[Federal Register Volume 60, Number 196 (Wednesday, October 11, 1995)]
[Rules and Regulations]
[Pages 52960-53019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24723]




[[Page 52959]]

_______________________________________________________________________

Part II





Department of Energy





_______________________________________________________________________



Federal Energy Regulatory Commission



_______________________________________________________________________



18 CFR Part 154, et al.



Natural Gas Companies (Natural Gas Act): Rate Schedule and Tariff 
Changes; Filing; Uniform Systems of Accounts, Forms, Statements, and 
Reporting Requirements; Revisions; Final Rules

  Federal Register / Vol. 60, No. 196 / Wednesday, October 11, 1995 / 
Rules and Regulations   

[[Page 52960]]


FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Part 154
[Docket No. RM95-3-000; Order No. 582]


Filing and Reporting Requirements for Interstate Natural Gas 
Company Rate Schedules and Tariffs

Issued: September 28, 1995

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission is amending part 154 
of the Commission's regulations under the Natural Gas Act. The 
Commission is reorganizing, rewriting and updating its regulations 
governing the form, composition and filing of rates and charges for the 
transportation of natural gas in interstate commerce. This rule is part 
of the Commission's ongoing program to review its filing and reporting 
requirements and reduce unnecessary burdens by eliminating the 
collection of data that are not necessary to the performance of the 
Commission's regulatory responsibilities. The rule also requires that 
certain data, necessary to the analysis of a proposed rate, be filed at 
an earlier stage of the process.

EFFECTIVE DATE: This final rule is effective November 13, 1995.

FOR FURTHER INFORMATION CONTACT: Richard A. White, Office of the 
General Counsel, Federal Energy Regulatory Commission, 825 North 
Capitol Street, NE., Washington, DC 20426, (202) 208-0491.

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 at 888 First 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 (800) 856-3920. 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 in ASCII and WordPerfect 5.1 
format. 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.

Table of Contents

I. Introduction
II. Public Reporting Burden
III. Background
IV. Discussion
    A. Overview and Objectives of the Final Rule
    1. Organization and editorial changes.
    2. Substantive changes.
    B. The Revised Regulations
    1. Subpart A--General Provisions and Conditions
    a. Section 154.1 Application; obligation to file
    b. Section 154.2 Definitions
    c. Section 154.3 Effective Tariff
    d. Section 154.4 Electronic and Paper Media
    e. Section 154.5 Rejection of Filings
    f. Section 154.6 Acceptance for filing not approval
    g. Section 154.7 General Requirements for the Submission of a 
Tariff Filing or Executed Service Agreement
    h. Section 154.8 Informal Submission for Staff Suggestions
    2. Subpart B--Form and Composition of Tariff
    a. Section 154.101 Form
    b. Section 154.102 Title Page and Arrangement
    c. Section 154.103 Composition of Tariff
    d. Section 154.104 Table of Contents
    e. Section 154.105 Preliminary Statement
    f. Section 154.106 Map
    g. Section 154.107 Currently Effective Rates
    h. Section 154.108 Composition of Rate Schedules
    i. Section 154.109 General Terms and Conditions
    j. Section 154.110 Form of Service Agreement
    k. Section 154.111 Index of Customers
    l. Section 154.112 Exception to Form and Composition of Tariff
    m. Miscellaneous Subpart B Comments
    3. Subpart C--Procedures for Changing Tariffs
    a. Section 154.201 Filing Requirements
    b. Section 154.202 Filings to Initiate a New Rate Schedule
    c. Section 154.203 Compliance Filings
    d. Section 154.204--Changes in Rate Schedules, Forms of Service 
Agreements, or the General Terms and Conditions
    e. Section 154.205 Changes Related to Suspended Tariffs, 
Executed Service Agreements or Parts Thereof
    f. Section 154.206 Motion to Place Suspended Rates Into Effect
    g. Section 154.207 Notice Requirements
    h. Section 154.208 Service on Customers and Other Parties
    i. Section 154.209 Form of Notice for Federal Register
    j. Section 154.210 Protests, Interventions, and Comments
    4. Subpart D--Material to be Filed With Changes
    a. Section 154.301 Changes in Rates
    b. Section 154.302 Previously Submitted Material
    c. Section 154.303 Test Periods
    d. Section 154.304 Format of Statements, Schedules, Workpapers, 
and Supporting Data
    e. Section 154.305 Tax Normalization
    f. Section 154.306 Cash Working Capital
    g. Section 154.307 Joint Facilities
    h. Section 154.308 Representation of Chief Accounting Officer
    i. Section 154.309 Incremental Expansions
    j. Section 154.310 Zones
    k. Section 154.311 Updating of Statements
    l. Section 154.312 Composition of Statements
    1. Schedule B
    2. Schedule C
    3. Schedule C-1, End of Base Period Plant Functionalized
    4. Schedule C-2 (Proposed Schedule C-3)
    5. Schedule C-3 (Proposed Schedule C-4)
    6. Schedule C-4 (Proposed Schedule C-5)
    7. Schedule C-5 (Proposed Schedule C-6)
    8. Schedule D
    9. Schedules D-1 and D-2
    10. Schedule D-2 (Proposed Schedule D-3)
    11. Statement E Schedule E-3
    14. Schedule E-4
    15. Proposed Schedule E-5
    16. Statement F-2
    17. Statement G, Revenues, Credits, and Billing Determinants
    18. Schedule G-1, Base Period Revenues Schedule G-2, Adjustment 
Period Revenues
    20. Schedule G-3
    21. Schedule G-4, At-risk Revenue
    22. Schedule G-5, Other Revenues
    23. Statement H-1
    24. Schedule H-1(1)
    25. Schedules H-1(1)(c), H-1(3)(a), and H-1(3)(b)
    26. Schedules H-1(2)(a) and H-1(2)(b)
    27. Schedule H-1(2) [Proposed Schedule H-1(3)]
    28. Schedule H-1(2)(j) [Proposed Schedule H-1(3)(k)]
    29. Schedule H-1(2)(k) [Proposed Schedule H-1(3)(l)]
    30. Schedule H-2(1)
    31. Statement H-3
    32. Schedules H-3(1)-(3)
    33. Schedule H-3(4)
    34. Schedule H-4
    35. Schedule I-1, Functionalization of Cost-of-service
    36. Schedules I-2 (i) and (ii)
    37. Schedule I-3, Allocation of Cost-of-Service
    38. Schedule I-4, Transmission and Compression of Gas by Others 
(Account 858)
    39. Schedule I-5
    40. Schedule I-5, Gas Balance
    41. Statement J, Comparison and Reconciliation of Estimated 
Revenues With Cost-of-service
    42. Schedule J-1, Summary of Billing Determinants
    43. Schedule J-2, Derivation of Rates
    44. Schedule J-2(iii)
    45. Statement P
    m. Section 154.313 Schedules for Minor Rate Changes 

[[Page 52961]]

    n. Section 154.314 Other Support for a Filing
    5. Subpart E--Limited Rate Changes
    a. Section 154.401 RD&D Expenditures
    b. Section 154.402 ACA Expenditures
    c. Section 154.403 Periodic Rate Adjustments
    6. Subpart F--Refunds and Reports
    a. Section 154.501 Refunds
    b. Section 154.502 Reports
    7. Subpart G--Other Tariff Changes
    a. Section 154.601 Change in Executed Service Agreement
    b. Section 154.602 Cancellation or Termination of a Tariff, 
Executed Service Agreement or Part Thereof
    c. Section 154.603 Adopting of a Tariff by a Successor
    C. Comments requesting further changes
    D. Electronic Filing
    1. Industry-wide conference
    2. Delayed implementation of electronic filing requirements
    3. Software
    4. Using Rich Text Format for Text
    5. Appropriate Format for Numeric Data
    6. Security and Reliability of Data
    7. Submission of Data to the Commission
    8. Dissemination of Data by the Commission
    9. Fees for costs of electronic filing
V. Regulatory Flexibility Act Certification
VI. Environmental Statement
VII. Information Collection Statement
VIII. Effective Date
Regulatory Text
Appendix A
Appendix B
Appendix C

I. Introduction

    The Federal Energy Regulatory Commission (Commission) hereby adopts 
procedural rules governing the form and composition of interstate 
natural gas pipeline tariffs and the filing of rates and charges for 
the transportation of natural gas in interstate commerce under sections 
4 and 5 of the Natural Gas Act (NGA) and section 311 of the Natural Gas 
Policy Act. This rule is a companion to the final rule, issued 
concurrently, titled ``Revisions to the Uniform System of Accounts and 
to Forms and Statements and Reporting Requirements for Natural Gas 
Companies'' which amends, among other things, the Uniform System of 
Accounts and FERC Form No. 2.
    The Commission intends to make the filing and reporting 
requirements reflect recent regulatory changes, in particular the 
implementation of Order No. 636, and the realities of the process of a 
modern rate case.1 The restructuring of the pipeline industry has 
rendered many of the current rate and tariff regulations superfluous or 
outdated. The Commission is adopting filing requirements that reflect 
the current part 284 service regulations that mandate unbundled 
pipeline sales and open-access transportation of natural gas. The 
current part 154 rate regulations are not designed for the type of rate 
changes that will occur in the restructured service environment. These 
filing requirements were originally designed to focus on pipeline sales 
activities. The revised regulations focus on transportation services.

