[Federal Register Volume 60, Number 9 (Friday, January 13, 1995)]
[Proposed Rules]
[Pages 3141-3168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-653]



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DEPARTMENT OF ENERGY
18 CFR Parts 158, 201, 250, 260, and 284

[Docket No. RM95-4-000]


Revisions to Uniform System of Accounts, Forms, Statements, and 
Reporting Requirements for Natural Gas Companies; Notice of Proposed 
Rulemaking

December 16, 1994.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission is proposing to amend 
its Uniform System of Accounts, its forms, and its reports and 
statements for natural gas companies. The proposed revisions reflect 
the current regulatory environment of unbundled pipeline sales for 
resale at market-based prices and open-access transportation of natural 
gas. The Commission seeks to simplify and streamline its requirements 
to reduce the burden of respondents.

DATES: Comments are due no later than April 13, 1995.

ADDRESSES: An original and 14 copies of written comments must be filed. 
All filings should refer to Docket No. RM95-4-000 and should be 
addressed to Office of the Secretary, Federal Energy Regulatory 
Commission, 825 North Capitol Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Jeffrey A. Braunstein, Office of the 
General Counsel, Federal Energy Regulatory Commission, 825 North 
Capitol Street, NE., Washington, DC 20426, (202) 208-2114.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document, excluding Appendices A (FERC Form No. 2), B (FERC Form 
No. 2-A), and C (FERC Form No. 11), 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 3104, 941 North Capitol Street, NE., Washington, DC 
20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user and may be accessed using a personal computer with a modem by 
dialing (202) 208-1397. To access CIPS, set your communications 
software to 19200, 14400, 12000, 9600, 7200, 4800, 2400, 1200 or 300 
bps, full duplex, no parity, 8 data bits and 1 stop bit. The full text 
of this document will be available on CIPS for 60 days from the date of 
issuance in ASCII and WordPerfect 5.1 format. After 60 days the 
document will be archived, but still accessible. 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 3104, 941 North Capitol Street, NE., Washington, DC 20426.

I. Introduction

    The Federal Energy Regulatory Commission (Commission) proposes to 
amend its Uniform System of Accounts,1 its forms, and its reports 
and statements for natural gas companies.2 This Notice of Proposed 
Rulemaking (NOPR) is a companion to the Commission's Notice of Proposed 
Rulemaking ``Filing Requirements for Interstate Natural Gas Company 
Rate Schedules and Tariffs'', which proposes to amend Part 154 of the 
Commission's regulations and is issued contemporaneously with this 
NOPR. In brief, the Commission proposes, in this NOPR, changes to the 
Uniform System of Accounts' treatment of gas stored underground,3 
revenues,4 gas supply expenses,5 and to eliminate all 
accounts for Nonmajor respondents and to redesignate accounts used only 
by Major respondents for use by all respondents. The Commission also 
proposes to change or eliminate various forms, reports, and statements. 
This includes changes to, and deletions from, FERC Form No. 2 (Form No. 
2), Annual report [[Page 3142]] for Major natural gas companies, and 
Form No. 2-A (Form No. 2-A), Annual report for Nonmajor natural gas 
companies.6

    \1\Section 8 of the Natural Gas Act (NGA), 15 U.S.C. 717g 
(1988), authorizes the Commission to prescribe rules and regulations 
concerning accounts, records and memoranda as necessary or 
appropriate for purposes of administering the NGA. The Commission 
may prescribe a system of accounts for jurisdictional companies and, 
after notice and opportunity for hearing, may determine the accounts 
in which particular outlays and receipts will be entered, charged, 
or credited.
    \2\Section 10 of the NGA, 15 U.S.C. 717i (1988), authorizes the 
Commission to prescribe rules and regulations concerning annual and 
other periodic or special reports, as necessary or appropriate for 
purposes of administering the NGA. The Commission may prescribe the 
manner and form in which such reports are to be made, and require 
from natural gas companies specific answers to all questions on 
which the Commission may need information. The reports must be made 
under oath unless the Commission otherwise specifies.
    \3\The Commission proposes to amend Account 117, Account 164.1, 
and other accounts that refer to Account 117.
    \4\The Commission proposes to amend Account 489 and Account 495.
    \5\The Commission proposes to amend Account 806.
    \6\Form No. 2 consists of approximately 162 non-consecutively 
numbered pages and a four-page index. See 18 CFR 260.1. The current 
version bears OMB approval No. 1902-0028. Form No. 2-A consists of 
approximately 22 consecutively numbered pages, 1-22, and 32 non-
consecutively numbered substitute pages from the Form No. 2 that may 
be used in lieu of the comparable pages in the first section. See 18 
CFR 260.2. The current version bears OMB approval No. 1902-0030.
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    The Commission is proposing the changes in order to create forms, 
reports, and statements that reflect the current regulatory environment 
of unbundled pipeline sales for resale at market-based prices and open-
access transportation of natural gas. In doing that, the Commission 
seeks to simplify and streamline its requirements to reduce the burden 
on respondents. Hence, the Commission is proposing to eliminate 
reporting requirements (as well as a few non-reporting requirements) 
that are outdated or nonessential in light of current regulation, or 
are duplicative of other reporting requirements. At the same time, the 
proposed revisions, especially of Form No. 2, will provide financial, 
rate, and statistical information on transactions that is more useful 
than what is currently available to regulatory agencies and other users 
of the financial statements and reports of natural gas companies. The 
Commission believes the proposed changes to Form No. 2 are needed 
because companies are giving different accounting treatment to similar 
transactions, and the characteristics of certain balance sheet and 
income statement items for the restructured industry are different from 
what they were when the current accounting regulations were adopted.
    In Part III, A of this NOPR, the Commission will discuss the 
proposed changes to the Uniform System of Accounts with respect to 
storage gas. In Part III, B the Commission will address the other 
proposed revisions to the Uniform System of Accounts. In Part IV, the 
Commission will discuss the changes to Part 250 of the Commission's 
regulations, ``Approved Forms, Natural Gas Act.'' In Part V, the 
Commission will discuss the proposed changes to Part 260 of the 
Commission's regulations, ``Statements and Reports (Schedules).'' That 
discussion will include the proposed changes to Forms No. 27 and 
No. 2-A.8 In Part VI, the Commission will discuss the proposed 
changes to Part 284 of the Commission's regulations, ``Certain Sales 
and Transportation of Natural Gas Under the Natural Gas Policy Act of 
1978 and Related Authorities.''

    \7\Appendix A consists of the proposed revised Form No. 2. 
Appendix A is not being published in the Federal Register, but is 
available from the Commission's Public Reference Room.
    \8\Appendix B consists of the proposed revised Form No. 2-A. 
Appendix B is not being published in the Federal Register, but is 
available from the Commission's Public Reference Room.
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    The Commission recognizes that the changes to these regulations and 
forms and to the regulations in the companion notice of proposed 
rulemaking titled, ``Filing Requirements for Interstate Natural Gas 
Company Rate Schedules and Tariffs,'' will necessitate modifications to 
the electronic formats for the affected filings and forms. To ensure 
the widest possible input, the Commission is directing its staff here, 
and in the companion NOPR, to convene a single technical conference to 
obtain the participation of the industry and other users of the filed 
information in designing the electronic filing requirements. By the 
time the Commission issues final rules in these companion rulemakings, 
the Commission expects staff, with the participation of interested 
parties, to have developed the changes needed to make the electronic 
filings that would be required under the regulations proposed in both 
of the rulemaking proceedings. The Commission intends to move toward a 
PC-based electronic filing system and away from mainframes. The 
Commission intends to use user friendly form-fill, word processing, and 
spreadsheet application software as much as possible.
    The changes to the Uniform of System of Accounts and Form Nos. 2 
and 2-A in this NOPR are proposed to be effective January 1, 1995. The 
remainder of the proposed rule is proposed to be effective 30 days 
after publication in the Federal Register.

II. Public Reporting Burden

    The proposed rule, if adopted, would establish new reporting 
requirements, modify existing reporting requirements and eliminate 
those requirements that are now obsolete. The Commission seeks to 
simplify and streamline its requirements to reduce the burden on 
pipelines. The current public reporting burden for these information 
collections is estimated to average the following number of hours per 
response: FERC Form No. 2--2,475 hours for the 46 gas companies that 
complete a filing; FERC Form No. 2-A--30 hours for the 87 gas companies 
that complete a filing; FERC Form No. 11--5.7 hours for the 50 gas 
companies that complete a filing; FERC Form No. 549--2.7 hours for the 
294 companies that complete a filing; FERC Form No. 549B--6,770 hours 
for the 78 gas companies that complete a filing; FERC Form No. 576--3 
hours for the 8 gas companies that complete filing; FERC Form No. 8--
3.6 hours for the 30 gas companies that complete a filing; and FPC-14 
(redesignated herein as FERC Form No. 14)--3.1 hours for the 46 gas 
companies that complete a filing. These estimates include the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    With respect to the gas companies filing the FERC Form No. 2, the 
Commission believes that there will be an average burden decrease due 
to the elimination of several schedules and significant increases in 
the thresholds for the reporting of information on other schedules. 
There will be some additional information required, but there should be 
a minimal burden increase as a result, because much of the information 
is already collected by the industry in other contexts.
    Also, those natural gas companies filing the FERC Form No. 2-A, and 
previously designated as ``Nonmajor'' who do not presently use the 
accounts formerly reserved for Major natural gas companies, may 
experience a one-time increase in burden associated with the conversion 
of their books and records. It is anticipated that this one-time burden 
will not be significant.
    The Commission estimates the public reporting burden for other 
filing requirements under the proposed rule will reduce the existing 
reporting burden. With respect to FERC Form No. 11, the semi-annual 
Form No. 11 will contain monthly details of data required annually on 
an aggregate basis in FERC Form No. 2. The semi-annual filing of FERC 
Form No. 11 on April 30 and October 31 of each year, rather than 
monthly, will reduce the number of reports from 600 to 100. In 
addition, data are primarily required by rate schedule or Uniform 
System of Accounts entries. These consistencies in reporting will 
simplify the filing burden. The revised reporting schedule will reduce 
the existing reporting burden by a total of 2,500 hours, or 
approximately 50 hours per respondent each year.
    The proposed elimination of initial, subsequent, termination, and 
annual reports, FERC Form No. 549, for interstate pipelines, and the 
retention of only the annual reports for intrastate pipelinesm, will 
reduce the reporting burden by a total of 13,295 hours. The Commission 
estimates that the annual report for the 75 remaining respondents 
[[Page 3143]] will require an average of ten hours to complete.
    The proposed Index of Customers requirement will add approximately 
11,700 hours to the total burden under FERC Form No. 549B. However, the 
Commission proposes to delete the paper filing requirement and require 
that the index be available through a pipelines electronic bulletin 
board. The average burden of approximately 25 hours per respondent 
consists of 135 hours for pipelines to establish the initial index, and 
three hours per filing to compile an average of six monthly updates.
    Allowing reporting of service interruptions in FERC Form No. 576 by 
any electronic means, including facsimile or telegraph, as proposed, 
will expedite the notice process, and reduce the burden to one hour per 
response. This report is required only in the event of an interruption 
to normal service lasting three hours or longer.
    The Commission is not proposing any substantive changes to FERC 
Form Nos. 8 and 14, but requests comment on whether data from other 
sources makes these forms unnecessary.
    On balance, therefore, the Commission believes the overall burden 
on the industry will be lessened over time by the proposed changes. To 
consider the impact of the persons affected by this rulemaking, the 
Commission would like specific comments on the impact of this rule on 
individual natural gas companies. Both estimates of current burden and 
impact should be in work hours and dollar costs in sufficient detail to 
demonstrate methodology and assumptions.
    Comments regarding these burden estimates or any other aspect of 
this collection of information, including suggestions for reducing this 
burden, can be sent to the Federal Energy Regulatory Commission, 941 
North Capitol Street, NE., Washington, DC 20426 [Attention: Michael 
Miller, Information Services Division, (202) 208-1415]; and to the 
Office of Information and Regulatory Affairs of OMB (Attention: Desk 
Officer for Federal Energy Regulatory Commission), FAX: (202) 395-5167.

III. Revisions to Uniform System of Accounts

A. Storage Accounting

    Before the recent industry restructuring, natural gas companies 
primarily provided a merchant service. A typical pipeline company would 
purchase gas from producers or other suppliers, transport the gas from 
the supply area to storage fields or sales delivery points, and sell 
its gas on a bundled basis. Now, pipeline companies are primarily 
transporters of gas. The physical operation of a pipeline used for 
open-access transportation, however, is much the same as when it was 
used for bundled merchant service. A transportation pipeline continues 
to need gas for compressor fuel, gas losses, line pack, and base 
storage gas. In addition, in order for the system to operate 
efficiently, it must have sufficient gas volumes and/or storage 
capacity available to provide for transportation imbalances and no-
notice transportation. Although these resource needs are not new ones, 
in the Commission's view, the mandate to unbundle and the changed 
primary role of pipelines from merchants to transporters require 
recognition, measurement, and reporting of these resources differently 
than presently required.
    One might argue that the present accounting requirements contained 
in the Uniform System of Accounts are adequate and appropriate for 
accounting for gas costs of a transportation pipeline. Under this view, 
it could be argued that the loss of the sales function does not change 
the economic character of the transportation function. Physically, the 
pipeline must operate essentially as it always has in performing a 
transportation function, and that the loss of the sales function does 
not change the economic character of the transactions that must be 
accounted for. Our analysis, however, indicates otherwise. We find that 
the financial and regulatory accounting needs for a transporter are 
sufficiently different from those of a merchant to warrant changes to 
our Uniform System of Accounts.
    To meet regulatory needs, the Commission's regulations should 
provide recognition and measurement criteria for accounting elements 
(e.g. revenues, expenses, assets, liabilities, equity capital) that not 
only represent their economic characteristics but also provide useful 
financial information relating to services provided. Further, the 
regulations should provide for uniform accounting. It is indisputable 
that regulation is improved when similar economic events are accounted 
for consistently between periods, and uniformly between companies. In 
the Commission's view, uniformity in accounting is essential for 
developing just and reasonable rates, for compliance review purposes, 
and for the preparation of meaningful intra- and inter-company 
statistics.
    The Commission believes that the financial statement treatment most 
consistent with the economic character of the accounting transactions, 
and the treatment that produces the most useful regulatory information, 
can be obtained if we require that: (1) Volumes maintained for system 
balancing purposes, including those needed for no-notice transportation 
service, be accounted for as fixed assets rather than as inventory held 
for sale, which is the current practice; and (2) gas furnished by 
transportation customers for compressor fuel, line losses, or other 
operational purposes be viewed as additional compensation for services, 
and an appropriate amount of expense be recognized concurrent with the 
use of such volumes by the pipeline. With respect to the second item, 
the current practice is, in general, not to recognize either the gas 
consideration received as revenues or to recognize an expense when the 
gas is consumed in system operations.
1. System Gas
    The Commission's existing accounting regulations for gas 
transactions (purchases, storage, exchanges, sales, system use, etc.) 
were developed when a typical natural gas pipeline company offered 
bundled sales service. Gas used in providing unbundled transportation 
service has characteristics that are different from gas used in 
providing bundled sales service. A transportation pipeline is a dynamic 
system where there are constant imbalances between what has been 
delivered to the system by customers or gas suppliers, on one hand, and 
what has been delivered to customers or used to operate the pipeline, 
on the other. Although a transportation pipeline has an obligation to 
transport and deliver gas provided to it by a shipper, gas is a 
fungible commodity. There is no specific identification of the 
molecules of gas that a transportation customer (shipper) delivers into 
the system with the volumes that it receives at the delivery point. The 
pipeline's obligation to the customer is satisfied when the customer 
either receives at the appropriate delivery point sufficient volumes, 
from whatever source, to meet the quantity, quality, and heat content 
called for by the tariff's terms and conditions or it is otherwise 
settled through cash-out provisions or balancing arrangements entered 
into between two or more customers.
    In order to meet its obligation to shippers, the pipeline must have 
available sufficient volumes to meet the operational dynamics of its 
system (after consideration of imbalance agreements between customers). 
For purposes of [[Page 3144]] this discussion these volumes will be 
referred to collectively as system gas. In our view, the character of 
the accounting for system gas needs falls into three categories: (1) A 
fixed asset for those volumes needed to provide for pressure 
maintenance, (2) a fixed asset for those volumes needed to meet 
imbalances, including no-notice transportation, and (3) operating 
expenses for volumes used for compression, line losses, and other 
operational uses.
    The first fixed asset category includes line pack gas,9 LNG 
``heel'',10 and gas held in underground or other natural gas 
storage facilities for purposes of pressure maintenance.11 The 
cost to the pipeline of these volumes, taken collectively, represents 
its fixed investment in the gas necessary to operate the pipeline 
transportation system. Under the current Uniform System of Accounts, 
the investment cost of these volumes is recorded as gas plant in 
service except for recoverable base storage gas which is recorded in 
Account 117, Gas Stored Underground- Noncurrent.

    \9\Gas Plant Instruction 3(20).
    \10\Gas Plant instruction 3(21).
    \11\The gas needed to maintain pressure requirements refers to 
those volumes needed to maintain the system at its design operating 
capacity. It includes the volumes of gas held in natural gas storage 
facilities in order to maintain pressure and deliverability 
requirements. These storage volumes are often referred to as base or 
cushion gas.
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    Aside from these volumes, however, pipelines as merchants have also 
traditionally maintained ``investments'' in additional volumes of gas 
that were needed for system balancing12 or to provide gas sales 
service at the city gate on demand during peak periods. These 
additional volumes were included in the pipeline's system as additions 
to line pack and/or underground storage. When the additional volumes 
were added to line pack, many pipelines charged the cost of the gas to 
expense at that time, even though the gas was not physically delivered 
to a customer until a later period. When the additional volumes were 
injected into underground storage, the cost of the gas was charged to 
either Account 164.1 or Account 117. As the volumes were withdrawn from 
inventory for load balancing or sales service, the related cost was 
charged to expense. The cost of gas withdrawn from storage would be 
determined in accordance with a generally accepted inventory method, 
consistently applied. The accounting costs were then recovered from 
sales customers through purchased gas adjustments (PGAs).

