Daily Rules, Proposed Rules, and Notices of the Federal Government
(October 18, 2012)
1. The Commission proposes new optional notice procedures which intrastate pipelines may elect to use when filing proposed rates or operating conditions pursuant to § 284.123 of the Commission's regulations.
2. NGPA section 311 authorizes the Commission to allow intrastate pipelines to transport gas “on behalf of” interstate pipelines or local distribution companies served by interstate pipelines “under such terms and conditions as the Commission may prescribe.”
3. Subpart C of the Commission's Part 284 open access regulations (18 CFR 284.121-126) implements the provisions of NGPA section 311 concerning transportation by intrastate pipelines. NGPA section 311 provides that the rates of intrastate pipelines performing transportation service under the NGPA shall be fair and equitable. Section 284.123 of the regulations provides procedures for section 311 and Hinshaw pipelines to establish fair and equitable rates for interstate services.
4. Section 284.123(b) allows intrastate pipelines an election of the methodology upon which to base their rates for interstate services. Section 284.123(b)(1) permits an intrastate pipeline to elect to base its rates on the methodology used by the appropriate state regulatory agency (A) to design rates to recover transportation or other relevant costs included in a then effective firm sales rate for city-gate service on file with the state agency; or (B) to determine the allowance permitted by the state agency to be included in a natural gas distributor's rates for city-gate natural gas service. Section 284.123(b)(1) also permits an intrastate pipeline to use the rates contained in one of its then effective transportation rate schedules for intrastate service on file with the appropriate state regulatory agency which the intrastate pipeline determines covers service comparable to service under Subpart C of Part 284.
5. If the intrastate pipeline does not make an election under paragraph (b)(1) of § 284.123, § 284.123(b)(2) requires that it “apply for Commission approval, by order, of the proposed rates and charges” pursuant to the procedures in that paragraph. Section 284.123(b)(2)(i) provides for the pipeline to file a petition for approval of the proposed rates and charges, as well as information showing the proposed rates and charges are fair and equitable. Upon filing the petition for approval, the intrastate pipeline is permitted to commence the transportation service and charge and collect the proposed rate, subject to refund. Section 284.123(b)(2)(ii) provides that the rate proposed in the application will be deemed to be fair and equitable and not in excess of an amount which interstate pipelines would be permitted to charge for providing similar transportation service, unless within the 150 day period after the date on which the Commission received a filed application, the Commission either extends the time for action, or institutes a proceeding in which all interested parties will be afforded an opportunity for written comments and for the oral presentation of views, data, and arguments. The Commission has extended this 150 day period when necessary, for example, to allow settlement in contested proceedings or institute proceedings in complex cases.
6. Section 284.123(e) requires that, within thirty days of commencement of a new service, any intrastate pipeline that engages in transportation arrangements under Subpart C of Part 284 must file with the Commission a statement that includes the pipeline's interstate rates, the rate election made pursuant to § 284.123(b) of that section, and a description of how the pipeline will engage in these transportation arrangements, including operating conditions, such as gas quality standards and financial viability of the shipper. This statement is generally referred to as the pipeline's “Statement of Operating Conditions.” Section 284.123(e) also requires that, if the pipeline changes its operations, rates, or rate election, it must amend the statement and file such amendments no later than thirty days after commencement of the change in operations or the change in rate election.
7. As part of its overall, more light-handed regulation of section 311 and
8. In an effort to reduce burdens on regulated entities, the Commission is proposing to add a new optional notice procedure under which section 311 and Hinshaw pipelines could seek approval of proposed rates or operating conditions without the need for a Commission order. Under this procedure, the intrastate pipeline's filing would be deemed approved without any order of the Commission, if the filing is not protested within a specified period after notice of the filing or if any protests are resolved during a reconciliation period. This optional procedure would be included in § 284.123(g) of our regulations.
9. The Commission is taking this action as part of its commitment to continually review its regulations and streamline or eliminate requirements that impose an unnecessary burden on regulated entities. The Commission believes that this notice procedure would provide an expedited and less burdensome method of processing filings by section 311 and Hinshaw pipelines which present few, if any, contested issues. Many of the intrastate pipeline companies filing rates and/or statements of operating conditions pursuant to § 284.123 are small and have few interstate shippers. Discount rate agreements are common, with the result that often the pipeline performs most of its interstate services at rates which are discounted substantially below its maximum rates for such services. Most pipeline filings under § 284.123 are not protested by any shipper. If a rate filing is protested, the protests often raise issues which are relatively amenable to settlement. The proposed optional notice procedure would permit approval of uncontested filings without the need for any Commission order upon expiration of a 60-day notice period (or other period established by the Secretary of the Commission for a particular filing). If a protest were filed within the notice period, proposed § 284.123(g) provides for an additional 30-day reconciliation period to resolve contested filings without the need for the parties to file a formal settlement offer pursuant to the Commission's settlement rules in § 385.601,
10. Currently our regulations permit similar prior notice blanket certificate procedures for interstate pipelines in § 157.205. That program has been in place for over three decades and has significantly reduced regulatory burden and provides pipelines certainty with regard to the disposition of their applications.