    \1\Pipeline Service Obligations and Revisions to Regulations 
Governing Self-Implementing Transportation; and Regulation of 
Natural Gas Pipelines After Partial Wellhead Decontrol, Order No. 
636, 57 FR 13267 (April 16, 1992), FERC Statutes and Regulations 
para.30,939 (April 8, 1992); order on reh'g, Order No. 636-A, 57 FR 
36128 (August 12, 1992), FERC Statutes and Regulations para.30,950 
(August 3, 1992); order on reh'g, Order No. 636-B, 57 FR 57911 
(December 8, 1992), 61 FERC para.61,272 (1992), reh'g denied, 62 
FERC para.61,007 (1993), appeal pending sub nom. United Distribution 
Co., et al. v. FERC, No. 92-1485, et al. (D.C. Cir. Feb. 8, 1995).
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    Before the recent industry restructuring, natural gas pipelines 
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 
the gas on a bundled basis. Now, pipeline companies are primarily 
transporters of natural gas. This change in the primary role of the 
pipeline from merchant to transporter requires that the filing 
requirements be adapted to the change. Accordingly, the Commission is 
deleting all of the current regulations in part 154 and replacing them 
with new regulations that reflect the restructured industry.
    Kern River requests clarification that the companion rules are 
pursuant to section 5 of the NGA. The clarification is denied. Section 
5 specifically gives the Commission the power to change any rule, 
regulation, practice or contract that the Commission finds to be 
unjust, unreasonable, unduly discriminatory or preferential. The 
Commission's power to prescribe rules, regulations and statements of 
policy of general applicability with respect to any function under its 
jurisdiction is derived from section 402 of the Department of Energy 
Organization Act and section 16 of the NGA. The instant rule is more 
appropriately considered to be promulgated pursuant to the latter 
authorities.
    The changes to the Commission's regulations are effective November 
13, 1995.

II. Public Reporting Burden

    The subject final rule will effect seven of the Commission's 
existing data collections. However, only one of these data collections 
will have a net change (reduction) in reporting burden. The final rule 
reflects many of the changes suggested in industry comments filed in 
response to Commission's Notice of Proposed Rulemaking. In particular, 
the joint comments of The Interstate Natural Gas Association of America 
(INGAA) and the American Gas Distributors (AGD) were helpful.
    The final rule is expected to reduce the existing reporting burden 
associated with FERC-545, Gas Pipeline Rates: Rate Change (Non-Formal) 
(OMB Control No. 1902-0154) (FERC-545) by an estimated 136,785 hours 
annually--an average of 172.9 hours per response. As a result of the 
final rule, the annual reporting requirement under FERC-545 is 
estimated to total 36,068 hours based on an expected 650 filings per 
year. A copy of this rule is being provided to Office of Management and 
Budget (OMB).
    The Commission estimates the public reporting burden for data 
collected under FERC-545 will average approximately 55.5 hours per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Six other existing data collections are affected by the changes in 
regulations.2 However, no net change in the reporting burden of 
those affected data collections is expected because of off-setting 
increases and decreases within each respective data collection. FERC-
545 is the only data collection under which a net change (reduction) in 
reporting burden is expected as a result of the changes in filing 
requirements adopted by the Commission in the subject final rule.

    \2\Five existing data collections affected by the subject final 
rule but with no net change in industry reporting burden, are:
    FERC-542, Rate Change and Tracking (1902-0070);
    FERC-543, Rate Tracking (Formal) (1902-0152);
    FERC-544, Gas Pipeline Rates: Rate Change (Formal) (1902-0153);
    FERC-546, Certificated Rate Filings: Gas Pipeline Rates (1902-
0155); and
    FERC-547, Refund Report Requirements (1902-0084).
    Under the above data collections plus FERC-545, net reductions 
in reporting burden have totaled more than 355,000 hours to date as 
a result of Order No. 636. Such reductions have been reflected in 
separate clearance packages previously reported to the Office of 
Management and Budget (OMB).
    A sixth existing data collection, FERC-542(A), Tracking and 
Recovery of Alaska Natural Gas Transportation System (ANGTS) Charge 
(1902-0129), which has conditional OMB approval on a ``standby'' 
basis, is terminated under the final rule.
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    Interested persons may send comments regarding these burden 
estimates or any other aspect of these 

[[Page 52962]]
collections of information, including suggestions for further 
reductions of burden, to the Federal Energy Regulatory Commission, 888 
First Street NE, Washington, DC 20426 (Attention: Michael Miller, 
Information Services Division, (202) 208-1415, FAX: (202) 208-2425). 
Comments on the requirements of this final rule may also be sent to the 
Office of Information and Regulatory Affairs of OMB, Washington, DC 
20503 (Attention: Desk Officer for Federal Energy Regulatory 
Commission, (202) 395-6880, FAX: (202) 395-5167).

III. Background

    On December 16, 1994, the Commission issued a Notice of Proposed 
Rulemaking proposing a major overhaul of its regulations governing 
natural gas company filing and reporting requirements.3 The 
Commission is determined to issue sensible regulations that impose the 
least burden without sacrificing rational and necessary 
protections.4 The Commission is not changing its substantive rate 
policies in this rulemaking, but rather bringing its filing 
requirements and procedures up to date to match its current substantive 
policies. In the interest of an expeditious process, the regulations 
have been revised with a view toward removing any industry-wide filing 
burdens that are not generally needed to analyze a proposal. The 
revised regulations are designed to provide the Commission and 
interested parties with the information generally required to access 
and process a rate filing. Where more information is needed, it may be 
collected on an individual case basis. This achieves a realistic 
balance between the public interest and the needs of the industry.

    \3\Filing and Reporting Requirements for Interstate Natural Gas 
Company Rate Schedules and Tariffs, 60 FR 3111 (January 13, 1995), 
IV FERC Stats. & Regs. para.32,511 (1995).
    \4\This effort is consistent with the President's directives in 
his memo dated 3/4/95 concerning the National Performance Review to, 
among other things, eliminate or revise outdated regulations, and to 
move from a process that creates volumes of regulations to issuing 
``sensible regulations that impose the least burden without 
sacrificing rational and necessary protections.''
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    The Commission received many comments on the NOPR.5 
Additionally, on August 17, 1995, AGD and INGAA filed joint comments to 
both this and the companion rule (Agreement).6 The Commission 
found the Agreement both informative and helpful as it clearly sets out 
the positions and interests of a fairly large representative group of 
pipelines and customers.

    \5\See Appendix B for a list of commenters.
    \6\Agreement Between Associated Gas Distributors (AGD) and The 
Interstate Natural Gas Association of America (INGAA) on Issues 
Related to Filing Requirements, filed August 17, 1995. The agreement 
was in addition to the individual comments provided by AGD, INGAA, 
and their members. It was an attempt to resolve various differences 
and reflected compromises in the positions of AGD and INGAA.
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    The Final Rule reflects many of the proposals in the Agreement. The 
suggestions concerning the restructuring of Statement G, the concurrent 
filing of Statement P, and the reduction in material required to 
support a filing, are reflected in the Final Rule, as more fully 
explained in the discussion of Statement G, supra. However, the Final 
Rule does not, automatically, accord confidential treatment to 
Statement G, as proposed in the Agreement, which is also discussed 
supra.
    The NOPR proposed to delete many filing requirements. After 
analyzing the comments in light of its current goals, the Commission 
has determined to delete even more of the current filing requirements, 
not include many proposed filing requirements, and further modify many 
other current and proposed regulations. Specific reductions in 
reporting requirements follow:
    All the filing requirements of current Secs. 154.201-213 have been 
deleted. Those regulations apply to shippers seeking to recover charges 
incurred for the conditioning and transportation of Alaska natural gas 
through the Alaska Natural Gas Transportation System (ANGTS) for sale 
in the contiguous 48 states of the United States.
    Current Sec. 154.38(e), requiring that the minimum bill heading 
appear on every schedule is deleted.
    Current Sec. 154.67(b), requiring annual reports, is deleted.
    Current Schedule E-5, showing the computations, cross-references 
and sources from which the data used in computing claimed working 
capital are derived, is deleted.
    Current Schedule H(1)-2, cost of purchased gas, is deleted.
    Current Schedule H(3)-1, reporting the reconciliation of book and 
taxable net income for a pipeline, is deleted.
    Current Schedule H(3)-2, reporting the differences between book and 
tax depreciation on a straight-line basis and the excess of liberalized 
depreciation for tax purposes, is deleted.
    Current Schedule I-5, requiring information on metering points and 
units, is deleted.
    Current Schedule I-6, Three-day peak deliveries, is deleted.
    Current Sec. 154.42, dealing with the price of gas, is deleted.
    Proposed Sec. 154.309 has been modified by removing the requirement 
to report ``every major expansion since the pipeline's last rate 
case.''
    Proposed Schedule C-2, Plant in Service as Adjusted, showing the 
proposed test period Adjusted Plant by function, has not been included 
in the final rule.
    Proposed Schedule D-2, Projected End of Test Period Depreciation 
Reserves Functionalized, showing the ending test period balance of 
accumulated depreciation reserve, has not been included in the final 
rule.
    Proposed Schedule E-3, which was to be filed by companies with PGA 
clauses, has not been included in the final rule.
    Proposed Schedule H-1(1) has been modified by removing the 
requirement to report the rate assigned for reflecting an expense for 
gas used on the system. Only the volumes will be required.
    Proposed Schedule H-1(2)(a), which was to be filed by companies 
with PGA clauses, has not been included in the final rule.
    Proposed Schedule H-1(2)(b), which was to be filed by companies 
with PGA clauses, has not been included in the final rule.
    Proposed Schedule H-1(3)(b), Account 813, Other Gas Supply 
Expenses, has not been included in the final rule.
    Proposed Schedule H(2)-1 requiring the reporting of the 
reconciliation of depreciable plant to gas plant was incorporated into 
Schedule H(2).
    Proposed Sec. 154.314 provided that in addition to the workpapers 
accompanying the filing, certain material, related to the test period, 
must be provided to the Commission on request. This requirement has 
been removed from the final rule. Parties to a hearing may seek this 
information through the discovery process.

IV. Discussion

A. Overview and Objectives of the Final Rule

    Section 4(a) of the Natural Gas Act (NGA) requires that any rate 
charged by a natural gas company must be ``just and reasonable.''7 
In order to aid the Commission in establishing whether a change in a 
rate meets the statutory standard, section 4 of the NGA grants 
authority to the Commission to establish procedures for the review of 
proposed changes. Section 4(c) of the NGA requires that a natural gas 
company file proposed changes in rates with the Commission thirty days 
prior to the proposed effective date.8 The Commission may suspend 
the effectiveness of the proposed changes to 

[[Page 52963]]
that rate for up to five months, permit the changed rates to take 
effect subject to refund, and may order a hearing to determine the 
lawfulness of the proposed rates.9 At such hearing, the company 
bears the burden of proof that the proposed changed rates are just and 
reasonable. Part 154 imposes specific filing and reporting requirements 
on jurisdictional natural gas companies in order for the Commission to 
fulfill its statutory review functions.

