Oil Pipeline Cost-of-Service Filing Requirements; Notice of Proposed Rulemaking

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 346

[Docket No. RM96-10-000]

Oil Pipeline Cost-of-Service Filing Requirements; Notice of

Proposed Rulemaking

April 29, 1996.

AGENCY: Federal Energy Regulatory Commission (Commission).

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes

to revise Part 346 of its regulations to make the cost-of-service

filing requirements of that Part applicable to the Trans-Alaska

Pipeline System (TAPS) carriers and carriers delivering oil directly or

indirectly to TAPS. These carriers were inadvertently excluded from the

streamlined procedural rules in Part 346 required by the Energy Policy

Act of 1992.

DATES: Comments are due on or before June 3, 1996.

ADDRESSES: An original and 14 copies of written comments on this

proposed rule must be filed in Docket No. RM96-10-000. All filings

should refer to Docket No. RM96-10-000 and should be addressed to:

Office of the Secretary, Federal Energy Regulatory Commission, 888

First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Jacob Silverman, Office of the General

Counsel, Federal Energy Regulatory Commission, 888 First Street NE.,

Washington, DC 20426, Telephone: (202) 208-2078.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of

this document in the Federal Register, the Commission also provides all

interested persons an opportunity to inspect or copy the contents of

this document during normal business hours in Room 2-A, 888 First

Street, N.E. Washington, D.C. 20426.

The Commission Issuance Posting System (CIPS), an electronic

bulletin board service, provides access to the texts of formal

documents issued by the Commission. CIPS is available at no charge to

the user and may be accessed using a personal computer with a modem by

dialing (202) 208-1397 if dialing locally or 1-800 856-3920 if dialing

long distance

First

Street, N.E. Washington, D.C. 20426.

The Commission Issuance Posting System (CIPS), an electronic

bulletin board service, provides access to the texts of formal

documents issued by the Commission. CIPS is available at no charge to

the user and may be accessed using a personal computer with a modem by

dialing (202) 208-1397 if dialing locally or 1-800 856-3920 if dialing

long distance. To access CIPS, set your communications software to

19200, 14400, 12000, 9600, 7200, 4800, 2400 or 1200bps, full duplex, no

parity, 8 data bits, and 1 stop bit. The full text of this document

will be available on CIPS indefinitely in ASCII and WordPerfect 5.1

format for one year. The complete text on diskette in WordPerfect

format may also be purchased from the Commission's copy contractor, La

Dorn Systems Corporation, also located in Room 2-A, 888 First Street,

N.E., Washington, D.C. 20426.

The Commission's bulletin board system can also be accessed through

the FedWorld system directly by modem or through the Internet. To

access the FedWorld system by modem: Dial (703) 321-3339 and logon to

the FedWorld system.

After logging on, type: /go FERC

To access the FedWorld system, through the Internet:

Telnet to: fedworld.gov

Select the option: [1] FedWorld

Logon to the FedWorld system

Type: /go FERC

The Federal Energy Regulatory Commission (Commission) proposes to

revise Part 346 of its regulations to make the cost-of-service filing

requirements of that Part applicable to the Trans-Alaska Pipeline

System (TAPS) carriers and carriers delivering oil directly or

indirectly to TAPS.

I. Background

o: fedworld.gov

Select the option: [1] FedWorld

Logon to the FedWorld system

Type: /go FERC

The Federal Energy Regulatory Commission (Commission) proposes to

revise Part 346 of its regulations to make the cost-of-service filing

requirements of that Part applicable to the Trans-Alaska Pipeline

System (TAPS) carriers and carriers delivering oil directly or

indirectly to TAPS.

I. Background

Order No. 561 1 was issued on October 22, 1993, to comply with

the Energy Policy Act of 1992 (Act of 1992),2 which required the

Commission to establish a simplified and generally applicable

ratemaking methodology for oil pipelines and to streamline its

procedures relating to oil pipeline rates. The Act of 1992 excluded

TAPS, and any pipeline delivering oil directly or indirectly to TAPS,

from its provisions for ratemaking purposes. Thus, Order No. 561 stated

that TAPS and the other excluded pipelines would continue to be

governed by their existing rate methodologies,3 but also would be

subject to the Commission's new procedural rules. Thereafter, on

October 28, 1994, as a companion to Order No. 561, the Commission

issued Order No. 571, establishing in Part 346 of its regulations cost-

of-service filing requirements for oil pipelines.4 These

procedural requirements include all the information necessary to

support a rate filing under the Opinion No. 154-B methodology. However,

the existing provisions of Part 346 do not apply to TAPS or its feeder

lines.5

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tablishing in Part 346 of its regulations cost-

of-service filing requirements for oil pipelines.4 These

procedural requirements include all the information necessary to

support a rate filing under the Opinion No. 154-B methodology. However,

the existing provisions of Part 346 do not apply to TAPS or its feeder

lines.5

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\1\ Revisions to Oil Pipeline Regulations Pursuant to the Energy

Policy Act of 1992, Order No. 561, FERC Statutes & Regulations para.

