[Federal Register Volume 60, Number 114 (Wednesday, June 14, 1995)]
[Proposed Rules]
[Pages 31262-31265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14532]



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 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 60, No. 114 / Wednesday, June 14, 1995 / 
Proposed Rules  


[[Page 31262]]


DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 357 and 382

[Docket No. RM95-12-000]


Minimum Filing Requirements for FERC Form No. 6, Annual Report 
for Oil Pipelines

June 8, 1995.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Commission is proposing to revise the filing requirements 
for FERC Form No. 6, Annual Report of Oil Pipeline Companies, and to 
exempt certain oil pipeline companies with minimal jurisdictional 
revenues from paying annual charges. The proposed rule would exempt 
from filing Form No. 6 those pipelines whose jurisdictional operating 
revenues are at or below $100,000 for each of the three preceding 
calendar years. Those companies that will be exempt from filing Form 
No. 6 must nevertheless prepare and file page 700 of Form No. 6. The 
Commission also proposes to relieve those companies not required to 
file Form No. 6 from the obligation to pay annual charges to the 
Commission.

DATES: Comments are due on or before July 14, 1995.

ADDRESSES: An original and 14 copies of written comments on this 
proposed rule must be filed in Docket No. RM95-12-000 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: Harris S. Wood, Office of the General 
Counsel, Federal Energy Regulatory Commission, 825 North Capitol 
Street, N.E., Washington, DC 20426, Telephone: (202) 208-0224.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission also provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in Room 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 or 1200 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.

Notice of Proposed Rulemaking

    The Federal Energy Regulatory Commission (Commission) proposes to 
revise the filing requirements for FERC Form No. 6, Annual Report of 
Oil Pipeline Companies (Form No. 6), and exempt certain oil pipeline 
companies with minimal jurisdictional revenues from the requirement for 
paying annual charges. These changes are proposed to become effective 
30 days after the publication of a final rule in this proceeding in the 
Federal Register.
    The Commission proposes to exempt from the requirements to prepare 
and file Form No. 6, those pipelines whose jurisdictional operating 
revenues are at or below $100,000 for each of the three preceding 
calendar years.1 For the reasons appearing below, those companies 
that will be exempt from filing Form No. 6 must nevertheless prepare 
and file page 700 of Form No. 6.

    \1\Notwithstanding the Commission's proposal to establish a 
threshold exemption from filing FERC Form No. 6, all jurisdictional 
oil pipelines will continue to be subject to the Commission's 
accounting and recordkeeping requirements (e.g., 18 CFR Parts 351, 
352, and 356).
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    The Commission also proposes to relieve those companies not 
required to file Form No. 6 from the obligation to pay annual charges 
to the Commission.
I. Background

    Order No. 561\2\ was issued on October 22, 1993, to comply with the 
Energy Policy Act of 1992 (Act of 1992),\3\ which required that the 
Commission establish a simplified and generally applicable method of 
oil pipeline rate regulation. Thereafter, on October 28, 1994, the 
Commission issued Order No. 571, which established certain filing 
requirements for oil pipelines seeking cost-of-service rate treatment 
and promulgated changes to Form No. 6.\4\

    \2\Revisions to Oil Pipeline Regulations Pursuant to the Energy 
Policy Act of 1992, Order No. 561, III FERC Stats. & Regs. para. 
30,985 (1993); Order on Rehearing, Order No. 561-A, III FERC Stats. 
& Regs. para. 31,000 (1994).
    \3\42 U.S.C. 7172 note (West Supp. 1993).
    \4\Cost-of-Service Reporting and Filing Requirements for Oil 
Pipelines, III FERC Stats. & Regs. para. 31,006 (1994).
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    The Commission's regulations currently require each jurisdictional 
oil pipeline company to submit Form No. 6 annually, reflecting the 
operating results and the financial condition of the company involved, 
irrespective of the size of the company.\5\

    \5\18 CFR 357.2.
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II. Public Reporting Burden

    The Commission estimates the public reporting burden for the 
collections of information under the proposed rule will be reduced for 
Form No. 6 by about 14 percent. These estimates include the time for 
reviewing instructions, researching existing data sources, gathering 
and maintaining the data needed, and completing and reviewing the 
collection of information. The current annual reporting burden 
associated with these information collection requirements is as 
follows:

Form No. 6: 22,572 hours, 148 responses, and 148 respondents.\6\

    \6\These numbers are based on an average of respondents expected 
to file Form No. 6. The number of respondents actually filing the 
Form No. 6 may vary slightly each year.