11. The optional notice procedure in proposed § 284.123(g) would operate as follows: Within ten days after a filing by an intrastate pipeline pursuant to the optional notice procedure, the Secretary of the Commission would issue a notice of the filing, which would be published in the
12. If a protest is filed, proposed § 284.123(g)(5) allows a reconciliation period for negotiations in a structured process to promote settlement of contested cases. Specifically, this section would permit the intrastate pipeline, the person who filed the protest in accordance with proposed § 284.123(g)(4), any intervenors, and staff thirty days from the deadline for protests to the pipeline's filing, to resolve the protest, and to convene informal settlement conferences to assist in resolving the protest. If all protests to the filing are withdrawn pursuant to proposed paragraph (g)(6) by the end of the reconciliation period, the filing would be deemed approved. Alter-natively, proposed paragraph (g)(7) permits the pipeline to amend or modify a tariff record in order to resolve concerns raised in a protest. Proposed paragraph (g)(7) provides that such a filing will toll the notice period established under paragraph (g)(3) of this section for the original filing, and the Secretary of the Commission will issue a notice establishing new deadlines for comments and protests for the entire filing pursuant to paragraph (g)(3). The intrastate pipeline may request a deadline for protests less than 60 days after the date of the filing. If there are no protests to the amendment or modification and any protests to the entire filing which have been filed are withdrawn, the amended filing would be deemed approved as of the day after the new deadline for protests established by the Secretary.
13. If a filing is still contested after the above procedures are completed, the filing would not be deemed approved and, within sixty days from the deadline for filing protests, the Commission would establish procedures to resolve the proceeding. The 150-day period in existing § 284.123(b)(2)(ii) under which filings are deemed approved unless the Commission acts within that period does not apply to filings pursuant to the new notice procedures.
14. While the proposed rules would establish a reconciliation period to promote settlement of protested filings, compliance with the Commission's rules regarding off-the-record communications in § 385.2201 would be required. Under the general rule set forth in § 385.2201(b), in any proceeding where an intervenor disputes any material issue resulting in a contested
15. The Commission is also adding procedures to further streamline the processing of these filings. The Director of the Office of Energy Market Regulation or his designee is required pursuant to paragraph (g)(2) to reject within seven days of the date of the filing any filing which patently fails to comply with the provisions of §§ 284.123(e) or 284.123(f), without prejudice to the intrastate pipeline's refiling a complete application. If such filing was required by § 284.123, it must be refiled within fourteen days of the date of the rejection.
16. The protestor may withdraw a protest under proposed paragraph (g)(6) by submitting written notice of withdrawal to the Secretary of the Commission pursuant to § 385.216 of the Commission's regulations and serving a copy on the intrastate pipeline, any intervenors, and any other person who has filed a motion to intervene in the proceeding. If any protest is filed within the time allowed for protests and is subsequently withdrawn under proposed paragraph (g)(6), the filing by the intrastate pipeline would be deemed approved effective upon the later of the day after the deadline for filing protests, if there are no other protests to the filing, or the day after the withdrawal of all protests unless the intrastate pipeline withdraws, amends, or modifies its filing or the filing is rejected in accordance with this paragraph prior to that date.
17. Under proposed paragraphs (g)(10) and (h) an intrastate pipeline may file to withdraw its filing prior to Commission action. Because § 284.123(b)(2)(i) permits an intrastate pipeline to commence collecting a proposed rate subject to refund upon making its filing, the pipeline must state in its withdrawal motion that any amounts collected subject to refund in excess of the rates authorized by the Commission will be refunded with interest, and that it will file a refund report. The refunds must be made within sixty days of the date the withdrawal motion becomes effective. A filing that is withdrawn will not fulfill the requirements under proposed paragraph (g)(8) for approval of a filing.
18. The Commission has a policy of requiring a review of the rates of both section 311 and Hinshaw pipelines every five years. While the periodic rate review requirement is not part of the Commission's existing regulations, the Commission has consistently imposed that requirement in its orders approving each rate filing by an intrastate pipeline. The proposed optional notice procedures provide for approval of the filing without a Commission order. Therefore, the Commission proposes in § 284.123(g)(9) to require that a NGPA section 311 intrastate pipeline whose rates are deemed approved under the optional notice procedures file an application for rate approval under § 284.123 on or before the date five years following the date it filed the application for approval of the rates pursuant to § 284.123(g). Similarly, a Hinshaw pipeline whose rates are deemed approved under § 284.123(g) would be required to file either (1) cost and throughput data sufficient to allow the Commission to determine whether any change to the pipeline's rates should be ordered pursuant to section 5 of the Natural Gas Act or (2) a petition for rate approval pursuant to § 284.123, on or before the date five years following the date it filed the application for approval of rates pursuant to § 284.123(g).
19. Under the Commission's proposal, the periodic rate review in our regulations would only be applicable when intrastate pipelines file under these proposed procedures in § 284.123(g). Therefore, the overall regulatory burden for the proposed procedures is less than current procedures for rate approval.
