801 Airport Road, Room 100, Mid-Continent Airport, Wichita, Kansas 67209; telephone
(316)946-4135; fax
(316)946-4107. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28016; Directorate Identifier 2006-NM-227-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion We have received a report indicating that the engine firewall sealing application on certain Learjet Model 45 airplanes does not meet engineering standards, as unsealed gaps (penetration points) of the engine firewall were discovered during production. Further investigation revealed that the same condition could be present on Model 31, 31A, 35, 35A (C-21A), 36, 36A, 55, 55B, and 55C airplanes. Such gaps could include those provided for bleed air, anti-ice, fuel, and fire extinguishing systems, as well as engine mounts, control cables, access panels, and others not described. This condition, if not corrected, could result in penetration of flammable liquids or fire through the engine firewall into the engine pylon, which could lead to fire inside the airplane. Relevant Service Information We have reviewed the service bulletins specified in the following table. For all airplanes, the service bulletins describe procedures for inspecting for unsealed gaps on the pylon side of the engine firewall and cleaning/sealing any unsealed gap. For Model 45 airplanes only, Service Bulletin 45-54-3 also describes procedures for inspecting for unsealed gaps on the pylon trailing edge and cleaning/sealing any unsealed gap. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. Applicable Service Information Learjet airplane model Service bulletin Revision level Date 31/31A Bombardier Service Bulletin 31-54-2 1 August 21, 2006. 45 Bombardier Service Bulletin 45-54-3 2 August 15, 2003. 35/35A (C-21A) and 36/36A Learjet Service Bulletin 35/36-54-3 Original March 16, 2001. 55/55B/55C Learjet Service Bulletin 55-54-3 Original March 16, 2001. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Costs of Compliance There are about 1,243 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 945 airplanes of U.S. registry. The following table provides the estimated costs for U.S. operators to comply with this proposed AD, at an average labor rate of $80 per work hour. Parts and materials may be supplied from operator stores or procured locally. Estimated Costs to Perform Inspection and Modifications Learjet airplane model Work hours Cost per airplane Number of U.S.-registered airplanes Fleet cost 31/31A 2 $160 173 $27,680 35/35A (C-21A) 2 160 507 81,120 36/36A 2 160 42 6,720 45 5 400 102 40,800 55/55B/55C 2 160 121 19,360 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **LEARJET:** Docket No. FAA-2007-28016; Directorate Identifier 2006-NM-227-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by June 11, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Learjet Model 31, 31A, 35, 35A (C-21A), 36, 36A, 55, 55B, and 55C airplanes, and Model 45 airplanes; certificated in any category; as identified in the service information specified in Table 1 of this AD. Table 1.—Applicable Service Information Learjet airplane model Service bulletin Revision level Date 31/31A Bombardier Service Bulletin 31-54-2 1 August 21, 2006. 45 Bombardier Service Bulletin 45-54-3 2 August 15, 2003. 35/35A (C-21A) and 36/36A Learjet Service Bulletin 35/36-54-3 Original March 16, 2001. 55/55B/55C Learjet Service Bulletin 55-54-3 Original March 16, 2001. Unsafe Condition
(d)This AD results from a report that unsealed gaps (penetration points) of the engine firewall were discovered during production. We are issuing this AD to prevent penetration of flammable liquids or fire through the engine firewall into the engine pylon, which could lead to fire inside the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Inspecting, Cleaning, and Sealing of Gaps in Engine Firewall
(f)Within 12 months after the effective date of this AD, do the actions described in paragraphs (f)(1) and (f)(2) of this AD, in accordance with the applicable service information specified in Table 1 of this AD.
(1)For all airplanes: Inspect for unsealed gaps on the pylon side of the engine firewall and clean and seal any unsealed gap.
(2)For Learjet Model 45 airplanes only: Inspect the engine pylon trailing edge for unsealed gaps, and clean and seal any unsealed gap. Credit for Actions Done Using Previous Service Information
(g)Actions accomplished before the effective date of this AD according to Bombardier Service Bulletin 31-54-2, dated March 16, 2001; or Bombardier Service Bulletin 45-54-3, dated March 16, 2001; or Revision 1, dated December 12, 2001; as applicable; are considered acceptable for compliance with the corresponding action specified in this AD. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, Wichita Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Issued in Renton, Washington, on April 19, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-8001 Filed 4-25-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-26353; Directorate Identifier 2006-NM-189-AD] RIN 2120-AA64 Airworthiness Directives; Bombardier Model CL-600-1A11 (CL-600), CL-600-2A12 (CL-601), CL-600-2B16 (CL-601-3A, CL-601-3R, and CL-604) Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Supplemental notice of proposed rulemaking (NPRM); reopening of comment period. SUMMARY: The FAA is revising an earlier NPRM for an airworthiness directive
(AD)that applies to certain Bombardier Model CL-600-1A11 (CL-600) airplanes, CL-600-2A12 (CL-601) airplanes, and CL-600-2B16 (CL-601-3A, CL-601-3R, and CL-604) airplanes. The original NPRM would have required inspecting to identify the part number and serial number of the selector valves of the nose landing gear
(NLG)and the nose gear door; and doing related investigative and corrective actions if necessary. The original NPRM resulted from reports of uncommanded partial retractions of the NLG. This action revises the original NPRM by adding airplanes to the applicability. We are proposing this supplemental NPRM to prevent internal leakage of the selector valve, which, under certain conditions, could result in an uncommanded retraction of the NLG with consequent damage to the airplane and possible serious injury to ground personnel. DATES: We must receive comments on this supplemental NPRM by May 21, 2007. ADDRESSES: Use one of the following addresses to submit comments on this supplemental NPRM. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Bombardier, Inc., Canadair, Aerospace Group, P.O. Box 6087, Station Centre-ville, Montreal, Quebec H3C 3G9, Canada, for service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Daniel Parrillo, Aerospace Engineer, Systems and Flight Test Branch, ANE-172, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, suite 410, Westbury, New York 11590; telephone
(516)228-7305; fax
(516)794-5531. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this supplemental NPRM. Send your comments to an address listed in the ADDRESSES section. Include the docket number “Docket No. FAA-2006-26353; Directorate Identifier 2006-NM-189-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this supplemental NPRM. We will consider all comments received by the closing date and may amend this supplemental NPRM in light of those comments. We will post all comments submitted, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this supplemental NPRM. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review the DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* , or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level in the Nassif Building at the DOT street address stated in ADDRESSES . Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion We proposed to amend 14 CFR part 39 with a notice of proposed rulemaking
(NPRM)for an airworthiness directive
(AD)(the “original NPRM”). The original NPRM applies to certain Bombardier Model CL-600-1A11 (CL-600) airplanes, CL-600-2A12 (CL-601) airplanes, and CL-600-2B16 (CL-601-3A, CL-601-3R, and CL-604) airplanes. The original NPRM was published in the **Federal Register** on November 20, 2006 (71 FR 67079). The original NPRM proposed to require inspecting to identify the part number and serial number of the selector valves of the nose landing gear
(NLG)and the nose gear door, and doing related investigative and corrective actions if necessary. Actions Since Original NPRM Was Issued Since the original NPRM was issued, Bombardier has determined that additional airplanes are subject to the unsafe condition. Relevant Service Information Bombardier has issued Service Bulletin 604-32-021, Revision 02, dated February 20, 2007 (for Model CL-600-2B16 (CL-604) airplanes). The service bulletin adds airplanes to the effectivity; however, Revision 02 is technically identical to Revision 01, dated February 20, 2006. We referred to Revision 01 as the appropriate source of service information for doing the actions specified in the original NPRM. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Proposed Requirements of the Supplemental NPRM Certain changes discussed above expand the scope of the original NPRM; therefore, we have determined that it is necessary to reopen the comment period to provide additional opportunity for public comment on this supplemental NPRM. Difference Between Supplemental NPRM and Canadian Airworthiness Directive Although Canadian airworthiness directive CF-2006-16, dated July 6, 2006, applies to certain airplanes as identified in Service Bulletin 604-32-021, Revision 01, this supplemental NPRM would apply to those airplanes and certain additional airplanes, as identified in Service Bulletin 604-32-021, Revision 02. This difference has been coordinated with TCCA. Costs of Compliance This proposed AD would affect about 502 airplanes of U.S. registry. The inspection to determine the manufacturer P/N and S/N of the selector valve(s) would take about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $40,160, or $80 per airplane. The general visual inspection of the selector valve(s), if accomplished, would take about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $80 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this supplemental NPRM and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **BOMBARDIER, INC. (Formerly Canadair):** Docket No. FAA-2006-26353; Directorate Identifier 2006-NM-189-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by May 21, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Bombardier Model CL-600-1A11 (CL-600) airplanes, CL-600-2A12 (CL-601) airplanes, and CL-600-2B16 (CL-601-3A, CL-601-3R, and CL-604) airplanes; certificated in any category; having serial numbers (S/Ns) as identified in the service bulletins specified in Table 1 of this AD, as applicable. Table 1.—Bombardier Service Bulletins Service Bulletin Revision level Date 600-0721 (for Model CL-600-1A11 (CL-600) airplanes) 01 February 20, 2006. 601-0558 (for Model CL-600-2A12 (CL-601) airplanes, and CL-600-2B16 (CL-601-3A and CL-601-3R) airplanes) 01 February 20, 2006. 604-32-021 (for Model CL-600-2B16 (CL-604) airplanes) 02 February 20, 2007. Unsafe Condition
(d)This AD results from reports of uncommanded partial retractions of the nose landing gear (NLG). We are issuing this AD to prevent internal leakage of the selector valve, which, under certain conditions, could result in an uncommanded retraction of the NLG with consequent damage to the airplane and possible serious injury to ground personnel. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Inspection and Corrective Actions
(f)Within 500 flight hours or 12 months after the effective date of this AD, whichever occurs first, inspect to determine the manufacturer part number (P/N) and S/N of the selector valves of the NLG and nose gear door. A review of airplane maintenance records is acceptable in lieu of this inspection if the S/Ns of the selector valves can be conclusively determined from that review. For any subject selector valve having Tactair Fluid Controls P/N 750006000 and a S/N from 0001 through 0767 inclusive, before further flight, do related investigative (including a general visual inspection for proper installation of the lock wire of the end cap) and corrective actions; in accordance with the applicable service bulletins identified in Table 1 of this AD. Note 1: Operators should be aware that selector valves having Bombardier P/N 601R75146-1 may be supplied by different manufacturers and have different manufacturer part numbers. Only airplanes having selector valves manufactured by Tactair Fluid Controls, having P/N 750006000, are subject to the investigative and corrective actions specified in paragraph
(f)of this AD. Note 2: For the purposes of this AD, a general visual inspection is: “A visual examination of an interior or exterior area, installation, or assembly to detect obvious damage, failure, or irregularity. This level of inspection is made from within touching distance unless otherwise specified. A mirror may be necessary to ensure visual access to all surfaces in the inspection area. This level of inspection is made under normally available lighting conditions such as daylight, hangar lighting, flashlight, or droplight and may require removal or opening of access panels or doors. Stands, ladders, or platforms may be required to gain proximity to the area being checked.” Note 3: The service bulletins identified in Table 1 of this AD refer to Tactair Fluid Controls Service Bulletin SB750006000-1, Revision A, dated September 6, 2005, as an additional source of service information for doing the related investigative and corrective actions required by this AD. Actions Accomplished According to Previous Issue of Service Bulletin
(g)Actions accomplished before the effective date of this AD according to Bombardier Service Bulletin 604-32-021, Revision 01, dated February 20, 2006 (for Model CL-600-2B16 (CL-604) airplanes), are considered acceptable for compliance with the corresponding actions specified in this AD. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, New York Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office. Related Information
(i)Canadian airworthiness directive CF-2006-16, dated July 6, 2006, also addresses the subject of this AD. Issued in Renton, Washington, on April 19, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-7979 Filed 4-25-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-27680; Directorate Identifier 2007-CE-026-AD] RIN 2120-AA64 Airworthiness Directives; AEROTECHNIC Vertriebs-u. Service GmbH Honeywell CAS67A ACAS II Systems Appliances AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive
(AD)for the products listed above. This proposed AD results from mandatory continuing airworthiness information
(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: It was detected by the STC holder that in earlier installations of the ACASII system there were no isolation diodes installed in the Heading and Attitude Valid lines. The absence of an isolation diode in the valid lines can prevent the valid flag to come up even if a gyro fault exists. The problem has only been detected for Heading Valid lines but could equally affect the Altitude Valid lines. With installation of the ACASII, the heading and attitude valid lines have to be connected to the TPU67A. On valid state, the signals are +28VDC. On invalid, the signals are open. This condition of direct connection (without an isolation diode installed) of the valid lines to the TPU67A, if not corrected, could cause the TPU67A to feed current into the open stated valid lines. This prevents the flag to appear even if the gyro is invalid, providing the flight crew with erroneous navigation information. The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by May 29, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*
(202)493-2251. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* . Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone
(800)647-5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Karl Schletzbaum, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:
(816)329-4146; fax:
(816)329-4090. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. This streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S.-certificated products. This proposed AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The proposed AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-27680; Directorate Identifier 2007-CE-026-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD. Discussion The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD No. 2007-0059 dated March 5, 2007 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: It was detected by the STC holder that in earlier installations of the ACASII system there were no isolation diodes installed in the Heading and Attitude Valid lines. The absence of an isolation diode in the valid lines can prevent the valid flag to come up even if a gyro fault exists. The problem has only been detected for Heading Valid lines but could equally affect the Attitude Valid lines. With installation of the ACASII, the heading and attitude valid lines have to be connected to the TPU67A. On valid state, the signals are +28VDC. On invalid, the signals are open. This condition of direct connection (without an isolation diode installed) of the valid lines to the TPU67A, if not corrected, could cause the TPU67A to feed current into the open stated valid lines. This prevents the flag to appear even if the gyro is invalid, providing the flight crew with erroneous navigation information. For the reasons stated above, this Airworthiness Directive
(AD)requires the installation of isolation diodes into the signal lines to the TPU67A to prevent reverse feed of the valid lines. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information Aerotechnic Vertiebs -u. Service GmbH has issued Service Bulletin No. DO228-119780-0104, Revision 2, dated December 21, 2006. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of the Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This Proposed AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD. Costs of Compliance The FAA is not aware of any airplanes on the U.S. Registry that have the affected equipment installed. All airplanes with this equipment included in the applicability of this rule currently are operated by non-U.S. operators under foreign registry; therefore, they are not directly affected by this AD action at this time. However, the FAA considers this rule necessary to ensure that the unsafe condition is addressed in the event that any of these subject airplanes are imported and placed on the U.S. Registry. Should an affected airplane be imported and placed on the U.S. Registry, accomplishment of the required action would take approximately 8 work-hours at an average labor rate of $80 per work-hour. Required parts would cost about $50 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, the total cost impact of this AD would be $690 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **AEROTECHNIC Vertriebs-u. Service GmbH:** Docket No. FAA-2007-27680; Directorate Identifier 2007-CE-026-AD. Comments Due Date
(a)We must receive comments by May 29, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Honeywell CAS67A ACAS II systems that are installed on, but not limited to, DORNIER LUFTFAHRT GmbH Models Dornier 228-100, Dornier 228-101, Dornier 228-200, Dornier 228-201, and Dornier 228-212 airplanes that:
(1)Had Supplemental Type Certificate No. SA1310 installed prior to January 31, 2005; and
(2)Are certificated in any category. Subject
(d)Air Transport Association of America
(ATA)Code 34: Navigation. Reason
(e)The mandatory continuing airworthiness information
(MCAI)states: It was detected by the STC holder that in earlier installations of the ACAS II system there were no isolation diodes installed in the Heading and Attitude Valid lines. The absence of an isolation diode in the valid lines can prevent the valid flag to come up even if a gyro fault exists. The problem has only been detected for Heading Valid lines but could equally affect the Attitude Valid lines. With installation of the ACAS II, the heading and attitude valid lines have to be connected to the TPU67A. On valid state, the signals are +28VDC. On invalid, the signals are open. This condition of direct connection (without an isolation diode installed) of the valid lines to the TPU67A, if not corrected, could cause the TPU67A to feed current into the open stated valid lines. This prevents the flag to appear even if the gyro is invalid, providing the flight crew with erroneous navigation information. For the reasons stated above, this Airworthiness Directive
(AD)requires the installation of isolation diodes into the signal lines to the TPU67A to prevent reverse feed of the valid lines. Actions and Compliance
(f)Unless already done, within 100 flight hours time-in-service
(TIS)after the effective date of this AD, modify the Honeywell CAS67A ACAS II System Installation following Aerotechnic Service Bulletin No. DO228-119780-0104, Revision 2, dated December 21, 2006. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows: No differences. Other FAA AD Provisions
(g)The following provisions also apply to this AD:
(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Standards Staff, FAA, ATTN: Karl Schletzbaum, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:
(816)329-4146; fax:
(816)329-4090, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.