    The proposed rule will reduce the existing reporting burden 
associated with Form No. 6 by an estimated 2,838 hours annually, or an 
average of 129 hours per response based on an 

[[Page 31263]]
estimated 22 oil pipelines who will be exempt from the filing 
requirements of Form No. 6 but not from the filing requirements of page 
700.
    Comments regarding these burden estimates or any other aspect of 
these collections of information, including suggestions for reducing 
this burden, can be sent to the Federal Energy Regulatory Commission, 
941 North Capitol Street, N.E., 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. Discussion

A. Form No. 6

    Form No. 6 provides the Commission with financial and operational 
data for the proper administration of the Commission's responsibilities 
for rate regulation of oil pipelines under the Interstate Commerce Act, 
as amended,\7\ and the Act of 1992. In a like manner, the Commission 
requires the other entities it regulates to submit annual financial and 
operational data. However, the Commission has established minimum 
filing thresholds for submission of annual reports for both electric 
utilities and natural gas companies.\8\ For example, a natural gas 
pipeline is only required to submit an annual report if its total gas 
sales or volumes transported exceeds 200,000 Mcf in each of the three 
previous calendar years. This has allowed the Commission to maintain 
data on the more significant pipelines and yet has allowed those whose 
operations are minimal to avoid the regulatory expense and burden of 
filing reports which would be of limited statistical importance to the 
Commission. The Commission here intends to provide the same type of 
relief from the annual filing burden and expense for oil pipelines with 
limited jurisdictional activity.

    \7\49 App. U.S.C. 1 (1988).
    \8\For electric utilities and licensees, see 18 CFR 141.1 and 
141.2 and General Instruction 1, Classification of Utilities of the 
Uniform System of Accounts Prescribed for Public Utilities and 
Licensees, 18 CFR Part 101.
    For natural gas companies, see 18 CFR 260.1 and 260.2 and 
General Instruction 1, Classification of Utilities of the Uniform 
System of Accounts Prescribed for Natural Gas Companies, 18 CFR Part 
201.
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    The Commission proposes to establish a filing threshold for Form 
No. 6 based on the annual jurisdictional operating revenues of an oil 
pipeline company. While the filing thresholds for electric utilities 
and natural gas companies are stated in volumes, the Commission 
believes that a volumetric threshold is not appropriate for oil 
pipelines.\9\

    \9\In establishing annual charges for the companies it 
regulates, the Commission considered the use of a volumetric 
standard in setting annual charges for oil pipelines, but rejected 
such an approach. It found, for the reasons stated in that 
proceeding, that the operating revenue approach for setting annual 
fees would most fairly and equitably distribute the oil program 
cost. See Annual Charges Under the Omnibus Budget Reconciliation Act 
of 1986, FERC Stats. & Regs., Preambles (1986-1990) para. 30,746 
(1987) at pp. 30,631-30,634. For the reasons stated in that 
proceeding, the Commission believes that jurisdictional operating 
revenues is the appropriate basis for exemption of filing Form No. 
6.
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    Analysis of the 146 oil pipelines that filed Form No. 6 for the 
1993 reporting year indicates three natural breaks in jurisdictional 
operating revenues that could be used to establish a minimum filing 
threshold:

    $100,000 level--22 oil pipelines, or 15 percent of the 1993 
total, had jurisdictional operating revenues at or below this level.
    $300,000 level--32 oil pipelines, or 22 percent of the 1993 
total, had jurisdictional operating revenues at or below this level.
    $1,000,000 level--38 oil pipelines, or 26 percent of the 1993 
total, had jurisdictional operating revenues at or below this level.

    The Commission proposes to establish the minimum reporting 
threshold for oil pipeline companies to file Form No. 6 at the $100,000 
level of jurisdictional operating revenues. This level will exempt 
companies with minimal jurisdictional transactions from the burdens 
associated with preparation of the annual report, yet the Commission 
should continue to have statistically valid data for its use in oil 
pipeline rate regulation.
    For both electric utilities and natural gas companies, the 
Commission's regulations require a company to look to its three 
immediately preceding reporting years to determine, inter alia, whether 
it is exempt from filing an annual report with the Commission.\10\ If a 
regulated company had been exempt from reporting and exceeds the 
minimum filing threshold for each of the three immediately preceding 
calendar years, it would be required to file an annual report for the 
current reporting year. Thereafter, the company would be required to 
file an annual report until the level of its operations falls below the 
established threshold for the three immediately preceding calendar 
years, at which time it would again become exempt from the annual 
report requirement. This three-year approach was established to guard 
against anomalies in the operations of a regulated company and to 
provide some measure of stability in the annual reports, while not 
imposing an undue burden on companies which were clearly showing a 
pattern of operations below the established minimum thresholds.