    \12\System balancing, as used here, refers to those situations 
where the pipeline provided gas from its own source of supply in 
order to meet deficiencies caused by a shipper tendering less 
volumes to the pipeline at the receipt point than it took from the 
systems at the delivery point. The term can also be used to refer to 
situations where the shipper tenders more volumes than it takes from 
the system.
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    In the post-Order No. 636 period, there is a need to measure and 
recognize the additional volumes of gas needed for load balancing and 
no-notice transportation service, as well as the recoverable base gas 
volumes, differently from how they have been measured and recognized in 
the past. This is because such investments are necessary to perform a 
transmission function whether there continue to be sales services or 
not. Further, with the implementation of unbundled services, pipelines 
generally discontinued their PGAs. Most pipelines that continue to 
provide sales service do so at market-based prices. It is obviously 
important to identify and aggregate the costs of transportation service 
separately from the costs of providing sales service, in order to avoid 
inappropriate allocations of costs between the two.
    Under Order No. 636, pipelines were required to relinquish most of 
the capacity of their transmission system, including storage, to their 
customers. The Commission permits pipeline companies to retain for 
their own use only a designated volume of storage capacity on their 
systems for use in load balancing and no-notice transportation service. 
These volumes, in general, are intended to represent the maximum volume 
needed to maintain reliability and continuity of transportation service 
during peak periods. It would be inappropriate to classify these 
volumes as gas held for resale in the ordinary course of business, i.e. 
inventory; instead, they represent permanent investments that a 
pipeline must make for providing transportation service. The Commission 
believes that the use of this gas provides further support for no 
longer viewing the costs incurred to provide this transportation 
function as inventory (or expended when acquired in the case of some 
line pack). To account for this gas in such a manner, which would be 
more appropriate for an enterprise engaged in a merchant type of 
business activity, is no longer the best financial statement 
representation.
    Even if a pipeline receives payment for system gas delivered to 
meet an imbalance or no-notice transportation requirement, the 
Commission does not believe that it should account for the transaction 
as if a sale has occurred. Simultaneously with the gas delivery, the 
transportation pipeline has an obligation, in order to maintain the 
integrity of the transportation system, to replenish the designated 
volumes that make up system supply. The obligation to replace these 
volumes would more appropriately be accounted for as if ``owed to 
system gas'' rather than as a sale. There is no expectation by the 
pipeline of realizing a profit from this type of gas transaction. It is 
merely a loan that is to be repaid by the shipper through either 
providing gas in kind or through cash-out provisions.
    The primary difference between the fixed asset accounting model and 
the inventory model for system gas is in the carrying value of the 
asset. Under the inventory model, the carrying value of the asset will 
change over time as withdrawals of system gas are made and replacements 
are brought back into the system. The inventory model would permit 
various methods of pricing these withdrawals. For instance, an entity 
could assign a cost to these withdrawals using LIFO, FIFO, or a 
weighted average inventory method, or specific identification, provided 
that the method is consistently applied. Replacements would be priced 
at their acquisition cost. Under the fixed asset model, as we view it, 
the carrying value for system gas would not change except for 
recognition of changes in designated volumes. Instead, the carrying 
value would be locked-in the same way that plant investments are to 
historical cost. Further, the fixed asset model would permit only one 
method for assigning cost to the temporary ``owed to system gas'' 
account--current market price. Gain or loss recognition, if any, would 
be limited to any differences between the actual replacement cost of 
system gas and reimbursements from customers on a cash-out basis where 
the differences are not required to be passed along to customers.
    The Commission believes that the fixed asset model is superior for 
several reasons.
    First, it more accurately reflects the economics of transportation 
transactions. If the withdrawal/replacement transaction is satisfied by 
gas in kind, it is obvious that there should be no economic gain or 
loss realized. Since the cash-out provisions are intended to be 
substitutes for gas deliveries, it should likewise be obvious that no 
economic gain or loss occurred from the basic transaction. However, the 
inventory method would result in a gain or loss being recognized to the 
extent that the accounting cost of gas withdrawn from storage 
(historical cost) differs from the cash-out price (generally current 
spot market prices). On the other hand, the fixed asset model would not 
show a gain or loss from the withdrawal/replacement activity. Both 
[[Page 3145]] models, however, will correctly show that a gain or loss 
has been realized by the pipeline on the difference between the cash-
out price and the actual cost of replacement gas (if such gain or loss 
is not passed along to customers).
    Second, the fixed asset model better matches cost (expenses) with 
services. To the extent that accounting gains and losses on system gas 
transactions are required to be passed along to transportation 
customers, the fixed cost model would achieve a closer matching of 
current gas cost with current service than would the inventory model. 
For instance, if a company uses a FIFO inventory pricing method, the 
effect of gas costs incurred in prior years will enter into the 
determination of the revenue requirements for current service. This 
distortion does not occur under the fixed asset model.
    Third, the fixed asset model for assigning costs to unbundled 
services permits a clearer separation of costs deemed to be 
transmission from costs related to other functions.
    And fourth, the fixed asset model, once adopted, should make the 
Commission's ratemaking and compliance activities an easier task since 
the investment included in rate base would be fixed. Any cash flow 
requirements/benefits related to the proposed ``Gas owed to system 
gas'' account and the companion account receivable could be included in 
cash working capital consideration.
2. Revenues and Expenses Associated With Compressor Fuel
    Some transportation tariffs provide for the shippers to furnish gas 
for compressor fuel and other pipeline system use. In other instances, 
the pipeline is required to purchase gas for such purposes from a third 
party. It is the Commission's understanding that, at least in the 
majority of instances, no accounting recognition is currently being 
given to the compensation in the form of gas that is received for the 
transportation service when the pipeline reports transportation 
revenues. However, in any instances where it is the pipeline's 
responsibility to purchase the gas, gas cost reimbursements would be 
included in reported revenues. Similarly, the pipeline that does not 
report the furnished gas as compensation would not show an expense for 
fuel burned, whereas the pipeline that purchases the gas would.
    This diversity in accounting treatment is not warranted. The 
Commission believes that all consideration received for services should 
be reported as revenues, whether paid in cash or otherwise. If the 
consideration is other than cash, then the non-cash consideration 
should be measured on a cash basis. In the case of gas furnished by a 
customer for compressor fuel, the Commission believes that an 
appropriate measure of the revenues received by the transportation 
pipeline is the cost that would have been incurred had the pipeline 
been required to purchase the gas itself. The same assigned value 
should be used when costing the gas actually used for compressor fuel. 
It is only through such accounting that uniformity can be achieved and 
valid financial comparisons made. The Commission invites comments from 
the industry about whether a price index should be used to account for 
the value of gas furnished by customers; if so, what would be the 
appropriate price index, and how should that price index be applied?
    The Commission is not proposing changes to its Uniform System of 
Accounts for these items since it believes that the current system 
already adequately provides for such recognition. However, it should be 
made clear that the expense account to be charged with the gas provided 
by shippers is the same purchased gas account that would have been 
charged if the gas was separately purchased in a cash transaction. 
Further, the records supporting the purchased gas accounts for retained 
gas must be so maintained that there will be readily available for each 
shipper and point of receipt, the quantity of gas tendered and the 
values assigned.
3. The Proposed Rule
    The Commission is proposing to revise its accounting regulations to 
provide for uniform accounting for all pipeline investment in the 
volumes of gas needed to operate the transportation system. The 
Commission is not proposing changes to the accounting requirements for 
initial line pack, LNG heel, and non-recoverable base gas. The cost of 
this gas will continue to be recorded in the utility plant accounts. 
The proposed rule will require, however, that Account 117, Gas Stored 
Underground-Noncurrent, be replaced by new accounts Account 117.1, Gas 
stored-Base Gas, Account 117.2, System balancing gas, Account 117.3, 
Gas stored in reservoirs and pipelines-noncurrent, and Account 117.4, 
Gas owed to system gas.
    Account 117.1 is to include the cost of recoverable gas volumes 
that are necessary, in addition to those volumes for which costs are 
properly includable in Account 352.3, Nonrecoverable Natural Gas, to 
maintain pressure and deliverability requirements for the storage 
facility. Account 117.2 is to be used to record a pipeline's investment 
in any additional system gas volumes, including line pack not 
capitalized in Account 101, Gas Plant in Service, designated as maximum 
system gas needed for load balancing, no-notice transportation, and 
other operational purposes. Account 117.3 is to include the cost of 
noncurrent company-owned stored gas not includable in Accounts 117.1 or 
117.2. Account 117.4 is to include encroachments upon system gas which 
result from transportation imbalances, no-notice transportation, and 
other operational needs.
    The initial investment cost to be recorded in Account 117.1 and 
117.2 is to be determined from the book balances on the date of 
adoption of the new accounts. If there is no Commission approved method 
to the contrary, volumes in Account 117.1 are to be priced consistent 
with the inventory method previously in use. Volumes includable in 
Account 117.2 are to be priced at the inventory price that would be 
applicable to the last volumes that would be withdrawn from storage 
before encroachment upon base gas. If there are insufficient volumes in 
gas storage to fully provide for the volumes designated as system gas 
as of the adoption date, the deficient volumes are to be priced at the 
current market price with an equal amount being credited to Account 
117.4. Future encroachments upon system gas are to be credited to 
Account 117.4 at the then current market price of gas with a 
corresponding charge to Account 808.1, Gas Withdrawn From Storage-
Debit. Account 806, Exchange Gas, would be credited and Account 174, 
Miscellaneous Current and Accrued Assets, would be debited 
simultaneously with the entries to system gas.
    If a customer responsible for an owed-to-system gas balance meets 
his responsibility for repayment by delivering gas in kind, Account 806 
would be debited and Account 174 credited at the market price 
originally used to establish the Account 174 balance. The next volumes 
injected into system gas would likewise be priced at this same price by 
crediting 808.2 Gas Delivered to Storage-Credit and debiting Account 
117.4. If the owed to system gas balance (Account 117.4) is due to more 
than one transaction, the above accounting would follow a queue with 
the earliest transaction first. Such accounting would be followed until 
the credit balance in Account 117.4 was eliminated.
    If the customer responsible for an owed-to-system gas balance meets 
his [[Page 3146]] responsibility for repayment through a cash-out 
provision, similar accounting would be followed. However, a gain or 
loss may be realized under either settlement method selected. The gain 
or loss could result from either the book amount for the account 
receivable (Account 174, Miscellaneous Current and Accrued Assets) 
being different than the cash-out settlement or the price paid for the 
replacement volumes being different than the price used to establish 
the owed to system gas account or both.
    If the pipeline's tariff provides that gains and losses on such 
transactions are to be passed along to customers in future periods, the 
gain or loss should be included in either Account 182.3, Other 
Regulatory Assets or Account 254, Other Regulatory Liabilities, with 
contra entries to Account 407.3, Regulatory Debits, or Account 407.4, 
Regulatory Credits, as appropriate. If the gain or loss on settlement 
of the imbalance receivable or payable is not to be passed along to 
customers, Account 495, Other Gas Revenues, or Account 813, Other Gas 
Supply Expenses, as appropriate, should be used to record the gain or 
loss.

B. Other Revisions to Uniform System of Accounts

1. Revenues
    At present, a pipeline includes in Account 489, Revenues from 
transportation of gas of others, ``revenues from transporting gas for 
other companies through the production, transmission, and distribution 
lines, or compression stations of the utility.'' Service charges for 
the storage of gas of others is included in Account 495, Other gas 
revenues, (See Item No. 5 of Account 495). The Commission proposes to 
delete Account 489 (Revenues from transportation of gas of others) in 
its entirety and Item No. 5 of Account 495 (Service charges for storing 
gas for others) and replace them with four new accounts. Those are: 
Account 489.1 in which the pipeline would include revenues from 
transportation of gas through gathering facilities; Account 489.2 in 
which the pipeline would include revenues from transportation of gas 
through transmission facilities; Account 489.3 in which the pipeline 
would include revenues from transportation of gas through distribution 
facilities; and Account 489.4 in which the pipeline would include 
revenues from storing gas of others. In addition, the Commission 
proposes to add a new item to the list of items in Account 495. This is 
item 8, ``Gains on settlements of imbalance receivables (See Account 
806).''
    The Commission is proposing the above changes in order to 
appropriately record revenues from unbundled services.
2. Gas Supply Expenses
    The Commission proposes to revise Account 806, Exchange gas, so 
that it will include debits or credits for the cost of gas in 
unbalanced transactions and not just unbalanced exchange transactions. 
Such unbalanced transactions would be those whereby gas is delivered to 
another party in exchange, load balancing, or no-notice transportation 
transactions. In addition, the Commission proposes to revise the 
instructions in paragraph B concerning the recording of revenue, gain, 
expense, or loss in connection with the performance of exchange 
services and to revise paragraph C with respect to the maintenance of 
records so that there would be readily available for each party 
entering gas exchange, load balancing, or no-notice transportation 
transactions by point of receipt and delivery, the quantity of gas 
delivered and received, the amount of consideration if other than gas, 
and the basis for the consideration. The Commission also proposes to 
revise Account 813, Other gas supply expenses, so that it will include 
losses on settlements of imbalance receivables.
3. Major/Nonmajor Accounts
    The Commission is proposing to eliminate all Nonmajor accounts in 
the Uniform System of Accounts and to require all natural gas companies 
to use the same accounts. The Commission is, thus, also proposing that 
the Major accounts be changed to eliminate their application to Major 
natural gas companies only and to revise the instructions, notes and 
items accordingly. In addition, as discussed below, the Commission is 
proposing to revise Form No. 2-A to require Nonmajor respondents to 
file certain Form No. 2 pages as their Form No. 2-A report. The 
Commission is also proposing to revise part 158 of the regulations to 
delete the references to major and nonmajor in sections 158.10 and 
158.11. In addition, the Commission proposes to further amend section 
158.10(a) so that it applies to all examinations of accounts without 
limitation and requires independent licensed public accountants to be 
licensed on or before December 30, 1970 as is the case in current 
section 158.10(b) and to delete present section 158.10(b). Further, the 
Commission proposes to revise section 158.11 to require the filing of 
the independent accountant's letter or report of certification with the 
original and each copy of the Form No. 2 or Form No. 2-A. Last, the 
Commission proposes to revise section 158.12 by removing the words, 
``The Commission will not recognize any certified public accountant or 
public accountant through December 31, 1975, who is not in fact 
independent. Beginning January 1, 1976, and each year thereafter, the'' 
and adding in their place, the word ``The''.
4. Mcf to Dth
    At present, the Uniform System of Accounts requires reporting 
volumes by Mcf. The Commission proposes to amend the Uniform System of 
Accounts where applicable to measure gas by dekatherms rather than by 
Mcf to reflect the current measurement of gas by heat content rather 
than by volume.

IV. Part 250

    Part 250 of the Commission's regulations specifies the use of 
certain forms for accomplishing specific actions. The most significant 
change proposed in Part 250 is the removal of section 250.16 (Format of 
compliance plan for transportation services and affiliate transactions) 
of the transportation discount information that a pipeline transporting 
gas under subparts B or G of Part 284 and conducting discounted 
transportation transactions with a marketing or brokering affiliate 
must maintain for each billing period. As more fully explained under 
the discussion in this NOPR regarding the changes proposed for Part 
284, infra, the discount reporting requirements under section 250.16(d) 
are somewhat duplicative of the discount reports required under section 
284.7(d)(5)(iv). Therefore, the Commission is proposing in this NOPR 
various modifications to section 284.7(d)(5)(iv) (proposed section 
284.7(c)(6)) that will make the discount reporting information under 
section 250.16(d) unnecessary. Accordingly, the Commission proposes to 
delete section 250.16(d).
    The other proposed changes to Part 250 are essentially intended to 
simplify, update, or eliminate these forms to reflect current 
regulatory practice, and to eliminate the forms related to the 
regulation of producers and gatherers, since the wellhead gas market 
has been finally deregulated and such forms are required by regulations 
that have been removed in Parts 154 and 157.
    Section 250.2 sets forth the forms required under section 154.64 
(proposed section 154.602) for notification to the 
[[Page 3147]] Commission of a cancellation of a filed tariff or part 
thereof, or a termination of the tariff by its own terms, when no new 
tariff or part thereof is to be filed in its place. The Commission 
proposes to simplify and clarify section 250.2 by stating that the 
notices of cancellation to be used when canceling an entire tariff or 
an entire rate schedule should be filed as a tariff sheet. Currently, 
the existing forms themselves include the header and footer information 
normally associated with a tariff sheet, which is unnecessary and 
confusing.
    In addition, the Commission proposes to modify section 250.2 by 
eliminating the requirement that a specific form be used when providing 
notice of the cancellation of individual tariff sheets. Rather, section 
250.2 will provide that when a single sheet is canceled, it should be 
reserved for future use. This does not represent a substantive change, 
but more accurately represents the current practice in canceling a 
tariff sheet, and will allow the sheet to conform better to the 
Commission's electronic tariff sheet filing requirements.
    Section 250.3 specifies the form required under section 154.64 
(proposed section 154.602) for notification to the Commission of a 
cancellation or termination of a contract, or executed service 
agreement. The Commission proposes to change the current instruction in 
the form to indicate the ``name of purchaser or purchasers'' to an 
instruction to indicate the ``name of customer or customers.'' The use 
of ``customer'' rather than ``purchaser'' better reflects the shift in 
today's gas market from sales to transportation service.
    The Commission proposes to modify the headings of sections 250.2, 
250.3, and 250.4 (governing the form of the certificate of adoption 
required under existing section 154.65 (proposed section 154.603) to be 
used when the tariff or contracts of a natural gas company are to be 
adopted by a successor entity) to refer to the new section numbers of 
the regulations from which their authority stems, since the Commission 
proposes in the companion rulemaking to redesignate the referenced 
sections of Part 154. Thus, the reference in sections 250.2 and 250.3 
to section 154.64 is changed to section 154.602, and the reference in 
section 250.4 to section 154.65 is changed to section 154.603. The 
Commission also proposes, in section 250.4, to modify the line 
indicating the date of the form of certificate of adoption by removing 
the year indicator of ``194 --.''
    Many of the forms set forth in Part 250 relate to the filing 
requirements of natural gas producers and gatherers under Parts 154 and 
157 of the Commission's regulations. Specifically, section 250.5 
specifies the form of contract summary required to be filed under 
section 154.24(a) by independent producers applying for a certificate 
of public convenience and necessity under section 7 of the NGA for the 
transportation, or sale for resale, of natural gas in interstate 
commerce. Section 250.7 specifies the form of contract summary required 
to be filed under section 157.30(b) by independent producers seeking 
abandonment authorization. Section 250.8 specifies the form for the 
summary of contract information required by section 154.92(d) to be 
filed by independent producers seeking authority to provide natural gas 
service, previously authorized by the Commission, as a successor-in-
interest. Section 250.9 specifies the form of notice required under 
section 154.97(a) to be filed by an independent producer when a rate 
schedule is proposed to be cancelled, or will terminate by its own 
terms, and no new schedule is to be filed in its place. Section 250.10 
specifies the form required to be filed under section 157.40(b)(4) by 
independent producers applying for a small producer exemption from 
certain filing requirements. Section 250.14 specifies the form of the 
initial billing statement required under section 154.92 to be filed 
with the filing of a rate schedule by every independent producer, and 
the form required under section 154.94(f) to be used by an independent 
producer seeking a change in its rate schedule.
    All of the above-referenced sections of Parts 154 and 157 have been 
removed from the Commission's regulations by Order No. 567, issued July 
28, 1994, in Docket No. RM94-18-000.\13\ Order No. 567 deleted certain 
regulations related to natural gas producer rate regulation that were 
either obsolete or nonessential in light of the deregulation of 
wellhead gas prices under the Natural Gas Wellhead Decontrol Act of 
1989,\14\ that finally occurred on January 1, 1993. Since the 
regulations requiring that independent producers make certain filings, 
and in specific forms, have been deleted, sections 250.5, 250.7, 250.8, 
250.9, 250.10, and 250.14 of part 250, setting forth the actual forms, 
should also be deleted. Thus, the Commission is proposing to remove 
these sections.

    \13\68 FERC 61,135 (1994).
    \14\Pub. L. No. 101-60; 103 Stat. 157 (1989).
---------------------------------------------------------------------------

    The Commission also proposes to remove section 250.12, governing 
the form of escrow agreements. This regulation was originally 
promulgated by Order No. 400, issued April 28, 1970, in Docket No. R-
376. It is rarely used. In the instances in which companies are 
required to place funds in escrow, the Commission proposes to determine 
in the proceeding establishing the escrow requirement whether, and in 
what form, the escrow agreement should be filed with the Commission. 
However, the Commission will invite comments from parties who believe 
it would be useful to retain a form of escrow agreement, or suggestions 
as to how this regulation could be modified to become more useful, 
rather than eliminated.
    Finally, the Commission proposes to change all references in Part 
250 from the ``FPC'' and the ``Federal Power Commission'' to the 
``FERC,'' and to the ``Federal Energy Regulatory Commission,'' 
respectively.

V. Part 260

    The provisions of Part 260 require that pipelines file certain 
forms and reports with the Commission, such as the FERC Form Nos. 2, 2-
A, 11, and 549-ST. As further discussed below, the Commission is 
proposing to modify the actual Form Nos. 2, 2-A, and 11, and various 
sections of Part 260. The proposed changes to Part 260 are simply 
designed to update these reporting requirements to reflect current 
regulatory practice, and to conform these prescriptive requirements to 
the changes to the other parts of the Commission's regulations proposed 
in this NOPR.

A. Revisions to Form No. 2

    The Commission is proposing to revise Form No. 2 for a variety of 
reasons. First, it is desirable to update Form No. 2 by deleting 
unneeded schedules, or individual data elements, by clarifying and 
modernizing schedules and instructions, and by increasing the 
thresholds for the reporting of certain information. Second, it is 
vital to revise Form No. 2 to accurately present the restructured 
nature of the natural gas pipeline industry, which is primarily focused 
on the transportation of gas rather than the sale of gas. Only then 
will the Form No. 2 provide more useful and relevant information to the 
Commission and to pipeline customers for the assessment of pipeline 
operations. A sample copy of the proposed revised Form No. 2 is 
attached as Appendix A.
    The specific changes the Commission proposes are: [[Page 3148]] 

General Information--Pages i and ii

    The Commission proposes to require Form No. 2 to be filed by each 
major interstate natural gas company having combined gas transported or 
stored for a fee exceeding 50 million dekatherms (Dth) in each of the 
three previous calendar years. This will replace the present 
requirement that Form No. 2 must be filed by major companies which are 
those having combined gas sold for resale and gas transported or stored 
for a fee exceeding 50 million Mcf at 14.70 psia (60 deg.F) in each of 
the three previous calendar years. The proposed elimination of ``gas 
sold for resale'' reflects the current nature of the pipeline industry 
where pipelines are primarily transporters of gas and make sales for 
resale on an unbundled basis in the supply area. The proposed 
replacement of Mcf with Dth reflects the current measurement of gas by 
heat content rather than by volume.
    The Commission also proposes to eliminate the words ``is a 
Regulatory Support Requirement (18 CFR 260.1)'' in the first sentence 
of page i as not needed and to revise the last sentence in Instruction 
1, to eliminate the reference to the Energy Information 
Administration's statistical publication (Financial Statistics of 
Interstate Natural Gas Pipeline Companies), to delete the words, ``as 
classified in the Commission's Uniform System of Accounts Prescribed 
for Natural Gas Companies Subject to the Provisions of the Natural Gas 
Act (18 CFR 201),'' from the first sentence in Instruction II, and to 
add the words, ``which meets the filing requirements of 18 CFR 260.1'' 
after the word company in that sentence.
    The Commission proposes to revise Instruction III(a) to add the 
present requirement for filing on an electronic medium. The Commission 
further proposes to change Instruction III(c) to replace the present 
Certified Public Accountant (CPA) certification statement with a 
flexible format that will enable the respondent's CPA firm to prepare 
its certification statement in accordance with current standards of 
reporting and still attest as to the conformity of listed FERC Form No. 
2 schedules with the Commission's Uniform System of Accounts and the 
Chief Accountant's published accounting releases.
    In addition, the Commission proposes that the letter or report 
required by Instruction III(c) for the CPA certification be submitted 
with each copy as well as with the original submission and be submitted 
with that submission rather than alternatively within 30 days after the 
filing date for Form No. 2.