(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the Office of Management and Budget
(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information
(h)Refer to MCAI European Aviation Safety Agency
(EASA)AD No. 2007-0059, dated March 5, 2007; and Service Bulletin No. DO228-119780-0104 Revision 2, dated December 21, 2006, for related information. Issued in Kansas City, Missouri, on April 20, 2007. Charles L. Smalley, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-7993 Filed 4-25-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28015; Directorate Identifier 2006-NM-210-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-300, 747-400, 747-400D, and 747SR Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to supersede an existing airworthiness directive
(AD)that applies to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-300, 747-400, 747-400D, and 747SR series airplanes. The existing AD currently requires repetitive inspections for cracking of the station 800 frame assembly, and repair if necessary. This proposed AD would revise certain applicabilities and compliance times in the existing AD. This proposed AD results from several reports of cracks of the station 800 frame assembly on airplanes that had accumulated fewer total flight cycles than the initial inspection threshold in the original AD. We are proposing this AD to detect and correct fatigue cracks that could extend and fully sever the frame, which could result in development of skin cracks that could lead to rapid depressurization of the airplane. DATES: We must receive comments on this proposed AD by June 11, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)917-6437; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “Docket No. FAA-2007-28015; Directorate Identifier 2006-NM-210-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review the DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or may can visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* , or in person at the Docket Management Facility office between 9 a.m. and 5 p.m. Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion On May 31, 2006, we issued AD 2006-12-12, amendment 39-14638 (71 FR 33595, June 12, 2006), for all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-300, 747-400, 747-400D, and 747SR series airplanes. That AD requires repetitive inspections for cracking of the station 800 frame assembly, and repair if necessary. That AD resulted from several reports of cracks of the station 800 frame assembly on airplanes that had accumulated fewer total flight cycles than the initial inspection threshold in an existing AD that AD 2006-12-12 superseded. We issued AD 2006-12-12 to detect and correct fatigue cracks that could extend and fully sever the frame, which could result in development of skin cracks that could lead to rapid depressurization of the airplane. Actions Since Existing AD Was Issued Since we issued AD 2006-12-12, errors have been found in the applicability of paragraphs
(f)and (g), and the compliance times in Tables 1 and 2 of that AD. Therefore, we have made the following changes: • We have removed the Model 747-200F from paragraphs
(f)and
(g)of this NPRM. The Model 747-200F was not included in the applicability of AD 2006-12-12 because the Model 747-200F is not subject to the unsafe condition. • We have added the Model 747SR to paragraphs
(f)and
(g)of this NPRM and added a new Table 2 to accommodate it. These airplanes were identified in the main applicability in paragraph
(c)of AD 2006-12-12. • We have removed the Model 747-100B SUD from paragraphs
(f)and
(g)of this NPRM because they are not subject to the requirements of AD 2001-14-22 (the AD that was superseded by AD 2006-12-12). • We have revised the thresholds in paragraphs (f)(2), (f)(3), (h)(2), and (h)(3) of this NPRM to correct an inadvertent error in the compliance times. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to develop on other airplanes of the same type design. For this reason, we are proposing this AD, which would supersede AD 2006-12-12 and would retain the requirements of the existing AD. This proposed AD would also revise certain applicabilities and compliance times in the existing AD. Costs of Compliance There are about 900 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 156 airplanes of U.S. registry. The repetitive inspections would take between 12 and 14 work hours per airplane, depending on the airplane configuration. The average labor rate is $80 per work hour. Based on these figures, the estimated cost of the currently required actions is between $149,760 and $174,720, or between $960 and $1,120 per airplane, per inspection cycle. The repetitive inspections of the expanded area would take between 18 and 20 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the new actions specified in this proposed AD for U.S. operators is between $224,640 and $249,600, or between $1,440 and $1,600 per airplane, per inspection cycle. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by removing amendment 39-14638 (71 FR 33595, June 12, 2006) and adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28015; Directorate Identifier 2006-NM-210-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by June 11, 2007. Affected ADs
(b)This AD supersedes AD 2006-12-12. Applicability
(c)This AD applies to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-300, 747-400, 747-400D, and 747SR series airplanes, certificated in any category. Unsafe Condition
(d)This AD results from several reports of cracks of the station 800 frame assembly on airplanes that had accumulated fewer total flight cycles than the initial inspection threshold in the existing AD. We are issuing this AD to detect and correct fatigue cracks that could extend and fully sever the frame, which could result in development of skin cracks that could lead to rapid depressurization of the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Requirements of AD 2006-12-12 With Revised Appicabilities and Thresholds Repetitive Inspections
(f)For Boeing Model 747-100, 747-100B, 747-200B, 747-200C, and 747SR series airplanes, as identified in Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000: Do detailed, surface high-frequency eddy current (HFEC), and open-hole HFEC inspections, as applicable, for cracking of the station 800 frame assembly (including the inner chord strap, angles, and exposed web) between stringers 14 and 18, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000; or Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005; after the effective date of this AD, only Revision 1 of the service bulletin may be used. Except as provided by paragraph
(g)of this AD, do the inspection at the applicable time specified in Table 1 or Table 2 of this AD, as applicable, and repeat the inspections thereafter at intervals not to exceed 3,000 flight cycles until the initial inspections required by paragraph
(h)of this AD are accomplished. Table 1.—Compliance Times for Boeing Model 747-100, 747-100B, 747-200B, and 747-200C Series Airplanes Total flight cycles as of August 30, 2001 (the effective date of AD 2001-14-22, amendment 39-12333, which was superseded by AD 2006-12-12) Do the inspection in paragraph
(f)of this AD at this time
(1)Fewer than 19,000 Before the accumulation of 19,000 total flight cycles, or within 1,500 flight cycles after August 30, 2001, whichever comes later.
(2)19,000 or more, but 24,250 or fewer Within 1,500 flight cycles or 12 months after August 30, 2001, whichever comes first.
(3)24,251 or more Within 750 flight cycles or 12 months after August 30, 2001, whichever comes first. Table 2.—Compliance Times for Boeing Model 747SR Series Airplanes Total flight cycles as of the effective date of this AD Do the inspection in paragraph
(f)of this AD at this time
(4)Fewer than 19,000 Before the accumulation of 19,000 total flight cycles, or within 1,500 flight cycles after the effective date of this AD, whichever comes later.
(5)19,000 or more, but 24,250 or fewer Within 1,500 flight cycles or 12 months after the effective date of this AD, whichever comes first.
(6)24,251 or more Within 750 flight cycles or 12 months after the effective date of this AD, whichever comes first. Adjustments to Compliance Time: Cabin Differential Pressure
(g)For Boeing Model 747-100, 747-100B, 747-200B, and 747-200C series airplanes, as identified in Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000, that were inspected before July 17, 2006 (the effective date of AD 2006-12-12); and for Boeing Model 747SR airplanes, as identified in Boeing Alert Service Bulletin 747-53A2451, that were inspected before the effective date of this AD: Except as provided by paragraph
(i)of this AD, for the purposes of calculating the compliance threshold and repetitive interval for the actions required by paragraph
(f)of this AD, the number of flight cycles in which cabin differential pressure is at 2.0 pounds per square inch
(psi)or less need not be counted when determining the number of flight cycles that have occurred on the airplane, provided that the flight cycles with momentary spikes in cabin differential pressure above 2.0 psi are included as full pressure cycles. For this provision to apply, all cabin pressure records must be maintained for each airplane: No fleet-averaging of cabin pressure is allowed. Repetitive Inspections of Expanded Area at a New Reduced Threshold
(h)For all airplanes, at the applicable time specified in Table 3 of this AD, except as provided by paragraph
(i)of this AD, do the following inspections of the station 800 frame assembly in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005: A detailed inspection for cracking of the inner chord strap, angles, and exposed web adjacent to the inner chords on the station 800 frame between stringer 14 and stringer 18; and surface HFEC and open-hole HFEC inspections for cracking of the inner chord strap and angles. Do the initial inspections at the applicable time specified in Table 3 of this AD, and repeat the inspections thereafter at intervals not to exceed 3,000 flight cycles. Accomplishing the initial inspections required by this paragraph terminates the inspection requirements of paragraph
(f)of this AD. Table 3.—Revised Compliance Times Total flight cycles as of July 17, 2006— Do the inspections in paragraph
(h)of this AD at this time—
(1)Fewer than 16,000 Before the accumulation of 16,000 total flight cycles, or within 1,500 flight cycles after July 17, 2006, whichever comes later.
(2)16,000 or more, but 21,250 or fewer Within 1,500 flight cycles after July 17, 2006, or within 1,000 flight cycles after the effective date of this AD, whichever comes later.
(3)21,251 or more Within 750 flight cycles after the July 17, 2006 or within 500 flight cycles after the effective date of this AD, whichever comes later. Adjustments to Compliance Time: Cabin Differential Pressure
(i)For the purposes of calculating the compliance threshold and repetitive interval for actions required by paragraphs
(f)and
(h)of this AD, for Boeing Model 747-100, 747-100B, 747-200B, and 747-200C series airplanes, on or after July 17, 2006; and for Boeing Model 747SR series airplanes, on or after the effective date of this AD: All flight cycles, including the number of flight cycles in which cabin differential pressure is at 2.0 psi or less, must be counted when determining the number of flight cycles that have occurred on the airplane. However, for airplanes on which the repetitive interval for the actions required by paragraph
(f)of this AD have been calculated in accordance with paragraph
(g)of this AD by excluding the number of flight cycles in which cabin differential pressure is at 2.0 pounds psi or less: Continue to adjust the repetitive inspection interval in accordance with paragraph
(g)of this AD until the initial inspections required by paragraph
(h)of this AD are accomplished. Thereafter, no adjustment to compliance times based on paragraph
(g)of this AD is allowed. Repair
(j)If any cracking is detected during any inspection required by paragraph
(f)or
(h)of this AD, and the service bulletin specifies to contact Boeing for appropriate action: Before further flight, repair using a method approved in accordance with the procedures specified in paragraph
(l)of this AD. No Report Required
(k)Although the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000; and Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005; describe procedures for reporting certain information to the manufacturer, this AD does not require that report. Alternative Methods of Compliance (AMOCs) (l)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office.
(3)An AMOC that provides an acceptable level of safety may be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane.
(4)AMOCs approved previously in accordance with AD 2001-14-22, are approved as AMOCs for the corresponding provisions of paragraphs
(f)and
(j)of this AD.
(5)AMOCS approved previously in accordance with AD 2006-12-12, are approved as alternative methods of compliance with this AD. Issued in Renton, Washington, on April 19, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-7978 Filed 4-25-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28017; Directorate Identifier 2007-NM-005-AD] RIN 2120-AA64 Airworthiness Directives; Airbus Model A310-203, A310-204, A310-222, A310-304, A310-322, and A310-324 Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive
(AD)for the products listed above. This proposed AD results from mandatory continuing airworthiness information
(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: * * * some structural areas have been identified for which existing recommended SB (service bulletin) needs to be rendered mandatory. As a consequence, and because it has been shown that the torque applied to the tension bolts connecting the beam (stringer 49) to the forward and aft beam extension at FR11 and FR17 may be insufficient, this AD renders mandatory the replacement of those tension bolts, in order to limit the risks of damage or corrosion of the specified areas. Damage or corrosion of the specified areas could result in reduced structural integrity of the airplane. The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by May 29, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*
(202)493-2251. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Federal eRulemaking Portal:* *http://www.regulations.gov* . Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone
(800)647-5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Tom Stafford, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-1622; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. This streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S.-certificated products. This proposed AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The proposed AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-28017; Directorate Identifier 2007-NM-005-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD. Discussion The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2006-0367, dated December 5, 2006 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: During the A310 life extension exercise performed by Airbus, the Airlines Representatives and the Airworthiness Authorities, some structural areas have been identified for which existing recommended SB (service bulletin) needs to be rendered mandatory. As a consequence, and because it has been shown that the torque applied to the tension bolts connecting the beam (stringer 49) to the forward and aft beam extension at FR11 and FR17 may be insufficient, this AD renders mandatory the replacement of those tension bolts, in order to limit the risks of damage or corrosion of the specified areas. Damage or corrosion of the specified areas could result in reduced structural integrity of the airplane. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information Airbus has issued Service Bulletin A310-53-2045, Revision 05, dated July 20, 2006. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of This Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 29 products of U.S. registry. We also estimate that it would take about 9 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $80 per work-hour. Required parts would cost about $886 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $46,574, or $1,606 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **AIRBUS:** Docket No. FAA-2007-28017; Directorate Identifier 2007-NM-005-AD. Comments Due Date
(a)We must receive comments by May 29, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Airbus Model A310-203, A310-204, A310-222, A310-304, A310-322, and A310-324 airplanes, certificated in any category, manufacturing serial numbers 283 through 434 inclusive. Airplanes which have received application of Airbus Service Bulletin A310-53-2045 at original issue up to Revision 05 are not affected by this AD. Subject
(d)Fuselage. Reason
(e)The mandatory continuing airworthiness information
(MCAI)states: During the A310 life extension exercise performed by Airbus, the Airlines Representatives and the Airworthiness Authorities, some structural areas have been identified for which existing recommended SB (service bulletin) needs to be rendered mandatory. As a consequence, and because it has been shown that the torque applied to the tension bolts connecting the beam (stringer 49) to the forward and aft beam extension at FR11 and FR17 may be insufficient, this AD renders mandatory the replacement of those tension bolts, in order to limit the risks of damage or corrosion of the specified areas. Damage or corrosion of the specified areas could result in reduced structural integrity of the airplane. Actions and Compliance
(f)Unless already done, do the following actions at the applicable time specified in paragraph (f)(1) or (f)(2) of this AD: Rework the structure between frame 11 and frame 17 of the nose landing gear well of the fuselage in accordance with the instructions of Airbus Service Bulletin A310-53-2045, Revision 05, dated July 20, 2006.
(1)For Model A310-300 airplanes: Prior to accumulation of 35,000 total flight cycles from first flight of the airplane, or within 30 days after the effective date of this AD, whichever occurs later.
(2)For Model A310-200 airplanes: Prior to the accumulation of 40,000 total flight cycles from the first flight of the airplane, or within 30 days after the effective date of this AD, whichever occurs later.
(3)Actions done before the effective date of this AD in accordance with Airbus Service Bulletin A310-53-2045, dated March 11, 1988; Revision 1, dated June 16, 1988; Revision 2, dated September 7, 1988; Revision 3, dated October 4, 1989; or Revision 4, dated April 20, 1990; is acceptable for compliance with the requirements of this AD. FAA AD Differences Note: This AD differs from the MCAI and/ or service information as follows: No differences. Other FAA AD Provisions
(g)The following provisions also apply to this AD:
(1)*Alternative Methods of Compliance (AMOCs):* The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to *ATTN:* Tom Stafford, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-1622; fax
(425)227-1149. Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office.
(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.