    \7\15 U.S.C. 717c(a).
    \8\15 U.S.C. 717c(d).
    \9\15 U.S.C. 717c(e).
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    This proceeding represents a major overhaul of the regulations 
governing natural gas company filing and reporting requirements. The 
new part 154 incorporates both basic ``housekeeping'' changes to 
eliminate obsolete language and sections, and substantive changes to 
update the regulations to reflect the many developments that have taken 
place in the natural gas industry since the regulations were first 
promulgated.
    The revised part 154 represents the reorganization, rewriting, 
updating, modification, consolidation, and pruning of the current 
regulations. The changes provide for more useful and less burdensome 
data filed in electronic format; a schedule by schedule revision of the 
current Sec. 154.63 filing requirements for an NGA section 4(e) general 
rate case; and, new filing requirements for initial rates and various 
limited section 4 filings, miscellaneous tariff change filings, and 
cost tracking filings.
1. Organization and Editorial Changes
    Part 154--Rate Schedules and Tariffs has been reorganized into 
subparts: Subpart A--General Provisions and Conditions; Subpart B--Form 
and Composition of Tariff; Subpart C--Procedures for Changing Tariffs; 
Subpart D--Material to be Filed With Changes; Subpart E--Limited Rate 
Changes; Subpart F--Refunds and Reports; Subpart G--Other Tariff 
Changes.
    The revised part 154 is organized in such a way that the filing 
requirements are cumulative. That is, all filings must meet the 
requirements of subpart A even if no other subpart applies. All tariff 
sheets or executed service agreements must conform to the requirements 
of subpart B. Changes to tariff sheets or executed service agreements, 
whether additions or modifications, must conform to the requirements of 
subpart B and comply with the filing requirements of subpart C. 
Additional filing or reporting requirements applicable to specific 
types of filings fall under subparts D through G.
    The entire part 154 has been edited for clarity and to remove 
outdated references. For example, all references to filing fees have 
been removed because fees are no longer required for interstate 
pipelines. Also, the current regulations contain some sections which 
have never been updated and refer to the Commission as the ``FPC'' or 
direct the applicant to comply with sections that have been removed. 
The Commission has made appropriate editorial revisions to these 
sections.
    Some current sections contain provisions on several different 
matters and, for the sake of clarity, have been broken out into several 
smaller sections. For example, the provisions of current Sec. 154.63 
are redistributed throughout the revised part 154. Current 
Sec. 154.38(d) (5) and (6) deal with the substantive rules for 
obtaining rate treatment for research, development, and demonstration 
costs (RD&D) and annual charge adjustment (ACA) expenditures, 
respectively. These sections are moved to a separate subpart and 
revised.
    Many provisions are redrafted to reflect the prevalent practice in 
the industry. For example, revised Sec. 154.208 formally adds to the 
regulations the requirement that the company must serve notice upon its 
customers. Revised Sec. 154.209 sets out a new form of notice to 
reflect current practice. Revised Sec. 154.107 formalizes the general 
practice of providing a detailed statement of rates and charges in a 
particular location in the tariff. Revised Sec. 154.2(d) allows mailing 
to customers and state commissions to be accomplished either through 
electronic media or traditional methods.
2. Substantive Changes
    The changes create filing requirements that reflect the current 
policies and regulations that mandate unbundled pipeline sales and 
open-access transportation of natural gas. The primary objectives of 
the substantive changes are to update the filing and reporting 
requirements to reflect restructured services and operations, 
streamline rate case processing by receiving important information 
earlier in the process, and remove outdated requirements.
    The revised filing requirements permit parties to address the 
important issues more quickly. For example, pipelines currently file 
their Statement P testimony 15 days after filing the rate proposal. The 
Commission's experience is that Statement P provides the most 
comprehensive description of the proposed change. The rule requires 
Statement P to be filed concurrently with the rate case so as to make a 
more complete explanation of the rate proposal available at the outset. 
To achieve its intended purpose of expediting the hearing, Statement P 
must serve as the applicant's complete case-in-chief, not a mere 
description of proposed rates.
    INGAA, Panhandle, ANR/CIG, KNI, MRT, and Great Lakes state that the 
proposed regulations would increase the burden to the pipeline 
industry. Panhandle attached a study showing that the number of hours 
needed to prepare a section 4 filing would increase by 77% and the 
paperwork would triple. Panhandle states that the study reflects 
estimates of time required to prepare a rate filing, responses to staff 
data requests and, the proposed quarterly updates. Panhandle states 
that the quarterly updates account for a substantial portion of the 
increased burden and that 88 percent of the increased burden could be 
eliminated if pipelines were permitted to submit supplemental testimony 
as the need arises (i.e., Statement P does not represent the ``sole'' 
case-in-chief).
    As discussed supra, the proposed quarterly update provision has not 
been included in the final rule. Proposed Sec. 154.311 has been 
modified to only require one update; and so, that portion of the 
increased burden has been substantially reduced. Statement G and 
associated schedule requirements have not been expanded as proposed. 
Revised Statement G does not require the customer specific information 
as proposed in the NOPR; and so, that portion of the increased burden 
has also been eliminated.
    It was unclear from the material provided by Panhandle whether the 
study considered that filing Statement P with the initial filing is an 
increase to the filing burden. The Commission remains firm in the 
belief that the requirement for a fuller, complete Statement P 
presented at the beginning of a rate case reduces the overall burden to 
the parties to the hearing. The Commission does not expect that this 
requirement will entirely remove the need for data requests and 
discovery in all instances. However, it is the pipelines' statutory 
burden to demonstrate that proposed rates are just and reasonable. When 
the rates cannot be determined to be just and reasonable by the filed 
material alone, a hearing must be established. This rule represents a 
concerted effort to avoid lengthy hearings. One way to expedite the 
process is to get the information needed to make the determination 
(Statement P) to the Commission and other parties sooner than under the 
current regulations. This does not 

[[Page 52964]]
increase the burden to the pipeline but changes only the timing of the 
submission.
    Certain regulations are, as a practical matter, no longer of 
general interest. The Commission has removed them from the general 
regulations. The regulations concerning Research, Development, and 
Demonstration expenses (RD&D) for example, are currently a lengthy and 
cumbersome part of Sec. 154.38. These regulations were originally 
developed to apply to all pipelines and to any number of RD&D 
organizations. However, in practice, there is one predominant and 
principal research organization, Gas Research Institute (GRI). Thus, 
the Commission has streamlined the regulations, recognizing that GRI is 
the principal research organization funded by the natural gas industry.
    The Commission has removed the regulations governing Purchase Gas 
Adjustments (PGAs) from the general regulations. As a result of the 
restructuring of the industry under Order No. 636, most pipelines have 
shed their traditional merchant function. At the time this rule is 
being written, only two natural-gas companies, Eastern Shore Natural 
Gas Company and West Texas Gas, Inc., continue to pass through gas 
purchase costs under the PGA regulations.10 The Commission will 
now require these natural-gas companies to incorporate all of the 
existing PGA regulatory requirements applicable to it into their 
tariffs if they are not open-access by the effective date of this 
rule.11 The PGA regulations are removed from part 154. The 
Commission also requires the provisions governing PGAs in current 
Sec. 154.111 to be incorporated into these companies' tariffs and that 
section is also removed.

    \10\These pipelines do not provide open access transportation 
under part 284 of this chapter; and so, were not subject to 
restructuring under Order No. 636.
    \11\Eastern Shore is required by a settlement to apply to become 
an open-access pipeline no later than January 1, 1996. 72 FERC 
para.61,176 (1995).
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    The Commission has deleted current Secs. 154.201-213. Those 
regulations apply primarily to shippers seeking to recover charges 
incurred for the conditioning and transportation of Alaska natural gas 
through the Alaska Natural Gas System (ANGTS) for sale in the 
contiguous 48 states of the United States. Those provisions establish 
the terms and conditions for a permanent tariff provision that a 
shipper may propose to adjust its rates semiannually to flow through to 
its jurisdictional customers the jurisdictional portion of changes its 
ANGTS charges. Alternatively, a shipper may recover the jurisdictional 
portion of these charges through a cost-of-service tariff approved by 
the Commission.
    The Commission has deleted these regulations because the ANGTS 
project has not been built as originally contemplated, and the 
regulations are obsolete in light of the post-Order No. 636 unbundled 
environment. Nonetheless, the Commission remains ready to facilitate 
the construction of ANGTS, which Congress has found to be in the public 
interest.12 Hence, if action is warranted in the future to 
facilitate financing and progress on the ANGTS and the recovery of 
ANGTS costs, the Commission will act expeditiously. What was stated in 
Order No. 636-A applies here as well: ``nothing in the rule (Order No. 
636) is intended to disturb the United States government's commitment 
to the ANGTS prebuild.''13 Further, the Commission continues to 
view the Northern Border Pipeline Company prebuild segment as remaining 
subject to the various agreements between the United States and 
Canadian governments and subsequent findings in Commission orders 
certificating Northern Border's system.14 Removing these 
regulations is not intended to have any effect on the ANGTS prebuild 
revenue stream.

    \12\Alaska Natural Gas Transportation System Act, 15 U.S.C. 
Sec. 719-719.
    \13\Order No. 636-A, III FERC Stats. & Regs. Preambles 
para.30,950 at p. 30,674 (1992).
    \14\Northern Border Pipeline Co., 63 FERC para.61,289 (1993).
---------------------------------------------------------------------------

B. The Revised Regulations

    The revised part 154 has a completely new organization from the 
current regulations, and virtually every section has been changed in 
some way. The text has been edited to remove outdated and incorrect 
references, and rewritten in a more concise style. Although many filing 
and reporting requirements have not been changed, they have been 
relocated. The revised regulations may be best understood by a 
comparison to the current regulations they replace.15 Details of 
the revised regulations are provided below along with a discussion of 
the comments.