General Instructions--Page iii

    The Commission proposes to replace Mcf with Dth in General 
Instruction II on page (ii) and ``14.73 psia and a temperature base of 
60 deg.F'' with ``in Btu and Dth,'' in General Instruction XII on page 
(iii). The Commission also proposes to delete General Instruction V 
with respect to the means of completing the report as outdated and 
unnecessary.

Definitions--Page iv

    The Commission proposes to define dekatherm as a unit of heating 
value equivalent to 10 therms or 1,000,000 Btu.15

    \15\Btu refers to British Thermal Unit--the quantity of heat 
required to raise the temperature of one pound of water by one 
degree Fahrenheit.
---------------------------------------------------------------------------

Excepts From the Law--Page iv

    The Commission proposes to correct the quoted language of the 
Natural Gas Act.

List of Schedules (Natural Gas Company)--Pages 2-4

    The Commission proposes to revise the list of schedules to conform 
with the changes proposed to the schedules by this NOPR.

Control Over Respondent--Page 102

    The Commission proposes to revise the instructions and provide a 
format for information required with respect to entities controlling 
the respondent natural gas company to provide better reporting of the 
vertical integration of the respondent and its parents.
    The Commission is proposing to delete referencing the SEC 10-K 
Report Form because most respondents are included in consolidated 
reports and do not prepare separate 10-K reports.

Corporations Controlled By Respondent--Page 103

    The Commission proposes to delete instruction 4, which permits 
referencing the SEC 10-K Report Form filing for the reason stated 
above. The Commission also proposes to add a new instruction 4 and new 
column (b) for designation of the type of control held by the 
respondent.

Definitions--Page 103

    The Commission proposes to delete column (d) entitled ``Footnote 
Ref.''

Officers--Page 104

    The Commission proposes to delete this page because it is not 
needed for Commission regulatory purposes.

Directors--Page 105

    The Commission proposes to delete this page because it is no longer 
needed for Commission regulatory purposes.

Security Holders and Voting Powers (Continued)--Page 107

    The Commission proposes to delete this continuation page because it 
is not needed with electronic reporting since supplemental pages can be 
added if more space is needed.

Important Changes During the Year--Page 108

    The Commission proposes to delete item 12, which allows the 
respondent to substitute notes from the annual report to stockholders 
for required data because most respondents are included in consolidated 
reports and do not prepare separate annual reports.

Important Changes During the Year--Page 109

    The Commission proposes to delete this continuation page because it 
is not needed with electronic reporting.

Comparative Balance Sheet (Assets and Other Debits)--Page 110

    The Commission proposes to modify column (c) by deleting ``Balance 
at Beginning of Year'' and inserting ``Balance at End of Current Year 
(in dollars)'' and to modify column (d) by deleting ``Balance at End of 
Year (in dollars)'' and inserting ``Balance at End of Previous Year (in 
dollars).'' The Commission also proposes to delete ``Gas Stored 
Underground Noncurrent (117)'' at Line 12 and replace it with four new 
accounts--Gas Stored--Base Gas (117.1), System Balancing Gas (117.2), 
Gas Stored in Reservoirs and Pipelines--Noncurrent (117.3), and Gas 
Owed to System Gas (117.4). The Commission discussed the proposed new 
accounts above.

Comparative Balance Sheet (Assets and Other Debits) (Continued)--Page 
111

    The Commission proposes to modify column (c) by deleting ``Balance 
at Beginning of Year'' and inserting ``Balance at End of Current Year 
(in dollars)'' and to modify column (d) by deleting ``Balance at End of 
Year'' and inserting ``Balance at End of Previous Year (in dollars).''

Comparative Balance Sheet (Liabilities and Other Credits)--Page 112

    The Commission proposes to modify column (c) by deleting ``Balance 
at Beginning of Year'' and inserting ``Balance at End of Current Year 
(in dollars)'' and to Modify Column (d) by deleting ``Balance at End of 
Year'' and [[Page 3149]] inserting ``Balance at End of Previous Year 
(in dollars).'' The Commission also proposes to add the language 
``(Less) Current Portion of Long-Term Debt'' to Line 22 and to add the 
language ``Current Portion of Long-Term Debt'' as Line No. 33.

Comparative Balance Sheet (Liabilities and Other Credits) (Continued)--
Page 113

    The Commission proposes to modify column (c) by deleting ``Balance 
at Beginning of Year'' and inserting ``Balance at End of Current Year 
(in dollars)'' and to modify column (d) by deleting ``Balance at End of 
Year'' and inserting ``Balance at End of Previous Year (in dollars).''

Statement of Income for the Year--Page 114

    The Commission proposes to move instructions 5 and 6 from this 
schedule to Notes to Financial Statements on page 122.

Statement of Income for the Year (Continued)--Page 115

    The Commission proposes to delete instruction 7, which permits the 
attaching at page 122 of any notes appearing in the report to 
stockholders that are applicable to this Statement of Income, and to 
move instruction 8 from this schedule to Notes to Financial Statement 
on page 122.

Statement of Income for the Year (Continued)--Page 116

    The Commission proposes to delete this continuation page because it 
is not needed with electronic reporting.

Statement of Retained Earnings for the Year--page 118

    The Commission proposes to modify column (c) by deleting ``Amount'' 
and inserting ``Current Year Amount (in dollars)'' and to add column 
(d) ``Previous Year Amount (in dollars).'' The Commission also proposes 
to delete instruction 8, which requires the attaching at page 122 of 
applicable notes in the annual report to stockholders.

Statement of Retained Earnings for the Year (Continued)--Page 119

    The Commission proposes to modify column (b) by deleting ``Amount'' 
and inserting ``Current Year Amount'' and adding column (c) ``Previous 
Year Amount.''

Statement of Cash Flows--Pages 120 and 121

    The Commission proposes to delete the first sentence of instruction 
1, which requires the attaching at page 122 of applicable notes in the 
annual report to stockholders.
    The Commission proposes to modify column (b) by deleting 
``Amounts'' and inserting ``Current Year Amount'' and to add Column (c) 
``Previous Year Amount.''

Notes to Financial Statement--Page 122

    The Commission proposes to change instruction one to require at 
least the same level of detail for disclosures that would be given in 
shareholder annual reports and to add new instructions to provide 
significant details on: the respondent's pension and other benefit 
plans; income tax accounting; differences in the way in which 
transactions are presented in the shareholder annual reports versus the 
Form No. 2; and disclosure of financial changes either to the 
respondent or the respondent's consolidated group that will directly 
affect the respondent's gas pipeline operations. The Commission also 
proposes to delete instructions 3 (``For Account 116, Utility Plant 
Adjustments'') and 6 (permitting the attaching of notes to financial 
statements in the annual report to stockholders). In addition, as 
stated above, the Commission proposes to move three instructions from 
pages 114 and 115 to page 122.

Notes to Financial Statement (Continued)--Page 123

    The Commission proposes to delete this continuation page between it 
is not needed with electronic reporting.

Summary of Utility Plant and Accumulated Provisions for Depreciation, 
Amortization and Depletion (Continued)--Page 201

    The Commission proposes to delete columns (f) and (g) both entitled 
``other (specify)'' as unneeded because electronic reporting permits 
additional columns to be added as necessary.

Gas Property and Capacity Leased From Others--Page 212

    The Commission proposes a new schedule to provide detailed 
information about gas property and capacity leased from others, 
including leases involving property constructed by the respondent, 
sold, and then leased back. The Commission proposes to require only the 
reporting of property leases in which the average annual lease payment 
under the initial term of the lease exceeds $500,000.

Gas Property and Capacity Leased to Others--Page 213

    The Commission proposes to revise the schedule on page 213 entitled 
``Gas Plant Leased to Others (Account 104)'' by changing the schedule 
and instructions to obtain details about gas property and capacity 
leased to others. The changes are necessary to provide information that 
would allow the Commission to determine whether ratepayers are paying 
for facilities not used in the respondent's utility operations. The 
Commission proposes to require only the reporting of property leases in 
which the average lease income over the initial term of the lease 
exceeds $500,000.

Gas Plant for Future Use (Account 105)--Page 214

    The Commission proposes to raise the reporting threshold from 
$250,000 to $500,000 and to delete the language in Line No. 1 which 
refers to pages 500-01, which are proposed to be deleted.

Production Properties Held for Future Use (Account No. 105.1)--Page 215

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Gas Stored (Accounts 117.1, 117.2, 117.3, 117.4, 164.1, 164.2, and 
164.3)--Page 220

    The Commission proposes to delete Account 117 and replace it with 
four new accounts as discussed above. The Commission also proposes to 
change Mcf to Dth in instruction 1 and lines 6 and 7, to redesignate 
the column letters, to eliminate instructions 2 through 5 as no longer 
necessary, and to add a new instruction on encroachments on base gas, 
system gas, and gas properly recordable.

Non-utility Property (Account No. 121) and Accumulated Provision for 
Depreciation and Amortization of Nonutility Property (Account 122)--
Page 221

    The Commission proposes to delete these schedules because they are 
not needed for Commission regulatory purposes.

Gas Prepayments Under Purchase Agreements--Pages 226 and 227

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Advances for Gas Prior to Initial Deliveries or Commission 
Certification (Accounts 124, 166, and 167)--Page 229

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Prepayments (Account 165)--Page 230

    The Commission proposes to eliminate the instruction requiring the 
[[Page 3150]] reporting of all payments for undelivered gas and the 
completion of pages 226 to 227, along with Line 5, Gas Prepayments 
(pages 226-227). Pages 226 and 227 are also proposed to be eliminated.

Preliminary Survey and Investigation Charges (Account 183)--Page 231

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Other Regulatory Assets (Account 182.3)--Page 232

    The Commission proposes to raise the reporting threshold for minor 
items from $50,000 to $100,000 and to add new instruction 4--``Report 
separately any `deferred regulatory Commission expenses' that are also 
reported on pages 350-351, Regulatory Commission Expenses.''

Miscellaneous Deferred Debits (Account 186)--Page 233

    The Commission proposes to raise the reporting threshold for minor 
items from $100,000 to $250,000 and to delete Line No. 48 ``Deferred 
Regulatory Commission Expenses (see pages 350-351).

Capital Stock (Accounts 201 and 204)--Page 250

    The Commission proposes to delete part of instruction 1, which 
permits referencing the SEC 10-K Report Form filing. The Commission is 
proposing this deletion because most respondents are included in 
consolidated reports and do not prepare separate 10-K reports.

Long-Term Debt (Accounts 221, 222, 223, and 224)--Page 256

    The Commission proposes to delete part of instruction 1, which 
permits referencing the SEC 10-K report Form filing for the reason 
stated above.

Investment Tax Credits Generated and Utilized--Pages 264 and 265

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Accumulated Deferred Investment Tax Credits (Account 253)--Pages 266 
and 267

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Miscellaneous Current and Accrued Liabilities (Account 242)--Page 268

    The Commission proposes to raise the reporting threshold for minor 
items from $100,000 to $250,000.

Other Deferred Credits (Account 253)--Page 269

    The Commission proposes to raise the reporting threshold for minor 
items from $100,000 to $250,000 and to delete instruction 4 as not 
needed for Commission regulatory purposes in that it refers to 
undelivered gas obligations to customers under take-or-pay clauses in 
sales agreements.

Undelivered Gas Obligations Under Sales Agreements--Pages 270 and 271

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Accumulated Deferred Income Taxes--Accelerated Amortization Property 
(Account 281)--Pages 272 and 273

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Other Regulatory Liabilities (Account 254)--Page 278

    The Commission proposes to raise the reporting threshold for minor 
items from $50,000 to $100,000 and to correct a typographical error.

Gas Operating Revenues (Account 400)--Pages 300, 301, and 301A

    The Commission proposes substantial and significant changes to this 
schedule. The proposed changes are: (1) the elimination of instruction 
1's reference to manufactured gas revenues; (2) the deletion of 
instruction 2 defining natural gas; (3) the deletion of instruction 3 
and present columns (f) and (g) concerning average number of natural 
gas customers per month; (4) the deletion of instruction 4 with respect 
to Mcf and therms; (5) the revision of instruction 5 to eliminate the 
reference to columns (c), (e), and (g); (6) the deletion of instruction 
6 concerning commercial and industrial sales; (7) the revision of 
instruction 7 to read, ``Include information on page 106, Important 
Changes During Year, for important new service added and important rate 
increases and decreases;'' (8) the addition of new instruction 2 to 
provide that other revenues are recovery of Order No. 636 transition 
costs and take-or-pay costs; (9) the addition of a new instruction 5 
with respect to reporting the revenue of bundled transportation and 
storage service as transportation service revenue; (10) the addition of 
new instruction 6 with repect to the reporting in columns (j) and (k) 
of revenues received for operational penalties (e.g., operational flow 
order penalties, scheduling penalties, penaties for failure to cycle 
storage gas, (11) the revising of operating revenues in columns (b) and 
(c) to revenues excluding GRI, ACA, other revenues, and penalties, (12) 
the deletion of lines 2-12 and 28-32, which provide for the reporting 
of sales revenues; (13) the addition of lines to show separately sales 
revenues,16 and revenues from gathering, transmission, 
distribution, and storage services; and (14) added columns showing GRI 
revenues, ACA revenues, other revenues, penalty revenues, and total 
operating revenues and dekatherms of natural gas, each for the current 
reporting year and the previous year.

    \16\The proposed new sales line includes Accounts 480-84 which 
are now reported on lines 2-12.
---------------------------------------------------------------------------

    The Commission's main reason for proposing these changes is to 
recognize that pipelines now receive most of their revenues from 
transportation and not sales. Hence, the breakout of information by 
types of sales is not needed. The Commission proposes to break out 
Account 489 into four new accounts (Accounts 489.1-489.4) as discussed 
above. The segregation of operating revenues from other types of 
revenues will facilitate comparisons to operating costs.

Revenues From Transportation of Gas of Others Through Gathering 
Facilities (Account 489.1)--Pages 302, 303, and 304

    The Commission proposes to replace the schedule ``Distribution Type 
Sales by States'' with several new schedules. The current schedule, 
which reflects residential, commercial, and industrial revenues and 
volumes by state is no longer needed for Commission regulatory purposes 
because with unbundling those sales are now unbundled and occur in the 
production area rather than in the market area.
    In the proposed new Revenues from Transportation of Gas of Others 
Through Gathering Facilities Schedule, the pipeline would have to 
report its revenues by state of delivery and by rate. The pipeline 
would have to report for both the current and previous year its 
revenues,17 GRI revenues, ACA revenues, other revenues,18 and 
total operating revenues, along with its Dth of gas delivered. The 
Commission believes that this proposed schedule will provide the 
information needed with respect to gathering to obtain a good 
description of the pipeline's activities in the unbundled environment.

    \17\Revenues excludes GRI, ACA, and other revenues.
    \18\Other revenues are Order No. 636 transition costs and take-
or-pay costs.
[[Page 3151]]

Revenues From Transportation of Gas of Others Through Transmission 
Facilities (Account 489.2)--Pages 302A, 303A, and 304A

    In the proposed new Revenues from Transportation of Gas of Others 
Through Transmission Facilities Schedule, the pipeline would have to 
report its revenues by state of delivery and by rate schedule. The 
pipeline would have to report for both the current and previous year 
its revenues,19 GRI revenues, ACA revenues, other revenues,20 
and total operating revenues, along with its Dth of gas delivered. The 
Commission believes that this reporting reflects the current unbundled 
environment's emphasis on transportation for others.

    \19\Revenues excludes GRI, ACA, and other revenues.
    \20\Other revenues are Order No. 636 transition costs and take-
or-pay costs.
---------------------------------------------------------------------------

Revenues From Storage of Gas of Others--Pages 302B, 303B and 304B

    In the proposed new Revenues from Storage of Gas of Others 
schedule, the pipeline would have to report its revenues by rate 
schedule. The pipeline would have to report for both the current and 
previous year its revenues,21 GRI revenues, ACA revenues, other 
revenues,22 and total operating revenues, along with the Dth 
withdrawn from storage.

    \21\Revenues excludes GRI, ACA, and other revenues.
    \22\Other revenues are Order No. 636 transition costs and take-
or-pay costs.
---------------------------------------------------------------------------

    The Commission believes that this proposed schedule will provide 
the information needed with respect to unbundled storage to obtain a 
good description of the pipeline's activities in the unbundled 
environment.

Residential and Commercial Space Heating Customers and Interruptible, 
Off-Peak, and Firm Sales to Distribution System Industrial Customers--
Page 305

    The Commission proposes to delete this page because it is not 
needed for Commission regulatory purposes.

Sales of Natural Gas--Pages 306 Through 309

    The Commission proposes to change the title of this schedule from 
Field and Main Line Industrial Sales of Natural Gas to ``Sales of 
Natural Gas'', to revise instruction 1, and the information required, 
and to delete continuation sheets on pages 308 and 309.
    The proposed new schedule will include all sales information on the 
schedule. The pages when revised will require respondents to report all 
sales by customer in Dth rather than Mcf (column (c)), by point of 
delivery (column (b)), and with total sales revenue from the customer 
(column (d)). The Commission also proposes to eliminate current 
instructions 2, 3, 4, 6, 7, and 8 and current columns (b), and (d)-(m) 
because that detailed information is no longer needed for Commission 
regulatory purposes. Pages 308 and 309 are proposed to be deleted 
because they are continuation pages and are no longer needed with 
electronic reporting.

Sales for Resale--Natural Gas (Account 483)--Pages 310 and 311

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Transportation Dth and Revenues--Pages 312 and 313

    The Commission proposes to replace the schedule ``Revenue From 
Transportation of Gas of Others--Natural Gas (Account 489)'' (pages 312 
and 313) with ``Transportation Dth and Revenues'', ``Storage Dth and 
Revenues'', and ``Gathering Dth and Revenues.''
    In the proposed new Transportation Dth and Revenues schedule, the 
respondent would have to list annual Dth of Gas delivered by state of 
delivery by rate schedule by customer.23 The respondent would have 
to report its deliveries separately to interstate pipelines and to 
others. The respondent would no longer have to set forth the distance 
the gas was transported in miles. In addition, the respondent would 
have to report operating revenues,24 GRI revenues, ACA revenues, 
other revenues,25 and total revenues by state of delivery by rate 
schedule by customer.

    \23\The respondent's Dth of gas reported would not be adjusted 
for discounting.
    \24\Operating revenues excludes GRI, ACA, and other revenues and 
includes reservation and usage charges.
    \25\Other revenues are Order No. 636 transition costs, take-or-
pay costs.
---------------------------------------------------------------------------

Storage Dth and Revenues--Pages 312(a) and 313(a)

    In the proposed new Storage Dth and Revenues schedule, the 
respondent would have to list annual Dth withdrawn from storage by rate 
schedule by customer. In addition, the respondent would have to report 
operating revenues,26 GRI revenues, ACA revenues, other 
revenues,27 and total revenues by rate schedule and by customer.

    \26\Operating revenues excludes GRI, ACA, and other revenues and 
includes reservation, deliverability, injection, and withdrawal 
charges.
    \27\Other revenues are Order No. 636 transition costs, take-or-
pay costs.
---------------------------------------------------------------------------

Gathering Dth and Revenues--Pages 312(b) and 313(b)

    In the proposed new Gathering Dth and Revenues schedule, the 
respondent would have to list annual Dth of gas delivered by state of 
delivery by rate by customer. In addition, the respondent would have to 
report operating revenues,28 GRI revenues, ACA revenues, other 
revenues,29 and total revenues by rate of delivery by rate by 
customer.