(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget
(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information
(h)Refer to MCAI European Aviation Safety Agency Airworthiness Directive 2006-0367, dated December 5, 2006; and Airbus Service Bulletin A310-53-2045, Revision 05, dated July 20, 2006; for related information. Issued in Renton, Washington, on April 19, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-7998 Filed 4-25-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 73 [Docket No. FAA-2007-27850; Airspace Docket No. 07-ASO-5] RIN 2120-AA66 Proposed Amendment to Restricted Areas R-3702A and R-3702B Fort Campbell, KY AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: This action proposes to amend the designated altitudes of restricted areas R-3702A and R-3702B, Fort Campbell, KY, to better accommodate training requirements and provide greater access to the airspace for nonparticipating aircraft flying through the area above 10,000 feet MSL. DATES: Comments must be received on or before June 11, 2007. ADDRESSES: Send comments on this proposal to the Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001. You must identify FAA Docket No. FAA-2007-27850 and Airspace Docket No. 07-ASO-05, at the beginning of your comments. You may also submit comments through the Internet at *http://dms.dot.gov* . FOR FURTHER INFORMATION CONTACT: Paul Gallant, Airspace and Rules Group, Office of System Operations Airspace and AIM, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone:
(202)267-8783. SUPPLEMENTARY INFORMATION: Comments Invited Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2007-27850 and Airspace Docket No. 07-ASO-05) and be submitted in triplicate to the Docket Management System (see ADDRESSES section for address and phone number). You may also submit comments through the Internet at *http://dms.dot.gov* . Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2007-27850 and Airspace Docket No. 07-ASO-05.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. Availability of NPRM's An electronic copy of this document may be downloaded through the Internet at *http://dms.dot.gov* . Recently published rulemaking documents can also be accessed through the FAA's Web page at *http://www.faa.gov* or the **Federal Register's** Web page at *http://www.gpoaccess.gov/fr/index.html* . You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see ADDRESSES section for address and phone number) between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Regional Air Traffic Division, Federal Aviation Administration, 1601 Lind Avenue, #14, SW., Renton, WA 98055. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking,
(202)267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure. Background R-3702A and R-3702B were established to contain a variety of hazardous activities involving both ground-based and aircraft weapons systems. Currently, R-3702A extends from ground level up to and including 6,000 feet MSL. R-3702B overlies R-3702A and extends from 6,000 feet MSL to Flight Level
(FL)220. A third subdivision, restricted area R-3702C, overlies R-3702A and B, and extends from FL 220 to FL 270, but is not affected by this proposed action. Hazardous training operations conducted in these areas only require restricted airspace up to 10,000 feet MSL. However, under the current configuration, R-3702A only extends up to 6,000 feet MSL. Therefore, to provide protection when hazardous training operations are being conducted at 10,000 feet MSL and below, R-3702B must also be activated. This results in periods when the airspace between 11,000 feet MSL and FL 220 is being unnecessarily restricted and unavailable for transit by nonparticipating aircraft. Resetting the altitude boundary between R-3702A and R-3702B at 10,000 feet MSL instead of 6,000 feet MSL, would permit more efficient airspace management and allow air traffic control
(ATC)to provide better service to civil aircraft in that area. The Proposal The FAA is proposing to amend Title 14 Code of Federal Regulations (14 CFR) part 73 to realign the designated altitudes of restricted areas R-3702A and R-3702B at Fort Campbell, KY. The proposal would change the designated altitudes for R-3702A from “surface to 6,000 feet MSL,” to “surface to 10,000 feet MSL.” In addition, the designated altitudes for R-3702B would be changed from “6,000 feet MSL to FL 220,” to “10,000 feet MSL to FL 220.” The proposed change would permit Fort Campbell to conduct training that involves hazardous operations not exceeding 10,000 feet MSL without unnecessarily restricting aircraft from transiting the area at higher altitudes. This change would allow ATC to provide better service to nonparticipating aircraft in the area. Section 73.37 of Title 14 CFR part 73 was republished in FAA Order 7400.8N, dated February 16, 2007. The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)is not a “significant rule” under Department of Transportation
(DOT)Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and
(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. Environmental Review This proposal will be subject to the appropriate environmental analysis in accordance with FAA Order 1050.1E, Environmental Impacts: Policies and Procedures, prior to any FAA final regulatory action. List of Subjects in 14 CFR Part 73 Airspace, Navigation (air). The Proposed Amendment In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 73 as follows: PART 73—SPECIAL USE AIRSPACE 1. The authority citation for part 73 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 73.37 [Amended] 2. Section 73.37 is amended as follows: R-3702A Fort Campbell, KY [Amended] Under Designated altitudes, by removing the words “Surface to 6,000 feet MSL,” and inserting the words “Surface to 10,000 feet MSL.” R-3702B Fort Campbell, KY [Amended] Under Designated altitudes, by removing the words “6,000 feet MSL to FL 220,” and inserting the words “10,000 feet MSL to FL 220.” Issued in Washington, DC, April 20, 2007. Paul Gallant, Acting Manager, Airspace and Rules Group. [FR Doc. E7-8020 Filed 4-25-07; 8:45 am] BILLING CODE 4910-13-P COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 3 RIN 3038-AC37 Registration of Intermediaries AGENCY: Commodity Futures Trading Commission. ACTION: Proposed rule. SUMMARY: The Commodity Futures Trading Commission (“Commission” or “CFTC”) is proposing to amend Commission Regulation 3.10 to require certain registered intermediaries, *i.e.* , futures commission merchants (“FCMs”), introducing brokers (“IBs”), commodity pool operators (“CPOs”), commodity trading advisors (“CTAs”) and leverage transaction merchants (“LTMs”), to complete an online annual review of their registration information maintained with the National Futures Association (“NFA”). The proposed amendment (“Proposed Amendment”) would ensure that NFA will have accurate and current information about such registrants. The Commission's proposal (“Proposal”) also includes a technical and conforming amendment to Commission Regulation 3.33(f), which regulation is cross-referenced in the Proposed Amendment. DATES: Comments must be received on or before May 29, 2007. ADDRESSES: Comments on the Proposal should be sent to Eileen Donovan, Acting Secretary, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. Comments may be sent by facsimile transmission to
(202)418-5521, or by e-mail to *secretary@cftc.gov.* Reference should be made to “Proposal Regarding the Registration of Intermediaries.” Comments also may be submitted by connecting to the Federal eRulemaking Portal at *http://www.regulations.gov* and following the comment submission instructions. FOR FURTHER INFORMATION CONTACT: Helene D. Schroeder, Special Counsel, Compliance and Registration Section, Division of Clearing and Intermediary Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581, telephone number:
(202)418-5450; facsimile number:
(202)418-5528; and electronic mail: *hschroeder@cftc.gov.* SUPPLEMENTARY INFORMATION: I. Background A. The Regulatory Framework Sections 4d, 4f(a)(1), 4m and 4n(1) of the Commodity Exchange Act (“Act”) 1 require the registration of firms seeking to act as intermediaries for exchange-traded futures. 2 The statutory framework for registration procedures is set forth in Section 4f(a)(1) of the Act for FCMs and IBs, 3 and in Section 4n(a)(1) for CPOs and CTAs. 4 Additionally, Section 19 of the Act grants the Commission plenary authority over leverage transactions. 5 1 7 U.S.C. 1 *et seq.* (2000). The Act can be accessed at *http://www.access.gpo.gov/uscode/title7/chapter1_.html.* 2 Section 4c of the Act provides the Commission with plenary authority over commodity options. 3 7 U.S.C. 6f(a)(1). 4 7 U.S.C. 6n(1). 5 7 U.S.C. 23. Commission Regulation 31.5, 17 CFR 31.5 (2006), was promulgated under this provision and along with Regulation 3.10, 17 CFR 3.10, governs the registration of LTMs. The Commission's regulations can be accessed at *http://www.access.gpo.gov/nara/cfr/waisidx_06/17cfrv1_06.html.* Pursuant to these statutory and other regulatory provisions, a person seeking to register as an intermediary must file an application that contains the information and facts that are deemed necessary by the Commission. 6 Sections 4f and 4n further provide that, unless renewed, the person's registration will expire automatically each year, or at such other time (not less than one year from the date of issuance) as the Commission by rule, regulation or order may prescribe. 7 6 In the case of FCMs and IBs, the application must provide the “names and addresses of the managers of all branch offices, and the names of such officers and partners, if a partnership, and the names of such officers, directors, and stockholders, if a corporation, as the Commission may direct.” With regard to CPOs and CTAs, the application must contain identifying information, education and business affiliations of controlling persons thereof, the manner of giving advice and rendering of analyses or reports, the basis upon which the applicant is or will be compensated and such other information as the Commission may require to determine whether the applicant is qualified for registration. 7 In this regard, Section 4f(a)(1) provides in pertinent part as follows: “Each registration shall expire on December 31 of the year for which issued or at such other time, not less than one year from the date of issuance, as the Commission may by rule, regulation, or order prescribe, and shall be renewed upon application therefor unless the registration has been suspended (and the period of such suspension has not expired) or revoked pursuant to the provisions of this Act.” Section 4n(2) additionally provides: “Each registration under this section shall expire on the 30th day of June of each year, or at such other time, not less than one year from the effective date thereof, as the Commission may by rule regulation, or order prescribe, and shall be renewed upon application therefor subject to the same requirements as in the case of an original application.” Section 17(o)(1) of the Act authorizes the Commission to require any registered futures association to perform any portion of its registration functions under the Act with respect to each member of the association, 8 and Section 8a(10) permits the Commission to authorize any person to perform any registration functions under the Act, in accordance with rules adopted by such person and submitted to the Commission for approval. 9 The Commission has exercised this authority by delegating to NFA, the sole registered futures association, its authority to process applications for registration of intermediaries. 10 8 7 U.S.C. 21(o)(1). 9 7 U.S.C. 12a(10). 10 54 FR 19556 (May 8, 1989) (LTMs); 49 FR 39593 (Oct. 9, 1984) (FCMs, CPOs and CTAs); and 48 FR 35158 (Aug. 3, 1983) (IBs). Part 3 of the Commission's Regulations 11 contains the regulations relating to the registration of intermediaries and other futures industry professionals. Commission Regulation 3.10(a) specifies that an application for registration as an FCM, IB, CPO, CTA or LTM must be on a Form 7-R, completed and filed with NFA in accordance with the instructions thereto. 12 Commission Regulation 3.31(a)(1) imposes a continuing obligation on registrants to update their registration information. 13 Specifically, Commission Regulation 3.31(a)(1) requires each FCM, IB, CTA, CPO or LTM to promptly correct any deficiency or inaccuracy that is contained in the person's Form 7-R or any Form 8-R filed on behalf of a principal or an associated person that no longer renders accurate and current the information contained therein. It further specifies that each such correction must be made on a Form 3-R and must be prepared and filed with NFA in accordance with the instructions thereto. 11 17 CFR part 3. 12 17 CFR 3.10(a). 13 17 CFR 3.31(a)(1). To further ensure that registration information remained accurate and current, Commission Regulation 3.10(d), which was revoked in 2002, required FCMs, IBs, CPOs, CTAs and LTMs to file the Form 7-R with NFA annually on a date specified by NFA. In accordance with that regulation, NFA sent each FCM, IB, CPO, CTA and LTM a pre-printed paper copy of the registrant's Form 7-R to review. If the information in the printout was inaccurate, the registrant was required to correct the information and return the printout with the corrections to NFA. 14 14 Regulation 3.10(d) also provided that the failure to file the Form 7-R within 30 days following the date specified by NFA would be deemed to be a request for withdrawal from registration. B. Implementation of NFA's Online Registration System In light of technological advancements and improvements, NFA altered its registration procedures in 2002 by shifting from paper-based registration to an online or electronic registration system. Pursuant to the updated procedures, NFA requires, with limited exception, 15 that all registration (and membership) forms, including the completed Form 7-R and 3-R, must be filed with NFA electronically through NFA's online registration system. 15 For example, NFA requires that any securities broker or dealer that is registered with the Securities and Exchange Commission that becomes a notice-registered FCM or IB must submit a hardcopy version of its Form 7-R. In June 2002, the Commission deleted the requirement for firms to review annually registration information as specified by Commission Regulation 3.10(d). 16 The Commission determined that, because such persons were already under an ongoing obligation pursuant to Commission Regulation 3.31(a) to update their registration information to correct deficiencies and inaccuracies, the continuation of the annual paper updating process was redundant and resulted in unnecessary costs to both NFA and the registrant. 17 Further, because NFA was implementing an online system for the intake of registration documents, the Commission believed it made little sense for NFA to continue receiving annual paper updates of such registration forms. 16 67 FR 38869 (June 6, 2002). 17 *Id.* at 38871. In the period since the elimination of Regulation 3.10(d), NFA has experienced some problems with the registration information provided by certain intermediaries. Further, the Commission and NFA recently have arranged for firms to designate an enforcement contact to be the recipient of communications from the Commission relating to enforcement issues. It is important to maintain an up-to-date list of such contacts. In addition, although the Commission has seen no evidence of security breaches of registration information, an annual review of information in the registration database should enhance the overall safety of such data. NFA has devoted significant resources toward developing an online registration update protocol for firms to review and update their registration records. The protocol is designed to provide a straightforward process by which registrants can review and modify their existing registration information. 18 In addition to providing an updated list of users, the protocol will require registrants to provide updated disciplinary, branch office and firm contact information. The Proposed Amendment is intended to facilitate NFA's efforts in implementing this new protocol and ensure that NFA is in possession of current and accurate information regarding intermediaries. All firms remain subject to their obligations under Regulation 3.31(a)(1) to promptly correct any deficiency or inaccuracy in a Form 7-R or Form 8-R filed by the firm. 18 For example, a firm could modify the title given for a particular principal of a firm, but it could not identify a new principal, as this would require separate application. II. Proposal The Proposed Amendment, which would set forth an annual review requirement, would be added as new paragraph (d). 19 As proposed, the new paragraph would provide that each FCM, IB, CPO, CTA and LTM, in accordance with procedures established by NFA, must complete an online annual review of the registration information maintained by NFA. Pursuant to procedures established by NFA, registrants would be expected to correct any deficiencies or inaccuracies contained therein. 19 Paragraph
(d)of Regulation 3.10 had been reserved. The Proposed Amendment also would provide that the failure to complete the review and update within 30 days of the date established by NFA for completion would be deemed to be a request for withdrawal from registration. As further provided therein, NFA would be required to process the request in accordance with the existing procedures for withdrawal of registration set forth in Commission Regulation 3.33(f). Commission Regulation 3.33(f) establishes the date on which a request for withdrawal of registration will become effective unless the Commission or NFA take certain actions as specified therein. 20 When the Commission deleted the requirement for registrants to conduct an annual paper updating process by revoking Commission Regulation 3.10(d) in 2002, the Commission did not make a conforming change to Commission Regulation 3.33(f). Specifically, the Commission did not remove unnecessary language that cross-referenced the revoked provision. That language, which appears as the introductory phrase of Commission Regulation 3.33(f) provides as follows: “Except as otherwise provided in Regulation 3.10(d).” This introductory phrase will continue to be unnecessary if the Proposed Amendment is adopted. Accordingly, the Commission's Proposal also includes a technical and conforming amendment to Commission Regulation 3.33(f) to remove the introductory language. As proposed, the text would begin with the language following the introductory phrase: “A request for withdrawing of registration.” The residual text in Commission Regulation 3.33(f) would remain intact. 20 Commission Regulation can be accessed at the Web site provided in footnote 5. *See also* NFA Registration Rule 601(c). III. Related Matters A. Regulatory Flexibility Act The Regulatory Flexibility Act (“RFA”) 21 requires that agencies, in proposing regulations, consider the impact of those regulations on small businesses. The Proposed Amendment would affect persons that are registered as FCMs, IBs, CPOs, CTAs and LTMs. The Commission has previously established certain definitions of “small entities” to be used by the Commission in evaluating the impact of its regulations on such entities in accordance with the RFA. 22 The Commission previously determined that registered FCMs, CPOs and LTMs are not small entities for the purpose of the RFA. 23 With respect to the remaining persons, CTAs and IBs, the Commission does not believe that the economic impact of the Proposed Amendment will be significant. First, the information that would be required under the Proposed Amendment already is required to be collected under the existing registration framework. Second, the Proposed Amendment and NFA's new protocol will focus each registrant on the specific areas that must be reviewed and, if needed, updated. Third, the Proposed Amendment will permit review and updating via electronic means in keeping with the current registration procedures. Accordingly, in accordance with Section 3(a) of the RFA, 24 the Chairman, on behalf of the Commission, certifies that the proposed rules will not have a significant economic impact on a substantial number of small entities. However, the Commission invites the public to comment on this finding. 21 5 U.S.C. 601 *et seq.* 22 47 FR 18618 (Apr. 30, 1982). 23 47 FR 18618, 18619. 24 5 U.S.C. 605(b). B. Cost-Benefit Analysis Section 15(a) of the Act 25 requires the Commission to consider the costs and benefits of its action before issuing a new regulation under the Act. By its terms, Section 15(a) does not require the Commission to quantify the costs and benefits of a new regulation or to determine whether the benefits of the proposed regulation outweigh its costs. Rather, Section 15(a) simply requires the Commission to “consider the costs and benefits” of its action. 25 7 U.S.C. 19(a). Section 15(a) further specifies that costs and benefits shall be evaluated in light of five broad areas of market and public concern:
(1)Protection of market participants and the public;
(2)efficiency, competitiveness, and financial integrity of futures markets;
(3)price discovery;
(4)sound risk management practices; and
(5)other public interest considerations. The Commission, in its discretion, may choose to give greater weight to any one of the five enumerated areas and determine that, notwithstanding its costs, a particular regulation is necessary or appropriate to protect the public interest or to effectuate any of the provisions or to accomplish any of the purposes of the Act. The Proposed Amendment concerns the registration of certain intermediaries, in particular, FCMs, IBs, CPOs, CTAs and LTMs. Specifically, the Proposed Amendment will require these intermediaries to complete an online annual review of their registration information, including disciplinary information, firm contacts and lists of authorized users. By ensuring that NFA, the self-regulatory organization that oversees the activities of these registrants, will have accurate and current information regarding registrants, the Proposed Amendment will maximize the protection of market participants and the public. Such intermediaries already are under an ongoing obligation to provide updated information to NFA pursuant to Commission Regulation 3.31(a)(1). The Proposed Amendment would require these registrants to comply with an online review protocol established by NFA. This protocol would provide a straightforward process for registrants to electronically update their registration information. It would focus and guide registrants on the particular areas that need updating. By facilitating NFA's efforts to adopt this protocol, the Proposed Amendment also should result in efficiency enhancements for registrants and NFA. The Proposed Amendment should have no effect on the following three enumerated areas:
(1)Efficiency, competitiveness or the financial integrity of futures markets;
(2)price discovery; and
(3)sound risk management practices. After considering these factors, the Commission has determined to issue the Proposed Amendment discussed above. The Commission invites public comment on its application of the cost-benefit provision. Commenters also are invited to submit any data that they may have quantifying the costs and benefits of the Proposed Amendment with their comment letters. C. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (“PRA”) imposes certain obligations on federal agencies, including the Commission, in connection with their conducting or sponsoring any collection of information as defined by the PRA. 26 The Proposed Amendment would require intermediaries to conduct an annual review of their registration information maintained with NFA. The information that would be reviewed in accordance with the Proposed Amendment is part of an approved collection of information. Moreover, the Proposed Amendment would not result in any material modifications to this approved collection. Accordingly, for purposes of the PRA, the Commission certifies that the requirements of the PRA are inapplicable to the Proposed Amendment. 26 26 44 U.S.C. 3501 *et seq.* List of Subjects in 17 CFR Part 3 Administrative practice and procedure, Brokers, Commodity Futures, Reporting and recordkeeping requirements. For the reasons discussed in the preamble, the Commission proposes to amend 17 CFR part 3 as follows: PART 3—REGISTRATION 1. The authority citation for part 3 continues to read as follows: Authority: 5 U.S.C. 522, 522b; 7 U.S.C. 1a, 2, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 6m, 6n, 6o, 6p, 8, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21, 23. 2. Section 3.10 is amended by adding paragraph
(d)to read as follows: § 3.10 Registration of futures commission merchants, introducing brokers, commodity trading advisors, commodity pool operators and leverage transaction merchants.
(d)On a date to be established by the National Futures Association, and in accordance with procedures established by the National Futures Association, each registrant as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator or leverage transaction merchant shall, on an annual basis, review and update registration information maintained with the National Futures Association. The failure to complete the review and update within thirty days following the date established by the National Futures Association shall be deemed to be a request for withdrawal from registration, which shall be processed in accordance with the provisions of § 3.33(f). 3. Section 3.33 is amended by revising paragraph
(f)introductory text to read as follows: § 3.33 Withdrawal from registration.