    \15\Appendix A is a finding guide between current and revised 
regulations.
---------------------------------------------------------------------------

1. Subpart A--General Provisions and Conditions
    a. Section 154.1 Application; obligation to file. The Commission 
has included as Sec. 154.1(b) the description of the purpose of part 
154, which is currently set forth in Sec. 154.1(a). That purpose 
reflects the requirement of Section 4(c) of the NGA that every natural 
gas company must file with the Commission, and maintain open for public 
inspection, its schedules and contracts.16

    \16\15 U.S.C. 717c(c).
---------------------------------------------------------------------------

    The Commission has deleted outdated language (i.e., ``On or after 
December 1, 1948''). The Commission is removing the electronic medium 
requirements from current Secs. 154.1 (b) and(c) and placing them in 
new Sec. 154.4.
    Section 154.1(c) replaces without change current Sec. 154.22, which 
states that no natural gas company may file a new or changed rate 
schedule or contract for service for which a certificate of public 
convenience and necessity or certificate amendment must be obtained 
pursuant to section 7(c) of the Natural Gas Act, until such certificate 
has been issued.
    Williston states that Sec. 154.1(c) only prolongs the approval 
process and delays implementation of services. Williston suggests 
allowing a new or changed rate to be filed concurrently with the 
certificate filing.
    This section imposes no additional requirements from current 
Sec. 154.22. However, the Commission clarifies that, although a 
pipeline may not file to incorporate a rate schedule in its tariff for 
which section 7(c) authorization is required but for which section 7(c) 
authorization has not yet been granted, it does not prohibit a pipeline 
from proposing an initial rate in its certificate application under 
section 7(c). Since the Commission has adopted the practice of granting 
blanket certificates for services, this provision will be applied most 
often to new companies which have not previously been subject to the 
Commission's jurisdiction and do not have a tariff on file.
    New Sec. 154.1(d) requires that any executed service agreement 
which deviates in a material aspect from the form of service agreement 
in a pipeline's tariff must be filed with the Commission. This 
requirement codifies current Commission policy.17

    \17\See, Tennessee Gas Pipeline Company, et al., 65 FERC 
para.61,356 (1993); reh'g denied, 67 FERC para.61,196 (1994). INGAA, 
CNG, Midcon, NGSA, and Columbia believe that Sec. 154.1(d) requires 
public disclosure of contract provisions and may negatively affect 
private contracts.
---------------------------------------------------------------------------

    INGAA proposes various alternatives that limit the extent to which 
information on contractual terms and conditions will be available to 
the public.
    Midcon urges the Commission to delete the requirements to file 
commercially sensitive information. Midcon also suggests that the 
proposal be deleted or clarified to state that 

[[Page 52965]]
discount agreements do not ``deviate in any material aspect.'' Further, 
Midcon suggests, any such contracts must be exempt from the 
FOIA.18

    \18\See the discussion on confidentiality, infra.
---------------------------------------------------------------------------

    Pacific Northwest Commenters urge the Commission to be more 
specific as to what deviations or substantive additional provisions 
will trigger this filing requirement. Columbia objects to Sec. 154.1(d) 
as too broad and requests that the Commission clarify that specifically 
drafted provisions addressing flow rates, pressure obligations, maximum 
delivery obligations, term, and other ``tariff-contemplated'' items are 
not ``material'' deviations.
    IPAA and NI-Gas support the requirement. IPAA states that the legal 
concept of materiality may depend upon ``where one resides in the food 
chain'' and suggests that all deviating agreements be filed.
    The use of forms of service agreements as the basis of contracts 
between a pipeline and its customers ensures that there are no 
unreasonable differences among the rates, charges, services, 
facilities, or otherwise of the pipeline's customers. Having made the 
determination that the form of service agreement in the tariff is just 
and reasonable, the Commission does not necessarily have to review 
every contract to determine if it complies with the requirements of the 
NGA. Thus, a contract that conforms to a pro forma service agreement 
need not be filed with the Commission because the Commission has 
already considered and determined that the pro forma service agreement 
is just and reasonable. Likewise, any contract that deviates in a 
material way from a pro forma service agreement must be evaluated anew 
to determine that it is not unjust, unreasonable, preferential, or 
otherwise unacceptable. The Commission does allow parties to negotiate 
additional mutually agreeable terms and conditions in their service 
agreements, but where the terms differ materially from those in the 
form of service agreement, the pipeline must seek authorization for 
these modifications from the Commission under section 4 of the 
NGA.19

    \19\Id. See also, Mojave Pipeline Company, 57 FERC para.61,300 
(1991).
---------------------------------------------------------------------------

    The Commission agrees that ``materiality'' is likely to vary with 
the circumstances of the case. Therefore, it is better to allow the 
term to remain less strictly defined in order that the particular facts 
of a given contract will determine whether the deviation is material 
and needs to be filed. The Commission also agrees that provisions such 
as those addressing flow rates, pressure obligations, maximum delivery 
obligations, receipt and delivery points, and term would not normally 
be expected to be ``material'' deviations. Such provisions could easily 
be drafted into the fixed language of the pro forma service agreements 
or a blank space could be provided for insertion according to the 
agreement of the parties. Likewise, rates that fall between the maximum 
and minimum rates permitted for the rate schedule would not be 
considered to be material. In either case, there would be no deviation 
from the Commission approved pro forma service agreements contract.
    b. Section 154.2 Definitions. The Commission defines terms of 
general applicability in Sec. 154.2. The Commission is proposing 
stylistic changes only to definitions for: ``Rate Schedule,'' currently 
in Sec. 154.11, ``Contract,'' currently in Sec. 154.12, ``Service 
Agreement,'' currently in Sec. 154.13, and ``Tariff or FERC Gas 
Tariff,'' currently in Sec. 154.14. ``Posting,'' currently in 
Sec. 154.16, has been defined to allow the parties to agree to 
alternative methods of ``mailing'' such as electronic mail.
    Williston states that the definition of ``rate schedule'' in 
Sec. 154.2(e) is unclear as to whether a ``sale of natural gas'' 
pertains to the price charged for gas sold by a pipeline's sales 
division. Williston states that such information is proprietary and 
should not be included in the rate schedule.
    The definition of ``rate schedule'' is substantially the same as in 
the current regulation and tracks the language of the NGA.20 
Williston has not persuaded us to change the definition.

    \20\18 U.S.C. 717c(c).
---------------------------------------------------------------------------

    c. Section 154.3 Effective Tariff. The Commission describes the 
term ``Effective tariff'' in Sec. 154.3, currently Sec. 154.21. The 
description clarifies that a pipeline may not avoid filing for a rate 
change by making the rate subject to an exception or condition, such as 
a periodic rate change under a price index. At present this concept is 
found in Sec. 154.38(d)(3).
    AGD requests clarification that Sec. 154.3(b) is not intended to 
cause incentive rates to be rejected. SoCal urges the Commission not to 
prohibit index adjustments submitted as part of a settlement or where 
supported by the facts.
    The regulation does not prohibit index adjustments or incentive 
rates when authorized by the Commission. The regulation only prevents a 
change from occurring automatically, without Commission authorization. 
The regulation is consistent with the statutory obligation of the 
Commission to review all proposed rate changes for adherence to the 
just and reasonable standard.
    d. Section 154.4 Electronic and Paper Media. Current Sec. 154.26 
generally calls for 6 paper copies and requires rate filings to be 
submitted electronically. New Sec. 154.4 continues to require 
electronic media filings in addition to paper copies. Generally, it 
calls for an original and 5 paper copies but requires an original and 
12 paper copies of filings made pursuant to subpart D.
    The new section consolidates in one place the Commission's 
requirements with respect to electronic submittal of filings required 
by part 154. Currently, these requirements are strewn throughout part 
154, often redundantly.
    The appendix to the NOPR included updated electronic tariff filing 
formats as well as tariff pagination guidelines.21 The revised 
formats take into consideration improvements in the FASTR software 
which reads the tariff ASCII files submitted by the companies to the 
Commission.22 The NOPR proposed that all companies that had not 
restated their tariffs, do so, electronically on or before June 1, 
1995. That date has passed. Therefore, all companies that have not 
restated their tariffs must do so, electronically on or before January 
26, 1996.

    \21\The formats for the electronic filing and paper copy can be 
obtained at the Federal Energy Regulatory Commission, Public 
Reference and Files Maintenance Branch, Washington, D.C. 20426.
    \22\On February 28, 1990, the Commission issued the ``Notice of 
Tariff Retrieval System Software Availability,'' otherwise referred 
to as the FASTR software package.
---------------------------------------------------------------------------

    Columbia seeks clarification as to whether the requirement under 
Sec. 154.4(a) that 6 (the NOPR had proposed 6 paper copies) paper 
copies be filed, applies to the quarterly updates under proposed 
Sec. 154.311. The quarterly update requirement has not been included in 
the final rule as originally proposed; however, the paper copy 
requirement applies to any updates which are required.
    El Paso does not support the increase in the number of paper copies 
to be filed. As discussed infra, the Commission is suspending 
electronic filing of proposed changes in rates. Until electronic filing 
is reinstated, the Commission will continue to require 12 paper copies 
of rate case data. At the time electronic filing is reinstated, the 
Commission will make any appropriate adjustment to the paper copy 
requirements.
    INGAA states that electronic filing should be the rule; in order to 
receive 

