Disclosure and Notice of Change of Rates and Other Service Terms for Pipeline Common Carriage

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Chapter X

[STB Ex Parte No. 538]

Disclosure and Notice of Change of Rates and Other Service Terms

for Pipeline Common Carriage

AGENCY: Surface Transportation Board, DOT.

ACTION: Advance notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The ICC Termination Act of 1995 (ICCTA) eliminated the tariff

and tariff filing requirements formerly applicable to pipeline

carriers, but imposed in lieu thereof certain obligations to disclose

common carriage rates and service terms as well as a requirement for

advance notice of an increase in such rates or change in service terms.

ICCTA requires the Board to promulgate regulations to administer these

new obligations by June 29, 1996. The Board seeks public comment on

appropriate regulations for that purpose, and encourages the affected

interests groups to discuss and seek mutually agreeable regulations to

propose.

DATES: Comments are due on April 15, 1996.

ADDRESSES: Send comments (an original and 10 copies) referring to STB

Ex Parte No. 538 to: Surface Transportation Board, Office of the

Secretary, Case Control Branch, 1201 Constitution Avenue, N.W.,

Washington, DC 20423.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-5610. [TDD for

the hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: The ICC Termination Act of 1995, Pub. L. No.

104-88, 109 Stat. 803 (ICCTA), enacted on December 29, 1995, abolished

the Interstate Commerce Commission (ICC) and transferred the

responsibility for the economic regulation of pipeline transportation

(of commodities other than water, gas, or oil) to a new Surface

Transportation Board (the Board). See ICCTA Section 101 (abolition of

the ICC). See also new 49 U.S.C. 701(a) (establishment of the Board),

as enacted by ICCTA Section 201(a). The transfer took effect on January

1, 1996. See ICCTA Section 2 (effective date).1

\1\ ICCTA also made several changes to the pipeline regulatory

authority that had been exercised by the ICC. In this notice, when

referring to the provisions of the United States Code affected by

ICCTA we use the word former to refer to the law in effect prior to

January 1, 1996, and the word new to refer to the law in effect on

and after January 1, 1996.

---------------------------------------------------------------------------

The substantive provisions of the new law differ in several

important respects from the former law. As pertinent here, the former

law required that pipeline carriers (of commodities other than water,

gas, or oil) file with the ICC tariffs containing the specific rates

and charges (or the basis for calculating them) for their common

carriage transportation services. Pipeline carriers had to adhere to

the rates and terms contained in their tariffs. See former 49 U.S.C.

10761 and 10762. See also 49 CFR Part 1312 (1995).

The ICCTA eliminated the pipeline tariff requirements, effective

January 1, 1996. Accordingly, no new pipeline

[[Page 10527]]

carrier tariffs are to be filed with the Board, and the pipeline

carrier tariffs that were previously filed with the ICC are no longer

effective tariffs as of January 1, 1996. The ICC regulations at 49 CFR

Part 1312 are likewise not effective with respect to transportation

provided by a pipeline carrier on and after that date.

Nevertheless, new 49 U.S.C. 15701 requires both disclosure of

pipeline common carriage rates and service terms and advance notice of

certain changes therein. (These requirements, it must be noted, apply

only to transportation by pipeline of commodities other than water,

gas, or oil). In particular, new 49 U.S.C. 15701(b) requires disclosure

of pipeline common carriage rates and service terms, new 49 U.S.C.

15701(c) requires that pipeline carriers, when providing common

carriage, not increase their rates or change their service terms

without advance notice, and new 49 U.S.C. 15701(d) requires pipeline

carriers to adhere to the rates and service terms published or

otherwise made available under new 49 U.S.C. 15701(b) and/or (c).2

\2\ A central feature of both the former and new law is the

requirement that a pipeline carrier adhere to its established rates.

Therefore, as a transition matter, a question that arises is whether

a pipeline carrier must continue to adhere to its established rates

and service terms--those that were in effect (in tariffs on file

with the ICC) on December 31, 1995--unless and until changed in a

manner consistent with the requirements of new section 15701.

Otherwise, it could be argued that there could be a break in the

continuity of rates that Congress did not intend.

---------------------------------------------------------------------------

New 49 U.S.C. 15701(e) directs the Board to establish rules to

implement the requirements of new 49 U.S.C. 15701. In accordance with

this directive, we intend to promulgate new regulations to implement

the requirements of new 49 U.S.C. 15701(b) and (c). We do not believe

that implementing rules are required for new 49 U.S.C. 15701(a), which

simply reenacts the longstanding common carrier obligation that the

carrier provide transportation or service on reasonable request. We

believe that this obligation, which has been well developed through

case law, is best addressed on a case-by-case basis.

Similarly, our preliminary view is that implementing rules are not

required for new 49 U.S.C. 15701(d), which requires a pipeline carrier

to provide transportation or service in accordance with the rates and

service terms, and any changes thereto, as published or otherwise made

available under new 49 U.S.C. 15701(b) or (c). This requirement appears

to be clear on its face.