30,985 (1993); Order on Rehearing, Order No. 561-A, FERC Statutes &

Regulations para. 31,000 (1994); 58 FR 58778, Nov. 4, 1993.

\2\ 42 U.S.C. 7172 note (West Supp. 1993).

\3\ TAPS and the excluded pipelines would continue to justify

their rates either in accordance with an applicable settlement

methodology such as, for example, the TAPS Settlement Methodology,

or under the Opinion No. 154-B cost-of-service methodology.

\4\ Cost-of-Service Reporting and Filing Requirements for Oil

Pipelines, FERC Statutes & Regulations 31,006 (1994).

\5\ See, Milne Point Pipeline Company, 75 FERC para. 61,050

(1996).

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II. Public Reporting Burden

The Commission estimates the public reporting burden for the

collection of information under the proposed rule will remain unchanged

for rate filings, since what the Commission proposes to codify as the

information to be provided is that which the Commission's staff

routinely has requested of oil pipelines for cost-of-service rate

filings in the past. The information will be collected on FERC-550,

``Oil Pipeline Rates: Tariff Filings.'' 6 This estimate includes

the time for reviewing instructions, researching existing data sources,

gathering and maintaining the data needed, and completing and reviewing

the collection of information. The current annual reporting burden

associated with this information collection requirement was described

in Order No

ways been the Commission's intent to exclude TAPS and its

feeder lines only from the simplified ratemaking methodology adopted in

Order No. 561, not from the streamlined procedural rules required by

the Act of 1992. Thus, the Commission stated in Order No. 561: 7

\7\ FERC Statutes & Regulations para. 30,985 at 30,961.

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For ratemaking purposes, TAPS and those excluded pipelines [the

TAPS feeder lines] will continue to be regulated under the

ratemaking standards that are currently in effect. However, it is

the Commission's judgment that such exclusion [of TAPS and its

feeder lines from the provisions of the Energy Policy Act of 1992]

was intended to apply only to the simplified and generally

applicable rate methodology, not to the procedural rules that the

Act of 1992 required the Commission to consider. Otherwise, the

Commission would be required to enforce one set of procedural rules

for TAPS and excluded pipelines and another for all other pipelines

under its jurisdiction under the ICA. This would not be consistent

with Congress' intent for the Commission to streamline its

procedures for oil pipelines.

Likewise, the Commission meant the procedural rules of Part 346 to

apply to TAPS and its feeder lines, but Order No. 571 neglected to

include them. This is the interpretation that is consistent with the

mandate of the Act of 1992 that the Commission streamline its

procedures in order to avoid unnecessary regulatory costs and delays,

and with the Commission's explicit desire to enforce one set of

procedural rules for all pipelines. However, Part 346 of the

regulations governing oil pipeline filing requirements inadvertently

excluded TAPS and its feeder pipelines.

that is consistent with the

mandate of the Act of 1992 that the Commission streamline its

procedures in order to avoid unnecessary regulatory costs and delays,

and with the Commission's explicit desire to enforce one set of

procedural rules for all pipelines. However, Part 346 of the

regulations governing oil pipeline filing requirements inadvertently

excluded TAPS and its feeder pipelines.

Accordingly, the Commission proposes to amend Part 346 to apply to TAPS

and its feeder lines. Thus, the TAPS carriers and the TAPS feeder lines

will be required to comply with the cost-of-service filing requirements

of Part 346 when they seek to establish rates under the Opinion No.

154-B methodology. These requirements are no more than a codification

of the information that these carriers now must provide routinely in

response to the Commission staff's requests for information to support

their cost-of-service rate filings, and, thus, should not create any

additional burden for carriers making cost-of-service filings.

Carriers' including cost-of service supporting information with their

initial filings instead of filing it at a time later in the regulatory

process also will satisfy the requirement of the Act of 1992 to avoid

unnecessary regulatory costs and delays.

IV. Environmental Analysis

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.\8\ The Commission

has categorically excluded certain actions from these requirements as

not having a significant effect on the human environment.\9\ The action

proposed here is procedural in nature and therefore falls within the

categorical exclusions provided in the Commission's regulations.\10\

Therefore, neither an environmental impact statement nor an

environmental assessment is necessary and will not be prepared in this

rulemaking.

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n the human environment.\9\ The action

proposed here is procedural in nature and therefore falls within the

categorical exclusions provided in the Commission's regulations.\10\

Therefore, neither an environmental impact statement nor an

environmental assessment is necessary and will not be prepared in this

rulemaking.

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\8\ Order No. 486, Regulations Implementing the National

Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes

and Regulations (Regulations Preambles 1986-1990) para. 30,783

(1987).

\9\ 18 CFR 380.4.

\10\ See 18 CFR 380.4(a)(2)(ii).