[[Page 52966]]
documents in another medium, the customer should have to demonstrate 
its lack of ability to retrieve information electronically. ANR/CIG 
suggests that the option should be the pipeline's where the customer is 
able to receive information electronically. El Paso suggests the filing 
of documents by electronic means such as telecommunications or upload 
to the OPR Bulletin Board.
    El Paso and Columbia support electronic service of filings upon 
parties rather than service on paper. According to Columbia, parties 
should be required to demonstrate their inability to receive electronic 
service. Service could be accomplished through a central electronic 
library of filings, from which copies could be made, or through 
electronic transmission through the EBB or other communication links. 
El Paso suggests the Federal Register notice be the only paper document 
served on customers. The remaining portions of a filing should be 
placed on the pipeline's EBB with the ability to view and download. 
This enhancement to the EBB would promote timely access to relevant 
information.
    The Commission will not require customers to accept only electronic 
versions of a pipeline's filings at this time. The new electronic 
filing requirements are not yet finalized. No testing has been done. It 
will take some time before anyone can be comfortable with solely 
electronic filing. Therefore, until all of the issues related to 
electronic only filing can be resolved, parties must continue to 
receive paper copies of the filing. As the industry gains more 
experience with electronic filings, parties may elect to receive only 
an electronic version of the filing. The decision to send or receive an 
electronic filing should be arrived at by mutual consent of the 
pipeline and the interested party as noted in Sec. 154.2(d).
    e. Section 154.5 Rejection of Filings. Section 154.5 states that 
filings, that would prejudice the Commission in the discharge of its 
duty to decide whether or not to investigate and suspend the increased 
rates contained in the filing, will be rejected by the Director of the 
Office of Pipeline Regulation. This section merely recognizes, in these 
rate and tariff filing requirements, the existing power of the Director 
of the Office of Pipeline Regulation to reject tariff or rate schedule 
filings pursuant to the authority delegated to the Director by the 
Commission in Sec. 375.307(b)(2) of the Commission's regulations.
    Proposed Sec. 154.5 replaced current Sec. 154.15 with a definition 
of filing date based on Sec. 35.2(c) of the Commission's regulations 
for public utilities under the Federal Power Act. The rule, as 
proposed, would allow the Director of the Office of Pipeline Regulation 
to notify a natural gas company that its filing is rejected within 15 
days of receipt of the document. Under this proposal, the date of 
receipt stamped by the Secretary would not necessarily be the 
officially recognized filing date.
    This proposed regulation was met with approval by some commenters 
such as APGA, Brooklyn Union, and AGD. However, others such as Columbia 
and El Paso object to the proposal that the stamped date is not 
necessarily the filing date. INGAA seeks clarification that the date 
the pipeline submits its filing to the Secretary is the filing date for 
determining compliance. INGAA and ANR/CIG state that the Commission 
already has the authority to reject rate filings if deemed incomplete; 
so, the proposal should be rejected because it may only create 
confusion as to the official filing date.
    Columbia argues that 15 days is more time than necessary and 
creates uncertainty in trying to project and place rates into effect as 
of a date certain. Panhandle states that the status of interventions 
and protests would be unclear during the 15 days. Northwest/Williams 
states that 7 days is sufficient for the Director's notice. Northwest/
Williams suggests that ``procedural'' revisions should be allowed 
within 2 days without effecting the filing date.
    Pacific Northwest Commenters recommends that the Commission issue a 
notice that a filing is deemed incomplete, suspend any applicable dates 
triggered by the original filing, and allow an additional 8 business 
days for further protests or comments.
    Columbia proposes that a modification permit pipelines to 
supplement deficient filings rather than being rejected where the 
deficiency is not substantive.
    Arizona Directs sees conflict between this regulation and 
Sec. 154.209. Arizona Directs states that there is no proposed 
requirement that a filing be deemed complete before the NGA section 
4(d) 30-day notice period begins. Arizona Directs states that it would 
be burdensome for customers to review, intervene, and comment upon a 
filing deemed incomplete. Arizona Directs suggests that a new comment 
period be established with respect to the entire complete application, 
not just the corrected portion. Further, public notice should be given 
whenever a filing is deemed incomplete, and a second notice issued 
designating the date the filing is deemed complete and filed and 
establishing a new intervention, protest, and comment deadline. Arizona 
Directs suggest that the rule provide that a section 4 rate filing is 
not accepted for filing within the meaning of section 4(d) until after 
the end of a 15-day public review period and a staff finding that the 
filing is complete. Then, a notice could issue establishing the 10-day 
comment period.
    NGSA suggests retaining the current provision or modifying the 
proposal to start a 15-day comment clock after the Director's review 
period.
    Panhandle states that the determination by the Director that a 
filing is incomplete is tantamount to a rejection or a summary 
judgment. Panhandle states that filings should not be rejected if they 
are in substantial compliance with the regulations. Panhandle states 
that the proposal allows the Director to decide rate cases on isolated 
components without further proceedings.
    Consumers Power does not object to the Director making the 
determination of incompleteness but believes the Commission should 
provide specific guidance as to conditions for rejection.
    INGAA states that the Director's discretion should be limited so 
that rejection does not take place where: in a section 4 case, a good 
faith effort was made to include all of the required statements and 
schedules; information has not been provided for which a legitimate or 
routine waiver has been sought; information is provided under seal with 
a request for confidential treatment.
    Panhandle suggests modifying the regulation to read that the 
``Secretary'' shall reject any material ``which patently fails to 
substantially comply with the applicable requirements.''
    INGAA states that the proposed regulation would create practical 
problems. If the Commission rejects a filing and establishes another 
filing date, the pipeline could be in violation of the requirement that 
the data be based upon a period ending not more than 4 months prior to 
the filing date. A delay in the start of the 30-day notice period could 
leave the pipeline without authorization to provide services set to 
coincide with the expiration of old contracts.
    Although several commenters supported proposed Sec. 154.5, most 
commenters either opposed the regulation or requested substantial 
modifications to the proposed section. Because of the confusion and 
uncertainty that may be created by the proposed regulation and the 
numerous procedural problems raised by the commenters, the Commission 
is not adopting Sec. 154.5 as proposed. New Sec. 154.5 is an indication 
of the 

[[Page 52967]]
Commission's intent to have the Director reject filings that do not 
comply with the filing requirements promulgated by this order.
    Finally, because the Commission is not adopting proposed 
Sec. 154.5, the definition of filing date contained in current 
Sec. 154.15 is retained in new Sec. 154.2(f).
    f. Section 154.6 Acceptance for filing not approval. New Sec. 154.6 
replaces current Secs. 154.23 and 24. The rejection language of 
Sec. 154.24 is amended and the reference to fees is deleted.
    g. Section 154.7 General Requirements for the Submission of a 
Tariff Filing or Executed Service Agreement. Section 154.7 is a new 
section setting forth the content of a tariff filing or executed 
service agreement. In part, new Sec. 154.7 reflects the requirements of 
current Sec. 154.63(b)(1). New Sec. 154.7 concerns all filings of 
tariff sheets and executed service agreements. In light of the short 
time period in which the Commission and interested parties have to 
review the filing, several items have been added to speed processing of 
the filing and minimize additional requests for information. These 
include an expanded definition of the reference to the authority under 
which the filing is made, addition of the name and telephone number of 
an official able to respond to questions regarding the filing, and 
clarification of the contents of the statement of the nature, reasons, 
and basis for the filing.
    Section 154.7(a)(9) requires that the transmittal letter contain 
either a motion, in case of minimal suspension, to place the proposed 
rates into effect at the end of the suspension period; or, a specific 
statement that the pipeline reserves its right to file a later motion 
to place the proposed rates into effect at the end of the suspension 
period.
    APGA supports the requirement to provide a detailed statement of 
the nature, reasons, and basis for any rate filing.
    Columbia suggested that the proposed Sec. 154.7(b) be modified to 
refer to the posting requirements of Sec. 154.2(d) as sufficient 
service. Columbia also states that filings should be provided only to 
firm customers, not ``affected'' customers. Although these suggestions 
have not been adopted, the service requirements have been further 
refined and reduced as discussed supra.
    NI-Gas suggests that Sec. 154.7(a)(2) be modified to require that 
the transmittal letter include an address suitable for overnight 
delivery as opposed to a PO Box and a facsimile (FAX) number. The 
Commission has required a telephone number in the transmittal letter to 
provide for those situations where an intervenor needs clarification or 
detects a problem with a filing that could best be resolved by a phone 
call. The address is required by Sec. 154.102 to be on the title page 
of the tariff. There is no need for it to also be in the transmittal 
letter.
    Northwest/Williams requests clarification whether the letter of 
transmittal and certificate of service are to be submitted on 
electronic media. These items are not required to be submitted on 
electronic media. Section 154.4(a) lists those filings that must be 
filed electronically. As discussed in the section on electronic filing, 
the Commission does not intend to require that all filings be made 
electronically.
    h. Section 154.8 Informal Submission for Staff Suggestions. Section 
154.8 replaces current Sec. 154.25.
2. Subpart B--Form and Composition of Tariff
    a. Section 154.101 Form. Section 154.101 replaces current 
Sec. 154.32. The Commission is proposing to eliminate the requirement 
that electronic media record format duplicate the page size, borders, 
and margins of the paper copy. The electronic filing requirements are 
in new Sec. 154.4. In addition, the Commission has eliminated the 
requirement of a binder.
    b. Section 154.102 Title Page and Arrangement. Section 154.102 
replaces current Sec. 154.33. The Commission has eliminated the 
reference to Sec. 154.52, as special exceptions are covered by new 
Sec. 154.112. The Commission has also eliminated the requirement of a 
binder. The Commission now requires that the numbering of sheets be as 
provided in the Tariff Sheet Pagination Guidelines.23

    \23\The guidelines and electronic filing instructions for tariff 
sheets may be obtained at the Federal Energy Regulatory Commission, 
Public Reference and Files Maintenance Branch, Washington, DC 20426.
---------------------------------------------------------------------------

    Currently, compliance with these guidelines is optional although 
the Commission has required use of the pagination guidelines in 
individual cases. Many companies have already voluntarily adopted the 
Commission's guidelines. The Commission now makes these guidelines 
mandatory. The guidelines provide the only means to ensure that tariff 
sheets are in the proper order in the Commission's electronic database. 
The guidelines also provide the basic knowledge necessary to create a 
sorting methodology for any party that wishes to create a database. 
Most importantly, the guidelines help to create a clear guide to the 
succession of tariff sheets.
    MoPSC suggests the title page of each volume of a pipeline's tariff 
contain a phone number which customers and interested persons may call 
to make inquiries about those tariffs.
    NI-Gas suggested that communications information be expanded to 
include an address suitable for overnight deliveries. Many pipelines 
use post office boxes for their general mail deliveries, but expedited 
delivery services cannot make deliveries to such locations. NI-Gas also 
recommends that the information should include a fax number, so that 
requests for additional information can be promptly delivered and 
forwarded.
    NGSA recommends tariff sheets be clearly distinguished from each 
other as being one of the following: (1) Proposed, (2) accepted but 
subject to refund, and (3) approved. It often becomes very confusing as 
to whether the tariff being identified is currently effective (i.e., 
the rate currently being charged) or is to become effective on the date 
proposed in the filing.
    The Commission finds that the proposal to add a telephone number 
and a fax number to the title page has merit. The regulations currently 
require, on the title page, the name and address of a person to whom 
communications concerning the tariff should be sent. A few pipelines 
provide a telephone number and/or a fax number on the title page now. 
Inclusion of a telephone number and a fax number on the title page will 
be made mandatory. This modest addition should foster communication 
about the tariff.
    Pipelines are fairly evenly divided between those who put a post 
office box number on the title page and those who put a street address. 
The Commission does not believe it is burdensome to provide a street 
address instead of, or in addition to, the post office box 
number.24 This suggestion will be adopted.