The regulations implementing new section 15701 would appear to

apply to any transportation or service provided by a pipeline carrier

subject to our jurisdiction under new 49 U.S.C. 15301, with one

exception. They would not apply, it would seem, to transportation or

service provided by a pipeline carrier covered by an exemption issued

under new 49 U.S.C. 15302, to the extent that such exemption applies to

rate notice and disclosure requirements. We would also again point out

that, under new 49 U.S.C. 15301, the Board has jurisdiction over

transportation by pipeline, or by pipeline and either railroad or

water, only as respects the transportation of commodities other than

water, gas, or oil.

The new regulations would first need to address the requirement of

new 49 U.S.C. 15701(b) that a pipeline carrier promptly provide to any

person, on request, its rates and other service terms. It would appear

that this requirement applies both to the disclosure of an existing

rate (and related service terms) and to the establishment of a new rate

(and related service terms) where none exists.

In the situation where the carrier has existing rates covered by

the rate information request, the provisions of 49 U.S.C. 15701(b) and

(e) require the carrier ``immediate[ly]'' to disclose its ``rates and

service terms, including classifications, rules, and practices'' to any

person requesting such information. We seek suggestions for a rule that

would implement these provisions in a way that would provide the rate

requestor with complete information about all relevant terms and

conditions. We also seek input on whether we should attempt to define

the word immediately, or instead should simply establish general

guidelines to be applied on a case-by-case basis, setting up broad

parameters governing disclosure.

There may be instances in which a shipper or prospective shipper

requests the carrier to establish a rate for a type of traffic for

which no existing rate is in place. Again, the provisions of 49 U.S.C.

15701(b) appear to require that the pipeline carrier provide a rate, as

well as any related charges and service terms, promptly. We seek input

on whether we ought to define the word promptly, or instead should

simply adopt broadly applicable guidelines.

The new regulations also need to address the requirement of new 49

U.S.C. 15701(c) that a pipeline carrier may not increase a common

carriage rate or change a common carriage service term without first

giving 20 days' notice to any person who, within the previous 12

months, (1) has requested that rate or term under new subsection (b),

or (2) has made arrangements with the carrier for a shipment that would

be subject to the increased rate or changed term. It seems to us that

the advance notice requirement would apply to known users of the

transportation or service to which the increase or change is applicable

(i.e., a person who has made a shipment within the past year or has

already made arrangements for a future shipment) and also to known

prospective users of such transportation or service (i.e., a person who

has requested that rate to be established). Our preliminary view is

that it would not be necessary or appropriate to require a carrier to

keep a record of and notify all persons who have requested rate

information but are not users of the affected transportation service.

We request comment on what guidance, if any, should be given for

determining which members of the shipping public are covered by the 20-

day notice period.

We note that the notice requirement does not apply to a rate

decrease, which a carrier may apply without notice. Similarly, it would

not seem that the notice requirement should apply to, and hence delay,

a change in service terms that is clearly beneficial to shippers. Our

initial view is that it is not necessary to establish rules addressing

how to determine whether a service change is clearly beneficial to

shippers. Commenters may wish to address this issue.

Finally, the new regulations should provide for the required

information to be supplied either in writing or in electronic form. It

would appear that the form chosen would depend upon the technical

capacities of the carrier to transmit, and of the requestor to receive,

the information.

Request for Comments

We invite all interested persons to comment and to offer

suggestions for the new regulations. Commenters may wish to address,

among other things, whether we should exercise our authority under new

49 U.S.C. 15701(e) to modify the 20-day advance notice period provided

by new 49 U.S.C. 15701(c).

We encourage affected interest groups to discuss the new

requirements with each other and to seek a mutually agreeable set of

regulations that would meet the needs of all affected interests--both

shipper and carrier, and both large and small.

Comments (an original and 10 copies) must be in writing, and are

due on April 15, 1996.

We encourage any commenter that has the necessary technical

wherewithal to submit its comments as computer

[[Page 10528]]

data on a 3.5-inch floppy diskette formatted for WordPerfect 5.1, or

formatted so that it can be readily converted into WordPerfect 5.1. Any

such diskette submission (one diskette will be sufficient) should be in

addition to the written submission (an original and 10 copies).

Small Entities

Because this is not a notice of proposed rulemaking within the

meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), we

need not conduct at this point an examination of impacts on small

entities. We will certainly welcome, of course, any comments respecting

whether regulations that commenters may suggest would have significant

economic effects on any substantial number of small entities.

Environment

The issuance of this advance notice of proposed rulemaking will not

significantly affect either the quality of the human environment or the

conservation of energy resources. Furthermore, we would not expect that

regulations suggested for implementing new 49 U.S.C. 15701 would

significantly affect either the quality of the human environment or the

conservation of energy resources. We certainly welcome, of course, any

comments respecting whether suggested regulations would have any such

effects.

Authority: 49 U.S.C. 721(a) and 15701.

Decided: March 6, 1996.

By the Board, Chairman Morgan, Vice Chairman Simmons, and

Commissioner Owen.

Vernon A. Williams,

Secretary.

[FR Doc. 96-6086 Filed 3-13-96; 8:45 am]

BILLING CODE 4915-00-P