(f)A request for withdrawal from registration will become effective on the thirtieth day after receipt of such request by the National Futures Association, or earlier upon written notice from the National Futures Association (with the written concurrence of the Commission) of the granting of such request, unless prior to the effective date: Issued in Washington, DC, on April 23, 2007, by the Commission. Eileen Donovan, Acting Secretary of the Commission. [FR Doc. E7-8025 Filed 4-25-07; 8:45 am] BILLING CODE 6351-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Parts 260 and 284 [Docket Nos. RM07-10-000 and AD06-11-000] Transparency Provisions of Section 23 of the Natural Gas Act; Transparency Provisions of the Energy Policy Act April 19, 2007. AGENCY: Federal Energy Regulatory Commission, DOE. ACTION: Notice of proposed rulemaking. SUMMARY: In order to implement its authority under section 23 of the Natural Gas Act, which was added by section 316 of the Energy Policy Act of 2005 (EPAct 2005), the Commission proposes to revise its regulations to: require that intrastate pipelines post daily the capacities of, and volumes flowing through, their major receipt and delivery points and mainline segments in order to make available the information needed to track daily flows of natural gas throughout the United States; and require that buyers and sellers of more than a *de minimis* volume of natural gas report annual numbers and volumes of relevant transactions to the Commission in order to make possible an estimate of the size of the physical U.S. natural gas market, assess the importance of the use of index pricing in that market, and determine the size of the fixed-price trading market that produces the information. These revisions would facilitate price transparency in markets for the sale or transportation of physical natural gas in interstate commerce. DATES: Comments are due June 11, 2007. Reply comments are due July 10, 2007. ADDRESSES: You may submit comments identified by Docket No. RM07-10-000, by one of the following methods: • *Agency Web Site: http://ferc.gov* . Follow the instructions for submitting comments via the eFiling link found in the Comment Procedures Section of the preamble. • *Mail:* Commenters unable to file comments electronically must mail or hand deliver an original and 14 copies of their comments to the Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street, NE., Washington, DC 20426. Please refer to the Comment Procedures Section of the preamble for additional information on how to file paper comments. FOR FURTHER INFORMATION CONTACT: Stephen J. Harvey (Technical), 888 First Street, NE., Washington, DC 20426,
(202)502-6372, *Stephen.Harvey@ferc.gov* . Eric Ciccoretti (Legal), 888 First Street, NE., Washington, DC 20426,
(202)502-8493, *Eric.Ciccoretti@ferc.gov* . SUPPLEMENTARY INFORMATION: I. Introduction 1. The Federal Energy Regulatory Commission (Commission), in order to facilitate market transparency in natural gas markets, proposes to revise its regulations to:
(a)Require daily posting of some natural gas flow information by intrastate pipelines; and
(b)require annual filings by buyers and sellers of natural gas in U.S. wholesale markets (that transact more than *de minimis* volumes) of aggregate annual purchase and sales information. These proposals exercise expanded Commission authority under section 23 of the Natural Gas Act, 1 which was added by the Energy Policy Act of 2005 (EPAct 2005) to require reporting from entities not under the Commission's traditional jurisdiction. 2 At this time, as discussed infra, due to other market-related Commission initiatives, we do not propose additional regulations for transparency in electricity markets. 1 *To be codified at* 15 U.S.C. 717t-2. 2 Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594 (2005). 2. The first proposal, designed to make available the information needed to track daily flows of natural gas throughout the United States, would create a requirement that intrastate pipelines post daily to the Internet the capacities of, and volumes flowing through, their major receipt and delivery points and mainline segments. Postings would be required within 24 hours from the close of the gas day on which gas flows, *i.e.* , on or before 9 a.m. central clock time for flows occurring on the gas day that ended 24 hours before. 3. The second proposal, designed to permit the annual estimate of
(a)The size of the physical domestic natural gas market,
(b)the use of index pricing in that market,
(c)the size of the fixed-price trading market that produces price indices from the subset reported to index publishers, and
(d)the relative size of major traders, would create an annual requirement that buyers and sellers of more than a *de minimis* volume of natural gas report numbers and volumes of relevant transactions to the Commission. As part of this proposal, the Commission would require each holder of blanket marketing certificate authority or blanket unbundled sales services certificate authority to notify the Commission as to whether it reports its transactions to publishers of electricity or natural gas price indices and whether any such reporting complies with certain standards. Currently, a holder of a blanket marketing certificate or a blanket unbundled sales service certificate is required to notify the Commission only when it changes its practice regarding such reporting. This part of the proposal would make notifications of reporting status more reliable. II. Background 4. The Commission's market-oriented policies for the wholesale electric and natural gas industries require that interested persons have broad confidence that reported market prices accurately reflect the interplay of legitimate market forces. Without confidence in the basic processes of price formation, market participants cannot have faith in the value of their transactions, the public cannot believe that the prices they see are fair, and it is more difficult for the Commission to ensure that jurisdictional prices are “just and reasonable.” 3 3 *See* sections 4 and 5 of the Natural Gas Act, 15 U.S.C. 717c, 717d (2000); sections 205 and 206 of the Federal Power Act, 16 U.S.C. 824d, 824e (2000). 5. The performance of Western electric and natural gas markets early in the decade shook confidence in posted market prices for energy. In examining these markets, the Commission's staff found, inter alia, that some companies submitted false information to the publishers of natural gas price indices, so that the resulting reported prices were inaccurate and untrustworthy. 4 As a result, questions arose about the legitimacy of published price indices, remaining even after the immediate crisis passed. Moreover, market participants feared that the indices might have become even more unreliable, since reporting (which has always been voluntary) declined to historically low levels in late 2002. 4 See *Initial Report on Company-Specific Separate Proceedings and Generic Reevaluations; Published Natural Gas Price Data; and Enron Trading Strategies—Fact Finding Investigation of Potential Manipulation of Electric and Natural Gas Prices* , Docket No. PA02-2-000 (August 2003). 6. The Commission recognized staff concerns about price discovery in electric and natural gas markets as early as January 2003, when, prior to passage of EPAct 2005, the Commission made use of its existing authority under the Natural Gas Act and the Federal Power Act to restore confidence in natural gas and electricity price indices. The Commission expected that, over time, improved price discovery processes would naturally increase confidence in market performance. On July 24, 2003, the Commission issued a *Policy Statement on Electric and Natural Gas Price Indices* (Policy Statement) that explained its expectations of natural gas and electricity price index developers and the companies that report transaction data to them. 5 On November 17, 2003, the Commission adopted behavior rules for certain electric market participants in its *Order Amending Market-Based Rate Tariffs and Authorizations* relying on section 206 of the Federal Power Act to condition market-based rate authorizations, 6 and for certain natural gas market participants in *Amendments to Blanket Sales Certificates* , relying on section 7 of the Natural Gas Act to condition blanket marketing certificates. 7 The behavior rules bar false statements and require certain market participants, if they report transaction data, to report such data in accordance with the Policy Statement. These participants must also notify the Commission whether or not they report prices to price index developers in accordance with the Policy Statement. 8 On November 19, 2004, the Commission issued an order that addressed issues concerning prices indices in natural gas and electricity markets and adopted specific standards for the use of price indices in jurisdictional tariffs. 9 5 *Price Discovery in Natural Gas and Electric Markets, Policy Statement on Natural Gas and Electric Price Indices* , 104 FERC ¶ 61,121 (Policy Statement). Subsequently, in the same proceeding, the Commission issued an *Order on Clarification of Policy Statement on Natural Gas and Electric Price Indices* , 105 FERC ¶ 61,282 (Dec. 12, 2003) (Order on Clarification of Policy Statement) and an *Order on Further Clarification of Policy Statement on Natural Gas and Electric Price Indices* , 112 FERC ¶ 61,040 (July 6, 2005) (Order on Further Clarification of Policy Statement). 6 *Investigation of Terms and Conditions of Public Utility Market-Based Rate Authorizations* , 105 FERC ¶ 61,218, at P 1, *superseded in part by Compliance for Public Utility Market-Based Rate Authorization Holders* , Order No. 674, 71 FR 9695 (Feb. 27, 2006), FERC Stats. and Regs. ¶ 31,208 (2006). 7 *Amendments to Blanket Sales Certificates* , Order No. 644, 68 FR 66,323 (Nov. 26, 2003), FERC Stats. and Regs. ¶ 31,153, at P 1
(2003)(citing 15 U.S.C. 717f (2000)), *reh'g denied* , 107 FERC ¶ 61,174
(2003)(Order No. 644-A). 8 Certain portions of the behavior rules were rescinded in *Amendments to Codes of Conduct for Unbundled Sales Service and for Persons Holding Blanket Marketing Certificates* , Order No. 673, 71 FR 9709 (Feb. 27, 2006), FERC Stats. and Regs. ¶ 31,207 (2006). The requirement to report transaction data in accordance with the Policy Statement and to notify the Commission of reporting status were retained in renumbered sections. 18 CFR 284.288(a), 284.403(a). 9 *Price Discovery in Natural Gas and Electric Markets* , 109 FERC ¶ 61,184, at P 73 (2004). 7. In the Policy Statement, among other things, the Commission directed staff to continue to monitor price formation in wholesale markets, including the level of reporting to index developers and the amount of adherence to the Policy Statement standards by price index developers and by those who provide data to them. 10 In adhering to this directive, Commission staff documented improvements in the number of companies reporting prices from back offices, adopting codes of conduct, and auditing their price reporting practices. 11 These efforts resulted in significant progress in the amount and quality of both price reporting and the information provided to market participants by price indices. 12 Further, in conformance with this directive, Commission staff recently concluded audits of three natural gas market participants with blanket certificate authority that were data providers subject to § 284.403 of the Commission's regulations. 13 10 Policy Statement at P 43. 11 Federal Energy Regulatory Commission, Report on Natural Gas and Electricity Price Indices, at 2, Docket Nos. PL03-3-004 *et al.* (2004). 12 *See, e.g.* , General Accounting Office, Natural Gas and Electricity Markets: Federal Government Actions to Improve Private Price Indices and Stakeholder Reaction (December 2005). 13 *See* April 5, 2007 letter issued to Anadarko Energy Services Co. in Docket No. PA06-11-000 by Susan J. Court, Director, Office of Enforcement, and attached Audit of Price Index Reporting Compliance; April 5, 2007 letter issued to BG Energy Merchants, LLC. in Docket No. PA06-12-000 by Susan J. Court and attached Audit of Price Index Reporting Compliance; April 5, 2007 letter issued to Marathon Oil Co. in Docket No. PA06-13-000 by Susan J. Court, and attached Audit of Price Index Reporting Compliance. 8. Congress recognized that the Commission might need expanded authority to mandate additional reporting to improve market confidence through greater price transparency and included in the Energy Policy Act of 2005 (EPAct 2005) 14 authority for the Commission to obtain information on wholesale electric and natural gas prices and availability. Under the Federal Power Act 15 and the Natural Gas Act, 16 the Commission has long borne a responsibility to protect wholesale electric and natural gas consumers. EPAct 2005 emphasized the Commission's responsibility for protecting the integrity of the markets themselves as a way of protecting consumers in an active market environment. In particular, Congress directed the Commission to facilitate price transparency “having due regard for the public interest, the integrity of [interstate energy] markets, [and] fair competition.” 17 In the new transparency provisions of section 23 of the Natural Gas Act and section 220 of the Federal Power Act, Congress provided that the Commission may, but is not obligated to, prescribe rules for the collection and dissemination of information regarding the wholesale, interstate markets for natural gas and electricity, and authorized the Commission to adopt rules to assure the timely dissemination of information about the availability and prices of natural gas and natural gas transportation and electric energy and transmission service in such markets. 14 Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594 (2005). 15 16 U.S.C. 824 *et seq.* 16 15 U.S.C. 717 *et seq.* 17 Section 23(a)(1) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(1); *see also* section 220 of the Federal Power Act, *to be codified at* 16 U.S.C. 824t (identical language). Section 316 of EPAct 2005 added section 23 to the Natural Gas Act (natural gas transparency provisions); section 1281 of EPAct 2005 added section 220 to the Federal Power Act (electric transparency provisions) (together, the transparency provisions). 9. Consistent with the directive to facilitate price transparency in natural gas and electric markets as well as to explore options for action under EPAct 2005's expansion of the Commission's authority, Commission staff met with interested entities in the summer of 2006. On September 26, 2006, staff conducted a workshop to review sources of energy market information with interested persons and to lay the groundwork for a technical conference held on October 13, 2006. In that conference, ideas for potential policy actions by the Commission were identified. 18 18 At the conference, the Commission convened two panels:
(a)A panel of seven market participants to discuss price transparency in markets for the sale or transportation of physical natural gas in interstate commerce; and,
(b)a panel of four market participants regarding price transparency in markets for the sale and transmission of electric energy in interstate commerce. See *Transparency Provisions of the Energy Policy Act of 2005, Program for the Technical Conference* , Docket No. AD06-11-000 (Oct. 6, 2006). In addition, for each panel, about ten representatives of information providers, such as price index publishers, attended to provide comment and answer questions. 10. Based on those efforts, in this Notice of Proposed Rulemaking (NOPR), the Commission sets out two proposals regarding collection and dissemination of information about natural gas wholesale markets. The Commission does not propose action with respect to electric markets at this time. The Commission has recently addressed and is currently addressing electric market transparency in other proceedings. For example, in its final rule reforming the Open Access Transmission Tariff, the Commission referred to its authority under the electric transparency provisions to “promote greater transparency in the provision of transmission service * * *” 19 In that order, the Commission increased the transparency of a transmission provider's transmission planning, 20 the transparency of its calculations of Available Transfer Capability, 21 and the transparency of its business rules and practices. 22 These reforms are consistent with the electric transparency provisions because they will “provide information about the availability and prices of wholesale * * * transmission service” to “users of transmission services” among others, as contemplated in the electric transparency provisions. 23 Furthermore, in the recently-initiated wholesale competition review, the Commission is reviewing a variety of market-related electricity issues in a series of public conferences evaluating the state of competition in wholesale power markets. 24 In the first conference, held February 27, 2007, among other issues, the Commission and panelists considered price transparency in the context of competition in the wholesale markets. 25 As a separate matter, we note that wholesale electric transactions under market-based rates are submitted to the Commission and made publicly available through the Electric Quarterly Reports. 26 Further, in organized electricity markets, Regional Transmission Organizations
(RTOs)and Independent System Operators
(ISOs)provide transparency by publishing the results of auction markets and by posting spot market and day-ahead prices at pre-established intervals. The RTOs also provide additional information concerning the electric system capacity markets and financial transmission rights that provide further transparency concerning the RTO/ISO-administered markets. 27 For these reasons, we do not believe that additional action is needed at this time to implement the new electric transparency provisions of section 220 of the Federal Power Act. 19 *Preventing Undue Discrimination and Preference in Transmission Service* , Order No. 890, 72 FR 12266 (March 15, 2007), FERC Stats. and Regs. ¶ 31,241 (2007), at P 80. 20 *Id.* at P 69, 83. 21 *Id.* at P 84. 22 *Id.* at P 88. 23 Section 220(a)(2) of the Federal Power Act, *to be codified at* 16 U.S.C. 824t(a)(2). 24 See, *e.g.* , *Conference on Competition In Wholesale Power Markets* , Docket No. AD07-7-000. 25 See, *e.g.* , Transcript of Feb. 27, 2007 Conference, *Conference on Competition in Wholesale Power Markets* , Docket No. AD07-7-000, at 123, 153-154, 244-249. 26 *Revised Public Utility Filing Requirements* , Order No. 2001, 67 FR 31043 (May 8, 2002), FERC Stats. & Regs. ¶ 31,127 (2002), *reh'g denied* , Order No. 2001-A, 100 FERC ¶ 61,074, *reh'g denied* , Order No. 2001-B, 100 FERC ¶ 61,342, *order directing filing* , Order No. 2001-C, 101 FERC ¶ 61,314 (2002), *order directing filing* , Order No. 2001-D, 102 FERC ¶ 61,334 (2003). 27 Comments of ISO/RTO Council, Docket No. AD06-11-000 (filed Oct. 5, 2006) (describing information provided by ISOs and RTOs). III. Legal Context 11. With the passage of EPAct 2005, Congress affirmed a commitment to competition in wholesale natural gas and electricity markets as national policy, the fifth major Federal law in the last 30 years to do so. 28 As part of this commitment to competition, in the transparency provisions, Congress charged the Commission with assuring the integrity of the wholesale markets and assuring fair competition by facilitating price transparency in those markets. It also significantly strengthened the Commission's regulatory tools in the transparency provisions, specifically, in new section 220 of the Federal Power Act and new section 23 of the Natural Gas Act. 28 *See* Energy Policy Act of 1992, Pub. L. No. 102-486, 106 Stat. 2776 (1992), codified as amended in scattered sections of 16 U.S.C.; Natural Gas Wellhead Decontrol Act of 1989, Pub. L. No. 101-60, 103 Stat. 157 (1989), codified in scattered section of 15 U.S.C.; Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 2601-2645 (2000); Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3442 (2000). 12. In new section 23(a)(1) of the Natural Gas Act, Congress provided the Commission's mandate: The Commission is directed to facilitate price transparency in markets for the sale or transportation of physical natural gas in interstate commerce, having due regard for the public interest, the integrity of those markets, fair competition, and the protection of consumers. 29 29 *To be codified* at 15 U.S.C. 717(v)(a)(1). The electric transparency provisions of the Federal Power Act are nearly identical as to the electric wholesale markets. Section 220 of the Federal Power Act, *to be codified* at 16 U.S.C. 824t. Because our proposals herein address natural gas transparency, we do not analyze the electric transparency provisions, although we expect that analysis of electric transparency provisions would be substantially similar. In new section 23(a)(2) of the Natural Gas Act, Congress left to the Commission's discretion whether to enact rules to carry out this mandate and provided that any rules implementing the transparency provisions provide for public dissemination of the information gathered: The Commission may prescribe such rules as the Commission determines necessary and appropriate to carry out the purposes of this section. The rules shall provide for the dissemination, on a timely basis, of information about the availability and prices of natural gas sold at wholesale and in interstate commerce to the Commission, State commissions, buyers and sellers of wholesale natural gas, and the public. 30 30 *To be codified* at 15 U.S.C. 717t-2(a). 13. In new section 23(a)(3) of the Natural Gas Act, Congress contemplated that the transparency provisions would differ from other provisions in the Natural Gas Act, both as to the entities covered by the Commission's jurisdiction and the possible involvement of third parties in implementing the rules. That section reads, with emphasis added: The Commission may—
(A)Obtain the information described in paragraph
(2)[ *i.e.* , information about the availability and prices of natural gas sold at wholesale and interstate commerce] from *any market participant;* and