    \24\Those pipelines who prefer communications to be addressed to 
a post office box number may wish to present the address information 
in the way Northern Border Pipeline Company does. The street address 
is noted specifically as the courier address.
---------------------------------------------------------------------------

    The Commission will not adopt the suggestion that the tariff sheets 
carry designations as suggested by NGSA. Adoption of this suggestion 
will require the pipelines to make filings of tariff sheets simply to 
change the status designation. This would consume additional pipeline 
and Commission staff resources. The tariff sheets available to the 
public at the Commission's Washington, DC headquarters are marked in 
the way suggested by NGSA. The electronic tariff sheets, in a format 
readable by the Commission's software, can be downloaded from the 
Commission's 

[[Page 52968]]
bulletin board system. In this format, the tariff sheets each carry a 
status indicator: proposed, effective, superseded, withdrawn, rejected, 
or suspended. The tariff sheets also indicate if the order acting on 
the sheets accepted the sheets subject to refund.
    c. Section 154.103 Composition of Tariff. Section 154.103 is the 
replacement for current Sec. 154.34. In recognition of prevailing 
practice, the new section specifically requires that the tariff set 
forth all currently effective rates. The Commission has deleted the 
reference to special exceptions and changed the examples of classes of 
service to reflect the current prevalent designations.
    d. Section 154.104 Table of Contents. Section 154.104 replaces 
current Sec. 154.35 with the clarification that the table of contents 
must contain a list of the sections of the general terms and 
conditions.
    NI-Gas states that the inclusion of a detailed listing of the 
General Terms and Conditions of the tariff in the table of contents 
will be a major improvement in the current practice of some pipelines.
    Columbia's tariffs have an initial table of contents in the front 
of the tariff which contains a line item reference to ``General Terms 
and Conditions'' and lists a page number for the ``General Terms and 
Conditions Table of Contents'' located in approximately the middle of 
the tariff, at the beginning of the General Terms and Conditions. 
Columbia seeks clarification that this is permissible within the 
context of the proposed regulation; and, if not, requests that the 
regulation be modified to accept this format.
    The intent of requiring the sections of the general terms and 
conditions to be listed in the table of contents is to ensure such a 
listing appears in the tariff. Columbia's approach to the table of 
contents is acceptable.
    e. Section 154.105 Preliminary Statement. Section 154.105 replaces 
current Sec. 154.36 with stylistic changes only.
    f. Section 154.106 Map. Section 154.106 is the replacement for 
current Sec. 154.37. Maps must be submitted on paper and updated to 
reflect major changes. The new section states a preference for zones to 
be displayed on separate sheets.
    Williston states that there should not be a map requirement in the 
tariff because there is a map in the FERC Form No. 2. The Commission 
has found that the presence of a map in the tariff is helpful in the 
process of evaluating other provisions.
    NGSA states that the map should identify storage, gathering, and 
all off-system (non-contiguous) facilities as well as ``pipeline'' 
facilities.
    Industrials recommend that pipelines be required to serve a hard 
copy of system maps prepared in accordance with new Sec. 154.106, even 
if the parties agree that tariff filings may be served via electronic 
mail, in diskette form, or otherwise.
    The Commission will not adopt NGSA's suggestion to require a more 
detailed map in the tariff. A detailed map with the facilities NGSA 
wishes identified is filed annually with the Form No. 2. Since the 
Commission is not discontinuing paper filing of tariffs, all parties 
receiving service of the tariff sheets are entitled to a paper copy 
unless they agree otherwise. It is up to the parties and the pipeline 
to determine the terms of electronic service, including exceptions to 
electronic service.
    g. Section 154.107 Currently Effective Rates. New Sec. 154.107 
governs the tariff sheets setting forth the natural gas company's 
currently effective rates. In part, this new section replaces 
Sec. 154.38(d) (1) and (2). The section requires that rates be stated 
in thermal units, as is the prevalent practice, rather than in units of 
volume.
    APGA points out that Sec. 154.107 formalizes the current practice 
of providing a detailed statement of rates and charges in a particular 
location in a pipeline's tariff. APGA supports this requirement. They 
state it will be particularly helpful for customers to receive a 
complete picture of effective and proposed rates upon the filing of a 
new rate case.
    Williston states that the language in this section appears to be 
adding a level of complexity to the rate schedules that is unnecessary. 
Williston requests clarification of a ``limited rate change.''
    The Commission believes that Williston misunderstands the purpose 
of this section. The summary of rates would not appear in the rate 
schedule. This section is intended to codify the nearly universal 
practice of placing a summary of rates on a tariff sheet or sheets 
which generally appears in the tariff after the map. It is not part of 
the rate schedule. We note that Williston's summary of rates fully 
complies with Sec. 154.107.25 Proposed subpart E details the 
filing requirements for limited rate changes. To avoid confusion, the 
Commission will modify this section to reference Subpart E. Northwest/
Williams asks whether the required ``total rate'' column applies only 
to the maximum rate and whether surcharges, ACA, and GRI charges are to 
be included in the ``total rate.''

    \25\Ninth Revised Sheet No. 15 to its FERC Tariff Second Revised 
Volume No. 1.
---------------------------------------------------------------------------

    Section 284.7(d)(5) requires that rate schedules filed under that 
section must state a maximum and minimum rate. Therefore, the summary 
of rates must show the total maximum and minimum rates. It is 
preferable for all surcharges to be added into the maximum rate and, if 
appropriate, into the minimum rate. However, it has been the 
Commission's past practice, in appropriate cases, to accept summaries 
of rates in which the GRI surcharge is noted in a footnote at the 
bottom of the summary rate sheet but not added into the total rate. 
This has been acceptable since the GRI surcharge does not necessarily 
apply to all transactions under a rate schedule. The reverse is 
accepted also--the GRI surcharge is listed in a column and added into 
the total rate. In this case, a footnote states the GRI surcharge is 
not applicable in certain circumstances.26 To a lesser degree, the 
same can be said of the ACA surcharge. The Commission will not depart 
from past practice on this issue. The regulations will be modified to 
allow the ACA and GRI surcharges to be noted in a footnote. If the 
footnote option is elected, the charges must be stated in the footnote, 
it must be clear when the charges apply,27 and the footnote must 
indicate that these charges are added to the total stated rate.

    \26\Northwest's summary of rates reports the GRI and ACA 
surcharges in separate columns and adds the charges into the total 
rate, where appropriate. Williams, in contrast, states the level and 
applicability of the GRI and ACA surcharges in footnotes on its 
summary of rates but does not include them in the total rate.
    \27\A reference to the section in the tariff where the 
applicability of the surcharge is explained is acceptable.
---------------------------------------------------------------------------

    Columbia, AGD, and APGA are in favor of the requirement to state 
rates in thermal units. APGA points out that many of its members and 
most LDCs bill their retail customers on the basis of units of volume. 
The use of units of heat content has been the standard measure for 
pipelines for some time.
    Great Lakes requests that the Commission clarify that, for 
pipelines whose rates are currently stated on a volumetric basis, 
inclusion of a statement of rates in thermal units should take place in 
the pipeline's next section 4 rate case. Great Lakes also asks that the 
Commission clarify whether ``thermal units'' refers to dekatherms or to 
some other measurement. NGSA recommends that the rates be stated on the 
same basis (Mcf or MMBtu) as they are charged, with the units clearly 

[[Page 52969]]
labeled. NGSA maintains that the proper unit for stating rates has been 
and can continue to be determined on an individual pipeline basis.
    NGSA is opposed to a generic rulemaking which mandates the use of a 
standard unit of measure in rate case filings at this time. NGSA states 
that rates and tariffs should be stated in the same units as charged. 
NGSA states that calculating the rates based on one unit of measurement 
and then converting those rates to a different unit of measurement for 
billing purposes creates confusion. Further, NGSA states, some 
pipelines and shippers have negotiated private contracts based on an 
``Mcf'' basis of measurement. NGSA states that the proposed requirement 
is a substantive change in the Commission's rate policy which was not 
the purpose of this rulemaking. NGSA states that in order to protect 
the due process rights of all parties, any Commission imposed change in 
measurement standards should be implemented on an individual pipeline, 
on a prospective basis, when the pipeline files its next major rate 
case. NGSA states that conversion to the thermal units will not be a 
simple process. Therefore, NGSA states, parties should be able to 
present the issues of material fact brought about by such conversion in 
the context of a full evidentiary hearing, wherein disputes as to the 
methodology of conversion may be resolved.
    Kern River objects to the proposal and states that changing 
measurement standards at this time from volumetric to thermal would be 
a substantive change and would needlessly put it to the expense of 
converting its tariff, contracts, and business systems. Whittier adds 
that, at a minimum, individual pipelines, like Kern River should be 
permitted to be exempt, if the thermal billing mandate would impair 
individual shippers. Kern River states that if the final rule requires 
billing unit uniformity, then the new Sec. 154.107 should be modified 
to require only volumetric billing units.
    Whittier states that volumetric billing is good policy because 
volumetric rates; (1) Equitably allocate to shippers the capital and 
operating cost of the pipeline on the basis of the units actually 
transported; (2) allow shippers efficiently to use their contracted 
space to transport as many Btu's as the quality specifications allow, 
and gas suppliers are able to optimize the economic efficiency of their 
own facilities by making the economic decision whether to leave 
liquefiable hydrocarbon gases in the gaseous form and transport them in 
the gas pipeline or to incur the cost of extracting and marketing them 
as liquids; and (3) allow the appropriate costs to be divided by the 
appropriate throughput in volume units. Whittier argues that there is 
no reason for a commodity to be transported on the same basis that it 
is purchased.
    Whittier states that forcing pipelines that are content with 
volumetric-based rates to change to thermal-based rates would be making 
a substantive change in the contracts of shippers on pipelines that 
measure and bill on a volumetric basis. Whittier states that this could 
result in reopening contracts and rates.
    Chevron, Whittier, and Kern River recommend deletion of the word 
``thermal'' so that the proper unit for stating rates can continue to 
be determined on an individual pipeline basis.
    A significant majority of pipelines state their rates on the basis 
of either MMBtu or Dth. Only a few pipelines continue to state their 
rates in Mcf.28 The Commission earlier adopted the MMBtu 
measurement base for all reports submitted under part 284, in 
Sec. 284.4. The change to the regulations in this rulemaking expands on 
the Commission's earlier action and reflects the prevalent practice in 
the industry. The Commission recognizes that some companies perceive a 
hardship in switching from Mcf to Dth or MMBtu. However, the Commission 
also recognizes the ongoing industry concern with standardizing certain 
practices as expressed at the EBB conference held on September 21, 
1995. Standardizing industry practices, such as stating rates in 
thermal units, facilitates cross-pipeline business. Accordingly, the 
Commission will maintain this standard in the regulations. However, in 
light of the difficulties expressed by some pipelines, the Commission 
does not intend to actively enforce this section until one year after 
the effective date of this rule.