    \28\Operating revenues excludes GRI, ACA, and other revenues and 
includes reservation and usage charges.
    \29\Other revenues are Order No. 636 transition costs, take-or-
pay costs.
---------------------------------------------------------------------------

Revenues From Natural Gas Processed by Others (Account 491)--Page 315

    The Commission proposes to replace Mcf with Dth in column (b).

Other Gas Revenues (Account 495)--Page 316

    The Commission proposes new schedule ``Other Gas Revenues (Account 
495)'' for the reporting of a variety of other gas revenues, such as 
revenues from dehydration and gains on settlements of imbalance 
receivables.

Exploration and Development Expenses (Accounts 795, 796, 798) (Except 
Abandoned Leases, Account 797)--Page 326

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Abandoned Leases (Account 797)--Page 326

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulating purposes.

Gas Receipts--Page 327

    The Commission proposes to revise instruction 5 to require the 
providing of the total quantity and cost data for gas supplied by 
shippers on lines 12, 13, and 14. The Commission proposes to add line 
11 as a heading, ``Gas Received From Shippers Included in Accounts 800-
805,'' line 12, ``Gas Received From Shippers as Fuel'', line 13, ``Gas 
Received From Shippers As Lost and Unaccounted'', and line 14, ``Total 
(Enter Total of Lines 12 and 13).'' The Commission also proposes that 
gas purchases in column (b) and average cost in column (d) be reported 
in Dth. [[Page 3152]] 

Exchange Gas Transactions (Account 806, Exchange Gas)--Pages 328, 329 
and 330

    The Commission proposes to revise instruction 1 to require the 
reporting of gas quantities rather than gas volumes and to require the 
reporting of load balancing and no-notice transactions separately from 
other exchange transactions. The Commission also proposes to revise 
instruction 4 by adding the words, ``For exchanges only,'' at the 
beginning of the instruction and to delete instruction 6 with respect 
to the pressure base of gas volumes. The Commission also proposes to 
replace Mcf with Dth in instruction 1 and in columns (c), (f) and (h).

Gas Used In Utility Operations--Page 331

    The Commission proposes to strike ``Credit (Accounts 810, 811, 
812)'' from the title, to replace Mcf with Dth, and to delete part of 
Instruction 1 and all of instructions 2, 3 and 5 concerning the 
definition of natural gas and Mcf reporting.

Transmission and Compression of Gas By Others (Account 858)--Pages 332 
and 333

    The Commission proposes to replace Mcf with Dth and to delete 
current columns (b)-(f) and to require the reporting of Dth of gas 
delivered in new column (b). This would eliminate the reporting of the 
distance gas is transported and revenue information. The continuation 
page 333 is deleted.

Other Gas Supply Expenses (Account 813)--Page 334

    The Commission proposes to require the reporting of losses on 
settlements of imbalance receivables.
    The Commission also proposes to require that items of $25,000 or 
more be listed separately.

Miscellaneous General Expenses (Account 930.2)(Gas)--Page 335

    The Commission proposes to divide Line No. 2 (Experimental and 
general research expenses) into (a) Gas Research Institute (GRI) 
expenses and (b) other expenses. In addition, the Commission proposes 
to raise the thresholds from $5,000 to $25,000.

Depreciation, Depletion, and Amortization of Gas Plant (Accounts 403, 
404.1, 404.2, 404.3, 405) (Except Amortization of Acquisition 
Adjustment)--Page 336

    The Commission proposes to delete instruction 2 to report 
information called for in Section B every fifth year after 1974 and to 
insert the words ``and amortizable'' in the first line of new 
instruction 2 after the word ``depreciable.''

Depreciation, Depletion, and Amortization of Gas Plant (continued)--
Page 338

    The Commission proposes to revise the headings to column (b) to 
read ``Plant Base (thousands)'' and column (c) to read ``Applied 
Depreciation or Amortization Rates (Percent).''

Income From Utility Plant Leased to Others (Account 412 and 413)--Page 
339

    The Commission proposes to delete this schedule because the 
information will be reported on page 213.

Particulars Concerning Certain Income Reductions and Interest Charges 
Accounts--Page 340

    The Commission proposes the raise the threshold for the grouping of 
items from $10,000 to $25,000.

Regulatory Commission Expenses--Pages 350 and 351

    The Commission proposes to change the account number reference in 
the headings to columns (e), (i) and (l) from 186 to 182.3, and to 
replace instruction 4 on page 351, which references Account No. 186, 
with ``4. Identify separately all annual charge adjustments (ACA).'' In 
addition, the Commission proposes to raise the threshold for minor 
items from $25,000 to $50,000.

Research, Development, and Demonstration Activities--Pages 352 and 353

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Charges for Outside Professional and Consultative Services--Pages 357

    The Commission proposes to raise the threshold from $25,000 to 
$50,000.

Natural Gas Reserves and Land Acreage--Pages 500 and 501

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Changes in Estimated Gas Reserves--Page 503

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Changes in Estimated Hydrocarbon Reserves and Costs, and Net Realizable 
Value--Page 504 and 505

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Natural Gas Production and Gathering Statistics--Page 506

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Products Extraction Operations--Natural Gas--Page 507

    The Commission proposes to replace Mcf with Dth and to delete Line 
15, ``For Line 9, Do Fuel Costs Include Gas Used From Company's Own 
Supply?''

Compressor Stations--Pages 508 and 509

    The Commission proposes to replace the reporting of number of 
employees in column (b) with a report of the number of units and the 
horsepower of each unit and to redesignate the remaining columns. In 
addition, gas for compressor fuel would be reported by Dth rather than 
by Mcf.

Gas and Oil Wells--Page 510

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Field and Storage Lines--Page 511

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Gas Storage Projects--Page 512

    The Commission proposes to delete this schedule because it is not 
needed in that the same information is reported on Form No. 8.

Gas Storage Projects--Page 513

    The Commission proposes to replace Mcf with Dth and to delete Lines 
42-44 and 58 concerning top gas and cushion gas because this 
information is reported on Form No. 8. In addition, the Commission 
proposes to renumber Lines 45-57 as 1-13 and to add two new 
instructions.

Liquefied Petroleum Gas Operations--Pages 516 and 517

    The Commission proposes to delete this schedule because it is not 
needed for Commission regulatory purposes.

Transmission System Peak Deliveries--Page 518

    The Commission proposes to replace Mcf with Dth and to require the 
reporting of total deliveries, deliveries of gas to interstate 
pipelines, and [[Page 3153]] deliveries to others. The Commission also 
proposes to delete the information with respect to the second and third 
highest peak day deliveries and the section, Highest Month's System 
Deliveries. Single peak day and consecutive three-day peak deliveries 
would be reported by various services and activities. The 
differentiation between jurisdictional and non-jurisdictional 
deliveries would be eliminated as no longer pertinent with unbundling.

Auxiliary Peaking Facilities--Page 519

    The Commission proposes to replace Mcf with Dth.

Gas Account-Natural Gas--Pages 520 and 521

    The Commission proposes to revise instruction 1 to exclude the 
reference to consideration of pressure bases in measuring Mcf of 
natural gas and replace Mcf with Dth in instruction 3 and column (c) on 
pages 520 and 521. The Commission also proposes to make line 17, 
``Exchange Gas Received,'' into a heading, to add lines 18, 
``Imbalances,'' and 19, ``Other'', to make line 48, ``Exchange Gas 
Delivered,'' a heading, and to add lines 5, ``Imbalances,'' and 52, 
``Other.'' The proposed changes reflect the proposed changes on pages 
328 and 329.

System Maps--Page 522

    The Commission proposes to clarify the information to be shown on 
the maps and to eliminate the requirement that transmission lines be 
colored in red, if they are not otherwise clearly indicated.

Index--Pages 1-4

    The Commission proposes to revise the index to reflect the above 
proposed changes.

B. Revisions to Form No. 2-A

    At present, a Nonmajor natural gas company30 must submit Form 
No. 2-A. The respondent is required to submit designated pages 
reflecting data designed for Nonmajor natural gas companies in the 
Uniform Systems of Account. However, if the respondent maintains the 
``Major'' designated accounts, it may substitute certain pages from 
Form No. 2. The Commission proposes to require Nonmajor respondents to 
submit only Form No. 2 type pages as their Form No. 2-A report. In 
addition, the Commission proposes to replace Mcf with Dth and to revise 
the instructions, including the CPA certification as discussed above. A 
sample copy of the proposed revised Form No. 2-A is attached as 
Appendix B.

    \30\Nonmajor means having total annual gas sales or volume 
transactions exceeding 200,000 Mcf at 14.73 psia (60 deg. F) in the 
previous calendar year and not classified as ``Major.'' The 
Commission proposes to revise the definition of Nonmajor as follows: 
``Nonmajor means having annual gas sales or volume transactions 
exceeding 200,000 Dth in each of the three previous calendar years 
and not classified as `Major'.'' This comports with proposed section 
260.2 of the Commission's regulations.
---------------------------------------------------------------------------

    The proposed Form No. 2-A will consist of instructions, 
identification, attestation, and list of schedules (pages i and ii and 
1 and 2), the following pages from Form No. 2 as proposed to revised by 
this NOPR: 106, 110-115, 117-122, 204-209, 212, 213, 219, 300, 301, 
320-325, 327, 520, 521, and the following pages from current Form No. 
2-A as renumbered: 26 as 211, 16 as 232, 19 as 250, and 20 as 278.

C. Revisions to Form No. 11

    The Commission proposes to modify Form No. 11, attached as Appendix 
C.31 The Commission has identified certain portions of Form No. 11 
which are no longer necessary. Those portions of the Form No. 11 are 
removed or consolidated to reduce the reporting burden on the 
pipelines. In addition, much of Form No. 11 was geared towards the 
collection of sales related data. In view of the restructuring of the 
interstate pipeline industry under Order No. 636, the pipeline's sales 
business is declining while the pipeline's transportation and storage 
business is increasing in relative importance. Therefore, the 
Commission proposes to modify the Form No. 11 to reflect the reduced 
emphasis on sales and the greater emphasis on transportation and 
storage. Finally, the Commission wishes to ensure that data collected 
in the Form No. 11 and the Form No. 2, as revised, is more consistent 
and interconnected. This interconnection will improve the usefulness of 
the data collected by the Commission. As a result, the proposed rule 
modifies Form No. 11 to collect data in the same general format as 
proposed in Form No. 2. This is particularly apparent in Part II of the 
revised Form No. 11. The specific changes the Commission proposes are 
as follows:

    \31\Appendix C is not being published in the Federal Register, 
but is available from the Commission's Public Reference Room.
---------------------------------------------------------------------------

General Information and General Instructions

    Currently, the Form No. 11 is filed monthly. The report is 
submitted within 40 days of the end of the month being reported. The 
Commission proposes to reduce the monthly reporting requirement to a 
semi-annual requirement. The proposed rule requires the first report 
covering the last six months of the calendar year to be submitted with 
the Form No. 2 on April 30 of each year. The second report covering the 
first six months of the calendar year will be filed on October 31. 
Parts II, III, and V require the data to be filed for each individual 
month of the six-month period. The proposed rule requires that the 
balances in the required accounts in Part IV be filed as of the end of 
each six-month reporting period with the exception of item 42. On line 
42, the pipeline will report in the aggregate all projects valued in 
excess of $5,000,000 started within the six-month reporting period.
    The proposed rule modifies instruction I to require consistency 
between the data filed on Form No. 11 and the data filed with Form No. 
2. It is the intent of the Commission to be able to compare the 
aggregation of twelve months of information submitted on the Form No. 
11 with data filed on the Form No. 2. Comparisons with the Form No. 2 
data may require aggregation of the Form No. 2 data as well.
    In a departure from current requirements, the Commission proposes 
that quantities reported on Form No. 11 be in thousands of dekatherms, 
rather than in thousands of Mcf. The change to dekatherms is consistent 
with the changes proposed to the Form No. 2. Costs and revenues will 
continue to be reported in thousands of dollars.
    Since there will be a longer lag time between the end of the 
reporting period and the date the report is due, the Commission 
anticipates actual data will be readily available. Consequently, former 
instruction V relating to estimated data is removed. It is replaced 
with the instruction regarding the filing of monthly data described 
above.

Specific Instructions and Definitions

    The instruction for the item ``All'' is modified and the 
instructions for items 7 through 12 and 15 through 17 are added to 
conform to the instructions contained in Form No. 2 for reporting 
transportation and storage services. Instructions for items 15 through 
17 are added to clarify the reporting of storage revenues. Since 
storage injections and withdrawals are reported separately on Part V, 
revenues related to quantities withdrawn or injected should not be 
reported here. Existing instructions for items 22, 24, and 27 are 
retained and renumbered 30, 32, and 35. The instructions for items 38 
and 40 are deleted, since the Commission no longer proposes to collect 
details on manufactured gas. An instruction is [[Page 3154]] added to 
explain the contents of item 43, Natural Gas Manufactured, Purchased or 
Produced.
    All existing definitions relate to purchases or sales of natural 
gas. The Commission proposes to simplify the reporting of sales and 
purchase information; therefore, the definitions are removed as no 
longer necessary.

Identification (Part I) and Revenue Data (Part II)

    Except for the revision to the period reported, Part I is 
unchanged. The proposed rule replaces Part II, which relates primarily 
to sales. The Commission proposes to modify Part II to recognize the 
de-emphasis of sales and the increased emphasis on transportation and 
storage subsequent to the implementation of Order No. 636. 
Specifically, Part II is modified to collect information for sales, 
transportation, gathering, storage and other revenue categories in the 
same way it is proposed to be collected in the Form No. 2, but in 
aggregate, rather than in detail.

Income Data (Part III) and Other Selected Data (Part IV)

    Part III is unchanged except for the numbering of the line items 
and the addition of two items, 37 and 38, which currently appear on 
Part IV as items 33 and 35. These items were moved to Part III since 
they are related more closely to revenues than to plant information.
    The proposed rule modifies the monthly reporting requirement for 
Part IV. Instead, the pipeline would report the balances at the end of 
the reporting period for each of the indicated accounts. The Commission 
proposes to replace the item ``gross additions to construction work in 
progress (107) for this month being reported'' with an aggregate value 
for major plant additions in excess of $5,000,000 started during the 
reporting period. As noted items 33 and 35 will be moved to Part III. 
Items 34 and 36 are no longer necessary for regulatory purposes and are 
removed.

Operation and Maintenance Expense (Part V)

    The Commission proposes to consolidate on one line the items 
previously reported on lines 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 
49, 50, 52, 68, 69, and 70. These items are related to the costs of 
manufactured petroleum gas, other manufactured gas, liquefied natural 
gas, gasified coal and synthetic gas, production and gathering, 
products extraction, exploration and development, gas purchased from 
producers, intracompany transfers, imports, gas purchased from other 
pipelines, and gas produced by the pipeline along with other gas 
purchases. The consolidation of these items recognizes the reduced role 
that sales of natural gas now play for the interstate pipelines. In 
addition, exchange gas-in and exchange gas-out are consolidated into 
one line, net exchange gas.

D. Other Revisions

    Section 260.1 requires that major natural gas companies, as defined 
in part 201 of the Commission's regulations, file with the Commission 
an annual report, designated as FERC Form No. 2. The Commission 
proposes to modify section 260.1 to remove references to reporting 
requirements pre-dating December 30, 1988, and to correct a 
typographical error that referenced ``Sec. 385.201'' instead of 
``Sec. 385.2011.''
    Section 260.2 requires that nonmajor natural gas companies file an 
annual report, designated as FERC Form No. 2-A. The Commission proposes 
to modify section 260.1 to remove references to reporting requirements 
pre-dating December 30, 1988, to correct a typographical error that 
referenced ``Sec. 385.201'' instead of ``Sec. 385.2011,'' and to 
conform to the format set forth in section 260.1 governing the FERC 
Form No. 2.
    Section 260.3 requires that natural gas companies file with the 
Commission a monthly statement--the FERC Form No. 11--containing 
information concerning selected revenues, income statements, and other 
items, and details of operation and maintenance expenses. The 
Commission proposes to modify section 260.3 to remove references to 
dates that have long since passed, and references to reporting 
requirements pre-dating November 30, 1988.
    Section 260.4 requires that importers and exporters of natural gas 
file with the Commission an annual report, Form No. 14. Section 260.11 
requires natural gas companies operating an underground natural gas 
storage field to file with the Commission a monthly underground gas 
storage report, Form No. 8. The Commission is not proposing any 
substantive changes to these sections in this NOPR. However, the 
Commission is seeking comments on whether the collection of the 
information contained in these forms by other governmental or private 
sources is currently adequate, making the collection of the same 
information in these Commission forms unnecessary. In addition, the 
Commission is proposing to modify section 260.4 to remove references to 
reporting requirements pre-dating December 30, 1988.
    Section 260.9 requires every natural gas pipeline company to report 
to the Commission serious interruptions of service to any wholesale 
customer involving facilities operated under certificate authorization 
from the Commission. The Commission proposes to modify sections 
260.9(b) and (e) to include facsimile transmission as an optional 
method for reporting interruptions of service. This recognizes advances 
in technology and current practice. Further, the Commission proposes to 
modify sections 260.9(b) and (c) to require that companies send 
telegrams, facsimile transmissions, or supplemental information to the 
Director, Division of Environmental and Engineering Review, the 
successor to the Director, Division of Engineering, Market and 
Environmental Analysis. A correction to the Commission's zipcode in 
260.9(b) is also proposed.
    Section 260.13 sets forth the requirements for the filing of the 
FERC Form No. 549-ST, Form of self-implementing transportation reports. 
The initial and subsequent reports currently filed by interstate and 
intrastate pipelines, Hinshaw companies, and local distribution 
companies undertaking transportation transactions under subparts B, C, 
or G of part 284 are required to be made on the FERC Form No. 549-ST. 
Because the Commission is proposing in this NOPR to eliminate the 
requirements of filing initial and subsequent reports for companies 
subject to the requirements of subparts B, C, and G of part 284, as 
further described below, the FERC Form No. 549-ST is no longer 
necessary. Accordingly, the Commission proposes to remove section 
260.13.
    Section 260.15 requires that natural gas companies making direct 
sales in interstate commerce of natural gas to customers consuming such 
gas file a Report of Alternate Fuel Demand Due to Natural Gas 
Curtailment, FPC Form No. 69. As noted in the footnote to section 
260.15, Form No. 69 was discontinued and replaced with Form No. EIA-50 
by order issued June 23, 1978.32 The EIA Form No. 50 was 
eliminated in 1984 after the Office of Management and Budget (OMB) 
rejected the Energy Information Administration's (EIA) request for an 
extension of OMB approval of the data collection. Thus, it now appears 
that the footnote to 18 CFR 260.15 references a non-existent EIA form 
as a replacement for the Form No. 69. Since neither the Commission nor 
EIA has collected this data since 1984, and there has been no 
significant [[Page 3155]] curtailment of natural gas in the nation for 
more than ten years, the Commission proposes to remove section 260.15.

    \32\FERC Statutes and Regulations, Regulations Preambles, 1977-
1981, 30,013 (1978).
---------------------------------------------------------------------------

    In addition, the Commission proposes to change all references in 
Part 260 from the ``FPC'' and the ``Federal Power Commission'' to the 
``FERC,'' and ``Federal Energy Regulatory Commission,'' respectively.

VI. Part 284

A. Introduction

    Under Part 284, the Commission is proposing revisions to the 
reporting requirements, and/or certain non-reporting requirements, 
contained in Subparts A, B, C, E, G, J and L. These subparts set forth 
general provisions and conditions (Subpart A), and govern the 
transportation of natural gas by interstate pipelines under section 
311(a)(1) of the NGPA (Subpart B), the transportation of natural gas by 
intrastate pipelines under section 311(a)(2) of the NGPA (Subpart C), 
the assignment by any intrastate pipeline to any interstate pipeline or 
local distribution company of contractual rights to receive surplus 
natural gas under section 312 of the NGPA (Subpart E), the 
transportation of natural gas by interstate pipelines on behalf of 
others, and services by local distribution companies, under blanket 
certificates authorized by section 7(c) of the NGA (Subpart G), 
(General Provisions and Conditions), as well as the sale of natural gas 
under section 7(c) blanket certificates by interstate pipelines 
offering transportation service under subparts B or G (Subpart J), and 
by non-interstate pipeline sellers (Subpart L).
    As further discussed below, many of the simplifying changes being 
proposed to the reporting requirements of the interstate pipelines are 
attributable to the fact that the Commission's close regulation of the 
interstate pipelines has required, in many instances, the reporting of 
the same information under several different reporting provisions in 
the regulations.
    There are six major categories of proposed changes to the Part 284 
provisions: (1) The removal of the initial full report, subsequent 
reports, annual report, and notification of termination, currently 
required under subparts B, G, and/or J; (2) the removal of the initial 
full report, subsequent reports, and notification of termination 
required under subpart C; (3) the modification of the Commission's 
discount reporting requirement; (4) the addition of a new reporting 
requirement under subparts B and G, that the pipelines maintain an 
electronic index of customers; (5) the elimination as obsolete of 
certain non-reporting provisions in subparts A and G, setting forth 
interim measures related to the implementation of Order Nos. 436 and 
636; and (6) other changes that either are grammatical in nature, 
remove references to deadlines that have long since passed or other 
outdated requirements, or reflect the use of current, more accurate, 
terminology. These revisions are discussed more fully below.