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V. Regulatory Flexibility Act Certification

The Regulatory Flexibility Act \11\ generally requires the

Commission to describe the impact that a proposed rule would have on

small entities or to certify that the rule will not have a significant

economic impact on a substantial number of small entities. An analysis

is not required if a proposed rule will not have such an impact.\12\

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\11\ 5 U.S.C. 601-612.

\12\ 5 U.S.C. 605(b).

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Pursuant to section 605(b), the Commission certifies that the

proposed rules and amendments, if promulgated, will not have a

significant adverse economic impact on a substantial number of small

entities.

VI. Information Collection Requirements

Office of Management and Budget (OMB) regulations require OMB to

approve certain information collection requirements imposed by an

agency. \13\ The information collection requirements in this proposed

rule are contained in FERC-550 ``Oil Pipeline Rates: Tariff filings''

(1902-0089).

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\13\ 5 CFR 1320.11.

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to

approve certain information collection requirements imposed by an

agency. \13\ The information collection requirements in this proposed

rule are contained in FERC-550 ``Oil Pipeline Rates: Tariff filings''

(1902-0089).

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\13\ 5 CFR 1320.11.

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The Commission's Office of Pipeline Regulation uses the data

collected in these information requirements to investigate the rates

charged by oil pipeline companies subject to its jurisdiction, to

determine the reasonableness of rates, and when appropriate prescribe

just and reasonable rates.

The revisions in the proposed rule will not change the reporting

requirements of FERC-550. This rule therefore is not subject to OMB

review. Nevertheless, the Commission is submitting a copy of the

proposed rule to OMB for informational purposes. Interested persons may

obtain information on these reporting requirements by contacting the

Federal Energy Regulatory Commission, 888 First Street, N.E.,

Washington, DC 20426 [Attention: Michael Miller, Information Services

Division, (202) 208-1415]. Comments on the requirements of this rule

can be sent to the Office of Information and Regulatory Affairs of OMB

(Attention: Desk Officer for Federal Energy Regulatory Commission),

FAX: (202) 395-5167.

VII. Comment Procedures

ting the

Federal Energy Regulatory Commission, 888 First Street, N.E.,

Washington, DC 20426 [Attention: Michael Miller, Information Services

Division, (202) 208-1415]. Comments on the requirements of this rule

can be sent to the Office of Information and Regulatory Affairs of OMB

(Attention: Desk Officer for Federal Energy Regulatory Commission),

FAX: (202) 395-5167.

VII. Comment Procedures

Copies of this notice of proposed rulemaking can be obtained from

the Public Reference and Files Maintenance Branch, Room 2-A, 888 First

Street, N.E., Washington, D.C. 20426. Any person desiring to file

comments should submit an original and fourteen (14) copies of such

comments to the Federal Energy Regulatory Commission, 888 First Street,

N.E., Washington, D.C. 20426, not later than June 3, 1996.

All written comments will be placed in the Commission's public

files and will be available for public inspection in the Commission's

public reference room at 888 First Street, N.E., Washington, DC 20426,

during regular business hours.

List of Subjects

18 CFR Part 346

Pipelines, Reporting and recordkeeping requirements.

By direction of the Commission.

Linwood A. Watson, Jr.,

Acting Secretary.

In consideration of the foregoing, the Commission gives notice of

its proposal to amend Part 346, Chapter I, Title 18, Code of Federal

Regulations, as set forth below.

PART 346--OIL PIPELINE COST-OF-SERVICE FILING REQUIREMENTS

1. The authority citation for Part 346 continues to read as

follows:

Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C.

1-85.

2. Sections 346.1 introductory text and 346.2 introductory text are

proposed to be revised as follows:

Sec. 346.1 Content of filing for cost-of-service rates.

Regulations, as set forth below.

PART 346--OIL PIPELINE COST-OF-SERVICE FILING REQUIREMENTS

1. The authority citation for Part 346 continues to read as

follows:

Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C.

1-85.

2. Sections 346.1 introductory text and 346.2 introductory text are

proposed to be revised as follows:

Sec. 346.1 Content of filing for cost-of-service rates.

A carrier that seeks to establish rates pursuant to Sec. 342.2(a)

of this chapter, or a carrier that seeks to change rates pursuant to

Sec. 342.4(a) of this chapter, or a carrier that otherwise seeks to

establish or change rates by filing cost, revenue, and throughput data

supporting such rates, must file:

* * * * *

Sec. 346.2 Materials in support of initial rates or change in rates.

A carrier that files for rates pursuant to Sec. 342.2(a) or

Sec. 342.4(a) of this chapter, or a carrier that otherwise files to

establish or change rates by filing cost, revenue, and throughput data

supporting such rates, must file the following statements, schedules,

and supporting workpapers. The statement, schedules, and workpapers

must be based upon an appropriate test period.

* * * * *

[FR Doc. 96-11048 Filed 5-2-96; 8:45 am]

BILLING CODE 6717-01-P