20. The Commission proposes in § 284.123(h) to codify the procedures for section 311 and Hinshaw pipelines to withdraw any filing under § 284.123 in its entirety prior to its approval, including filings made under the existing procedures in § 284.123. Currently, the practice would require a request to withdraw a filing to be filed under the Commission's general rules of practice and procedure. Because § 284.123(b)(2)(i) permits an intrastate pipeline to commence collecting a proposed rate subject to refund upon making its filing, proposed § 284.123(h)(1) would require the pipeline to acknowledge that any amounts collected subject to refund in excess of the rates authorized the Commission will be refunded with interest and a refund report will be filed. The refunds must be made within sixty days of the date the withdrawal motion becomes effective. A shipper will have 15 days to respond to the pipeline's filing. Section 284.123(h)(2) would make the pipeline's withdrawal of its filing effective at the end of 15 days from the date of filing the withdrawal motion, if no opposition to the motion is filed within that period and the Commission does not issue an order disallowing the motion. This proposal would add regulatory certainty as to the Commission's treatment of withdrawal filings, and ensure that the pipeline will know its obligations if it withdraws a filing.
21. The Paperwork Reduction Act (PRA)
22. The Commission is submitting these proposed reporting and recordkeeping requirements to OMB for its review and approval. The Commission solicits comments on the proposed modifications, the accuracy of burden estimates, ways to enhance the
23. The Commission's estimates of the average annual public reporting burden imposed on the section 311 and Hinshaw intrastate pipelines of making filings for rate approval under § 284.123 will not change, except for an estimated burden of only 12 hours per year for the new withdrawal filing requirements as a result of the proposed rule in Docket No. RM12-17-000. Following is a table showing the existing burden estimate, a relabeling to reflect the new filing option, and the additional withdrawal procedures specifically tailored for intrastate pipelines.
24. The Commission is also proposing a new withdrawal procedure for filings made prior to their approval to reflect the unique nature of the intrastate pipeline regulations that allow a pipeline to file for a rate change and begin charging the new rates prior to Commission approval. The proposed new § 284.123(h) regulation will reflect the regulatory process that addresses that unique rate implementation issue. The Commission believes it would add certainty to any intrastate pipeline making a withdrawal filing.
25. The proposed changes will primarily affect the post-filing process and cost. The changes will reduce overall cost and delay for stakeholders; however that post-filing burden is beyond the scope of requirements of the Paperwork Reduction Act. The new optional procedures will provide both intrastate pipelines and their shippers greater regulatory certainty and a simpler process without any change in the upfront burden of preparing and making a filing.
26. In 18 CFR 284.123(h), the Commission also proposes to implement new regulations with respect to withdrawal of a filing prior to approval. The regulations provide more details about the rights and obligations of the intrastate pipeline and its shippers. These procedures would lessen regulatory costs, provide increased regulatory certainty, and result in an improved framework in which to achieve settlement of contested cases.
27. Interested persons may obtain information on the reporting requirements by contacting: Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, email:
28. 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.
29. The Regulatory Flexibility Act of 1980 (RFA)
30. 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 December 6, 2012. Comments must refer to Docket No. RM12-17-000, and must include the commenter's name, the organization they represent, if applicable, and their address in their comments.
31. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's Web site at
32. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE., Washington, DC 20426.
33. 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.
34. In addition to publishing the full text of this document in the
35. From the Commission's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
36. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Online Support at 202-502-6652 (toll free at 1-866-208-3676) or email at
Continental shelf, Natural gas, Reporting and recordkeeping requirement.
By direction of the Commission.
In consideration of the foregoing, the Commission proposes to amend Part 284, Chapter I, Title 18,
1. The authority citation for Part 284 continues to read as follows:
15 U.S.C. 717-717z, 3301-3432; 42 U.S.C. 7101-7352; 43 U.S.C. 1331-1356.
2. Section 284.123 is amended by adding paragraphs (g) and (h) to read as follows:
(ii) Protests shall be filed with the Commission in the form required by Part 385 of this Chapter including a detailed statement of the protestor's interest in the filing and the specific reasons and rationale for the objection and whether the protestor seeks to be an intervenor.
(ii) If any protest is filed within the time allowed by the Secretary of the Commission under paragraph (g)(3) of this section and is subsequently withdrawn before the end of the 30-day reconciliation period provided by paragraph (g)(5) of this section, the filing by the intrastate pipeline is approved effective upon the later of the day after the deadline for filing protests, if there are no other protests to the filing, or the day after the withdrawal of all protests unless the intrastate pipeline withdraws, amends, or modifies its filing or the filing is rejected, prior to that date.
(1) The withdrawal motion must state that any amounts collected subject to refund in excess of the rates authorized the Commission will be refunded with interest calculated and a refund report filed with the Commission in accordance with § 154.501 of this chapter. The refunds must be made within 60 days of the date the withdrawal motion becomes effective.
(2) The withdrawal motion will become effective, and the filing will be deemed withdrawn at the end of 15 days from the date of filing of the withdrawal motion, if no order disallowing the motion is issued within that period. If an answer in opposition is filed within the 15 day period, the withdrawal is not effective until an order accepting the withdrawal is issued.