B. Removal of Initial, Subsequent, Annual, and Termination Reports 
Under Subparts B, G and J

    In light of all of the broad changes that are being proposed in 
this NOPR, and the changes to the industry brought about by Order No. 
636, it is no longer necessary to require interstate pipelines to 
provide the detailed and duplicative reporting set forth under the 
initial, subsequent, termination, and annual reports in sections 
284.106 and 284.223. Most of the information included in these reports 
will be reported in other ways. For example, the Commission proposes to 
collect some contract information, including the date the contract 
terminates, through an Index of Customers, as discussed below. Under 
changes being proposed in the contemporaneous NOPR being issued in 
Docket No. RM95-3-000 to section 154.1, contracts will be filed if the 
contract differs in a significant manner from the form of service 
agreement in the pipeline's tariff. If it does not, the form of service 
agreement will provide information relating to the basic terms and 
conditions of the contract.
    Accordingly, the Commission proposes to remove paragraphs (a), (b), 
(c), and (d) of section 284.106, and paragraph (d) of section 284.223, 
to delete the requirements that pipelines file the initial full report, 
subsequent reports, notification of termination, and annual report. 
However, the Commission proposes to retain the requirement in section 
284.106(a)(4) that an interstate pipeline file a statement with the 
Commission that the pipeline has provided notification of bypass of a 
local distribution company (LDC) to the LDC and the LDC's regulatory 
agency.33 In addition, the Commission proposes to remove sections 
284.106(e) and 284.223(b) relating to the fees accompanying the initial 
full report, and sections 284.106(f) and 284.223(c), prescribing the 
use of FERC Form No. 549-ST for the initial and subsequent reports, 
since they would no longer apply due to the proposed discontinuance of 
the associated reporting requirements. Because sections 284.106 and 
284.223 will require identical reporting requirements, the Commission 
proposes to remove all of the filing requirements from section 
284.223(d), and to substitute a statement that all pipelines 
transporting gas under section 284.223 of Subpart G must comply with 
the reporting requirements specified under section 284.106 of Subpart 
B. There is no reason to require an identical report under section 
284.223.

    \33\The Commission also proposes to retain the semi-annual 
storage reports currently required under sections 284.106(g) and 
284.223(d)(5).
---------------------------------------------------------------------------

    The Commission is also proposing to remove the annual report 
required under section 284.288 of Subpart J, applicable to pipelines 
that engage in sales under a blanket certificate and also offer 
interstate transportation under subparts B and G. Most of the sales 
information required by this annual report is being reported in the 
FERC Form No. 2. Removal of this section will eliminate duplicative 
reporting requirements.

C. Removal of Initial, Subsequent, and Termination Reports Under 
Subpart C

    The Commission proposes to delete certain of the reporting 
requirements for intrastate pipelines transporting gas under NGPA 
section 311 under Subpart C. The Commission proposes to eliminate the 
initial full report, subsequent reports, and notification of 
termination currently required under section 284.126. The Commission no 
longer finds these reports useful for regulatory review. However, the 
Commission invites parties to comment on our proposed removal of these 
reports.
    The Commission will continue to require intrastate pipelines to 
file the annual report and semi-annual storage reports required under 
section 284.126, as well as the notification of bypass requirement 
currently included in the initial report. However, the Commission is 
revising the annual report to reflect the fact that the transportation 
transactions are no longer docketed, and to require the specification 
of whether the transportation service is firm or interruptible. Until 
recently, intrastate pipelines only provided interruptible 
transportation service. Since they are now performing firm 
transportation service, firm and interruptible transactions must be 
separately identified for accurate reporting.
    Additionally, as a conforming change to reflect the elimination of 
the initial and subsequent reporting requirements under section 
284.126, the Commission proposes to remove section 284.227(d), 
governing the conversion reports filed by intrastate pipelines 
transporting [[Page 3156]] certain gas produced offshore. That section 
requires the initial and subsequent reports filed under section 284.126 
to state that service is now being provided under section 284.227.
    Further, the Commission proposes to revise the filing requirements 
under section 284.123(e) to require that the statement filed by an 
intrastate pipeline within 30 days after commencement of new service 
under subpart C, include the rate election made by the intrastate 
pipeline under section 284.123(b).

D. Modification of Discount Reports

    In considering revisions to the Commission's marketing affiliate 
regulations implemented in Order No. 566,34 the Commission 
received comments contending that the discount information that had to 
be filed with the Commission under section 284.7(d)(5)(iv) was 
duplicative of the information on transportation discounts provided to 
affiliate and non-affiliate shippers that pipelines are required to 
maintain under section 250.16(d). There are two major differences 
between the sections: section 250.16(d) requires maintenance of 
information on quantities scheduled under the discount, while section 
284.7(d)(5)(iv) does not require filing of quantity information; and 
the information required under section 250.16 only has to be maintained 
and made available to the Commission upon request, while the 
information in section 284.7(d)(5)(iv) must be filed with the 
Commission.

    \34\Standards of Conduct and Reporting Requirements for 
Transportation and Affiliate Transactions, Order No. 566, 59 FR 
32885 (June 27, 1994), III FERC Stats. & Regs. Preambles  30,997 
(June 17, 1994), Order No. 566-A, 59 FR 52896 (Oct. 20, 1994), III 
FERC Stats. & Regs. Preambles  31,002 (Oct. 14, 1994).
---------------------------------------------------------------------------

    In Order No. 566, the commenters urged the Commission to consider 
reconciling the duplicative requirements.35 The Commission 
declined to make a piecemeal change at that time, because the Part 284 
discount reporting requirements are not identical with the requirements 
of section 250.16(d). The Commission, however, noted that it was in the 
process of examining its regulations, in light of the changes caused by 
Order No. 636, and that revisions to these requirements would be made 
at the appropriate time when all the regulations could be considered as 
a whole.

    \35\Slip op. at 31.
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    The Commission is now proposing to eliminate the section 250.16(d) 
maintenance requirement and to expand the Part 284 filing requirement 
to include the relevant information previously maintained under section 
250.16 (proposed section 284.7(c)(6)). The major change from the 
existing Part 284 regulations would be the addition of a requirement 
for filing information on quantities delivered for interruptible 
service and the contract demand for firm service.36 In light of 
the Commission's adoption of a capacity release program under Order No. 
636, information on quantities shipped and contract demand would enable 
the Commission and the market to compare the extent of interruptible 
and firm discounting by the pipelines with the extent of capacity 
release transactions. Under this proposal, the discount information 
would be required to be filed electronically with the Commission.

    \36\For interruptible discounts, the Commission is proposing to 
include the zone in which the quantities are delivered. Information 
on zones is not needed for firm service because the information 
would be reported in the index of customers under section 284.106.
---------------------------------------------------------------------------

    The discount reports would not apply to capacity releases at a 
discounted rate, except when the release is permanent. The discount 
report is designed to capture discounts granted by the pipelines. In a 
temporary capacity release, the releasing shipper is still obligated to 
the pipeline under its initial contract. Thus, even if the shipper 
obtaining released capacity pays a discounted rate, the pipeline has 
not agreed to the discount because the releasing shipper will owe the 
pipeline the maximum rate under its contract. In a permanent capacity 
release, however, the releasing shipper's contractual obligations end, 
and the replacement shipper enters into a new primary contract with the 
pipeline. Thus, if the pipeline offers a discount for a permanent 
capacity release, the pipeline is providing the discount and would have 
to report it.
    The Commission is not proposing to require the filing of two items 
of information that the pipelines are now required to maintain under 
section 250.16(d): the duration of discounts and the delivery points to 
which the gas is delivered. Elimination of these items would reduce the 
filing burden. Moreover, the filing of this information for every 
transaction involving both affiliates and non-affiliates does not 
appear necessary for monitoring of affiliate discount transactions 
given the Commission's other regulations regarding affiliate discount 
transactions. Under Standard H of the Standards of Conduct, section 
161.3(h), pipelines are now required to post discount information 
concerning affiliate transactions on their EBBs, including the delivery 
points to which the discount applies. The proposed elimination of 
section 250.16(d), therefore, would have no effect on the ability of 
non-affiliates to learn the details of affiliate discounts so they can 
assess whether possible undue discrimination has occurred. With respect 
to non-affiliate transactions, filing of information on delivery points 
for every discount transaction does not appear warranted, since the 
Commission only requires this information in specific situations. The 
Commission, however, continues to require pipelines to maintain records 
of affiliate and non-affiliate discount transactions, including the 
delivery points used, in case the Commission requires this information 
for specific investigations.

E. Establishment of Electronic Index of Customers

    In the Electronic Bulletin Board (EBB) standardization proceeding 
in Docket No. RM93-4-000, some groups had proposed to include an 
electronic Index of Purchasers to provide the market with information 
about capacity rights.\37\ The EBB Industry Working Groups, which 
developed the standards implemented by the Commission, failed to reach 
consensus on an Index of Purchasers proposal. However, several groups 
of participants in the process submitted proposals for consideration. 
In Order No. 563-A, the Commission found that one proposal by a group 
of 44 participants had significant merit.\38\

    \37\Standards For Electronic Bulletin Boards Required Under Part 
284 of the Commission's Regulations, Order No. 563, 59 FR 516 (Jan. 
5, 1994), III FERC Stats. & Regs. Preambles  30,988 (Dec. 23, 
1993), order on reh'g, Order No. 563-A, 59 FR 23624 (May 6, 1994), 
III FERC Stats. & Regs. Preambles  30,994 (May 2, 1994), reh'g 
denied, Order No. 563-B, 68 FERC  61,002 (1994).
    \38\Order No. 563-A, III FERC Stats. & Regs. Preambles at 
31,047.
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    Under this proposal, the Commission would eliminate some of the 
paper reporting requirements relating to firm and interruptible 
transportation, specifically, the initial and subsequent reports (but 
not the annual reports or the reports on bypasses), and the requirement 
in section 154.41 (proposed section 154.111) to include an Index of 
Purchasers in a pipeline's tariff. These reports would be replaced by 
an electronic index provided in downloadable form consisting of the 
following nine data elements for each firm transportation and storage 
shipper:\39\ shipper's name, contract identifier, rate schedule, 
contract start [[Page 3157]] date, contract end date, contract 
quantity, receipt points (and associated maximum daily quantities 
(MDQs)), delivery points (and associated MDQs), and conjunctive 
restrictions, if any.\40\

    \39\Although the initial and subsequent reports had included 
interruptible contracts, it is not necessary to require the posting 
of interruptible contracts in the Index of Customers.
    \40\Conjunctive restrictions are provisions that operate across 
multiple points or contracts and may limit a shipper's rights at a 
particular receipt or delivery point. For example, a shipper with 
stated rights of 2,000 MDQs at three points may but not be able to 
ship more than a total of 2,500 MDQ's from all three points on a 
single day.
---------------------------------------------------------------------------

    In Order No. 563-A, the Commission was unclear with respect to some 
details in the proposal, and directed the Working Groups, together with 
Commission staff, to work on developing a final proposal. In a report 
filed on October 3, 1994, in Docket No. RM93-4-005, the Working Group 
reported that it was still unable to reach consensus on a final Index 
of Purchasers. However, a drafting committee, composed both of 
opponents and proponents of the Index of Purchasers, filed on October 
4, 1994, a proposal addressing the mechanics for implementing such an 
Index of Purchasers, should the Commission decide to proceed with one.
    After considering the elements included in the industry proposals 
and the Commission's own need for information about shippers' 
contracts, the Commission is proposing to require pipelines to provide 
an electronic Index of Customers\41\ through a downloadable file that 
is updated monthly, and restated in its entirety annually (sections 
284.106 and 284.243). The proposed requirement includes many of the 
elements proposed during the Working Group process, as well as 
independent requirements the Commission deems necessary. The electronic 
Index of Customers information would serve two functions. It would 
provide the Commission with the information that the Commission 
requires for analyzing capacity held on pipelines (which previously was 
included in the initial and subsequent reports); and it would provide 
capacity information to the market, which will aid the capacity release 
system by enabling shippers to locate those holding capacity rights 
that the shippers may want to acquire.\42\

    \41\The Commission is proposing to term the electronic index an 
``Index of Customers'' rather than an ``Index of Purchasers,'' to 
reflect the proposed use of that term in the NOPR revising part 154. 
``Index of Customers'' more accurately captures the nature of the 
current natural gas market.
    \42\The Commission also is considering whether other changes to 
facilitate the release of capacity are warranted. Any such changes 
would be promulgated in another proceeding. The Commission is 
proceeding with the proposed electronic index in this proceeding 
because, in addition to fostering capacity release, the Commission 
finds that such index is necessary to provide the information 
previously provided through the initial and subsequent reports. 
Moreover, regardless of the changes made to the capacity release 
system, information on contractual rights appears to be important to 
facilitating the secondary market in capacity.
---------------------------------------------------------------------------

    The proposed Index of Customers would contain the nine data 
elements referenced above. The Commission also is proposing some 
additional elements: information on capacity held by rate zones to 
permit verification of reservation billing determinants; and additional 
elements for storage to capture the additional detail required to 
assess storage capacity.\43\ When a pipeline has implemented the 
electronic Index of Customers, its obligation to provide for an Index 
of Customers in its tariff would cease.

    \43\In addition, the Commission is proposing to include a unique 
customer identifier to permit the information in the Index of 
Customers to be tied to the electronic data interchange information 
on capacity release, and an authorization code to delineate whether 
the information is for Part 284, Subpart B, Part 284, Subpart G, or 
Part 157 service.
---------------------------------------------------------------------------

    In the EBB proceeding, some commenters objected to the inclusion of 
receipt and delivery points, contending that the provision of such 
information would be burdensome and might disclose information that 
would place firm shippers at a competitive disadvantage with respect to 
future gas purchase decisions.\44\ Since pipelines must currently file 
receipt and delivery point information for all their shippers in the 
initial and subsequent reports, the Commission would not anticipate 
that including such information in the Index of Customers would create 
undue burdens. Commenters, however, should address the relative burden 
or difficulty in including the receipt and delivery point information 
under the assumption that all the other information would be required.

    \44\Order No. 636-A, III FERC Stats. & Regs. Preambles at 
31,047-48.
---------------------------------------------------------------------------

    Once the Commission decides upon the data elements to be included 
in the Index of Customers, the EBB Working Group should work with the 
Commission staff to develop the data sets and other procedures 
necessary to provide for downloading of the information. For example, 
the EBB Working Group and the Commission Staff must determine whether 
the data should be reported as a data set suitable for electronic data 
interchange or for posting on the pipeline's electronic bulletin board. 
Further, instructions for reporting the data elements listed in the 
regulations will need to be finalized. In particular, the participants 
must determine how the contract end date will be reported, so that the 
Commission may know with certainty when a contract has terminated.
    The finalization of the Index of Customers by the EBB Working Group 
and the Commission Staff will not occur until some time after the 
effective date of this rule. The Commission is proposing to require the 
pipelines to initially comply with the Index of Customers requirement 
within 180 days of the effective date of the final rule. Such deadline 
should allow ample time for the EBB Working Group and Staff to conclude 
their conferences, and for the pipelines to implement the resulting 
electronic elements of the Index of Customers. However, in the 
intervening period between the effective date of the rule and the 
pipelines' implementation of the electronic Index of Customers under 
sections 284.106 and 284.223, the Commission proposes, as an interim 
measure, to require pipelines providing transportation service under 
sections 284.106 or 284.223 to comply with the non-electronic index of 
customer requirements applicable to transportation and sales under Part 
157, as set forth in sections 154.111 (b) and (c).

F. Removal of Obsolete Transitional Requirements

    Several sections in Part 284 were established by either Order No. 
436 or Order No. 636 as interim measures to implement those orders, or 
to bridge the transition between the two orders. Some of these 
provisions contained action deadlines that have long since passed. The 
Commission proposes to remove the following sections because they have 
become outdated due to subsequent events, and the current state of the 
regulatory environment.
    Section 284.7(b) provides for interim rates for part 284 
transactions to be charged until new transportation rates are filed 
under section 284.7, which had to have been filed by July 1, 1986. This 
section has become obsolete, and therefore is no longer necessary.
    Section 284.10 provides an interim program for bundled sales 
customers to convert to firm transportation services. Since Order No. 
636 has unbundled sales service, so that sales and transportation 
services are now separate services, there is no need for customers to 
convert from one to the other. This section is no longer applicable to 
the current regulatory framework.
    Section 284.14--Provisions governing pipeline restructuring--was 
designed to implement the restructuring of pipelines' services under 
Order No. 636, and contains, among other things, the requirements for 
the compliance filings pipelines were required to make, and for 
[[Page 3158]] the associated restructuring proceedings. The 
restructuring process is now complete; therefore this section is no 
longer necessary. Any pipeline who proposes to offer transportation 
service under subpart B or G of part 284 in the future will simply file 
to comply with the requirements of this part and Order No. 636.
    Section 284.122 governs transportation by intrastate pipelines 
under Section 311(a)(2) of the NGPA. The Commission proposes to delete 
paragraph (e) of section 284.122, which sets a January 31, 1992 
expiration date for the authorization provided under that section for 
certain transportation. This transitional provision is no longer 
required. Similarly, section 284.123, governing the rates and charges 
for this section 311 transportation service, contains in subparagraph 
(e)(2) a transitional filing requirement deadline of February 1, 1985 
for certain pre-existing transportation arrangements; thus, the 
Commission proposes to remove section 284.123(e)(2).
    The Commission also proposes to remove sections 284.223(e) 
(Transitional rule for transportation arrangements) and 284.223(f) 
(governing the conversion of transportation service under NGPA section 
311 to NGA section 7(c) blanket transportation service. Section 284.223 
authorizes an interstate pipeline to transport gas under a section 7 
blanket certificate of public convenience and necessity for any shipper 
for any end use by that shipper or any other person. Section 284.223(e) 
was established as a transitional provision to permit transportation 
arrangements authorized under section 157.209(a)(1), which commenced 
before October 9, 1985, to qualify as transportation under section 
284.223. Section 157.209(a)(1) permitted section 7 certificate holders 
under section 157.201 to transport natural gas only on behalf of a 
high-priority end user for a high-priority end use. Section 
157.209(a)(1) was replaced by section 284.223, and was removed from the 
regulations effective November 18, 1985.45 Accordingly, the 
transitional rule contained section 284.223(e) applicable to 
transportation under section 157.209 is obsolete, and no longer 
necessary. Similarly, section 284.223(f) is an interim measure that was 
designed to implement the addition of blanket transportation services. 
This section requires that all conversions be made prior to November 1, 
1990. Consequently, sections 284.223(f) is also obsolete, and no longer 
necessary.

    \45\See 50 FR 42408 (October 18, 1985).
---------------------------------------------------------------------------

    Finally, section 284.402 of Subpart L, setting forth the 
authorization for blanket marketing certificates, provides in paragraph 
(c)(1) that the authorization for an ``affiliated marketer'' with 
respect to transactions involving affiliated pipelines becomes 
effective either when the affiliated pipeline receives its blanket 
sales certificate under Subpart J, a transportation-only affiliated 
pipeline's Order No. 636 compliance filing is approved, or when the 
Commission terminates the affiliated pipelines RS proceeding. The 
Commission proposes to delete the latter two conditions, since those 
occurrences have passed.

G. Other Revisions

    The Commission proposes to delete most of Subpart D, governing 
certain sales under section 311 of the NGPA by intrastate pipelines. In 
Order No. 547,46 the Commission granted any person who is not an 
interstate pipeline a blanket certificate of public convenience and 
necessity pursuant to section 7 of the Natural Gas Act, authorizing the 
certificate holder to make sales for resale at negotiated rates in 
interstate commerce of any category of gas that is subject to the 
Commission's Natural Gas Act jurisdiction. The certificate of limited 
jurisdiction does not subject the certificate holder to any other 
regulation under the Natural Gas Act by virtue of transactions under 
the certificate. Although the blanket certificate eliminates the need 
for Subpart D, the Commissison will retain the basic authorization and 
rate provisions under Subpart D in sections 284.141, 284.142, and 
284.144 for those persons who may wish to make sales under the NGPA 
instead of the blanket certificate under the Natural Gas Act. However, 
in recognition that an intrastate pipeline can also sell natural gas in 
an unbundled transaction under the blanket certificate, at negotiated 
rates, the Commission proposes to retain a simplified version of 
section 284.144 governing rates and charges as part of the 
authorization provision set forth in section 284.142. The proposed rate 
rule within section 284.142, simplifies the current maximum sales rate 
rule to permit the gas commodity price negotiated in the contract, plus 
a fair and equitable transportation rate.