    \10\In the case of a newly established jurisdictional entity, 
the projected data of the company would be the basis for determining 
whether an annual report would be required for its first year of 
operations. See 18 CFR Parts 101 and 201, General Instruction 1, 
Classification of Utilities, paragraph C.
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    The Commission proposes to require the same three-year test for oil 
pipelines to see if they meet the minimum exemption. That is, a 
pipeline will be exempt from preparing and filing FERC Form No. 6 if 
its jurisdictional operating revenues for the three calendar years 
immediately preceding the current reporting year were $100,000 or less 
per reporting year. For a newly established pipeline without three 
years of operations, the company, as is now required for electric 
utilities and natural gas companies, would use projected data to 
determine whether Form No. 6 needs to be filed.
    Order No. 571 amended Form No. 6 by requiring, inter alia, that a 
new page 700 be incorporated into Form No. 6. This page requires an oil 
pipeline to report its total annual cost of service as calculated under 
the Opinion No. 154-B methodology,\11\ its operating income, and its 
throughput in barrels and barrel-miles. This page is an integral part 
of the Commission's data collection efforts to ensure that the index 
prescribed by Order No. 561 properly tracks industry costs. Page 700 
provides shippers with the necessary information to serve as a 
preliminary screening tool for pipeline rate filings. It is designed to 
enable shippers to compare proposed changes in rates against the change 
in the level of a pipeline's cost of service, to compare the change in 
a shipper's individual rate with the change in a pipeline's average 
company-wide barrel-mile rate, and to determine whether to challenge a 
pipeline's indexed rate increase filings. As such, page 700 provides 
the Commission and the public with information beyond the financial and 
accounting data found in the rest of Form No. 6. Because the 
information found on page 700 is not readily available elsewhere, the 
Commission proposes to require those pipelines that would be exempt 
from filing Form No. 6 to prepare and file page 700 at the time that 
other pipelines are required to 

[[Page 31264]]
file Form No. 6 (i.e., on or before March 31st of each year for the 
previous calendar year).

    \11\The Opinion No. 154-B methodology is derived from the 
Commission's opinions in Williams Pipe Line Company, Opinion No. 
154-B, 31 FERC para. 61,377 (1985), on rehearing, Opinion No. 154-C, 
Williams Pipeline Company, 33 FERC para. 61,327 (1985); and ARCO 
Pipe Line Company, Opinion No. 351, 52 FERC para. 61,055 (1990), on 
rehearing, Opinion No. 351-A, ARCO Pipe Line Company, 53 FERC para. 
61,398 (1990).
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B. Annual Charges

    Annual charges are assessed on all jurisdictional companies who 
file annual reports with the Commission to assist in defraying the cost 
of regulation of those companies. For public utilities and natural gas 
companies, those companies who fall below the reporting thresholds for 
those industries are not required to file annual reports, and therefore 
they do not pay annual charges to the Commission. Currently, all oil 
pipelines reporting jurisdictional operating revenues in Form No. 6 are 
subject to annual charges.\12\ The Commission proposes to provide the 
same type of relief from annual charges as it provides with respect to 
other entities it regulates, by exempting from the requirement to pay 
annual charges those oil pipelines whose annual jurisdictional revenues 
are at or below the $100,000 threshold.

    \12\However, on a case by case basis, certain oil pipelines have 
been granted waiver of the Form 6 filing requirements.
    Annual charges for oil pipelines are calculated on the basis of 
jurisdictional operating revenues. If an oil pipeline company has no 
jurisdictional operating revenues, it pays no annual charge. For the 
1993 reporting year, 22 of the 146 oil pipeline companies filing Form 
No. 6 either had no jurisdictional operating revenues, or their 
jurisdictional operating revenues were under $100,000. The remaining 
124 oil pipelines with jurisdictional operating revenues over $100,000 
paid annual charges with the smallest annual charge amount being $132. 
If the proposed change in filing requirements for Form No. 6 had been 
in effect for that reporting year, 22 companies would have been 
exempted from paying annual charges. The total annual charges involved 
based on 1993 jurisdictional operating revenues would amount to $77 for 
those companies, a de minimis amount.
    Based on the foregoing, the Commission proposes to require annual 
charges only of those oil pipelines that are required to file Form No. 
6. This would be consistent with the treatment accorded public 
utilities and natural gas companies.

IV. Environmental Analysis

    The Commission is required to prepare an Environmental Assessment 
or an Environmental Impact Statement for any action that may have a 
significant adverse effect on the human environment.13 The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.14 The action proposed here is procedural in nature 
and therefore falls within the categorical exclusions provided in the 
Commission's regulations.15 Therefore, neither an environmental 
impact statement nor an environmental assessment is necessary and will 
not be prepared in this rulemaking.

    \13\Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes 
and Regulations, Regulations Preambles 1986-1990 para.30,783 (1987).
    \14\18 CFR 380.4.
    \15\See 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act16 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.17

    \16\5 U.S.C. 601-612.
    \17\5 U.S.C. 605(b).
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    Pursuant to section 605(b), the Commission certifies that the 
proposed rules and amendments, if promulgated, will not have a 
significant adverse economic impact on a substantial number of small 
entities. Rather, the proposed rules will relieve small entities of the 
burden of preparing and filing annual reports and of paying annual 
charges to the Commission.