(B)Rely on *entities other than the Commission* to receive and make public the information, subject to the disclosure rules in subsection (b). 31 31 *To be codified at* 15 U.S.C. 717t-2(a)(3). By using the term “any market participant,” Congress deliberately expanded the universe subject to the Commission's transparency authority beyond the entities subject to the Commission's rate and certificate jurisdiction under other parts of the Natural Gas Act. The term “market participant” is not defined in the Natural Gas Act and is not on its face limited to otherwise jurisdictional entities. 14. Congress could have limited the scope of entities subject to the Commission's transparency authority by referring to “natural gas company” as defined in the Natural Gas Act 32 or by referring to section 1, 3, or 7 of the Natural Gas Act. 33 The former approach would have excluded intrastate pipelines from the Commission's transparency authority. The latter approach would have entailed the jurisdictional limitations of those sections, which exclude from the Commission's jurisdiction first sales, sales of imported natural gas, sales of imported liquefied natural gas, and sales and transportation by entities engaged in production and gathering, local distribution, “Hinshaw” pipelines, or vehicular natural gas. 34 These limitations do not apply to the Commission's transparency authority. Given Congress's use of the term “market participant,” the Commission's transparency authority includes any person or form of organization, including, for instance, natural gas producers, processors and users. 32 Section 2(6) of the Natural Gas Act, 15 U.S.C. 717a(6). 33 15 U.S.C. 717, 717b, 717f. 34 Section 1(b)-(d) of the Natural Gas Act, 15 U.S.C. 717(b)-(d); section 3 of the Natural Gas Act, 15 U.S.C. 717b; section 7(f) of the Natural Gas Act, 15 U.S.C. 717f(f); see, also, section 601(a) of the Natural Gas Policy Act, 15 U.S.C. 3431(a). The Commission has previously explained that the Natural Gas Policy Act of 1978 (NGPA or Natural Gas Policy Act) and the Natural Gas Wellhead Decontrol Act of 1989 narrowed its jurisdiction under the Natural Gas Act: Under the NGPA, first sales of natural gas are defined as any sale to an interstate or intrastate pipeline, LDC [Local Distribution Company] or retail customer, or any sale in the chain of transactions prior to a sale to an interstate or intrastate pipeline or LDC or retail customer. NGPA Section 2(21)(A) sets forth a general rule stating that all sales in the chain from the producer to the ultimate consumer are first sales until the gas is purchased by an interstate pipeline, intrastate pipeline, or LDC. Once such a sale is executed and the gas is in the possession of a pipeline, LDC, or retail customer, the chain is broken, and no subsequent sale, whether the sale is by the pipeline, or LDC, or by a subsequent purchaser of gas that has passed through the hands of a pipeline or LDC, can qualify under the general rule as a first sale on natural gas. In addition to the general rule, NGPA Section 2(21)(B) expressly excludes from first sale status any sale of natural gas by a pipeline, LDC, or their affiliates, except when the pipeline, LDC, or affiliate is selling its own production. Order No. 644 at P 14. 15. The Commission's authority to obtain information from “any market participant” is not plenary. In the natural gas transparency provisions, Congress limited that authority in two respects: the scope of the markets at issue and the type of information to obtain and disseminate. First, Congress directed the Commission to “facilitate price transparency in markets for the sale or transportation of physical natural gas in interstate commerce * * *.” 35 Thus, any information collected and disseminated must be for the purpose of price transparency in those markets. We do not interpret this language to limit the Commission to obtaining information only about physical natural gas sales or transportation in those markets, provided that the information obtained and disseminated pertains to price transparency in those markets. Second, Congress provided that any rules “provide for the dissemination, on a timely basis, of information about the availability and prices of natural gas sold at wholesale and in interstate commerce * * *.” 36 Thus, the Commission's authority is limited to “information about the availability and prices of natural gas sold at wholesale and in interstate commerce.” 37 Again, this language does not limit the type of information the Commission could collect to implement its mandate, provided that such information is “about” ( *i.e.* , pertains to) the “availability and prices of natural gas sold at wholesale and in interstate commerce.” For instance, some transportation or sales of natural gas is not in interstate commerce, but, nonetheless, would affect the availability and prices of natural gas at wholesale and in interstate commerce. 35 Section 23(a)(1) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(1). 36 Section 23(a)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(2). 37 *Id.* 16. The natural gas transparency provisions further provide that the Commission shall “rely on existing price publishers and providers of trade processing services to the maximum extent possible.” 38 Thus, Congress authorized the Commission to rely on third parties to collect and disseminate transparency information. The Commission does not herein authorize or empower third parties to collect or disseminate information. Nonetheless, we expect that third parties may use the information collected pursuant to the proposals in this NOPR and repackage it, if sufficient demand for such services arises in the information marketplace. 39 38 Section 23(a)(4) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(4). 39 We reiterate here our comments made previously regarding price index publishers, data hubs, and other trade processing services: we do not “endors[e] any particular entity or approach, but continue to encourage industry participants to find optimal solutions to better wholesale price formation.” *Order on Further Clarification of the Policy Statement* at P 11. 17. Also, in the transparency provisions, Congress cautioned the Commission in providing for any dissemination of information pursuant to the transparency provisions to ensure that “consumers and competitive markets are protected from the adverse effects of potential collusion or other anticompetitive behaviors by untimely disclosure of transaction-specific information.” 40 40 Section 23(b)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(b)(2). 18. Finally, new section 23(d)(2) of the natural gas transparency provisions mandates an exemption from any reporting for “natural gas producers, processors, or users who have a *de minimis* market presence * * *.” 41 This paragraph does not exempt all producers and all processors from reporting, but exempts only producers that have a *de minimis* market presence and only processors that have a *de minimis* market presence. 41 Section 23(d)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(d)(2). IV. Reporting of Flow Volume and Capacity by Intrastate Pipelines A. Proposal 19. The Commission proposes that in order to make available the information needed to track daily flows of natural gas throughout the United States, each intrastate pipeline would be required to post daily to the Internet the capacities of, and volumes flowing through, their major receipt and delivery points and mainline segments. Postings would be required within 24 hours from the close of the gas day on which gas flowed, *i.e.* , at or before 9 a.m. central clock time for flow that occurred on the gas day that ended 24 hours before. To illustrate, the volume of gas that flowed through a receipt point from 9 a.m. central clock time on Monday through 9:00 a.m. central clock time on Tuesday would be reported as a daily flow volume for that gas day and must be reported by 9 a.m. Wednesday central clock time. The Commission would implement this proposal by adding a new § 284.14 to its regulations. 20. As explained in greater detail below, by adding information on intrastate pipeline flows to the information already available from interstate pipelines, the Commission, market participants, and the public could develop a better understanding of daily supply and demand conditions that directly affect U.S. wholesale natural gas markets. While distinctions between intrastate and interstate natural gas markets may be meaningful from a legal perspective, they are not meaningful from the perspective of market price formation. The U.S. natural gas market produces geographically diverse prices through the direct influence of supply, demand and transportation availability, but without ever differentiating interstate from intrastate commerce. Consequently, this proposal to increase information from intrastate pipelines would directly “facilitate price transparency for the sale * * * of physical natural gas in interstate commerce” as authorized in the natural gas transparency provisions. 42 42 Section 23(a)(1) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(1). B. Legal Considerations 21. As discussed above, the natural gas transparency provisions provide the authority for the Commission to obtain information from otherwise non-jurisdictional entities, including intrastate pipelines. The proposal to require intrastate pipelines to post flow information raises the additional issue whether such information qualifies as “information about the availability and prices of natural gas sold at wholesale in interstate commerce.” 43 If not, the Commission would be foreclosed from requiring the posting. 43 Section 23(a)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(2). 22. The Commission believes that the information covered by the instant proposal qualifies as “information about the availability and prices of natural gas sold at wholesale and in interstate commerce.” Notwithstanding their intrastate status, most major intrastate pipelines today transport or buy and sell wholesale natural gas that eventually enters or at least impacts the interstate natural gas market. Further, supply and demand in intrastate markets have a direct effect on prices of gas destined for interstate markets because both intrastate and interstate consumers draw on the same sources of supply. This is the case because of the statutory, regulatory and market changes that have taken place in the last three decades. 23. In 1978, in the Natural Gas Policy Act, Congress allowed an intrastate pipeline to transport natural gas in interstate commerce on behalf of any interstate pipeline or local distribution company served by an interstate pipeline, without losing its intrastate status. 44 Congress likewise permitted an intrastate pipeline to sell natural gas to any interstate pipeline or any local distribution company served by any interstate pipeline, without losing its intrastate status. 45 In addition, at the same time that the Commission issued Order No. 636 in 1992, it promulgated a new subpart of Part 284 (revised several times in the past 15 years) that provides blanket authority to any person who is not an interstate pipeline (including intrastate pipelines) to make sales for resale of natural gas in interstate commerce. 46 This authorization is a limited jurisdiction certificate, which means that the holder does not become subject to the panoply of Natural Gas Act regulation by exercising its rights under the certificate. 47 44 *See* section 311(a)(2) of the Natural Gas Policy Act, 15 U.S.C. 3371(a)(2); *see also* 18 CFR part 284, subpart C (Certain Transportation by Intrastate Pipelines). 45 *See* section 311(b) of the Natural Gas Policy Act, 15 U.S.C. 3371(b); *see also* 18 CFR part 284, subpart D (Certain Sales by Intrastate Pipelines). 46 *Pipeline Service Obligations and Revisions to Regulations Governing Self-Implementing Transportation and Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol,* Order No. 636, 57 FR 13267 (Apr. 16, 1992), FERC Stats. & Regs. ¶ 30,939 (1992), *order on reh'g,* Order No. 636-A, 57 FR 36128 (Aug. 12, 1992), FERC Stats & Regs. ¶ 30,950 (1992), *order on reh'g,* Order No. 636-B, 61 FERC ¶ 61,272 (1992), *order on reh'g,* 62 FERC ¶ 61,007 (1993), *aff'd in part and remanded in part sub nom United Distribution Cos. v. FERC,* 88 F.3d 1104 (D.C. Cir. 1996), *order on remand,* Order No. 636-C, 78 FERC ¶ 61,186 (1997). 47 *See* 18 CFR part 284, subpart L (Certain Sales for Resale by Non-interstate Pipelines). 24. The market understandably reacted to these statutory and regulatory changes since 1978. As relevant here, and explained in greater detail below, natural gas sold at or destined to be sold at wholesale in the interstate market is frequently exchanged or the transactions consummated at market hubs where interstate and intrastate pipelines are interconnected ( *e.g.* , Waha, Katy, Houston Ship Channel, and Carthage in Texas and at Henry Hub in Louisiana). Prices formed at these hubs are, in effect, prices for wholesale transactions in interstate commerce, even if a portion of the gas priced at each market hub is consumed intrastate. In addition, transfer of natural gas can take place directly between parties who ship gas on both intrastate and interstate pipelines at any pipeline interconnection. C. Discussion 25. Currently, through the availability of information regarding daily scheduled flows of natural gas through interstate pipelines, market participants have an increased, daily understanding of natural gas markets, including regional conditions and the pipeline capacity available to resolve different geographic supply/demand balances. This is due in part to Order No. 637, where the Commission required posting of capacity and scheduled volume information on interstate pipelines with the direct intention of allowing shippers to monitor capacity availability. 48 Accordingly, interstate pipelines must post available capacity information, specifically: 48 *Regulation of Short-Term Natural Gas Transportation Services and Regulation of Interstate Natural Gas Transportation Services* , Order No. 637, 65 FR 10156, at 10204-10205, (Feb. 25, 2000), FERC Stats. & Regs. ¶ 31,091, at 31,320-31,321 (2000); *order on reh'g* , Order No. 637-A, 65 FR 35706 (June 5, 2000), FERC Stats. & Regs. ¶ 31,099 (2000); *order on reh'g* , Order No. 637-B, 65 FR 47284 (Aug. 2, 2000), *affirmed in relevant part, Interstate Natural Gas Ass'n of America v. FERC* , 285 F.3d 18 (D.C. Cir. 2002), *order on remand* , 101 FERC ¶ 61,127, *order on reh'g* , 106 FERC ¶ 61,088, *aff'd sub nom. American Gas Ass'n v. FERC* , 428 F.3d 255 (D.C. Cir. 2005) (Order No. 637). The availability of capacity at receipt points, on the mainline, at delivery points, and in storage fields, whether the capacity is available directly from the pipeline or through capacity release, the total design capacity of each point or segment on the system; the amount scheduled at each point or segment whenever capacity is scheduled, and all planned and actual service outages or reductions in service capacity. 49 49 18 CFR 284.13(d). In Order No. 637, the Commission anticipated that such postings would provide useful information regarding supply and demand fundamentals: The changes to the Commission's reporting requirements will enhance the reliability of information about capacity availability and price that shippers need to make informed decisions in a competitive market as well as improve shippers' and the Commission's ability to monitor marketplace behavior to detect, and remedy anticompetitive behavior. 50 50 Order No. 637, 65 FR at 10169. 26. Today, interested market participants as well as commercial vendors retrieve this information from the Web sites of interstate pipelines to obtain schedule information that is then used to estimate a variety of supply and demand conditions including geographic and industrial sector consumption, storage injections and withdrawals and regional production in almost real-time. 51 Market participants have come to rely on this information to help price transactions. Commission staff has also come to rely on this information to perform its oversight and enforcement functions. In fact, observers believe that this information posting has contributed to market transparency by revealing the underlying volumetric (or availability) drivers behind price movements. 52 51 *See, e.g.* , Comments of Bentek Energy, LLC., Docket No. AD06-11-000 (filed Oct. 10, 2006). 52 *See, e.g.* , Comments of Platt's, at p. 11-13, Docket No. AD06-11-000 (information regarding the supply and demand of natural gas explains prices and such information is available from interstate pipelines, but not intrastate pipelines). 27. Notwithstanding the contribution of posted interstate schedule information to the transparency of price and availability of natural gas, this information cannot provide a complete picture of natural gas flows in the United States—or even those flows directly relevant to the pricing of natural gas flowing in interstate commerce. Several major U.S. natural gas pricing points sit at the confluence of multiple interstate and intrastate pipelines. A recent study by the Department of Energy's Energy Information Administration
(EIA)identified 28 national market centers or pricing hubs, of which 13 are served by a combination of interstate and intrastate pipelines. 53 The table below shows the capacity of interstate and intrastate pipelines connected to each of these 13 hubs. 53 Department of Energy, Energy Information Administration, Natural Gas Market Centers and Hubs: A 2003 Update, Oct. 2003, *http://www.eia.doe.gov/pub/oil_gas/natural_gas/feature_articles/2003/market_hubs/mkthubs03.pdf.* Table 1.—Inter- and Intrastate Pipeline Delivery Capacity at Selected U.S. Natural Gas Pricing Points Hub name State Receipt and delivery capacity Interstate pipelines (MMcfd) Intrastate pipelines (MMcfd) Carthage TX 1,120 1,355 Henry Hub LA 2,770 1,215 Katy—Enstore TX 1,370 3,815 Katy—DEFS TX 260 2,360 Mid Continent KS 1,112 627 Moss Bluff TX 1,050 1,800 Nautilus LA 1,200 1,350 Perryville LA 3,652 350 Aqua Dulce TX 855 835 Waha—Lone Star TX 810 1,140 Waha—Encina TX 525 800 Waha—El Paso TX 1,165 1,660 Waha—DEFS TX 300 1,850 Source: Unpublished Energy Information Administration update to March 2005 of information presented in Natural Gas Market Centers and Hubs: A 2003 Update, October 2003. 28. Many of these pricing points are closely connected to other regions of the United States, influencing prices across the country. The figure below shows the location and flow patterns of natural gas moving between intrastate and interstate markets through several of these pricing points. BILLING CODE 6717-01-P EP26AP07.000 29. One pricing point directly connected to both interstate and intrastate pipelines is Henry Hub, Louisiana, the location for delivery of natural gas under the New York Mercantile Exchange's (NYMEX) futures contract. Monthly settlement of NYMEX's Henry Hub natural gas future contract has become important in determining a variety of monthly index prices used to set natural gas prices in a variety of transactions, some in interstate commerce, particularly along the East Coast and Gulf Coast of the United States. The nature of this influence is detailed in Commission staff's *2006 State of the Markets Report.* 54 54 Federal Energy Regulatory Commission, 2006 State of the Markets Report, at 48-50 (Jan. 2007), *http://www.ferc.gov/market-oversight/market-oversight.asp* , (follow link to the State of the Markets Full Report). 30. Purchasers of natural gas in interstate commerce draw on the same sources of supply as users and buyers of natural gas in intrastate commerce. For example, much of the recent Barnett Shale development in the Fort Worth basin flows into intrastate systems before moving into interstate markets. In total, slightly more than 40 percent of total on-shore production in Texas is connected to interstate pipelines, less than 60 percent in Louisiana and less than 80 percent in Oklahoma. 55 Though daily volume flowing from intrastate into interstate pipelines can be estimated, the supply dynamics that make these volumes available cannot. 55 BENTEK Energy, LLC analysis of supply scheduled into interstate pipelines compared with EIA data from its table Natural Gas Gross Withdrawals and Production for Texas and Oklahoma available at *http://tonto.eia.doe.gov/dnav/ng/ng_prod_sum_dcu_NUS_m.htm.* 31. Send-out from current liquefied natural gas
(LNG)terminals—Cove Point, Elba Island, Everett and Lake Charles—is observable through interstate receipt point flow postings. Of seven approved, but not yet operational, terminals in Texas and Louisiana, all would discharge in whole or in part to intrastate pipelines. 56 56 Texas Railroad Commission, Onshore LNG Supply Terminal Projects Proposed for Texas (June 28, 2006), *http://www.rrc.state.tx.us/commissioners/carrillo/press/LNGprojects.html.* 32. The Commission proposes to require posting of actual flow information from intrastate pipelines rather than scheduled volumes, as it does for interstate pipelines. Intrastate pipelines operate in different regulatory and business contexts from interstate pipelines, making scheduled volumes less helpful in estimating movement of natural gas. For example, interstate pipelines primarily operate as open access transporters, not as sellers of natural gas. Scheduled volumes represent the communication that must occur between the shipper and the pipeline to conduct most of their business. As a consequence, interstate receipt, transportation and delivery schedules, as updated before and through the delivery day, reflect actual flows on their systems as well. 57 In contrast, intrastate pipelines often sell gas directly to customers under a variety of regulatory regimes. Much of such gas can flow without being scheduled, especially for customers' variable requirements. Similarly, many direct pipeline purchases from the wellhead and from smaller gathering systems need not be scheduled. Given the different business models, and the likelihood that scheduling information on intrastate pipelines would be unhelpful, we conclude that actual flow information, posted after-the-fact, would be needed to develop an understanding of these flows. 57 In the case of “no-notice” service, *see* 18 CFR 284.7(a)(4), interstate pipeline schedules do not reflect flows. Consequently, information about interstate flows in areas using no-notice service is less useful. 33. The daily posting of flow information by intrastate pipelines would provide several benefits to the functioning of natural gas markets in ways that would protect the integrity of physical, interstate natural gas markets, protect fair competition in those markets and consequently serve the public interest by better protecting consumers. First, by providing a more complete picture of supply and demand fundamentals, these postings would improve market participants' ability to assess supply and demand and to price physical natural gas transactions. Second, during periods when the U.S. natural gas delivery system is disturbed, for instance due to hurricane damage to facilities in the Gulf of Mexico, these postings would provide market participants a clearer view of the effects on infrastructure, the industry, and the economy as a whole. Finally, these postings would allow the Commission and other market observers to identify and remedy potentially manipulative activity. We discuss each of these points in turn. 34. First, the proposed daily intrastate pipeline capacity and volume postings would improve market participants' ability to assess supply and demand and price physical natural gas transactions by providing a more complete picture of supply and demand fundamentals. 58 As discussed above and noted in comments filed in these proceedings, interstate pipeline information does not provide a complete picture of the supply and demand fundamentals that apply to interstate commerce because much of the natural gas in the U.S. is moved through the intrastate pipeline system. 59 58 See, *e.g.* , Comments of Platt's, at p. 11, Docket No. AD06-11-000 (filed Nov. 1, 2006) (explaining that, to understand prices, “the marketplace must look to * * * information on [the] availability of and demand for natural gas * * *.”). 59 See Comments of Platt's, at p. 13, Docket No. AD06-11-000 (filed Nov. 1, 2006) (stating that much of the fundamental supply and demand data is missing from natural gas markets and advocating for reporting by intrastate pipelines). \ 35. Second, the proposed daily intrastate pipeline capacity and volume postings would provide market participants—and the Commission in its market oversight efforts—a clearer view of the effects on infrastructure, the industry, and the economy as a whole during periods when the U.S. natural gas delivery system is disturbed. For example, after landfall of hurricanes Katrina and Rita in late 2005, even the most interested of governmental and commercial market observers were not able to obtain complete information regarding the extent of the damage at production facilities. 60 By monitoring receipt and delivery points for production facilities on interstate pipelines, market participants were able to obtain only a limited sense of production facility output. 61 Similarly, market participants, State commissions and others were unable to assess effects on natural gas consumption in the Gulf Coast, including consumption by the petrochemical industry, for some period. The significance and duration of these effects on this industry—vulnerable to energy price and availability disruptions—remain unclear. This proposal would allow interested governmental and private parties to gain a much better picture of disruptions in natural gas flows in the case of future hurricanes in the Gulf region. 62 60 See, *e.g.* , Transcript of the Oct. 13, 2006 Technical Conference (Tr.), at 25, *Transparency Provisions of the Energy Policy Act of 2005* , Docket No. AD06-11-000 (Comments of Sheila Rappazzo, Chief of Policy Section of the Office of Gas and Water of the New York State Department of Public Service). 61 Tr. at 25 (Comments of Sheila Rappazzo) (describing how after the 2005 hurricanes data availability differed widely). 62 Along these lines, this proposal is consistent with a recent Commission final rule and a proposed survey by EIA. On August 23, 2006, the Commission revised its reporting regulations to require jurisdictional natural gas companies to report damage to facilities due to a natural disaster or terrorist activity that results in a reduction in pipeline throughput or storage deliverability. *Revision of Regulations to Require Reporting of Damage to Natural Gas Pipeline Facilities* , Order No. 682, 71 FR 51098 (Aug. 29, 2006), FERC Stats. and Regs. ¶ 31,227 (2006), *order on reh'g* , 118 FERC ¶ 61, (2007). On January 30, 2007, EIA proposed to survey natural gas processing plants “to monitor their operational status and assess operations of processing plants during a period when natural gas supplies are disrupted.” *Agency Information Collection Activities* , 72 FR 4248 (Jan. 30, 2007). The purpose of the survey would be to “inform the public, industry, and the government about the status of supply and delivery activities in the area affected by the disruption.” *Id* . 36. Third, the proposed daily intrastate pipeline capacity and volume postings would allow the Commission and other market observers to identify and remedy potentially manipulative activity more actively by tracking price movement in the context of natural gas flows. 63 In particular, information regarding availability on intrastate pipelines could be used to track manipulative or unduly discriminatory behavior intended to cause harm to consumers by distorting market prices in interstate commerce. For example, Commission staff overseeing markets routinely check for unused interstate pipeline capacity between geographically distinct markets with substantially different prices as a sign that flows may be managed to manipulate prices. Given the importance of intrastate pipeline connections to 13 major pricing hubs, including Henry Hub, as discussed above, the lack of flow information on intrastate pipelines hinders the Commission's market oversight and enforcement efforts. 63 See Prohibition of Energy Market Manipulation, Order No. 670, 71 FR 4244 (Jan. 26, 2006), FERC Stats. & Regs. ¶ 31,202