    \46\61 FERC 61,281 (1992).
---------------------------------------------------------------------------

    The Commission proposes to delete Subpart E in its entirety, 
governing the assignment by any intrastate pipeline to any interstate 
pipeline or local distribution company of its contractual right to 
receive surplus natural gas at any first sale, without prior Commission 
approval. The Natural Gas Wellhead Decontrol Act of 1989 amended the 
definition of ``surplus natural gas'' in section 312 of the NGPA to 
mean ``any natural gas.'' Moreover, the only filings under Subpart E 
were made in 1979. Therefore, Subpart E is no longer necessary.
    Further, in light of the proposed elimination of Subpart E, the 
Commission proposes to remove all references in section 284.224, 
governing certain transportation, sales and assignments by local 
distribution companies, to Subpart E, as well as to the word 
``assignments'' in the section provisions and in the section heading. 
The Commission also proposes to remove the reference to assignment in 
section 284.3, which sets forth the NGA jurisdiction. In addition, the 
Commission proposes to delete the references in section 284.224(e)(5) 
to those reporting requirements that the Commission is proposing to 
delete in subparts C and D. The Commission is retaining the blanket 
certificate and rate election procedures in section 284.224 that allow 
local distribution companies served by an interstate pipeline or 
Hinshaw pipeline to engage in sales and transportation of natural gas 
to the same extent as intrastate pipelines are authorized to engage in 
such activities under subparts C and D.
    The Commission proposes to remove sections 284.225 and 284.226 
concerning the transportation of gas released under the good faith 
negotiation procedures. Order No. 567,47 issued July 28, 1994, in 
Docket No. RM94-18-000, removed the good faith negotiation procedures 
under Section 270.201 as a result of the repeal of maximum lawful 
ceiling prices under the NGPA.

    \47\68 FERC 61,135 (1994).
---------------------------------------------------------------------------

    The Commission proposes to remove section 284.222, regarding 
transportation by interstate pipelines on behalf of other interstate 
pipelines. Since the Commission deleted the prior notice requirement in 
Order No. 537,\48\ which applied to transportation by interstate 
pipelines on behalf of shippers other than interstate pipelines under 
section 284.223, but did not apply to transactions under section 
284.222, there is no longer any reason to distinguish between 
transportation under sections 284.222 and 284.223. Thus, the Commission 
proposes to delete section 284.222, and apply section 284.223 to 
transportation by [[Page 3159]] interstate pipelines on behalf of other 
interstate pipelines, as well as transportation by interstate pipelines 
on behalf of non-interstate pipeline shippers. Therefore, the 
Commission is also proposing to modify the title of section 284.223 to 
read ``Transportation by interstate pipelines on behalf of shippers.''

    \48\Revisions to Regulations Governing Transportation under 
Section 311 of the Natural Gas Policy Act of 1978 and Blanket 
Transportation Certificates, 56 FERC  61,415 (1991).
---------------------------------------------------------------------------

    The Commission proposes to modify paragraph (b) of section 284.221, 
setting forth the general rules regarding the transportation by 
interstate pipelines on behalf of others under section 7(c) blanket 
certificates, to delete reference to an October 31, 1989 date no longer 
relevant, and a fee no longer collected.
    In section 284.102(e), governing the certifications interstate 
pipelines must obtain from shippers to be able to transport gas on 
behalf of an intrastate pipeline or local distribution company under 
section 311, the Commission proposes to delete reference to a January 
3, 1992 deadline for tariff revisions establishing the certification 
requirement.
    Finally, the Commission proposes to make a grammatical revision in 
section 284.8(b)(4)(iii).

VII. 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.\49\ The Commission 
has categorically excluded certain actions from these requirements as 
not having a significant effect on the human environment.\50\ The 
action proposed here is procedural in nature and therefore falls within 
the categorical exclusions provided in the Commission's 
regulations.\51\ Therefore, neither an environmental impact statement, 
nor an environmental assessment is necessary, and will not be prepared 
in this proposed rulemaking.

    \49\Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes 
and Regulations, Regulations Preambles 1986-1990  30,783 (1987).
    \50\18 CFR 380.4.
    \51\See 18 CFR 380.4(a)(2)(ii).
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VIII. Reporting Flexibility Certification

    The Regulatory Flexibility Act (RFA)\52\ 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.\53\ 
Most gas companies to whom the proposed rule will apply do not fall 
within the definition of a ``small entity.''\54\ Consequently, pursuant 
to section 605(b) of the RFA, the Commission certifies that the 
proposed rule will not have a significant impact on a substantial 
number of small entities.

    \52\5 U.S.C. 601-612.
    \53\5 U.S.C. 605(b).
    \54\Section 601(c) of the RFA defines a ``small entity'' as a 
small business, a small not-for-profit enterprise, or a small 
governmental jurisdiction. A ``small business'' is defined by 
reference to section 3 of the Small Business Act as an enterprise 
which is ``independently owned and operated and which is not 
dominant in its field of operation.'' 15 U.S.C. 632(a).
---------------------------------------------------------------------------

IX. Information Collection Statement

    The Office of Management and Budget's (OMB) regulations\55\ require 
that OMB approve certain information and recordkeeping requirements 
imposed by an agency. The information collection requirements in this 
proposed rule are contained in the following: FERC Form No. 2 ``Annual 
Report of Major Natural Gas Companies'' (1902-0028); FERC Form No. 2-A 
``Annual Report of Nonmajor Natural Gas Companies'' (1902-0030); FERC 
Form No. 11 ``Natural Gas Pipeline Company Monthly Statement'' (1902-
0032); FERC Form No. 549 ``Gas Pipeline Rates: Natural Gas Policy Act 
Title III Transactions'' (1902-0086); FERC Form No. 549B ``Gas Pipeline 
Rates: Capacity Release Information'' (1902-0169); FERC Form No. 576 
``Reports on Pipeline Systems Service Interruptions'' (1902-0004); FERC 
Form No. 8 ``Underground Gas Storage Report'' (1902-0026); and FPC-14 
(redesignated herein FERC Form No. 14) ``Annual Report for Importers 
and Exporters of Natural Gas'' (1902-0027).

    \55\5 CFR 1320.13.
---------------------------------------------------------------------------

    The Commission in this proposed rule intends to modernize its 
regulations to reflect the current regulatory environment that it 
instituted with Order No. 636 and the restructuring of the natural gas 
industry. Specifically, the Commission intends to revise the Uniform 
System of Accounts to provide financial information that will be of 
greater benefit than what is available now, and to create forms and 
reports that reflect open-access transportation of natural gas and 
unbundled pipeline sales for resale at market-based prices. The 
Commission's Office of Chief Accountant uses the data in its audit 
program and continuous review of the financial condition of regulated 
companies. The Office of Pipeline Regulation uses the data in its 
various rate proceedings and supply programs, and the Office of 
Economic Policy and Office of General Counsel use the data in their 
programs relating to the administration of the Natural Gas Act.
    The Commission is submitting to the Office of Management and Budget 
a notification of these proposed collections of information. Interested 
persons may obtain information on these reporting requirements by 
contacting the Federal Energy Regulatory Commission, 941 North Capitol 
Street, NE, 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, Washington, D.C. 20503, (Attention: Desk 
Officer for Federal Energy Regulatory Commission).

X. Comment Procedures

    The Commission invites all interested persons to submit written 
comments on the proposals of this NOPR. To the extent possible, the 
comments should be keyed to the topic headings of this NOPR. An 
original and 14 copies of the written comments must be filed with the 
Commission by April 13, 1995. Comments must refer to Docket No. RM95-4-
000 and be submitted to the Office of the Secretary, Federal Energy 
Regulatory Commission, 825 North Capitol Street, N.E., Washington, D.C. 
20426.
    All written submissions will be placed in the Commission's public 
file and will be available for public inspection, during regular 
business hours, at the Commission's Public Reference Room, Room 3408, 
941 North Capitol Street, N.E., Washington, D.C. 20426.

List of Subjects

18 CFR Part 158

    Administrative practice and procedure, Natural gas, Reporting and 
recordkeeping requirements, Uniform System of Accounts.

18 CFR Part 201

    Natural gas, Reporting and recordkeeping requirements, Uniform 
System of Accounts.

18 CFR Part 250

    Natural gas, Reporting and recordkeeping requirements.

18 CFR Part 260

    Natural gas, Reporting and recordkeeping requirements. 
[[Page 3160]] 

18 CFR Part 284

    Continental shelf, Natural gas, Reporting and recordkeeping 
requirements.

    By direction of the Commission.
Lois D. Cashell,
Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Parts 158, 201, 250, 260, and 284, Chapter I, Title 18, Code of Federal 
Regulations, as set forth below.

PART 158--ACCOUNTS, RECORDS, AND MEMORANDA

PART 158--AUTHORITY CITATION [REVISED]

    1. The authority citation for Part 158 is revised to read as 
follows:

    Authority: 42 U.S.C. 7101-7352; 15 U.S.C. 717-717w, 3301-3432.

    2. Section 158.10 is revised to read as follows:


Sec. 158.10  Examination of accounts.

    All natural gas companies not classified as Class C or Class D 
prior to January 1, 1984 shall secure for each year, the services of an 
independent certified public accountant, or independent licensed public 
accountant (licensed on or before December 31, 1970), certified or 
licensed by a regulatory authority of a State or other political 
subdivision of the United States, to test compliance in all material 
respects of those schedules that are indicated in the General 
Instructions set out in the applicable Annual Report, Form No. 2 or 
Form No. 2-A, with the Commission's Uniform System of Accounts and 
published accounting releases. The Commission expects that 
identification of questionable matters by the independent accountant 
will facilitate their early resolution and that the independent 
accountant will seek advisory rulings by the Commission on such items. 
This examination shall be deemed supplementary to periodic Commission 
examinations of compliance.
    3. Section 158.11 is revised to read as follows:


Sec. 158.11  Report of certification.

    Each natural gas company not classified as Class C or Class D prior 
to January 1, 1984 shall file with the Commission a letter or report of 
the independent accountant certifying approval, together with the 
original and each copy of the filing of the applicable Annual Report, 
Form No. 2 or Form No. 2-A, covering the subjects and in the format 
prescribed in the General Instructions of the applicable Annual Report. 
The letter or report shall also set forth which, if any, of the 
examined schedules do not conform to the Commission's requirements and 
shall describe the discrepancies that exist. The Commission shall not 
be bound by the certification of compliance made by an independent 
accountant pursuant to this paragraph.
    4. In section 158.12, the words ``The Commission will not recognize 
any certified public accountant or public accountant through December 
31, 1975, who is not in fact independent. Beginning January 1, 1976, 
and each year thereafter, the'' are removed and the word ``The'' is 
added in their place.

PART 201--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR NATURAL GAS 
COMPANIES SUBJECT TO THE PROVISIONS OF THE NATURAL GAS ACT

    5. The authority citation for Part 201 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352, 
7651-7651o.

PART 201--[AMENDED]

    6. In Part 201, Definitions, Definitions 13, 15, 16, 32B, 38, and 
39 are amended by removing the words ``in the case of Major natural gas 
companies,'' and Definition 29 is amended by removing the word ``(Major 
natural gas companies).''
    7. In Part 201, General Instructions, paragraph 1 is revised to 
read as follows:

General Instructions

    1. Applicability. Each natural gas company must apply the system 
of accounts prescribed by the Commission.
* * * * *
    8. In Part 201, General Instructions, paragraphs 8, 12, 14, 15, and 
16, the words ``(Major natural gas companies)'' are removed at the end 
of each heading, and in the heading for paragraph 21, the words 
``(Nonmajor Natural Gas Companies)'' are removed.
    9. In Part 201, Gas Plant Instructions, paragraph 1, the words 
``Classification of utilities (Major natural gas companies)'' are 
removed from the heading and the words ``Classification of gas plant at 
effective date of system of accounts'' are added in their place.
    10. In Part 201, Gas Plant Instructions, paragraph 3, introductory 
text, the words ``For Major natural gas companies'' are removed and the 
words ``A. The'' are added in their place, the words ``(Major and 
Nonmajor Natural Gas Companies)'' are removed from paragraphs 3A.(17) 
and 3A.(19), and paragraph 3B. is removed.
    11. In Part 201, Gas Plant Instructions, paragraph 4C., the words 
``For Major natural gas companies, the'' are removed and the word 
``The'' is added in their place.
    12. In Part 201, Gas Plant Instructions, paragraph 6A., the words 
``(For Nonmajor companies, account 404, Amortization of Limited-Term 
Gas Plant)'' are removed.
    13. In Part 201, Gas Plant Instructions, paragraphs 7C. and 7E., 
the words ``or in the case of Major companies,'' are removed.
    14. In Part 201, Gas Plant Instructions, paragraph 7D., the words 
``In the case of Major companies, a parcel,'' are removed and the words 
``A parcel'' are added in their place.
    15. In Part 201, Gas Plant Instructions, paragraph 7G., the words 
``in the case of Major Companies,'' are removed.
    16. In Part 201, Gas Plant Instructions, paragraph 7H., the words 
``(For Major companies, see,'' are removed and the word ``(See'' is 
added in its place, and the two sentences ``For Nonmajor companies, see 
account 403.1, Depreciation and Depletion Expense, and account 110, 
Accumulated Provision for Depreciation, Depletion and Amortization of 
Gas Utility Plant. See also account 797, Abandoned Leases, for the 
accounting for abandonments of natural gas leases which have never been 
productive'' are removed and the words ``, and account 797, 
Abandonment, leases'' are added in their place.
    17. In Part 201, Gas Plant Instructions, paragraph 8G., the words 
``(Major natural gas companies)'' are removed at the end of Items 2, 6, 
11, 12, 18, 19, 22, 28, 29, 32, 35, 36, 39, 40, 41, 42, 44, 45, 47, 49, 
52, 53, 55, 58, 60, 61, 62, 62, 64, 65, 66, and 67.
    18. In Part 201, Gas Plant Instructions, paragraph 10E., the words 
``or in the case of Major companies,'' immediately following the words 
``Gas Plant Held for Future Use'' are removed.
    19. In Part 201, Gas Plant Instructions, paragraph 10F., the words 
``(account 110, Accumulated Provision for Depreciation, Depletion and 
Amortization of Gas Utility Plant, in the case of Nonmajor companies)'' 
and the words ``(account 110 for Nonmajor companies)'' are removed.
    20. In Part 201, Gas Plant Instructions, paragraph 10G., the words 
``In the case of Major companies, the accounting for'' are removed and 
the words ``The accounting for'' are added in their place.
    21. In Part 201, Gas Plant Instructions, paragraph 11C., the words 
``In the case of Major companies, each utility'' are 
[[Page 3161]] removed and the words ``Each utility'' are added in their 
place.
    22. In Part 201, Gas Plant Instructions, paragraph 12, the words 
``(105.1, Production Properties Held for Future Use, in the case of 
Major companies)'' are removed and the words ``105.1, Production 
Properties held for Future Use,'' are added in their place, and the 
words ``(Major Companies)'' in the note are removed.
    23. In Part 201, Gas Plant Instructions, paragraph 14, the words 
``(Major natural gas companies)'' are removed at the end of the 
heading.
    24. In Part 201, Gas Plant Instructions, paragraph 15A., the words 
``(account 180, Other Deferred Debits, in the case of Nonmajor 
companies)'' are removed from paragraph A.(1), the words ``(the amounts 
recorded in account 186 shall be cleared to the appropriate plant 
accounts, in the case of Nonmajor companies)'' are removed from 
paragraph A.(2), and the words ``(Account 180 in the case of Nonmajor 
companies)'' are removed from paragraph A.(3).
    25. In Part 201, Gas Plant Instructions, paragraph 16 is removed.
    26. In Part 201, Operating Expense Instructions, paragraph 1, the 
words ``(Major natural gas companies)'' at the end of the heading are 
removed.
    27. In Part 201, Balance Sheet Chart of Accounts, and Balance Sheet 
Accounts, the words ``(Major only)'' at the end of the headings of 
Accounts 103, 105.1, 106, 108, 111, 115, 117, 123, 123.1, 125, 126, 
128, 131 through 135, 151 through 153, 155, 156, 163, 164.3, 166, 167, 
171 through 173, 183.1, 183.2, 184, 185, 188, 202, 203, 205 through 
210, 216.1, 222, 238 through 241 are removed.
    28. In Part 201, Balance Sheet Chart of Accounts, Accounts 103.1, 
110, 129, 180, and 218, and their respective titles are removed.
    29. In Part 201, Balance Sheet Accounts, Accounts 117A, 117D, 117E, 
117F, and 117G are removed, Accounts 117B and 117C are redesignated 
117.3B and 117.3C, respectively, new Accounts 117.1, 117.2, 117.3A, and 
117.4 are added, and redesignated Account 117.3C is revised to read as 
follows:

Balance Sheet Accounts

* * * * *

117.1  Gas stored-Base gas.

    This account is to include the cost of recoverable gas volumes 
that are necessary, in addition to those volumes for which cost are 
properly includable in Account 101, Gas plant in service, to 
maintain pressure and deliverability requirements for each storage 
facility. Subaccounts are to be maintained so that the cost of base 
gas applicable to each gas storage facility shall not be changed 
from the amount initially recorded except for changes in volumes 
designated as base gas.

117.2  System balancing gas.

    This account is to be used to record the cost of system gas 
designated as available for transmission load balancing (including 
no-notice transportation) and other uses associated with maintaining 
efficient transmission operations other than gas properly recordable 
in Account 117.1 or the plant accounts. The cost initially recorded 
herein shall not be changed except for adjustments to volumes 
designated as system gas. Detailed records must be kept separately 
identifying volumes and unit prices of system gas held in 
underground storage facilities and held in pipelines.

117.3  Gas stored in reservoirs and pipelines-noncurrent.

    A. This account shall include the cost of stored gas available 
for sale.
    B. Gas stored during the year shall be priced at cost according 
to generally accepted methods of cost determination consistently 
applied from year to year. Transmission expenses for facilities of 
the utility used in moving the gas to the storage area and expenses 
of storage facilities shall not be included in the inventory of gas 
except as may be authorized or directed by the Commission.

    Note B-1: In general, gas stored from the supply in an 
integrated system shall be priced at the average cost of the gas 
constituting the common supply of the system, although this general 
rule may be departed from where conditions of system operation of 
gas supply and utilization permit a valid presumption that the gas 
stored may be considered to be from specified sources, as indicated 
below.
    Note B-2: When in harmony with the over-all system operation of 
gas supply and utilization, and the presumption is consistently 
observed from year to year, gas stored during the year may be 
presumed to be from total gas purchases, or from purchases from 
specified sources. When either of these presumptions is proper, the 
cost of gas stored shall be priced at the weighted average cost of 
all gas purchased, or at the weighted average cost of purchases from 
the specified sources, as appropriate. The weighted average cost may 
be the average for preceding twelve months, except where a 
significant change occurs in the cost of gas, the full effect of 
such change shall be reflected for the period after the change is 
effective.
    Note B-3: When in harmony with the over-all system operation of 
gas supply and utilization, and the presumptions are consistently 
observed from year to year, gas stored during the year may be 
presumed to be from identified sources of the utility's own 
production. Such stored gas shall be priced at the weighted average 
cost of gas produced from the specified production areas. Where this 
presumption is made, or where the stored gas is identified as a 
matter of fact under circumstances which do not permit a proper 
application of the theory of displacement, the utility shall 
maintain separate records of the cost of gas produced from such 
areas and the derivation of the cost used for stored gas from such 
sources.
    Note B-4: Where gas is purchased specifically for storage, or a 
price concession received because of the storing of purchased gas, 
such gas shall be priced at the net contract price of the gas so 
purchased and stored.
    Note B-5: The provisions of this instruction and the related 
footnotes shall not be construed as permitting or authorizing a 
restatement of the amounts at which stored gas inventories are 
stated on the utility's books at the effective date of this 
instruction, except as may be authorized by the Commission.

    C. Withdrawals of gas may be priced according to the first-in-
first-out, last-in-first-out, or weighted average cost method, 
provided the method adopted by the utility is used consistently from 
year to year and the inventory records are maintained in accordance 
therewith. Approval of the Commission must be obtained for any other 
pricing method, or change in the pricing method adopted by the 
utility.