    \28\Approximately a dozen pipelines continue to state their 
rates in Mcf. Another five state their reservation rates in Mcf but 
state their usage rates in Dth or MMBtu.
---------------------------------------------------------------------------

    NGSA recommends that the rate sheets should state the amount of 
each applicable surcharge and include a citation to the docket in which 
such surcharge level was accepted by the Commission. The Commission 
will not adopt NGSA's suggestion that the summary statement of rates 
include the citation to the docket in which each surcharge level was 
accepted. This would add a great deal of complexity to the summary 
statement of rates. The information NGSA is interested in is available 
publicly. Since comments in this docket were filed, the Commission 
provided access to each company's electronic tariff sheets on the 
Commission's bulletin board system.29 Each tariff sheet which is 
not pending contains the citation to the order which acted on the 
tariff sheet. With some careful checking, a researcher can identify 
each tariff sheet containing a surcharge change and readily identify 
the order acting on that sheet.

    \29\Pipelines began filing electronic versions of their tariff 
sheets with tariff sheets effective November 1, 1989. Some of the 
tariff sheets filed early in the process are contained in separate 
archive databases.
---------------------------------------------------------------------------

    h. Section 154.108 Composition of Rate Schedules. Section 154.108 
replaces current Sec. 154.38. Current Sec. 154.38(d)(4), Refunds, is 
moved to Sec. 154.501. Current Sec. 154.38(d)(5), RD&D, is moved to 
Sec. 154.401. Current Sec. 154.38(d)(6), ACA expenditures, is moved to 
Sec. 154.402. Current Secs. 154.38(d) (1) and (2) are revised and moved 
to Sec. 154.107. Current Sec. 154.38(d)(3) is moved to Sec. 154.3. 
Current Sec. 154.38(e), minimum bill, is deleted.
    Williston objects to the requirement that pipelines provide a 
description of the calculation of the monthly charges for each rate 
component. It argues this would cause a pipeline's tariff to become 
even more voluminous and onerous without serving any useful purpose. 
Williston requests that the Commission eliminate this proposed 
requirement.
    Section 154.108 merely formalizes current practice. Virtually all 
current tariffs include a section in the rate schedules explaining how 
the rate is to be applied to derive monthly billings. This section of 
the tariff is essential to determining the accuracy of a shipper's 
bill. Under current practice, this section provides both a textual 
description of the components of the rate and the mathematical method 
to determine charges each month. The Commission notes that almost all 
pipelines appear to comply with this regulation already.
    i. Section 154.109 General Terms and Conditions. Section 154.109 
replaces current Sec. 154.39. The company's discounting policies are 
added to the tariff.
    AGD, NI-Gas, and the LDC Caucus support the proposed requirement 
that the pipeline set forth in its tariff its discount policy and the 
order in which each pipeline charge will be discounted. The LDC Caucus 
states that this would assist customers in ensuring that the pipeline's 
discount policy is consistently applied and that adjustment to rates to 
reflect discounted revenues are proper.

[[Page 52970]]

    INGAA supports a requirement of providing broad policy statements 
by pipeline companies concerning nondiscriminatory discounts but 
objects to disclosure of management policies or any specific order in 
which rate components would be discounted. The statement specifying the 
order in which each rate component will be discounted must be in 
accordance with Commission policy. This proposed regulation could be 
interpreted to require pipelines to disclose the order in which each 
rate component will be discounted. This portion of proposed 
Sec. 154.109(c) reduces pipeline rights and flexibility as granted in 
Order Nos. 436 and 500. Great Lakes, Columbia, KN, MRT, and Panhandle 
concur.
    Panhandle and Great Lakes state that a company's discount policy is 
commercially sensitive information. Disclosure of this information may 
interfere with a pipeline's ability to compete in the marketplace, 
thwarting the Commission's goals in Order No. 636 to foster competition 
and provide natural gas transportation service to the customer which 
values it most. Great Lakes submits that a general statement of policy 
will meet the Commission's intent without requiring the disclosure of 
commercially sensitive information.
    Columbia argues the proposed requirement is too broad. Columbia 
notes that pipelines are already subject to nondiscriminatory standards 
with respect to the granting of discounts, and must post/disclose 
discounts to affiliates. Columbia requests deletion of this requirement 
to the extent it requires setting forth the ``manner'' in which rates 
are discounted.
    KN fears that this provision would allow each pipeline to review 
the discounting policies of other pipelines that compete with it for 
business. KN states that the disclosure rule would serve to reward 
those pipelines that are evasive or simplistic in their policy 
statements and would punish those that are more descriptive or 
detailed. KN states that there is no valid competitive purpose served 
by compelling pipelines to reveal all their discount policies.
    MRT fails to see the relevance of this provision. MRT states that 
pipelines already file discount reports and report marketing affiliate 
discounts on their Electronic Bulletin Boards. MRT states that this 
provides sufficient information for both the Commission and the 
pipeline's customers to monitor the discounts a pipeline is granting.
    Great Lakes also states its opposition to the proposed section 
requiring the pipeline to state in its general terms and conditions its 
policy for financing and constructing laterals. Great Lakes states that 
pipelines must be able to evaluate each proposal to finance and 
construct lateral facilities on a case-by-case basis. Great Lakes 
states that no set policy can contemplate all of the factors which 
contribute to a pipeline's decision to finance and construct these 
facilities. Great Lakes states that a pipeline's decisions with regard 
to laterals are public knowledge since the financing, cost, location, 
and customer information related to the construction of any lateral 
facilities are disclosed in a pipeline's certificate application. Great 
Lakes state that the Commission and others have the ability to 
determine whether or not a pipeline is unduly discriminatory in its 
decision regarding the financing and construction of laterals and so, 
proposed Sec. 154.109(b) is not necessary for regulatory purposes.
    Section 154.109(c) merely formalizes the Commission's policy on 
recognition of discounts as enunciated in Natural.30 Under the 
policy, the pipeline must recognize discounts in a specified order. The 
first item of the overall reservation charge discounted will be the GRI 
surcharge (for member pipelines), followed by the base rate reservation 
charge, Account 858 or other Order No. 636 transition cost surcharges, 
and, last, all GSR reservation surcharges. Other non-transition 
reservation surcharges will be attributed as agreed by the pipeline and 
its customers in individual proceedings.31

    \30\Natural Gas Pipeline Company of America (Natural), 69 FERC 
para. 61,029, (1994), reh'g, 70 FERC para. 61,317 (1995). Policy 
applied in ANR, 69 FERC para. 61,322 (1994), and Tennessee, 69 FERC 
para. 61,094 (1994). Policy applied to interruptible transportation 
in Southern, 69 FERC para. 61,093 (1994), and MRT, 69 FERC para. 
61,112 (1994).
    \31\In Algonquin Gas Transmission Company, 69 FERC para. 61,105 
(1994), the Commission clarified its policy with respect to 
surcharges designed to collect costs in Account No. 858. If the 
Account No. 858 costs at issue are not Order No. 636 transition 
costs, but relate to upstream capacity retained by the pipeline for 
operational use and are embedded in the pipeline's base rates, the 
policy announced in Natural does not apply.
---------------------------------------------------------------------------

    In adopting the policy in Natural, the Commission saw the need for 
a generic methodology to recognize discounts in a transition cost 
recovery filing. The Commission enumerated the advantages of its policy 
as follows:
     Maximize the pipeline's recovery of transition costs from 
its discounted customers,
     Minimize the need for a subsequent true-up to implement 
the Commission's policy of permitting full recovery of transition 
costs,
     Ensure transition costs are spread as evenly and widely as 
possible, and
     Minimize discount adjustments in periodic filings.
    The requirement, in Sec. 154.109(b), for a general statement of the 
pipeline's policies on laterals formalizes the Commission's policy of 
assuring that laterals are built on a non-discriminatory basis. By 
placing the general policy in the tariff, parties may more effectively 
monitor its application.
    j. Section 154.110 Form of Service Agreement. Section 154.110 
replaces current Sec. 154.40 with the addition of receipt points as an 
item for insertion on the form when appropriate.
    k. Section 154.111 Index of Customers. Section 154.111 replaces 
current Sec. 154.41, Index of Purchasers, but with applicability 
specifically limited to natural gas activities not subject to part 284 
of this chapter. The Commission has expanded the Index of Customers to 
include all firm transportation services and contract demand for each 
customer for each rate schedule. In the order issued in Tennessee Gas 
Pipeline Company's restructuring proceeding,32 the Commission 
clarified that current Sec. 154.41 is not limited to the requirement to 
file sales-related information. The changes here make that 
interpretation explicit. Some pipelines have provided contract demand 
information on a voluntary basis before this. The information has 
proven valuable to the Commission in analyzing pipelines' filings and 
in eliminating additional requests for information.