(2006)(implementing section 4A of the Natural Gas Act, *to be codified at* 15 U.S.C. 717c-1, which prohibits natural gas market manipulation), *reh'g denied* , 114 FERC ¶ 61,300 (2006). 37. This benefit comports with EPAct 2005, in which Congress directed the Commission to facilitate price transparency in physical, interstate natural gas markets “with due regard for the public interest, the integrity of those markets, fair competition, and the protection of consumers.” 64 By this language, Congress intended that the improvement of Commission market oversight activities is a legitimate justification for proposing rules under the natural gas transparency provisions. Monitoring and preventing manipulative or unduly discriminatory activity would meet the Commission's responsibility for ensuring the integrity of the physical interstate natural gas markets. The proposal to make intrastate pipeline information available to the public would assist the Commission in fulfilling that responsibility. 64 Section 23(a)(1) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(1). D. Solicitation of Comments 38. The Commission seeks comments on its proposal to be codified in subpart A of part 284 of the Commission's regulations that intrastate pipelines be required to post daily to the Internet the capacities of, and volumes flowing through their major receipt and delivery points and mainline segments. 65 In particular, the Commission seeks comment on whether market participants believe that the posting of flow information on intrastate pipelines would provide valuable additional information on supply and demand fundamentals for interstate markets and whether such information would be sufficient. The Commission also seeks comment on the burden this proposal would impose on intrastate pipelines. Those providing burden estimates should provide support for their estimate and compare that estimate to the burden currently borne by interstate pipelines that report capacity availability pursuant to § 284.13(d) of the Commission's regulations. 65 The Commission is not proposing to amend subparts C and D of part 284, because those subparts govern interstate transactions by intrastate pipelines under the authority of the Natural Gas Policy Act. The instant proposal is based on the Commission's Natural Gas Act jurisdiction as amended by EPAct 2005. 39. The Commission seeks comment on how to define “major” receipt and delivery points and mainline segments on intrastate systems. The Commission does not wish to include extremely small points connected to one or a few customers, which it would consider burdensome and possibly even anti-competitive in certain cases. 40. The proposal does not make an exception for intrastate pipelines transporting *de minimis* volumes. Although the natural gas transparency provisions mandate that the Commission create an exception from reporting requirements for “natural gas producers, processors, or users who have a *de minimis* market presence,” they do not mandate a *de minimis* exception for natural gas pipelines. 66 The Commission seeks comment on whether the Commission should create a *de minimis* threshold under which certain intrastate pipelines should not be required to report or should create a method for certain intrastate pipelines to seek waiver of these requirements. How would such a *de minimis* threshold be measured, for instance, by throughput volume? The Commission also seeks comment on whether the proposed flow posting requirements should apply to all intrastate pipelines, or whether it should be limited to intrastate pipelines in states where a significant percentage of supply and demand information is not observable through current interstate pipeline posting requirements. 66 Section 23(d)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(d)(2). 41. The Commission seeks comment on the difference in approach applied to intrastate and interstate pipelines by requiring intrastate pipelines to post actual natural gas flows instead of scheduled flows. Should the Commission require intrastate pipelines to post information about capacity availability at major points on a daily basis, similar, or identical, to the information that interstate pipelines are required to post under § 284.13(c)? Is it possible to determine major intrastate pipeline flows using schedule information? 42. Regarding the method of posting, the Commission seeks comment on the format for posting flow information by intrastate pipelines, including whether intrastate pipelines should follow the standards of the North American Energy Standards Board. If not, what additional accommodations would need to be made for their different operations? Further, how would § 284.12, which outlines formatting requirements for interstate pipeline postings be modified to accommodate intrastate pipelines and to accommodate posting of flow information as opposed to scheduling information? Also, the timing in the proposal requires the posting of flow information within 24 hours from the close of the gas day on which gas flows ( *i.e.* , on or before 9 a.m. central clock time for flows occurring on the gas day that ended 24 hours before). Does this timing create an undue burden? Is it sufficiently timely? 43. Finally, the Commission seeks comment on whether it should revise the posting requirements applicable to interstate pipelines provided in § 284.13(d)(1) of the Commission's regulations. 67 Since those posting requirements were mandated, have there been changes in technology or the marketplace that justify changing the posting requirements for interstate pipelines? In addition to current posting requirements, should interstate pipelines be required to post actual flow information as we propose to require intrastate pipelines to do? Would posting of actual flow information provide useful information regarding actual capacity use, for instance, by providing information regarding no-notice service? 67 18 CFR 284.13(d)(1). V. Annual Reporting of Natural Gas Transactions A. Proposal 44. The Commission proposes that buyers and sellers of more than a *de minimis* volume of natural gas be required to report aggregate numbers and volumes of relevant transactions in an annual filing using an electronic form to be provided by the Commission on its Internet Web page. This proposal would be codified at § 260.401 of the Commission's regulations. This information would provide regularly an estimate of
(a)the size of the physical domestic natural gas market,
(b)the use of index pricing in that market,
(c)the size of the fixed-price trading market that produces price indices, and
(d)the relative size of major traders. Although the natural gas transparency provisions authorize the Commission to require reporting of detailed transaction-by-transaction information, the Commission proposes obtaining this more limited set of information designed to assess the market. The requirement would be applied to companies both traditionally jurisdictional to the Commission and others. This form would also serve to identify users of blanket certificates and document their reporting status as required under § 284.403(c) and § 284.288(a), discussed further below. A proposed form for the report is set forth in Appendix A. 68 68 Pursuant to § 375.314(f) and (g), the Director of the Office of Enforcement or the Director's designee, could deny or grant waivers of the requirements of this form and could act on requests for extensions of time to file the form. 18 CFR 375.314(f) and (g). The Commission anticipates directing staff to make changes to the format of the form. *Cf. Revised Public Utility Filing Requirements* , 106 FERC ¶ 61,281
(2004)(directing staff to make future changes to the Electric Quarterly Reports). 45. Under the proposed reporting requirement, certain natural gas buyers and sellers would identify themselves to the Commission and report summary information about physical natural gas transactions for the previous calendar year including:
(a)Their total amount of physical 69 natural gas transactions by number and volume;
(b)the breakdown of their transactions by purchases and sales;
(c)the number and volume breakdown of their purchases and sales by whether they were conducted in monthly or daily spot markets; and
(d)the number and volume breakdown of their purchases and sales by type of pricing, in particular whether that pricing was fixed or indexed. 69 Although the standard contract for the most significant natural gas futures market traded on the New York Mercantile Exchange (NYMEX) requires physical delivery, the vast majority of those transactions do not go to delivery. For the purposes of this proposal, and despite the particulars of the futures contract language, we intend to explicitly exclude volumes of futures transactions from consideration. Indeed, information about volumes of futures transactions is already publicly available through a variety of commercial means or directly through NYMEX at *http://www.nymex.com* , so collection of the information would be redundant and unnecessary. 46. In addition, a natural gas seller would be required to state whether it operates under blanket certificate authority under § 284.402 of the Commission's regulations, and whether it reports transactions to price index publishers and whether any such reporting complies with the standards provided in § 284.403(a). Similarly, an interstate pipeline would be required to state whether it operates under blanket certificate authority under § 284.284 of the Commission's regulations, and whether it reports transactions to price index publishers and whether any such reporting complies with the standards provided in § 284.288(a). 70 70 The Commission recognizes that few if any interstate natural gas pipelines still make wholesale sales. Nevertheless, if they were to sell gas at wholesale in interstate commerce, they would be subject to the proposed rule. More relevant, of course, is the fact that all of their affiliates making wholesale sales in interstate commerce would be subject to the proposed rule. B. Legal Considerations 47. The Commission intends “physical natural gas transaction” to mean a sale or purchase of natural gas with an obligation to deliver or receive physically, even if the natural gas is not physically transferred due to some offsetting or countervailing trade. Thus, with one explicit exception, even if the transaction does not go to physical delivery, it would still be included as a physical transaction. The exception is physically settled futures contracts. The Commission would require such a contract to be reported only if it actually goes to delivery. Although the language of the natural gas transparency provisions address sales of natural gas, it does not limit the Commission from seeking information about natural gas purchases as well as sales. They are simply different sides of the same transaction. Congress directed the Commission to “facilitate price transparency in markets for the sale * * * of physical natural gas in interstate commerce,” but that language does not limit the Commission to seeking information regarding only sales. 71 Purchases of physical natural gas are also a part of such markets; there is no market for the sale of natural gas that does not include purchases. Nor does the natural gas transparency provision language that provides for the “dissemination * * * of information about the availability and prices of natural gas *sold* at wholesale and interstate commerce” restrict the Commission. 72 As a practical matter, information regarding purchases of natural gas is necessary to evaluate the reliability of information regarding sales of natural gas. Both types of information are necessary to obtain a useful gauge of price transparency in natural gas markets. 71 Section 23(a)(1) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(1). 72 Section 23(a)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(2) (emphasis added). 48. Further, in its Policy Statement, the Commission states that data providers should provide both sale and purchase information to price index developers. 73 As the Policy Statement and related Commission initiatives were major Commission proceedings regarding this topic, we can presume that Congress was aware of this Policy Statement when it wrote the transparency provisions and, thus, contemplated that the Commission would continue its practice of seeking both sale and purchase information in facilitating price transparency. 73 Policy Statement on Price Indices at P 34. 49. The proposed public nature of the filings would comport with the transparency provisions which require that any such rules “provide for the dissemination, on a timely basis, of information * * * to the public.” 74 The transparency provisions further direct the Commission to “rely on [existing price publishers and providers of trade processing services] to the maximum extent possible.” 75 By requiring public filings by market participants, the Commission would provide an opportunity for trade publications and commercial vendors to aggregate the information and provide any analysis should a desire for such services arise in the energy information marketplace. 74 Section 23(a)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(2). 75 Section 23(a)(4) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(4). C. Discussion 50. Because of the way transactions currently take place in the natural gas industry, there is no way to estimate in even the broadest terms the overall size of the natural gas market or its breakdown by types of contract provision, including pricing and term ( *e.g.* , spot or longer term forwards). 76 More particularly, there is no way to determine important volumetric relationships between the fixed-price day-or month-ahead transactions that form price indices or to determine the use of price indices themselves. As noted by the price index developer Platt's, the question of what is the total size of the traded market has “hung over the gas market for years.” 77 Without the most basic of volumetric information, the Commission has been hampered in its oversight and its ability to assess the adequacy of price-forming transactions. Market participants are likewise unable to evaluate their use of indexed transactions. Typically, market participants rely on index-price transactions as a way to reference market prices without taking on the risks of active trading. These market participants rely on index prices, often whether or not those prices are derived from a robust market of fixed-price transactions. 76 In its supplemental comments, Platt's provided information regarding its use of physical basis transactions in compiling monthly indices. Supplemental Comments of Platt's, *Transparency Provisions of the Energy Policy Act,* Docket No. AD06-11-000 (filed Feb. 23, 2007). 77 Comments of Platt's, at 6, *Transparency Provisions of the Energy Policy Act,* Docket No. AD06-11-000, (filed Nov. 1, 2006). 51. Price formation in natural gas markets makes no distinction between transactions that are jurisdictional to the Commission under the Natural Gas Act absent new section 23 of that statute and those that are not. As discussed above, generally, while the Commission's traditional jurisdiction arising from sections 3 through 10 of the Natural Gas Act is limited to “natural gas compan[ies],” 78 this limitation is not applicable to the Commission's jurisdiction under new section 23 of the Natural Gas Act, 79 the natural gas transparency provisions. As a consequence, in order to assess the size and structure of U.S. natural gas markets, information is required from transacting companies whether or not they fall under the Commission's traditional jurisdiction. 78 *See* , 15 U.S.C. 717b-717i (2000). 79 *To be codified at* 15 U.S.C. 717t-2. 52. Notwithstanding Congress's broadening of the scope of the Commission's jurisdiction in new section 23 of the Natural Gas Act with respect to transparency, Congress also mandated that the Commission exempt “natural gas producers, processors or users who have a *de minimis* market presence [from compliance] with the reporting requirements of this section.” 80 In establishing a *de minimis* threshold for reporting, which would apply to all market participants, the Commission seeks to require reporting from only those market participants whose transactions could have an effect on the price for the sale of physical natural gas in interstate commerce and to obtain reporting from a sufficient number of market participants to ensure, in the aggregate, an accurate picture of the physical natural gas market as a whole. To this end, we propose to define such a *de minimis* market participant as a market participant that engages in physical natural gas transactions that amount by volume to *less* than 2,200,000 MMBtus annually. 81 This figure is based on the rather simple calculation of one-ten thousandth ( 1/10,000 th ) of the annual physical volumes consumed in the United States, which is approximately 22 trillion cubic feet
(Tcf)(or roughly 22,000,000,000 MMBtus). 82 Consequently, a *de minimis* market participant would trade the equivalent of less than one standard NYMEX futures contract per day. Although a market participant that contracts for 1/10,000 th of the nation's annual physical volume may appear to have little effect on natural gas prices, that participant may be transacting only at one location and, thus, have a much greater pricing effect there. Although we do not expect annual physical volumes consumed in the United States to remain constant, the figure of 22 Tcf is a useful snapshot of consumption and a useful starting-point for setting the *de minimis* exemption. 80 Section 23(d)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(d)(2). 81 Proposed 18 CFR 284.401 (defining *de minimis* market participant). The Commission proposes to define a market participant as “any buyer or seller that engaged in physical natural gas transactions for the previous calendar year.” Proposed 18 CFR 284.401. 82 Department of Energy, Energy Information Administration, Natural Gas Summary, Data Series: Total Consumption, 2006, *http://tonto.eia.doe.gov/dnav/ng/ng_sum_lsum_dcu_nus_a.htm.* 53. The proposed reporting requirement would also shift the notification regarding the index reporting practices of companies selling under blanket certificates to this annual form and away from the prior practice of a letter notification upon a change in company policy. Consequently, if a market participant makes use of its blanket certificate authority, even if its sales are *de minimis* , it would still be required to report, but only its identification information, whether it reports transaction information to price index publishers, and whether any such reporting complies with the regulations governing reporting to price index publishers. This proposal would be codified at § 284.403(a) for blanket marketing certificate holders and at § 284.288(a) for interstate pipelines with unbundled sales service certificates. The Commission would impose these requirements on all blanket certificate holders regardless of size. 83 83 The Commission makes this proposal under section 4, 5 and 7 of the Natural Gas Act, 15 U.S.C. 717c, 717d, and 717f (2000), and, thus, is not required to create a *de minimis* exception for holders of blanket marketing certificates or for interstate pipelines that have blanket unbundled sales services certificates. 54. In Order No. 644, the Commission required each holder of blanket marketing certificate authority to notify the Commission whether it engages in reporting of its transactions to publishers of electricity or natural gas price indices according to the standards set out in the Commission's Policy Statement on Price Indices. 84 Pursuant to § 284.403(a) of the Commission's regulations, if a holder of a blanket marketing certificate changes its reporting standards, it is required to report that change to the Commission. 85 Pursuant to § 284.288(a) of the Commission's regulations, if an interstate pipeline that holds blanket unbundled sales service certificate, it is similarly required to report that change to the Commission. 84 Order No. 644 at P 70-72. 85 18 CFR 284.403(a). 55. Several data providers asked for clarification as to whether they may report certain classes of products traded, but not others. In one instance, related to electricity, the data provider was reporting all transactions other than next-hour electric transactions. 86 We clarify that a data provider remains eligible for the safe harbor provisions if it reports certain products but not others, provided that it provides all of the same type of transactions and that it notifies the Commission which products it will report in its annual filing or other notification. A data provider would be required to notify the commission of any change in the types of products it reports within 15 days of any such change. We intend to reiterate this clarification in the preamble of any final rule issued in these proceedings. 86 See, Pinnacle West Capital Corporation and Pinnacle West Marketing and Trading Co., LLC, *Investigation of Terms and Conditions of Market-Based Rate Tariffs and Authorizations* , Docket No. EL01-118-000 (filed Feb. 12, 2007). 56. At the October 13, 2006 technical conference, several participants called for mandatory reporting of all fixed-price transactions. 87 Mandatory reporting would appear to provide additional benefits in that it could assist in determining whether the price indices are an accurate reflection of underlying fixed-price trading. Market participants, State commissions, and this Commission could gain a clearer sense of the volume and number of natural gas transactions that form prices by location and duration. For the following reasons, however, we believe that mandatory reporting is not appropriate at this time. 87 Tr. at 13-14 (Ms. Lewis-Raymond on behalf of the American Gas Association) (calling for mandatory reporting of fixed-price trades); Tr. at 18-19 (Mr. Les Fyock on behalf of the American Public Gas Association (APGA)) (calling for mandatory price reporting); Comments of the APGA, *Transparency Provisions of the Energy Policy Act* , Docket No. AD06-11-000 (filed Nov. 1, 2006) (same). 57. First, mandatory reporting of certain transactions would create an incentive for wholesale buyers and sellers to consider structuring transactions based on avoiding reporting requirements rather than simply on the economics of the transaction. Even very subtle shifts in the form of transactions could easily make them non-reportable in any pre-defined system. For instance, if the Commission required reporting of fixed-price, day-ahead transactions, market participants could create two-day transactions, achieve substantially the same economic result and avoid reporting. 58. Second, buyers and sellers might shift away from fixed-price transactions to indexed-price transactions. Fixed-price transactions could easily decrease to the point that indices that rely on them would no longer represent reliable indicators of the market. Such indices would likely become more volatile as they moved more in response to fewer transactions. At the October 13, 2006 technical conference, several panelists raised similar concerns and advocated against mandatory price reporting. 88 88 See, *e.g.* , Tr. at 12-13 (Mr. Christopher Conway on behalf of Conoco-Phillips Gas and Power, the Natural Gas Supply Association, and the Independent Producers Association of America) (asserting that mandatory price reporting could drive market participants away from reportable transactions, thereby, possibly reducing liquidity); Tr. at 35-36, 38-39 (Mr. Alex Strawn on behalf of the Process Gas Consumers Group) (asserting that mandatory reporting of fixed price transactions would drive market participants to use index-price transactions, thereby, reducing liquidity); Comments of Independent Petroleum Association of America, at p. 3, *Transparency Provisions of the Energy Policy Act* , Docket No. AD06-11-000 (filed Nov. 1, 2006) (mandatory reporting would push market participants away from reportable transactions and cause them to do more index-price transactions); Comments of Natural Gas Supply Association, *Transparency Provisions of the Energy Policy Act* , Docket No. AD06-11-000 (filed Nov. 1, 2006) (similar). 59. Third, broad availability of detailed transaction data might prove to be anticompetitive. By contrast, our proposal herein is intended to adhere to the requirement provided in section 23 of the Natural Gas Act that the Commission “shall seek to ensure that consumers and competitive markets are protected from the adverse effects of potential collusion or other anticompetitive behaviors that can be facilitated by untimely public disclosure of transaction-specific information.” 89 In its comments in these proceedings, the Department of Justice echoed this caution, stating that the Commission “may be able to achieve the benefits of transparency while limiting its potential harm by aggregating, masking, and lagging the release of such information.” 90 The Commission's proposal would not provide for the collection and disclosure of “transaction-specific information.” The proposal is intended to avoid facilitating anti-competitive behavior in several ways:
(i)Reported information would not include specific price information;
(ii)reported information would be aggregated information over a period of one year and not transaction-specific information; and
(iii)reported information would be made on an aggregated, national level, and not by point or even region. 89 Section 23(b)(2) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(b)(2). 90 Comments of the Department of Justice, Antitrust Division, *Transparency Provisions of the Energy Policy Act* , Docket No. AD06-11-000 (filed Jan. 25, 2007). The Department of Justice's comments focused on the electricity markets, although it did note that the same general considerations that applied to electricity markets also applied to natural gas markets. 60. The Commission also does not propose that market participants report information regarding their financially-settled transactions nor regarding their physically-settled futures contracts that do not go to delivery. 91 The Commission has noted significant interactions among financial, futures and physical natural gas markets. 92 The most direct and important influence of this type on physical markets is from the futures market, which is regulated by the Commodities Futures Trading Commission (CFTC). The CFTC actively monitors that market, and communicates regularly with the Commission regarding market matters. 93 91 See, *e.g.* , Tr. at 22-24, Comments of Industrial Energy Consumers of America, (arguing that because the physical and financial natural gas markets are linked, the Commission and the Commodity Futures Trading Commission should make Over-the-Counter markets more transparent.) 92 Federal Energy Regulatory Commission, 2006 State of the Markets Report, at 48-50 (Jan. 2007), *http://www.ferc.gov/market-oversight/market-oversight.asp* , (follow link to the State of the Markets Full Report). 93 In the transparency provisions, Congress mandated that this Commission and the CFTC conclude a memorandum of understanding relating to information sharing to include “provisions ensuring that information requests to markets within the respective jurisdiction of each agency are properly coordinated to minimize duplicative information requests, and provisions regarding the treatment of proprietary trading information.” Section 23(c)(1) of the Natural Gas Act, 15 U.S.C. 717t-2(c)(1); *see also* section 220(c)(1) of the Federal Power Act, 16 U.S.C. 824t(c)(1) (identical language). The Commission and the CFTC entered into the memorandum of understanding on October 12, 2005. *Memorandum of Understanding Between FERC and the CFTC Regarding Information Sharing And Treatment Of Proprietary Trading And Other Information* , available at *http://www.ferc.gov/legal/maj-ord-reg/fed-sta/ene-pol-act.asp* (follow “Interagency/Tribal,” then, “MOU”). 61. By obtaining the number and volume of transactions conducted for each market participant, the Commission, market participants and others would be able to determine the overall level of activity of market participants in the physical natural gas market. In particular, the information would provide regularly an estimate of
(a)The size of the physical U.S. domestic natural gas market,
(b)the use of index pricing in that market,
(c)the size of the fixed-price trading market that produces price indices, and
(d)the relative sizes of major traders. 62. The information provided through the Commission's proposal would improve the understanding of index pricing by interested entities, including the market participants and State energy regulators who use them. The number and volume break-down of transactions by price type, fixed-price or index-price, should permit an overall assessment of the ratio of index-using transactions to price-forming transactions, *i.e.* , fixed-price transactions. At present, we do not know how much fixed-price transactions are a part of the universe of natural gas transactions, although they may be the minority of natural gas transactions. 94 94 Tr. at 32 (Comments of Ms. Jane Lewis-Raymond, American Gas Association) (surmising that we currently cannot know the amount of fixed-price transactions and the amount of fixed-price trades that make up an index). 63. As noted in the introduction, the Commission has taken several steps to restore confidence in natural gas index prices and their formation. 95 By obtaining information regarding the extent that market participants make fixed-price transactions, market participants would be able to evaluate their confidence in the index prices that are formed by those fixed-price transactions. By collecting sales and purchases information, results could also be cross-checked to ensure that information was accurate. In effect, total sales should roughly equal total purchases, with some allowance for *de minimis* buyers and sellers. 95 *See supra* , notes 5-11. 64. The Commission also proposes to require a holder of blanket market certificates or an interstate pipeline with an unbundled sales service certificate to notify the Commission annually about its reporting of transaction information to price index publishers and whether any such reporting conforms to the Policy Statement. After the Policy Statement's notification requirement took effect, we observed that blanket marketing certificate holders may have overlooked this requirement and we provided the opportunity for blanket marketing certificate holders to notify the Commission by August 1, 2005 of their reporting status. 96 Based on Commission staff's experience monitoring price indices and adherence to the Policy Statement, as discussed in the introduction, the Commission believes that notification on an annual basis would make the information more reliable. As a further benefit, notifying companies would have the opportunity to review their practices in coordination with their response to the data collection proposal described above. 96 Order on Further Clarification of Policy Statement at P 21. D. Solicitation of Comments 65. The Commission seeks comment on this proposal, including whether market participant responses to the questions would provide useful information to market participants, State commissions, this Commission and the public in understanding the natural gas market, the price formation process, and the use of price indices. 66. In particular, the Commission encourages market participants to review the questions (in draft form at Appendix A) and determine whether they would result in useful information for understanding the prices and availability of physical natural gas in interstate commerce. What adjustments might improve these questions? What alternative or additional questions might add sufficient information to justify additional burden on filers? Does the format for responses ensure consistency for aggregation and analysis? The Commission anticipates holding meetings, if needed, to consider the details of this annual filing requirement. 67. The Commission seeks comment on its proposed definition of a *de minimis* market participant. Is this threshold sufficiently low to permit a comprehensive picture of the U.S. wholesale natural gas market? Is it sufficiently high so that persons or municipalities not able to prices of natural gas in interstate commerce are not required to report? Is there another, more effective bright-line measure that allows market participants to determine easily whether they are exempt? Further, the Commission seeks comment on the burden this proposal would impose on market participants. For instance, is it unduly burdensome for market participants to file the information by February 15 of each year? 68. The Commission seeks comments on its proposal that buyers and sellers of more than a *de minimis* volume of natural gas be required to report aggregate numbers and volumes of relevant transactions in an annual filing with the Commission. Does information regarding purchases of natural gas at wholesale “facilitate price transparency in markets for the sale and transportation of physical natural gas in interstate commerce,” as provided in the natural gas transparency provisions? 97 97 Section 23(a)(1) of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(1). 69. The Commission seeks comment on whether reporting information aggregated by calendar year is adequate. Would a monthly breakdown create an undue burden compared to providing the information by calendar year? Would it provide a better understanding of the physical natural gas market given the seasonal nature of the market? 70. The Commission seeks comment on the proposed modifications to the notification requirements regarding reporting of transactions to publishers of price indices imposed on those entities who hold blanket marketing certificates in proposed § 284.403(a) and imposed on intrastate pipelines with blanket unbundled sales service certificates in proposed § 284.288(a). Also, as currently codified, those sections refer to the procedural requirements for reporting to publishers of price indices “set forth in the Policy Statement on Electric and Natural Gas Price Indices, issued by the Commission in PL03-3-000 and any clarifications thereto.” 98 Instead of referring to policy statements in that proceeding for the procedural requirements, should the Commission codify in the regulations the procedural requirements that such reporting entities must follow in reporting transactions to publishers of electric and natural gas price indices? 98 18 CFR 284.403(a); * see, also* , 18 CFR 284.288(a) (identical language). 71. The Commission seeks comment on making public participant responses to these questions through public filing requirements. Commenters who suggest an alternate method, such as aggregating data received before disseminating it to the public, should address whether such an approach meets the objectives of the statute sufficiently. 72. The Commission seeks comment on whether, in lieu of this proposal, to require mandatory, detailed transaction reporting by market participants. Commenters should address the burdens and benefits of such an approach. Commenters supporting mandatory reporting of transactions should address the cautions set forth in the natural gas transparency provisions and echoed by the Department of Justice in the discussion above. If detailed transaction reporting were mandatory, could these concerns be addressed by making the reporting non-public, aggregating the reported information, and disseminating publicly only the aggregated information (either by the Commission or, as contemplated in the natural gas transparency provisions, by other entities) subject to sufficient disclosure rules? 99 99 Section 23(a)(3)(B) and
(b)of the Natural Gas Act, *to be codified at* 15 U.S.C. 717t-2(a)(3)(B) and (b). VI. Information Collection Statement 73. The Office of Management and Budget
(OMB)regulations require it to approve certain reporting and recordkeeping (information collection) requirements imposed by an agency. 100 In this NOPR, the Commission makes two proposals that would require the posting or collection of information. 101 The Commission is submitting notification of these proposed information collection requirements to OMB for its review and approval under section 3507(d) of the Paperwork Reduction Act of 1995. 102 100 5 CFR 1320.11. 101 The OMB regulations cover both the collection of information and the posting of information. 5 CFR 1320.3(c). Thus, the proposal to post information would create an information collection burden. 102 44 U.S.C. 3507(d). 74. The proposal to require intrastate pipelines to post flow information would impose an information collection burden on intrastate pipelines. We presume that intrastate pipelines already collect flow information for receipt and delivery points and, thus, the burden that would be imposed by this proposed requirement is only for the posting of this information in the required format. 103 The proposal to require market participants to file annually a form regarding their physical natural gas transactions would impose an information collection burden on market participants. Again, we presume that market participants already collect transaction information and, thus, the burden imposed by this proposed requirement is only for completing and submitting the form. 103 See 5 CFR 1320.3(b)(2) (“The time, effort, and financial resources necessary to comply with a collection of information that would be incurred by persons in the normal course of their activities ( *e.g.* , in compiling and maintaining business records) will be excluded from the “burden” if the agency demonstrates that the reporting, recordkeeping, or disclosure activities needed to comply are usual and customary.”) 75. OMB regulations require OMB to approve certain information collection requirements imposed by agency rule. The Commission is submitting notification of this proposed rule to OMB. *Public Reporting Burden:* The start-up and annual burden estimates for complying with this proposed rule are as follows: Data collection Number of respondents Number of responses per respondent (per year) Estimated annual burden hours per respondent (hours) Total annual hours for all respondents Estimated start-up burden per respondent (hours) Part 284 FERC-xxx: Intrastate Pipeline Postings 179 365 183 32,757 160 Annual Reporting Requirement 1,500 1 4 6,000 40 Total 38,757 The total annual hours for collection (including recordkeeping) for all respondents is estimated to be 38,757. *Information Collection Costs:* The average annualized cost for each respondent is projected to be the following (savings in parenthesis): Annualized capital/startup costs (10 year amortization) Annual costs Annualized costs total FERC-xxx: Intrastate Pipeline Postings $1,600 $18,300 $19,900 Transaction Reporting Requirement 400 400 800 *Title:* FERC-xxx. *Action:* Proposed Information Posting and Information Filing. *OMB Control No:* *Respondents:* Business or other for profit. *Frequency of Responses:* Daily posting requirements and annual filing requirements. *Necessity of the Information:* The daily posting of flow information by intrastate pipelines is necessary to provide information regarding the price and availability of natural gas to market participants, State commissions, the FERC and the public. The annual filing of transaction information by market participants is necessary to provide information regarding the size of the physical natural gas market, the use of the natural gas spot markets and the use of fixed and index price transactions. *Internal Review:* The Commission has reviewed the requirements pertaining to natural gas pipelines and natural gas market participants and determined they are necessary to provide price and availability information regarding the sale of natural gas in interstate markets. 76. These requirements conform to the Commission's plan for efficient information collection, communication, and management within the natural gas industry. The Commission has assured itself, by means of internal review, that there is specific, objective support for the burden estimates associated with the information posting requirements. The Commission seeks comment on these estimates. 77. 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]. 78. Comments on the requirements of the proposed rule may also be sent to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission]
(202)395-4650 or *oira_submission@omb.eop.gov.* VII. Environmental Analysis 79. 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. 104 The actions taken here fall within categorical exclusions in the Commission's regulations for information gathering, analysis, and dissemination, and for sales, exchange, and transportation of natural gas that requires no construction of facilities. 105 Therefore, an environmental assessment is unnecessary and has not been prepared in this rulemaking. 104 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). 105 18 CFR 380.4(a)(5) and (a)(27). VIII. Regulatory Flexibility Act Analysis 80. The Regulatory Flexibility Act of 1980
(RFA)generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. 106 The two proposals in this NOPR will not have a significant economic impact on a substantial number of small entities. 106 5 U.S.C. 601-612. 81. The proposal to require daily postings by intrastate pipelines will not impact small entities. Natural gas pipelines are classified under NAICS code, 486210, Pipeline Transportation of Natural Gas. 107 A natural gas pipeline is considered a small entity for the purposes of the Regulatory Flexibility Act if its average annual receipts are less than $6.5 million. 108 The Commission does not believe that any intrastate pipeline has receipts less than $6.5 million. Thus, the daily posting proposal will not impact small entities. 107 This industry comprises establishments primarily engaged in the pipeline transportation of natural gas from processing plants to local distribution systems. 2002 North American Industry Classification System (NAICS) Definitions, *http://www.census.gov/epcd/naics02/def/ND486210.HTM* . 108 See Table of Small Business Size Standards, U.S. Small Business Administration (effective July 31, 2006), available at *http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf* . 82. The proposal to require annual reporting of physical natural gas transactions will have minimal impact on small entities. 109 By incorporating a *de minimis* exemption into the regulations, the Commission has reduced the number of small entities subject to the requirements; *de minimis* entities without blanket certificates will not be required to report. This reporting proposal will affect small entities but the burden on them will be minimal. For each entity, small or otherwise, that is required to comply with the annual reporting requirement, the Commission estimates that the compliance would require a one-time cost of approximately $4,000 and an annual cost thereafter of $400. Although some costs would increase for market participants with a greater number of transactions, we expect that that increase would be likely offset because such entities would have already compiled information regarding their transactions in the aggregate. The Commission bases its one-time cost estimate on an assumption that it would take approximately one person one week to set up the reporting and file the report initially and that their time costs $100 per hour. The Commission bases its annual estimate on an assumption that it would take one person four hours to compile the information and that his or her time costs $100 per hour. On an annualized basis, costs would amount to approximately $1,200 per entity. This amount is not a significant burden on small entities. The Commission seeks comment on its Regulatory Flexibility Act analysis and the assumptions on which it is based. 109 For the purposes of analyzing the impact of the proposed filing requirement on small entities, the Commission classifies market participants under the NAICS category of “Natural Gas Distribution,” Code 221210, which includes gas marketers, and establishments engaged in gas distribution. Under that classification, a small entity is any entity with less than 500 employees. See Table of Small Business Size Standards, U.S. Small Business Administration (effective July 31, 2006), available at *http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.* IX. Comment Procedures 83. The Commission invites interested persons to submit comments on the matters and issues proposed in this notice to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due June 11, 2007. Reply comments are due July 10, 2007. Comments must refer to Docket No. RM07-10-000, and must include the commenter's name, the organization they represent, if applicable, and their address in their comments. Comments may be filed either in electronic or paper format. 84. Comments may be filed electronically via the eFiling link on the Commission's Web site at *http://www.ferc.gov.* The Commission accepts most standard word processing formats and requests commenters to submit comments in a text-searchable format rather than a scanned image format. Commenters filing electronically do not need to make a paper filing. Commenters that are not able to file comments electronically must send an original and 14 copies of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street, NE., Washington, DC 20426. 85. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters. X. Document Availability 86. 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. 87. 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. 88. User assistance is available for eLibrary and the FERC's Web site 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.* List of Subjects 18 CFR Part 260 Natural gas; Reporting and recordkeeping requirements. 18 CFR Part 284 Continental Shelf; Incorporation by reference; Natural gas; Reporting and recordkeeping requirements. By direction of the Commission. Philis J. Posey, Deputy Secretary. In consideration of the foregoing, the Commission proposes to amend parts 260 and 284 Chapter I, Title 18, Code of Federal Regulations, to read as follows. PART 260—STATEMENTS AND REPORTS (SCHEDULES) 1. The authority citation for part 260 continues to read as follows: Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352. 2. Section 260.401 is added to read as follows: § 260.401 FERC Form No. [X], Annual Reporting of Natural Gas Transactions and Blanket Certificate Authorities. Unless otherwise exempted or granted a waiver by Commission rule or order, each natural gas market participant that is not a *de minimis* market participant as defined in § 284.401 of this chapter and each *de minimis* market participant that holds a blanket marketing certificate under § 284.402 of this chapter or a blanket unbundled sales service certificate under § 284.284 of this chapter must file with the Commission by February 15, 2008, and by February 15 of each year thereafter, a report, FERC Form No. [X], for the prior calendar year. Every such report must be prepared in conformance with the Commission's software and guidance posted and available for downloading from the FERC Web site ( *http://www.ferc.gov* ). PART 284—CERTAIN SALES AND TRANSPORATION OF NATURAL GAS UNDER THE NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES 3. The authority citation for part 284 continues to read as follows: Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352; 43 U.S.C. 1331-1356. 4. Section 284.14 is added to read as follows: § 284.14 Intrastate pipeline flow information. An intrastate pipeline must provide on a daily basis on an Internet Web site and in downloadable file formats, in conformity with § 284.12 of this chapter, access to information on flowing volumes and capacities at each major receipt point, mainline segment, and delivery point on its pipeline. This information must be posted within 24 hours from the close of the gas day on which gas flows, *i.e.* , on or before 9:00 a.m. central clock time for flows occurring on the gas day that ended 24 hours before. 5. In § 284.288, paragraph
(a)is revised to read as follows: § 284.288 Code of conduct for unbundled sales service.