VI. Comment Procedures

    Copies of this notice of proposed rulemaking can be obtained from 
the Office of Public Information, Room 3104, 941 North Capitol Street, 
N.E., Washington, D.C. 20426. Any person desiring to file comments 
should submit an original and fourteen (14) copies of such comments to 
the Federal Energy Regulatory Commission, 825 North Capitol Street, 
N.E., Washington, D.C. 20426, not later than 30 days after the date of 
publication in the Federal Register.
    The full text of this notice of proposed rulemaking also is 
available through the Commission Issuance Posting System (CIPS), an 
electronic bulletin board service, which 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, communications 
software should be set to use 300, 1200, or 2400 bps, full duplex, no 
parity, 8 data bits, and 1 stop bit. CIPS can also be accessed at 9600 
bps by dialing (202) 208-1781. The full text of this notice will be 
available on CIPS for 30 days from the date of issuance. 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, N.E., Washington, D.C. 20426.

VII. Information Collection Requirements

    Office of Management and Budget (OMB) regulations require OMB to 
approve certain information collection requirements imposed by agency 
rules.18 While these proposed rules and amendments contain no new 
information collection requirements, we expect the proposed rule will 
revise and reduce the reporting requirements under existing Form No. 6.

    \18\5 CFR 1320.13.
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    The Commission uses the data collected under Form No. 6 to monitor 
the financial and operating data of oil pipeline companies subject to 
its jurisdiction, and to assist in determining the reasonableness of 
rates.
    Because of the proposed revisions and expected reduction in public 
reporting burden under Form No. 6, the Commission is submitting a copy 
of the proposed rule to OMB for its review and approval. Interested 
persons may obtain information on these reporting requirements by 
contacting the Federal Energy Regulatory Commission, 941 North Capitol 
Street NE, Washington, D.C. 20426 (Attention: Michael Miller), 
Information Policy and Standards Branch, (202) 208-1415, FAX (202) 208-
2425; and to the Office of Information and Regulatory Affairs, Office 
of Management and Budget (Attention: Desk Officer for Federal Energy 
Regulatory Commission), Washington, D.C. 20503.
List of Subjects

18 CFR Part 357

    Pipelines, Reporting and recordkeeping requirements, Uniform System 
of Accounts.

18 CFR Part 382

    Annual Charges.

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

    In consideration of the foregoing, the Commission gives notice of 
its proposal to amend Parts 357 and 382, Chapter I, 

[[Page 31265]]
Title 18, Code of Federal Regulations, as set forth below.

PART 357--ANNUAL SPECIAL OR PERIODIC REPORTS: CARRIERS SUBJECT TO 
PART I OF THE INTERSTATE COMMERCE ACT

    1. The authority citation for Part 357 is revised to read as 
follows:

    Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 
1-85.

    2. Section 357.2 is revised to read as follows:


Sec. 357.2  FERC Form No. 6, Annual Report of Oil Pipeline Companies.

    Each pipeline carrier subject to the provisions of section 20 of 
the Interstate Commerce Act whose annual jurisdictional operating 
revenues has been more than $100,000 for each of the three previous 
calendar years must prepare and file with the Commission copies of FERC 
Form No. 6, ``Annual Report of Oil Pipeline Companies,'' pursuant to 
the General Instructions set out in that form. This report must be 
filed on or before March 31st of each year for the previous calendar 
year. Newly established entities must use projected data to determine 
whether FERC Form No. 6 must be filed. One copy of the report must be 
retained by the respondent in its files. The conformed copies may be 
produced by any legible means of reproduction. Notwithstanding the 
exemption provided above, those carriers exempt from filing Form No. 6 
must prepare and file page 700 of FERC Form No. 6 on or before March 
31st of each year for the previous calendar year, beginning with the 
year ending December 31, 1995, including the subscription required by 
Sec. 385.2005(a) of this chapter.

PART 382--ANNUAL CHARGES

    1. The authority citation for Part 382 continues to read as 
follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w; 3301-3432; 16 
U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 
49 App. U.S.C. 1-85.

    2. Section 382.102(c) is revised to read as follows:


Sec. 382.102  Definitions.

* * * * *
    (c) Oil pipeline company means any person engaged in the 
transportation of crude oil and petroleum products subject to the 
Commission's jurisdiction under the Interstate Commerce Act with annual 
operating revenues greater than $100,000 in any of the three calendar 
years immediately preceding the fiscal year for which the Commission is 
assessing annual charges.
* * * * *
[FR Doc. 95-14532 Filed 6-13-95; 8:45 am]
BILLING CODE 6717-01-P