117.4  Gas owed to system gas.

    A. This account shall include credit balances resulting from 
withdrawals from system gas of volumes that encroach upon the 
volumes designated as base gas (Account 117.1), system balancing gas 
(Account 117.2), and gas properly recordable in the plant accounts. 
Withdrawals are to be credited to this account and charged to 
Account 808.1, Gas Withdrawn From Storage-Debit, at an amount equal 
to the current market price of gas available to the utility. Gas 
owned by the utility and injected into the system will be deemed to 
satisfy the owed to system account first before any other use. The 
gas injected is to be priced at the same rate used to price 
withdrawals by crediting Account 808.2, Gas Delivered to Storage-
Credit. If the owed to system balance is due to more than one 
transaction, the accounting for injections should follow a queue 
with the earlier transaction being the first accounted for.
    B. Detailed records must be kept for each transaction 
identifying volumes and unit prices used for gas owed to system gas.
* * * * *
    30. In Part 201, Balance Sheet Accounts, Account 154, the words 
``For Nonmajor utilities, this account shall include the cost of fuel 
on hand and unapplied materials and supplies (except meters and house 
regulators). For both Major and Nonmajor utilities, it shall'' are 
removed from the introductory text of paragraph A, paragraph C and Note 
B are removed, Note A is redesignated Note, and the words ``they may be 
charged to a stores expense clearing account (account 163, Stores 
Expenses Undistributed, in the case of Major Utilities), and 
distributed therefrom to the appropriate accounts'' in redesignated 
Note are removed and the words ``they shall be charged to account 163, 
Stores expenses Undistributed'' are added in their place. 
[[Page 3162]] 
    31. In Part 201, Balance Sheet Accounts, Account 164.1 is revised 
to read as follows:

Balance Sheet Accounts

* * * * *

164.1  Gas stored-current.

    This account shall be debited with such amounts as are credited 
to account 117.3, Gas Stored in Reservoirs and Pipelines-Noncurrent, 
to reflect classification for balance sheet purposes of such portion 
of the inventory of gas stored as represents a current asset 
according to conventional rules for classification of current 
assets.

    Note: It shall not be considered conformity to conventional 
rules of current asset classification if the amount included in this 
account exceeds an amount equal to the cost of estimated withdrawals 
of gas from storage for purposes of sale within the 24-month period 
from date of the balance sheet, or if the amount represents a volume 
of gas which, in fact, could not be withdrawn from storage without 
impairing pressure levels needed for normal operating purposes.
* * * * *
    32. In Part 201, Balance Sheet Accounts, Accounts 164.2D. and 
164.3D., the words ``Mcf'' and ``Mcf (or Btu),'' respectively, are 
removed, and the words ``Dth'' are added in their place.
    33. In Part 201, Balance Sheet Accounts, Account 186, the words 
``For Major companies, this account shall'' are removed from paragraph 
A, and the words ``This account shall'' are added in their place, 
paragraph B is removed, paragraph C is redesignated as paragraph B, and 
all the words in parenthesis in redesignated paragraph B are removed.
    34. In Part 201, Balance Sheet Accounts, Accounts 201 through 204, 
Note, the words ``(For Nonmajor companies, account 211, Miscellaneous 
Paid-In Capital)'' are removed.
    35. In Part 201, Balance Sheet Accounts, Account 211, the words 
``(In the case of Nonmajor companies, this account shall be kept so as 
to show the source of the credits includible herein) are removed, the 
ITEMS section and Note B are removed, Note A is redesignated Note, and 
the words ``(Major companies)'' are removed from the heading of 
redesignated Note.
    36. In Part 201, Balance Sheet Accounts, Account 242, the Items 
section is removed.
    37. In Part 201, Gas Plant Chart of Accounts and Gas Plant 
Accounts, the words ``(Major only)'' at the end of each title of 
Accounts 363, 363.1, 363.2, 363.3, 363.4, 364.1, 364.2, 364.3, 364.4, 
364.5. 364.6, 364.7 and 364.8 are removed.
    38. In Part 201, Gas Plant Accounts, Accounts 302C. and 303B., the 
words ``(For Nonmajor Companies; account 110, Accumulated Provisions 
for Depreciation, Depletion and Amortization of Gas Utility Plant)'' 
following the words ``Gas Utility Plant'' are removed.
    39. In Part 201, Gas Plant Accounts, the first sentence of Account 
352.3B is revised to read as follows:

Gas Plant Accounts

* * * * *

352.3  Nonrecoverable natural gas

* * * * *
    B. Such nonrecoverable gas shall be priced at the acquisition 
cost of native gas or, when acquired for storage by purchase or 
presumed to be supplied from the utility's own production, priced as 
outlined in Paragraph B of account 117.3 Gas Stored in Reservoirs 
and Pipelines-Noncurrent. * * *

    40. In Part 201, Income Chart of Accounts and Income Accounts, 
Accounts 403, 404.1, 404.2, 404.3, and 418.1, the words ``(Major 
only)'' are removed from the end of the headings.
    41. In Part 201, Income Chart of Accounts, Accounts 403.1 and 404 
are removed.
    42. In Part 201, Income Accounts, Accounts 421.1 and 421.2, the 
words ``(Major only)'' are removed.
    43. In Part 201, Operating Revenue Chart of Accounts and Operating 
Revenue Accounts, Account 482, the words ``(Major only)'' are removed 
at the end of the headings.
    44. In Part 201, Operating Revenue Accounts, Account 481C, the 
words ``(Major companies)'' is removed from the introductory text, and 
the word ``Mcf'' is removed and the word ``Dth'' is added in its place.
    45. In Part 201, Operating Revenue Accounts, Account 488, Item 3, 
the words ``For Major Companies, see,'' are removed and the word 
``See'' is added in their place.
    46. In Part 201, Operating Revenue Accounts, Account 489 is 
deleted, and new Accounts 489.1, 489.2, 489.3, and 489.4 are added read 
as follows:

Operating Revenue Accounts

* * * * *

489.1  Revenues from transportation of gas of others through gathering 
facilities.

    This account shall include revenues from transporting gas for 
other companies through the gathering facilities of the utility.

489.2  Revenues from transportation of gas of others through 
transmission facilities.

    This account shall include revenues from transporting gas for 
other companies through the transmission facilities of the utility.

489.3  Revenues from transportation of gas of others through 
distribution facilities.

    This account shall include revenues from transporting gas for 
other companies through the distribution facilities of the utility.

489.4  Revenues from storing gas of others.

    This account shall include revenues from storing gas for other 
companies.
* * * * *
    47. In Part 201, Operating Revenue Accounts, Account 491B is 
revised to read as follows:

Operating Revenue Accounts

* * * * *

491  Revenues from natural gas processed by others.

* * * * *
    B. The records supporting this account shall be so maintained 
that full information concerning determination of the revenues will 
be readily available concerning each processor of gas of the 
utility, including as applicable (a) the Dth of gas delivered to 
such other party for processing, (b) the Dth of gas received back 
from the processor, (c) the field, general production area , or 
other source of the gas processed, (d) Dth of gas used for 
processing fuel, etc., which is chargeable to the utility, (e) total 
gallons of each product recovered by the processor and the utility's 
share thereof, (f) the revenues accruing to the utility, and (g) the 
basis of determination of the revenues accruing to the utility. Such 
records shall be maintained even though no revenues are derived from 
the processor.
* * * * *
    48. In Part 201, Operating Revenue Accounts, Account 495 is revised 
to read as follows:

Operating Revenue Accounts

* * * * *

495  Other gas revenues.

    This account shall include revenues derived from gas operations 
not includible in any of the foregoing accounts.

Items

    1. Commission on sale or distribution of gas of others when sold 
under rates filed by such others.
    2. Compensation for minor or incidental services provided for 
others such as customer billing, engineering, etc.
    3. Profit or loss on sale of material and supplies not 
ordinarily purchased for resale and not handled through 
merchandising and jobbing accounts.
    4. Sales of steam, water, or electricity, including sales or 
transfers to other departments of the utility.
    5. Miscellaneous royalties received.
    6. Revenues from dehydration and other processing of gas of 
others, except products extraction where products are received as 
compensation and sales of such are includible in account 490, Sales 
of Products Extracted From Natural Gas, and except compression of 
gas of others, revenues from which are includible in accounts 489.1, 
[[Page 3163]] 489.2, or 489.3, Revenues from Transportation of Gas 
of Others.
    7. Included in a separate subaccount, revenues in payment for 
rights and/or benefits received from others which are realized 
through research, development, and demonstration ventures.
    8. Gains on settlements of imbalance receivables (See Account 
806).

    49. In Part 201, Operation and Maintenance Expense Chart of 
Accounts and Operation and Maintenance Expense Accounts, the words 
``(Major only)'' are removed at the end of each title of Accounts 700 
through 708, 711 through 730, 732 through 735, 740 through 742, 751 
through 754, 756, 757, 761, 762, 765 through 775, 777 through 791, 800, 
801 through 804.1, 806, 809.1, 809.2, 810 through 812, 815 through 822, 
824, 830, 831, 833 through 837, 840 through 842, 842.1 through 842.3, 
843.1 through 842.3, 843.1 through 843.9, 844.1 through 844.8, 845.1 
through 845.6, 846.1, 846.2, 847.1 through 847.8, 851, 853, 854 through 
857, 859, 861, 862, 865 through 867, 871 through 873, 875 through 877, 
880, 885 through 892, 894, 901, 905, 907 through 913, and 916.
    50. In Part 201, Operation and Maintenance Expense Chart of 
Accounts, and Operating and Maintenance Expense Accounts, Accounts 
724.1, 729.1, 737, 743, 769.1, 792, 799, 812.1, 827, 838, 839, 853.1, 
857.1, 868, 880.1, 892.1, 895, 906, 917, and 933 are removed, and 
Account 935 is redesignated Account 932.
    51. In Part 201, Operation and Maintenance Expense Accounts, 
Account 710, the words ``For Major companies, this'' are removed from 
paragraph A, and the word ``This'' is added in their place, and 
paragraph B and the Items section are removed.
    52. In Part 201, Operation and Maintenance Expense Accounts, 
Account 731A and 731B, the words ``(for Nonmajor companies, account 
154, Plant Materials and Operating Supplies)'' are removed.
    53. In Part 201, Operation and Maintenance Expense Accounts, 
Account 750, the words ``For Major companies, this'' in paragraph A are 
removed and the word ``This'' is added in their place, and paragraph B, 
the headings ``Major and Nonmajor'' and ``Nonmajor Only'' under Items, 
and Items 5 through 21 are removed.
    54. In Part 201, Operation and Maintenance Expense Accounts, 
Account 755, the words ``stations (including in the case of Major 
companies, applicable amounts of fuel stock expenses)'' in paragraph A 
are removed and the words ``stations, including applicable amounts of 
fuel stock expenses'' are added in their place, the words ``For Major 
companies, respective'' in paragraph B are removed and the word 
``Respective'' is added in their place, Note B is removed, Note A is 
redesignated Note, and the words ``(Major Companies)'' are removed from 
redesignated Note.
    55. In Part 201, Operation and Maintenance Expense Accounts, 
Account 759, the words ``(Major companies only)'' in the introductory 
text are removed, the headings ``(Major only)'' and ``(Nonmajor 
companies):'' in the Items section are removed, and Items 1 through 18 
are removed.
    56. In Part 201, Operation and Maintenance Expense Accounts, 
Account 776, the words ``in the case of Major companies,'' the words 
``(Major only)'' following the heading ``Items'', and the Note at the 
end of the account are removed.
    57. In Part 201, Operation and Maintenance Expense Accounts, 
Account 795, Note, the words ``(in the case of Nonmajor Companies, 
account 105, Gas Plant Held for Future Use)'' are removed.
    58. In Part 201, Operation and Maintenance Expense Accounts, 
Account 796, Note A, the words ``(in the case of Nonmajor companies, 
General Instruction 21, Gas Well Records)'' following the words ``Each 
Plant'' are removed.
    59. In Part 201, Operation and Maintenance Expense Accounts, 
Account 797, paragraph A, the words ``For Major companies, this'' are 
removed, the word ``This'' is added in their place, and the sentence 
following the word ``productive.'' is removed, and in paragraph B, the 
words ``(Major only)'' are removed.
    60. In Part 201, Operation and Maintenance Expense Accounts, 
Account 798, the words ``for Major companies,'' and the words ``for 
``Nonmajor companies, see account 186, Miscellaneous Deferred Debits'' 
are removed.
    61. In Part 201, Operation and Maintenance Expense Accounts, 
Account 806 is revised to read as follows:

806 Exchange gas

    A. This account shall include debits or credits for the cost of 
gas in unbalanced transactions whereby gas is received from or 
delivered to another party in exchange, load balancing, or no-notice 
transportation transactions. The costs are to be determined from the 
current market price of gas at the time gas is tendered for 
transportation. Contra entries to those in this account shall be 
made to account 174, Miscellaneous Current and Accrued Assets, for 
gas receivable and to account 242, Miscellaneous Current and Accrued 
Liabilities, for gas deliverable under such transactions. Such 
entries shall be reversed and appropriate contra entries made to 
this account when gas is received or delivered in satisfaction of 
the amounts receivable or deliverable (See Paragraph B of this 
account for unbalanced transactions that are satisfied by other than 
gas in kind).
    B. If revenue is earned or amounts are payable in consideration 
of the performance of exchange services, or if consideration for the 
amounts receivable or deliverable are satisfied by other than gas, 
such as in cash-out provisions, and at different amounts than 
originally recorded pursuant to Paragraph A of this account, such 
revenue, gain, expense, or loss should be recorded in account 495, 
Other Gas Revenues, or in account 813, Other Gas Supply Expenses, as 
appropriate. See, however, accounts 489.1, 489.2, and 489.3, 
Revenues from Transportation of Gas by Others, for transactions 
which, in fact, are for transportation of gas rather than exchange 
of gas.
    C. Records shall be maintained so that there is readily 
available for each party entering gas exchange, load balancing, or 
no-notice transportation transactions by point of receipt and 
delivery, the quantity of gas delivered and received, the amount of 
consideration if other than gas, and the basis for the 
consideration.

    62. In Part 201, Operation and Maintenance Expense Accounts, 
Account 807, paragraph D, the words ``(Major companies'') are removed.
    63. In part 201, Operation and Maintenance Expense Accounts, 
paragraph A of Accounts 808.1 and 808.2 are revised to read as follows: 
808.1 Gas withdrawn from storage-Debit
    A. This account shall include debits for the cost of gas 
withdrawn from storage during the year. Contra credits for entries 
to this account shall be made to accounts 117.3 Gas Stored in 
Reservoirs and Pipelines-Noncurrent, or account 117.4, Gas Owed to 
System Gas, or account 164.2, Liquefied Natural Gas Stored, as 
appropriate. (See instructions to accounts 117.3 and 117.4).
* * * * *

808.2 Gas delivered to storage-Credit

    A. This account shall include credits for the cost of gas 
delivered to storage during the year. Contra debits for entries to 
this account shall be made to accounts 117.3 Gas Stored in 
Reservoirs and Pipelines-Noncurrent, account 117.4, Gas Owed to 
System Gas, or account 164.2, Liquefied Natural Gas Stored, as 
appropriate. (See instructions to accounts 117.3 and 117.4).
* * * * *
    64. In Part 201, Operation and Maintenance Expense Accounts, 
Account 813, the words ``including, in the case of Major companies, 
research and development expenses'' are removed and the words 
``including research and development expenses. This account shall 
include losses on settlements of imbalance receivables (See Account 
806)'' are added in their place. [[Page 3164]] 
    65. In Part 201, Operation and Maintenance Expense Accounts, 
Account 814, paragraph B and the Items (Nonmajor only) section are 
removed, and in paragraph A, the designation ``A.'' and the words ``For 
Major companies, this'' are removed and the word ``This'' is added in 
their place.
    66. In Part 201, Operation and Maintenance Expense Accounts, 
Account 823, the words ``For Major companies, see'' are removed and the 
word ``See'' is added in their place.
    67. In Part 201, Operation and Maintenance Expense Accounts, 
Account 845.6B, the words ``Mcf or Bth, as appropriate,'' are removed 
and the word ``Dth'' is added in their place.
    68. In Part 201, Operation and Maintenance Expense Accounts, 
Account 850, paragraph B and the Items (Nonmajor only) section are 
removed, and in paragraph A, the designation ``A.'' and the words ``For 
Major companies, this'' are removed and the word ``This'' is added in 
their place.
    69. In Part 201, Operation and Maintenance Expense Accounts, 
Accounts 853.1B and 854B, the word ``Mcf'' is removed and the word 
``Dth'' is added in its place.
    70. In Part 201, Operation and Maintenance Expense Accounts, 
Account 858B, the word ``Mcf'' is removed in two places and the word 
``Dth'' is added in its place.
    71. In Part 201, Operation and Maintenance Expense Accounts, 
Account 870, the words ``(Major only)'' are removed, and the words 
``For Major companies, see'' are removed, and in their place the word 
``See'' is added.
    72. In Part 201, Operation and Maintenance Expense Accounts, 
Account 874, Items, the words ``(Major only)'' in the heading ``Labor'' 
are removed, the heading ``Labor (Nonmajor only):'' and Items 1 through 
3 under that heading are removed, the words ``(Major and Nonmajor):'' 
in the heading ``Materials and Expenses'' are removed, and the words 
``(Major only)'' are removed from Items 2, and 8 through 12 under that 
heading.
    73. In Part 201, Operation and Maintenance Expense Accounts, 
Account 878, Items, the words ``(Major only)'' are removed at the end 
of each Item 1 through 12 and 20.
    74. In Part 201, Operation and Maintenance Expense Accounts, 
Account 879, Items, the words ``(Major only)'' are removed at the end 
of Items 1, 2, 4, 5, 6, 9, and 11 through 13.
    75. In Part 201, Operation and Maintenance Expense Accounts, 
Account 902, Items, Items 13 and 14 are removed, and a new Item 13 is 
added to read as follows:

902  Meter reading expenses

* * * * *
    13. Transportation, meals and incidental expenses.

    76. In Part 201, Operation and Maintenance Expense Accounts, 
Account 903, the words ``(Major only)'' at the end of Item 26 are 
removed, and Items 31 and 32 are removed.
    77. In Part 201, Operation and Maintenance Expense Accounts, 
Account 924, the words ``For Major companies, it'' are removed from 
paragraph A and the word ``It'' is added in their place, the words 
``(stores expenses in the case of Nonmajor companies)'' are removed 
from paragraph (1) of Note B, in paragraph (2) of Note B, the words 
``For Major companies, transportation'' are removed and the word 
``Transportation'' is added in their place, and the words ``For 
Nonmajor companies, transportation and garage equipment, to account 
933, Transportation expenses.'' are removed, and the words ``(Major 
only)'' are removed from the title of Note C.
    78. In Part 201, Operation and Maintenance Expense Accounts, 
Account 925A, the words ``For Major Companies, it'' are removed and the 
word ``It'' is added in their place.
    79. In Part 201, Operation and Maintenance Expense Accounts, 
Account 926D, the words ``For Major companies, records'' are removed 
and the word ``Records'' is added in their place.
    80. In Part 201, Operation and Maintenance Expense Accounts, 
Account 930.2, Item 4, the words ``For Major Companies, research'' are 
removed and the word ``Research'' is added in their place, and the 
words ``For Nonmajor companies, experimental and general research work 
for the industry.'' are removed.
    81. In Part 201, Operation and Maintenance Expense Accounts, 
Account 935 is redesignated Account 932, and redesignated Account 932 
is amended by removing the words ``For Nonmajor companies, include also 
other general equipment accounts (not including transportation 
equipment).'' in paragraph A, revising paragraph B after the words 
``the following accounts:'' and adding the Note to read as follows:

932  Maintenance of general plant.

* * * * *
    B. * * *

Manufactured Gas Production, accounts 708, 742.
Natural Gas Production and Gathering, account 769
Natural Gas Production Extraction, account 791
Underground Storage, account 837
Local Storage, account 846.2
Transmission Expenses, account 867
Distribution Expenses, account 894
Merchandising and Jobbing, account 416
Garage, Shops, etc.--appropriate clearing account, if used.

    Note: Maintenance of plant included in other general plant 
equipment accounts shall be included herein unless charged to 
clearing accounts or to a particular functional maintenance expense 
indicated by the use of the equipment.

PART 250--FORMS

    82. The authority citation for part 250 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.

    83. Section 250.2 is revised to read as follows:


Sec. 250.2  Form of proposed cancellation of tariff or part thereof 
(see Sec. 154.602 of this chapter).

    When cancelling an entire tariff or an entire rate schedule, the 
notice of cancellation as set forth below must be filed as a revised 
tariff sheet superseding the first tariff sheet in the sequence of 
tariff sheets containing the tariff or part of the tariff being 
cancelled. When cancelling an individual tariff sheet, the tariff sheet 
should be designated as reserved for future use.