(a)To the extent Seller engages in reporting of transactions to publishers of electricity or natural gas indices, Seller shall provide accurate and factual information, and not knowingly submit false or misleading information or omit material information to any such publisher, by reporting its transactions in a manner consistent with the procedures set forth in the *Policy Statement on Natural Gas and Electric Price Indices,* issued by the Commission in Docket No. PL03-3-000 and any clarifications thereto. Seller shall notify the Commission as part of its annual reporting requirement in § 260.401 of this chapter whether it reports its transactions to publishers of electricity and natural gas indices. Seller shall notify the Commission within 15 days of any subsequent change to its transaction reporting status. In addition, Seller shall adhere to such other standards and requirements for price reporting as the Commission may order. 6. In § 284.401, definitions of “ *de minimis* market participant” and “market participant” are added in alphabetical order to read as follows: § 284.401 Definitions. *De minimis market participant* . For purposes of this subpart, a *de minimis* market participant is a market participant that engaged in physical natural gas transactions that by volume amounted to less than 2,200,000 MMBtus for the previous calendar year. *Market participant* . For purposes of this subpart, a market participant is any buyer or seller that engaged in physical natural gas transactions the previous calendar year. 7. In § 284.403, paragraph
(a)is revised to read as follows: § 284.403 Code of conduct for persons holding blanket marketing certificates.
(a)To the extent Seller engages in reporting of transactions to publishers of electricity or natural gas indices, Seller shall provide accurate and factual information, and not knowingly submit false or misleading information or omit material information to any such publisher, by reporting its transactions in a manner consistent with the procedures set forth in the *Policy Statement on Natural Gas and Electric Price Indices* , issued by the Commission in Docket No. PL03-3-000 and any clarifications thereto. Seller shall notify the Commission as part of its annual reporting requirement in § 260.401 of this chapter whether it reports its transactions to publishers of electricity and natural gas indices. Seller shall notify the Commission within 15 days of any subsequent change to its transaction reporting status. In addition, Seller shall adhere to such other standards and requirements for price reporting as the Commission may order. Note: The following Appendix will not be published in the *Code of Federal Regulations.* Appendix A to Notice of Proposed Rulemaking—Transparency Provisions of Section 23 of the Natural Gas Act; Transparency Provisions of the Energy Policy Act of 2005, Docket Nos. RM07-10-000 and AD06-11-000: Proposed FERC Form No. [X] Provide accurate and complete responses to the following questions. Purchases by number Purchases by volume (TBtu/Bcf) Sales by number Sales by volume (TBtu/Bcf) A. How much physical gas,* did you transact in the prior calendar year? B. Of the amount reported in Row A, what number and volume are transacted for next-day delivery? C. Of these next-day transactions, what number and volume are priced at a fixed price? D. Of these next-day transactions, what number and volume are priced at an index price? E. Of the amount reported in Row A, what number and volume are transacted for delivery in the next month? F. Of your transactions for delivery in the next month, what number and volume are priced at a fixed price during bid week? ** G. Of your transactions for delivery in the next month, what number and volume are priced at an index price? H. Of your transactions for delivery beyond next-day or month, what number and volume are priced using next-day or next-month index prices? * Notwithstanding its physical delivery provisions, for the purposes of this form, exclude NYMEX futures contracts or any other physically-settled futures contract unless the contract actually goes to delivery. ** Bid week is defined as the last 5 working days prior to the delivery month. Please include those transactions in this row. [FR Doc. E7-7822 Filed 4-25-07; 8:45 am] BILLING CODE 6717-01-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 1051 [EPA-HQ-OAR-2006-0858; FRL-8305-7] RIN 2060-A035 Exhaust Emission Test Procedures for All-Terrain Vehicles AGENCY: Environmental Protection Agency (EPA). ACTION: Notice of proposed rulemaking. SUMMARY: In a rule published November 8, 2002, EPA promulgated new emission standards for recreational vehicles beginning in model year 2006. This included a newly regulated class of nonroad vehicles/engines commonly referred to as all-terrain vehicles. In that rulemaking, a temporary provision was included allowing manufacturers to certify all-terrain vehicles over a steady-state, engine-based, duty cycle for exhaust emissions prior to the 2009 model year in lieu of the transient, chassis-based, Federal Test Procedure which was effective for 2006 and later model years. In this rulemaking we are proposing to extend the availability of this temporary provision for in some cases up to an additional six model years, after which the chassis-based Federal Test Procedure would become the only available test cycle. More specifically, manufacturers would have to certify exhaust emission engine families representing not less than 50 percent of their U.S.-directed production on the Federal Test Procedure in model year 2014 and 100 percent in 2015. Manufacturers with only one all-terrain vehicle exhaust emission engine engine family would not be required to use the Federal Test Procedure until the 2015 model year. For those manufacturers who have not yet done so, this will allow additional time to certify to the previously promulgated Federal Test Procedure-based emission standards using either contract facilities or by obtaining in-house capability. DATES: Written comments must be received by May 29, 2007. Request for a public hearing must be received by May 11, 2007. If we receive a request for a public hearing, we will publish information related to the timing and location of the hearing and the timing of a new deadline for public comments. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2006-0858, by one of the following methods: • *www.regulations.gov* : Follow the on-line instructions for submitting comments. • *E-mail: a-and-r-docket@epa.gov* . • *Fax:*
(202)566-1741. • *Mail:* Environmental Protection Agency, Mail Code: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460. Please include two copies. • *Hand Delivery:* EPA Docket Center (Air Docket), U.S. Environmental Protection Agency, EPA West Building, 1301 Constitution Avenue, NW., Room: 3334, Mail Code: 6102T, Washington, DC. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. *Instructions:* Direct your comments to Docket ID No. EPA-HQ-OAR-2006-0858. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *http://www.regulations.gov,* including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through *www.regulations.gov* or e-mail. The *www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *www.regulations.gov,* your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket, visit the EPA Docket Center homepage at *http://www.epa.gov/epahome/dockets.htm.* *Docket:* All documents in the docket are listed in the *www.regulations.gov* index. Although listed in the index, some information is not publicly available, *e.g.* , CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in *www.regulations.gov* or in hard copy at the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Avenue, NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is
(202)566-1744, and the telephone number for the Air Docket is
(202)566-1742. FOR FURTHER INFORMATION CONTACT: Michael Samulski, Assessment and Standards Division, Office of Transportation and Air Quality, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number:
(734)214-4532; fax number:
(734)214-4050; e-mail address: *samulski.michael@epa.gov.* SUPPLEMENTARY INFORMATION: I. General Information In the “Rules and Regulations” section of this **Federal Register** , we are making these revisions as a direct final rule without prior proposal because we view these revisions as noncontroversial and anticipate no adverse comment. We have explained our reasons for these revisions in the preamble to the direct final rule. If we receive no adverse comment, we will not take further action on this proposed rule. If we receive adverse comment on the rule, we will withdraw the direct final rule. We will address all public comments in a subsequent final rule based on this proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. II. Does This Action Apply to Me? This action will affect companies that manufacture and certify all-terrain vehicles in the United States. Category NAICS code a Examples of potentially affected entities Industry 336999 Snowmobiles and all-terrain vehicle manufacturers. Industry 421110 Independent commercial importers of vehicles and parts. a North American Industry Classification System (NAICS). To determine whether particular activities may be affected by this action, you should carefully examine the regulations. You may direct questions regarding the applicability of this action as noted in FOR FURTHER INFORMATION CONTACT . III. What Should I Consider as I Prepare My Comments for EPA? *A. Submitting CBI.* Do not submit this information to EPA through www.regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. *2. Tips for Preparing Your Comments.* When submitting comments, remember to: • Identify the rulemaking by docket number and other identifying information (subject heading, **Federal Register** date and page number). • Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations
(CFR)part or section number. • Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. • Describe any assumptions and provide any technical information and/or data that you used. • If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. • Provide specific examples to illustrate your concerns, and suggest alternatives. • Explain your views as clearly as possible, avoiding the use of profanity or personal threats. • Make sure to submit your comments by the comment period deadline identified. IV. Summary of Rule In a rule published November 8, 2002, EPA promulgated new emission standards for all terrain vehicles
(ATVs)beginning in model year 2006. In that rulemaking, a temporary provision was included allowing manufacturers to certify ATV exhaust emissions over a steady-state, engine-based, duty cycle prior to the 2009 model year in lieu of the transient, chassis-based, Federal Test Procedure
(FTP)which was effective for 2006 and later model years. In the interim the manufacturers, the California Air Resources Board, and EPA were to work together to assess the in-use operating characteristics of ATVs, determine whether the nature of this operation was transient or steady state and, if workable, develop and agree upon an emission test cycle which could replace both the engine-based steady state option and the primary approach, the chassis-based FTP. This work did not result in a mutually satisfactory outcome and agreement could not be reached on an alternate testing approach. Therefore, as prescribed in the 2002 final rule, the chassis-based FTP is to be the sole procedure for exhaust emissions certification in the long term. As stated above, in the original rulemaking the steady state option expired for the 2009 model year. While many manufacturers have certified using the FTP not all have done so, since there was the possibility of a replacement cycle. To provide appropriate certainty and lead time, in this rulemaking we are proposing to extend the availability of this temporary provision for an additional six model years, after which the chassis-based FTP would become the only available approach. More specifically, we are proposing that manufacturers would have to certify exhaust emission engine families representing not less than 50 percent of their U.S.-directed production on the FTP in model year 2014 and 100 percent in 2015. Manufacturers with only one ATV exhaust emission engine family would not be required to use the FTP until the 2015 model year. For those manufacturers who have not yet done so, this will allow additional time to certify on the FTP by using contract facilities or by obtaining the in-house capability and if a large manufacturer acquires the capability to run the production line testing program. EPA does not expect that this revision will have any adverse cost impact to the manufacturers in the long term. The requirement was promulgated as part of the 2002 final rule and many off-shore manufacturers and importers have already complied using excess inhouse capability or contract facilities. We expect this extension will help to ensure compliance costs are minimized and that the emission reductions identified in the 2002 rule are achieved. Even the J1088 test cycle has reduced emissions significantly by eliminating ATVs powered by high emitting two-stroke engines as a new product offering. Adopting the FTP will help to ensure robust emission control in ATVs using 4-stroke engines by including consideration of transient operation and vehicle/engine operation over a wider variety of conditions than that seen in the J1088 cycle. For additional discussion of the proposed rule changes, see the direct final rule EPA has published in the “Rules and Regulations” section of today's **Federal Register** . This proposal incorporates by reference all the reasoning, explanation, and regulatory text from the direct final rule. V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review This proposed rule is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Order. This proposed rule merely gives an extension of time in which a temporary optional test duty cycle may be used. There are no new costs associated with this proposed rule relative to the original final rule. B. Paperwork Reduction Act This action does not impose any new information collection burden. This proposed rule does not include any new collection requirements, as it merely gives an extension of time in which a temporary optional test duty cycle may be used. There are no new paperwork requirements associated with this rule. However, the Office of Management and Budget
(OMB)has previously approved the information collection requirements contained in the existing regulations 40 CFR 1051; 1200 Pennsylvania Ave., NW., Washington, DC 20460 or by calling
(202)566-1672. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act
(RFA)generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this proposed rule on small entities, a small entity is defined as:
(1)A small business that meet the definition for business based on SBA size standards at 13 CFR 121.201;
(2)a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and
(3)a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. After considering the economic impacts of today's proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. This proposed rule would give an extension of time in which a temporary optional test duty cycle may be used. We have therefore concluded that today's proposed rule will relieve regulatory burden for all affected small entities and will not have a significant economic impact on a substantial number of small entities if the rule. We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts. D. Unfunded Mandates Reform Act This proposed rule contains no federal mandates for state, local, or tribal governments or the private sector as defined by the provisions of Title II of the UMRA. The proposed rule imposes no enforceable duties on any of these governmental entities. Nothing in the proposed rule would significantly or uniquely affect small governments. EPA has determined that this proposed rule contains no federal mandates that may result in expenditures of more than $100 million to the private sector in any single year. Thus, this rule is not subject to the requirements of sections 2020 and 205 of the UMRA. This proposed rule merely gives an extension of time in which a temporary optional test duty cycle may be used. EPA has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments. See the direct final rule EPA has published in the “Rules and Regulations” section of today's **Federal Register** for a more extensive discussion of UMRA policy. E. Executive Order 13132: Federalism This proposed rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This proposed rule would give an extension of the time in which a temporary optional test duty cycle may be used. Thus, Executive Order 13132 does not apply to this rule. See the direct final rule EPA has published in the “Rules and Regulations” section of today's **Federal Register** for a more extensive discussion of Executive Order 13132. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments This proposed rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. This proposed rule does not uniquely affect the communities of Indian Tribal Governments. Further, no circumstances specific to such communities exist that would cause an impact on these communities beyond those discussed in the other sections of this rule. This proposed rule would give an extension of the time in which a temporary optional test duty cycle may be used. Thus, Executive Order 13175 does not apply to this rule. See the direct final rule EPA has published in the “Rules and Regulations” section of today's **Federal Register** for a more extensive discussion of Executive Order 13132. G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks This proposed rule is not subject to the Executive Order because it is not economically significant, and does not involve decisions on environmental health or safety risks that may disproportionately affect children. See the direct final rule EPA has published in the “Rules and Regulations” section of today's **Federal Register** for a more extensive discussion of Executive Order 13045. H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use This proposed rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)) because it is not a significant regulatory action under Executive Order 12866. This proposed rule would give an extension of the time in which a temporary optional test duty cycle may be used. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This proposed rule does not involve technical standards. This proposed rule would merely give an extension of the time in which a temporary optional test duty cycle may be used. Therefore, EPA is not considering the use of any voluntary consensus standards. See the direct final rule EPA has published in the “Rules and Regulations” section of today's **Federal Register** for a more extensive discussion of NTTAA policy. J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. See the direct final rule EPA has published in the “Rules and Regulations” section of today's **Federal Register** for a more extensive discussion of Executive Order 13045. K. Statutory Authority The statutory authority for this action comes from section 213 of the Clean Air Act as amended (42 U.S.C. 7547). This action is a notice of proposed rulemaking subject to the provisions of Clean Air Act section 307(d). See 42 U.S.C. 7607(d). List of Subjects in 40 CFR Part 1051 Environmental protection, Air pollution control, Exhaust emission testing, Recreational vehicle, All-terrain vehicle. Dated: April 19, 2007. Stephen L. Johnson, Administrator. [FR Doc. 07-2068 Filed 4-25-07; 8:45 am]