Cancellation of Entire Tariff

    Notice is hereby given that effective ________________(date) 
FERC Gas Tariff of ______________ (Name of Company) is to be 
cancelled.

Cancellation of Rate Schedule

    Notice is hereby given that effective ______________(date) Rate 
Schedule ______________ constituting ______________ Sheet(s) No.(s) 
____________ of the FERC Gas Tariff of ______________ (Name of 
Company) is to be cancelled.

    84. Section 250.3 is revised to read as follows:


Sec. 250.3  Form of proposed cancellation or termination of contract or 
part thereof (see Sec. 154.602 of this chapter).

    Notice is hereby given that effective the ________ day of 
____________, __________, the contract with ______________, (Name of 
customer or customers) dated ______________ and relating to service 
under rate schedules(s) ________________ (Here identify the rate 
schedule(s), giving sheet numbers in the Tariff) is to be 
________________ (Specify whether it automatically terminates by its 
terms or is to be canceled by action of the parties) ______________ 
(Name of natural-gas company filing notice)
By---------------------------------------------------------------------

----------------------------------------------------------------------
(Title)

Dated------------------------------------------------------------------

    [[Page 3165]] 85. Section 250.4 is revised to read as follows:


Sec. 250.4  Form of certificate of adoption (see Sec. 154.603 of this 
chapter).

  The------------------------------------------------------------------
(Exact name of company or person) ______________________ (Address) 
effective ____________ (Effective date of adoption) hereby adopts, 
ratifies, and makes its own, in every respect, the Tariff and 
contracts listed below, which have heretofore been filed with the 
Federal Energy Regulatory Commission by ______________ (Exact name 
of predecessor) __________________ (Here identify the Tariff and 
contracts adopted.)

----------------------------------------------------------------------
(Name of successor)

By---------------------------------------------------------------------

----------------------------------------------------------------------
(Title)

Dated------------------------------------------------------------------


Sec. 250.16  [Amended]

    86. In Sec. 250.16, paragraph (d) is removed, and paragraph (e) is 
redesignated as paragraph (d).


Secs. 250.5, 250.7, 250.8, 250.9, 250.10, 250.12, and 250.14  [Removed]

    87. Sections 250.5, 250.7, 250.8, 250.9, 250.10, 250.12, and 250.14 
are removed and reserved.

PART 260--STATEMENTS AND REPORTS (SCHEDULES)

    88. 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.

    89. In Sec. 260.1, paragraph (a) is amended by adding a heading, 
and paragraph (b) is revised to read as follows:


Sec. 260.1  FERC Form No. 2, Annual report for Major natural gas 
companies.

    (a) Prescription. * * *
    (b) Filing requirements. Each natural gas company, as defined in 
the Natural Gas Act (15 U.S.C. 717, et seq.) which is a major company 
(a natural gas company whose combined gas transported or stored for a 
fee exceeded 50 million Dth in each of the three previous calendar 
years) must prepare and file with the Commission for the calendar year 
beginning January 1, 1995, and for each calendar year thereafter, on or 
before April 30 following the close of such calendar year, FERC Form 
No. 2. Newly established entities must use projected data to determine 
whether FERC Form No. 2 must be filed. The form must be filed 
electronically as indicated in the general instructions set out in that 
form. The format for the electronic filing can be obtained at the 
Federal Energy Regulatory Commission, Division of Public Information, 
941 North Capitol Street, N.E., Washington, D.C. 20426. One copy of the 
report must be retained by the respondent in its files. The conformed 
copies may be by any legible means of reproduction.
    90. In Sec. 260.2, paragraph (b) is revised to read as follows:


Sec. 260.2  FERC Form No. 2-A, Annual report for nonmajor natural gas 
companies.

* * * * *
    (b) Filing requirements. Each natural gas company, as defined by 
the Natural Gas Act, not meeting the filing threshold for FERC Form No. 
2, but having total gas sales or volume transactions exceeding 200,000 
Dth in each of the three previous calendar years, must prepare and file 
with the Commission for the calendar year beginning January 1, 1995, 
and for each calendar year thereafter, on or before March 31 following 
the close of such calendar year, FERC Form No. 2-A. Newly established 
entities must use projected data to determine whether FERC Form No. 2-A 
must be filed. The form must be filed electronically as indicated in 
the general instructions set out in that form. The format for the 
electronic filing can be obtained at the Federal Energy Regulatory 
Commission, Division of Public Information, 941 North Capitol Street, 
N.E., Washington, D.C. 20426.
    91. In Sec. 260.3, paragraph (b)(1) is revised to read as follows:


Sec. 260.3  FERC Form No. 11, Natural gas pipeline company monthly 
statement.

* * * * *
    (b)(1) Who must file. Each natural gas company, as defined in the 
Natural Gas Act, whose combined gas sold for resale and gas transported 
or stored for a fee exceeded 50 million Dth in the previous calendar 
year, must prepare and file with the Commission FERC Form No. 11. The 
form must be filed electronically. The format for the electronic filing 
can be obtained at the Federal Energy Regulatory Commission, Division 
of Public Information, 941 North Capitol Street, NE., Washington, DC. 
20426.
* * * * *
    92. Sec. 260.4 is revised to read as follows:


Sec. 260.4  Form No. 14, Annual report for importers and exporters of 
natural gas.

    (a) The form of the annual report for importers and exporters of 
natural gas is prescribed for the calendar year ending December 31, 
1972, and thereafter, and is designated as FERC Form No. 14.
    (b) Each person having authorization from the Federal Energy 
Regulatory Commission pursuant to section 3 of the Natural Gas Act, to 
import or export natural gas must, beginning with the reporting year 
1972, and thereafter annually, filed on or before March 31, Form No. 
14. The form must be submitted in the manner prescribed in 
Sec. 285.2011 of this chapter.
    93. In Sec. 260.9, the introductory text of paragraph (b), and 
paragraphs (c) and (e) are revised to read as follows:


Sec. 260.9  Report by natural gas pipeline companies on service 
interruptions occurring on the pipeline system.

* * * * *
    (b) Natural gas pipeline companies must report such interruptions 
to service by any electronic means, including facsimile transmission or 
telegraph, to the Director, Division of Environmental and Engineering 
Review, Office of Pipeline Regulation, Federal Energy Regulatory 
Commission, 825 North Capitol Street NE., Washington, DC 20426 (FAX: 
(202) 208-2853), at the earliest feasible time following such 
interruption to service, and must state briefly:
* * * * *
    (c) If so directed by the Commission or the Director, Division of 
Environmental and Engineering Review, the company must provide any 
supplemental information so as to provide a full report of the 
circumstances surrounding the occurrence.
* * * * *
    (e) Copies of the telegraphic or facsimile report on interruption 
of service must be sent to the State commission in those States where 
service has been or might be affected.
    94. In Sec. 260.11, paragraph (a) is revised to read as follows:


Sec. 260.11  Form No. 8, Underground gas storage report.

    (a) The Form of Underground Gas Storage Report as FERC Form No. 8, 
is prescribed.
* * * * *


Secs. 260.13 and 260.15  [Removed]

    95. Sections 260.13 and 260.15 are removed and reserved.

PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE 
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES

    96. The authority citation for part 284 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7201-7352; 
43 U.S.C. 1331-1356. [[Page 3166]] 

Subpart A--General Provisions and Conditions


Sec. 284.3  [Amended]

    97. In Sec. 284.3(a), the words ``, sale or assignment'' are 
removed and the words ``or sale'' are added in their place.
    98. In Sec. 284.7, paragraph (b) is removed, paragraphs (c) and (d) 
are redesignated (b) and (c), respectively, redesignated paragraph 
(c)(5)(iv) is removed, and a new paragraph (c)(6) is added to read as 
follows:


Sec. 284.7  Rates.

* * * * *
    (c) Rate design. * * *
    (6) Discount reports.
    (i) A pipeline that provides either firm or interruptible 
transportation service at a discounted rate must file within 15 days of 
the close of the billing period a report containing the following 
information:
    (A) The name of the shipper being provided the discount (including 
a designation whether the shipper is a local distribution company, an 
interstate pipeline, an intrastate pipeline, an end-user, a producer, a 
marketer, or a pipeline sales operating unit), and for discounts of 
firm transportation, the shipper's contract number;
    (B) Any affiliate relationship between the pipeline and the shipper 
and the affiliate's role in the transportation transaction (i.e., 
shipper, marketer, supplier, seller);
    (C) The maximum rate or fee;
    (D) The rate or fee actually charged during the billing period;
    (E) For discounted interruptible service, the quantity of gas 
delivered during the billing period at the discounted rate and the zone 
of delivery; and
    (F) For discounted firm service, the contract demand for firm 
service provided at the discounted rate.
    (ii) The requirements of this section do not apply to discounts 
relating to the release of capacity under Sec. 284.243, unless the 
release is permanent.
    (iii) The discount report information must be provided in 
electronic format according to the specifications and format contained 
in Form No. ________, which can be obtained at the Federal Energy 
Regulatory Commission, Public Reference and Files Maintenance Branch, 
941 North Capitol St., N.E., Washington, DC 20426. The discount 
information with respect to each transaction, including the delivery 
points used, must be maintained for three years from the date the 
transaction commences.
    99. In Sec. 284.8, paragraph (b)(4)(iii) is revised to read as 
follows:


Sec. 284.8  Firm transportation service.

* * * * *
    (b) * * *
    (4) * * *
    (iii) Purging of information on completed transactions from current 
files,
* * * * *


Sec. 284.10  [Removed]

    100. Section 284.10 is removed and reserved.


Sec. 284.14  [Removed]

    101. Section 284.14 is removed and reserved.

Subpart B--Certain Transportation by Interstate Pipelines

    102. Section 284.102(e) is revised to read as follows:


Sec. 284.102  Transportation by interstate pipelines.

* * * * *
    (e) An interstate pipeline must obtain from its shippers 
certifications including sufficient information to verify that their 
services qualify under this section. Prior to commencing transportation 
service described in paragraph (d)(3) of this section, an interstate 
pipeline must receive the certification required from a local 
distribution company or an intrastate pipeline pursuant to paragraph 
(d)(3) of this section.
    103. In Sec. 284.106, paragraph (a) is revised, paragraphs (b) 
through (f) are removed, paragraph (g) is redesignated as paragraph 
(b), the introductory text of redesignated paragraph (b) is revised, 
and a new paragraph (c) is added to read as follows:


Sec. 284.106  Reporting requirements.

    (a) Notice of bypass. An interstate pipeline that provides 
transportation (except storage) under Sec. 284.102 to a customer that 
is located in the service area of a local distribution company and will 
not be delivering the customer's gas to that local distribution 
company, must file with the Commission, within thirty days after 
commencing such transportation, a statement that the interstate 
pipeline has notified the local distribution company and the local 
distribution company's appropriate regulatory agency in writing of the 
proposed transportation prior to commencement.
    (b) Semi-annual storage report. Within 30 days of the end of each 
complete storage injection and withdrawal season, the interstate 
pipeline must file with the Commission a report of storage activity 
provided under the authority of either Sec. 284.102 or Sec. 284.223, as 
applicable. The report must be signed under oath by a senior official, 
consist of an original and five conformed copies, and contain a summary 
of storage injection and withdrawal activities to include the 
following:
* * * * *
    (c) Index of customers. (1) Within 180 days of the effective date 
of this paragraph, and each year thereafter on January 15, an 
interstate pipeline must provide for electronic dissemination of an 
index of all its firm transportation customers under contract as of the 
preceding December 31.
    (2) Until an interstate pipeline is in compliance with the 
reporting requirements of this paragraph, the pipeline must comply with 
the index of customer requirements applicable to transportation and 
sales under Part 154, set forth under Sec. 154.111(b) and (c) of this 
chapter.
    (3) For each customer receiving firm transportation service, the 
index must include the information listed below in paragraphs (c)(3)(i) 
through (x) of this section. For each customer receiving firm storage 
service, the index must include the information in paragraphs (c)(3)(i) 
through (vi) and (c)(3)(x) through (xiii) of this section.
    (i) The legal name of the customer;
    (ii) The DUNS number for the customer;
    (iii) The unique contract number;
    (iv) Rate schedule;
    (v) Contract start date;
    (vi) Contract end date;
    (vii) Contract quantity, or if applicable, the contract quantity 
associated with each zone, or other rate subdivision of the pipeline, 
created in a proceeding before the Commission;
    (viii) Receipt points and associated Maximum Daily Quantities (MDQ) 
and any restrictions or limitations on the use of points;
    (ix) Delivery points and associated Maximum Daily Quantities (MDQ) 
and any restrictions or limitations on the use of points;
    (x) Source of authorization (i.e., Subpart B of this part 
implementing Section 311 of the NGPA; Subpart G of this part 
implementing Section 7(c) of the NGA; or Part 157 of this chapter 
implementing section 7(c) of the NGA);
    (xi) Maximum Storage Quantity;
    (xii) Maximum Daily Injection Quantity;
    (xiii) Maximum Daily Withdrawal Quantity.
    (4) During the year, between the annual restatements provided on 
January 15, the interstate pipeline must provide updates detailing all 
changes or [[Page 3167]] additions to the index prepared under 
paragraph (c)(1) of this section occurring during a calendar month. The 
updates for each month must be provided by the 15th of the next month. 
The updates must reflect only the new or modified contracts without 
restating the entire index.
    (5) The information included in the annual index and each monthly 
update must be available until the next year's annual index is 
established. The electronic files must be archived for at least three 
years.
    (6) The requirements of this section do not apply to contracts 
which relate solely to the release of capacity under Sec. 284.243, 
unless the release is permanent.
    (7) The requirements for the electronic index can be obtained at 
the Federal Energy Regulatory Commission, Division of Public 
Information, 825 North Capitol Street, NE., Washington DC 20426.

Subpart C--Certain Transportation by Intrastate Pipelines


Sec. 284.122  [Amended]

    104. In Sec. 284.122, paragraph (e) is removed.
    105. In Sec. 284.123, paragraph (e) is revised to read as follows:


Sec. 284.123  Rates and charges.

* * * * *
    (e) Filing requirements. Within 30 days of commencement of new 
service, any intrastate pipeline that engages in transportation 
arrangements under this subpart must file with the Commission a 
statement that describes how the pipeline will engage in these 
transportation arrangements, including operating conditions, such as, 
quality standards and financial viability of the shipper. The statement 
must also include the rate election made by the intrastate pipeline 
pursuant to paragraph (b) of this section. If the pipeline changes its 
operations or rate election under this subpart, it must amend the 
statement and file such amendments not later than 30 days after 
commencement of the change in operations or the change in rate 
election.
    106. In Sec. 284.126, paragraph (a) is revised, paragraphs (b), 
(e), and (f) are removed, paragraphs (c) and (g) are redesignated (b), 
and (c), respectively, and redesignated paragraph (b) is revised to 
read as follows:


Sec. 284.126  Reporting Requirements

    (a) Notice of bypass. An intrastate pipeline that provides 
transportation (except storage) under Sec. 284.122 to a customer that 
is located in the service area of a local distribution company and will 
not be delivering the customer's gas to that local distribution 
company, must file with the Commission within thirty days after 
commencing such transportation, a statement that the interstate 
pipeline has notified the local distribution and the local distribution 
company's appropriate state regulatory agency in writing of the 
proposed transportation prior to commencement.
    (b) Annual report. Not later than March 1 of each year, each 
intrastate pipeline must file an annual report with the Commission and 
the appropriate state regulatory agency that contains, for each 
transportation service (except storage) provided during the preceding 
calendar year under Sec. 284.122, the following information:
    (1) The name of the shipper receiving the transportation service;
    (2) The type of service performed (i.e. firm or interruptible);
    (3) Total volumes transported for the shipper. If it is firm 
service, the report should separately state reservation and usage 
quantities; and
    (4) Total revenues received for the shipper. If it is firm service, 
the report should separately state reservation and usage revenues.
* * * * *

Subpart D--Certain Sales by Intrastate Pipelines

    107. Section 284.142 is revised to read as follows:


Sec. 284.142  Sales by intrastate pipelines.

    Any intrastate pipeline may, without prior Commission approval, 
sell natural gas to any interstate pipeline or any local distribution 
company served by an interstate pipeline. The rates charged by an 
intrastate pipeline pursuant to this subpart may not exceed the price 
for gas as negotiated in the contract, plus a fair and equitable 
transportation rate as determined in accordance with Sec. 284.123.


Sec. Sec. 284.143 and 284.148  [Removed]

    108. Sections 284.143 through 284.148 are removed and reserved.

Subpart E--Assignment of Contractual Rights to Receive Surplus 
Natural Gas

Subpart E--[Removed]

    109. Subpart E is removed and reserved.

Subpart G--Blanket Certificates Authorizing Certain Transportation 
by Interstate Pipelines on Behalf of Others and Services by Local 
Distribution Companies

    110. In Sec. 284.221, the introductory text of paragraph (b)(1) is 
revised to read as follows:


Sec. 284.221  General rule; transportation by interstate pipelines on 
behalf of others.

* * * * *
    (b) Application procedure. (1) An application for a blanket 
certificate under this section must be filed electronically. The format 
for the electronic application filing can be obtained at the Federal 
Energy Regulatory Commission, Division of Public Information, 941 North 
Capitol Street, N.E., Washington, D.C. 20426, and must include:
* * * * *


Sec. 284.222  [Removed]

    111. Section 284.222 is removed and reserved.
    112. In Sec. 284.223, the section heading is revised, paragraphs 
(b) through (f) are removed, and a new paragraph (b) is added to read 
as follows:


Sec. 284.223  Transportation by interstate pipelines on behalf of 
shippers.

* * * * *
    (b) Reporting requirements. Any interstate pipeline transporting 
gas under this section must comply with each of the reporting 
requirements specified in Sec. 284.106.
    113. In Sec. 284.224, the heading, paragraphs (b)(3), (c) 
introductory text, (d)(1), (e)(1), and (g) are revised, paragraph 
(e)(5)(i) is redesignated as paragraph (e)(5) and paragraph (e)(5)(ii) 
is removed to read as follows:


Sec. 284.224  Certain transportation and sales by local distribution 
companies.

* * * * *
    (b) Blanket certificate-- * * *
    (3) The Commission will grant a blanket certificate to such local 
distribution company or Hinshaw pipeline under this section, if 
required by the present or future public convenience and necessity. 
Such certificate will authorize the local distribution company to 
engage in the sale or transportation of natural gas that is subject to 
the Commission's jurisdiction under the Natural Gas Act, to the same 
extent that and in the same manner that intrastate pipelines are 
authorized to engage in such activities by subparts C and D of this 
part, except as otherwise provided in paragraph (e)(2) of this section. 
[[Page 3168]] 
    (c) Application procedure. Applications for blanket certificates 
must be accompanied by the fee prescribed in Sec. 381.207 of this 
chapter or a petition for waiver pursuant to Sec. 381.106 of this 
chapter, and shall state:
* * * * *
    (d) Effect of certificate. (1) Any certificate granted under this 
section will authorize the certificate holder to engage in transactions 
of the type authorized by subparts C and D of this part.
* * * * *
    (e) General conditions. (1) Except as provided in paragraph (e)(2) 
of this section, any transaction authorized under a blanket certificate 
is subject to the same rates and charges, terms and conditions, and 
reporting requirements that apply to a transaction authorized for an 
intrastate pipeline under subparts C and D of this part.
* * * * *
    (g) Hinshaw pipeline without blanket certificate. A Hinshaw 
pipeline that does not obtain a blanket certificate under this section 
is not authorized to sell or transport natural gas as an intrastate 
pipeline under subparts C and D of this part.
* * * * *
    114. Sections 284.225 and 284.226 are removed and reserved.
    115. In Sec. 284.227, paragraph (d) is removed, and paragraphs (e), 
(f), and (g) are redesignated (d), (e), and (f).

Subpart J--Blanket Certificates Authorizing Certain Natural Gas 
Sales by Interstate Pipelines


Sec. 284.288  [Removed]

    116. Section 284.288 is removed and reserved.

Subpart L--Certain Sales for Resale by Non-interstate Pipelines

    117. In Sec. 284.402, paragraph (c)(1) is revised to read as 
follows and in the first sentence of paragraph (c)(2) the word 
``criteria'' in paragraph (c)(2) is removed, and the word ``criterion'' 
is added in its place:


Sec. 284.402  Blanket marketing certificates.

* * * * *
    (c)(1) The authorization granted in paragraph (a) of this section 
will become effective for an affiliated marketer with respect to 
transactions involving affiliated pipelines when an affiliated pipeline 
receives its blanket certificate pursuant to Sec. 284.284.
* * * * * *
[FR Doc. 95-653 Filed 1-12-95; 8:45 am]
BILLING CODE 6717-01-P