    \32\Tennessee Gas Pipeline Company, 65 FERC para. 61,224 (1993).
---------------------------------------------------------------------------

    Pipelines that offer services under part 284 of this chapter, 
exclusively or in addition to services authorized under part 157 of 
this chapter, must comply with the requirements in the companion 
rulemaking instead of this provision. In the companion rulemaking, 
pipelines providing service pursuant to part 284 of this chapter, 
provide an Index of Customers on their electronic bulletin board (EBB). 
As an interim measure, we will require pipelines providing 
transportation service under part 284 to comply with the Index of 
Customers requirements as set forth in Sec. 154.111 until the 
electronic index is implemented.
    Panhandle recommends that the Index of Customers requirement remain 
the same as that contained in the current regulations. Panhandle 
objects to the expansion of the index as being anti-competitive. 
Panhandle objects to the inclusion of the term of each contract, 
arguing the duration of the contract is sensitive information. Further, 
Panhandle believes this 

[[Page 52971]]
information serves no valid regulatory purpose.
    Columbia objects to the requirement to include contract demand for 
each customer for each rate schedule in the Index of Customers. 
Columbia believes public disclosure of such commercially-sensitive 
information unfairly places pipelines and their customers at a 
competitive disadvantage in the marketplace.
    AGD supports the provision and suggests that this information 
should be provided in both print and electronic media in order to 
facilitate its full use by interested parties. AGD recommends that the 
regulations be amended to require each pipeline to provide a sum of the 
MDQ contract levels by rate schedule, at least in the paper copy of the 
index of purchasers. This information is valuable because it 
facilitates analysis of billing determinants in rate cases and between 
rate cases.
    The Pacific Northwest Commenters urge the Commission to continue to 
require that the tariff include a reasonably current index of all firm 
customers. Pipelines should be required to provide a completely current 
customer index on their EBBs--but on a semi-annual basis the pipeline 
should still file updated indices or firm customers in their tariffs.
    Consistent with the action being taken in the companion rule, the 
Index of Customers will include the full legal name of the shipper, the 
rate schedule number of the service under contract, the effective date 
of the contract, the termination date of the contract, and the maximum 
daily contract quantity under the contract.
    We will not adopt Columbia or Panhandle's recommendations. As we 
note in our companion rulemaking, the index will contain fundamental 
data about the natural gas industry--how much of the pipeline's 
capacity shippers have under firm contract. This information is basic 
to the Commission's understanding of events taking place in the 
industry. With this information, the Commission will remain apprised of 
trends in the industry, the willingness of shippers to hold firm 
capacity, the average length of time capacity remains under contract, 
the proportion of capacity rolling over under evergreen provisions, 
etc. Pipelines are beginning to deal with complex issues related to 
shippers' contracts coming up for renewal in the post restructuring 
period.33 The lack of easily accessible data regarding customers' 
contract levels and contract terms could hamper the Commission's 
ability to assess the impact of this phenomenon on the industry. The 
index will provide key data for this purpose. The Index of Customers 
which is the subject of this section will be included in the tariff. 
Currently, the tariff is filed both electronically and on paper. 
Therefore, AGD's suggestion is moot.

    \33\For example, Transwestern Pipeline Co. recently filed a 
settlement in Docket No. RP95-271-000 to deal with the turn back of 
significant amounts of capacity by a key customer.
---------------------------------------------------------------------------

    We will not require the pipelines offering service under part 284 
to maintain the Index of Customers in both their tariff and on their 
EBBs. It is the Commission's intention to reduce the filing burden on 
the pipelines. Access to the Index of Customers through a downloadable 
file or through the tariff should be sufficient. The Commission will 
hold future conferences on the appropriate format for the electronic 
Index of Customers.
    The language originally proposed in Sec. 154.111 required the index 
to be updated coincident with the filing of the Form No. 2 and Form No. 
11. At the time, Form No. 11 was proposed to be filed semi-annually. In 
our companion rulemaking, we are revising the Form No. 11 and requiring 
it to be filed quarterly. In light of the change to the frequency of 
the filing of Form No. 11, we will remove the reference to Form No. 11 
and modify the language in this section to preserve the semi-annual 
schedule originally contemplated.
    l. Section 154.112 Exception to Form and Composition of Tariff. 
Section 154.112(a) replaces current Sec. 154.52, but deletes those 
paragraphs dealing with the sale of gas or purchased gas cost tracking. 
Because the requirements of Sec. 154.101 (Form) and Sec. 154.102 (Title 
page and arrangements) are applicable, Sec. 154.112(a) does not refer 
to those matters.
    Section 154.112(a) specifies that special rate schedules for 
service under part 157 of this chapter are to be included in FERC 
Volume No. 2. Section 154.112(b) mirrors the provision in Sec. 154.1(d) 
which requires that contracts that deviate in any material aspect from 
the form of service agreement must be filed with the Commission.34 
Section 154.112(b) also requires that such contracts be referenced in 
FERC Volume No. 1.

    \34\The language proposed in the NOPR for Sec. 154.112(b), which 
would require the filing of contracts ``that do not conform to the 
form of service agreement'' has been changed to be consistent with 
the provision of Sec. 154.1(d).
---------------------------------------------------------------------------

    m. Miscellaneous Subpart B Comments. AGD commented that proposed 
Subpart B should be supplemented to include a provision requiring a 
pipeline seeking a rate increase to identify (a) the new rate being 
proposed by rate schedule and (b) for each proposed new rate the rate 
which represents the refund floor or ``last clean rate.'' AGD states 
that this information should be presented in a simple, easy-to-
understand format such as a chart or matrix so that interested parties 
can quickly find in one place the rate levels which quantify the 
totality of the applicant's rate increase proposal. Pipeline rate 
changes are routinely made in response to various factors. Some of the 
resultant adjustments are made effective subject to refund. AGD state 
that these circumstances have the effect of obscuring the underlying 
rate and that AGD's recommendation is intended to simplify the task of 
the staff and the pipeline customer in discovering what rate is 
proposed and what portion of that rate is already subject to change as 
a result of some regulatory contingency.
    AGD also suggests that many pipelines follow a practice of 
providing to their customers a quarterly statement summarizing the 
currently effective tariff sheets. This practice should be required of 
all pipelines as it is an efficient mechanism for keeping abreast of 
the developments affecting pipeline services.
    Subpart B sets out the proper contents of a pipeline's tariff. 
AGD's suggested summary appears in Sec. 154.7(a)(6) which requires ``a 
summary of the changes or additions made to the tariff'' to be included 
in the statement of the nature, the reasons, and the basis for the 
filing. Thus, what AGD seeks is already required. No additional 
language needs to be added to the regulations.
    AGD's suggestion that the pipeline identify the last ``clean rate'' 
when it proposes an increased rate has merit. The identification will 
assist the Commission and other interested parties in determining the 
level of potential refunds if the proposed rate is suspended and 
ultimately found unjust or unreasonable. It will also alert interested 
parties to the fact that the underlying rate may also be in effect 
subject to refund. Proposed Sec. 154.7(a) was modified to require that 
the letter of transmittal identify the last rate found to be just and 
reasonable that underlies the proposed rate.
    The NGA requires a pipeline to ``keep open in convenient form and 
place for public inspection, schedules showing all rates and charges 
for any transportation or sale subject to the jurisdiction of the 
Commission, * * *''35 Historically, this provision 

[[Page 52972]]
has not been interpreted as requiring pipelines to provide periodic 
copies of effective tariffs to each customer. The Commission notes that 
much more can be done through electronic means, today. As a result, the 
Commission makes available through its electronic bulletin board 
system, each pipeline's complete tariff for downloading. As this 
information is available through the Commission's EBB, we will not 
require the pipelines to send their customers a copy of the pipeline's 
current tariff on a quarterly basis.

    \35\15 U.S.C. 717c.
---------------------------------------------------------------------------

3. Subpart C--Procedures for Changing Tariffs
    a. Section 154.201 Filing Requirements. New Sec. 154.201(a) is a 
replacement for current Sec. 154.63(b)(1)(v), Marked Versions of Tariff 
Changes. The new section clarifies that changes to both text and 
numbers must be marked. New Sec. 154.201(b) is a replacement for 
current Sec. 154.63(e)(4), Workpapers and Supporting Data. The intent 
of this regulation is to ensure that all mathematical calculations are 
complete and logically follow from the first calculation to the last; 
so that, anyone attempting to recreate the calculations can do so. This 
requirement will also ensure that any numbers that are not directly 
from the company's source documents are explained.
    Other parts of current Sec. 154.63 are revised and distributed 
elsewhere in revised part 154.
    Northwest/Williams requests clarification as to when the filing 
requirements of subpart C or D apply. The confusion over the 
applicability of subparts C and D turns on the inclusion of the section 
titled ``Changes in rate schedules, forms of service agreements, or the 
general terms and conditions,'' as proposed in subpart D, Sec. 154.301. 
Some of subpart C applies to all changes to a tariff or executed 
service agreement, such as Sec. 154.201 and the notice, service, and 
protest requirements. There are other sections in subpart C which have 
a more limited scope, such as the provisions for submission of new rate 
schedules, filing of compliance filings, and changes to suspended 
tariffs. The subject section is better positioned in subpart C since it 
applies when a pipeline submits changes to specific portions of the 
tariff. Subpart D applies to changes in rates other than those 
described in subparts E, F, G, and H. To avoid any confusion, the 
subject section is now Sec. 154.204 in Subpart C.
    NI-Gas supports Sec. 154.201(a) but seeks clarification that all 
changes be marked, not just substantive changes. The Commission 
clarifies that the regulation applies to all changes in text and 
numbers whether substantive or not.
    Williston states that Sec. 154.201(a) should not apply to maps. The 
regulation requires that changes in text and numbers be marked. This 
includes text and numbers on pages containing maps. Whenever possible, 
text and numbers on maps should be marked in the same manner as text 
and numbers elsewhere in the filing. However, the Commission recognizes 
that maps are often produced in such a fashion that this is not 
practical. In such cases, the text and numbers on maps may be marked in 
any clear fashion. Further, the Commission is not specifying any 
particular method for marking changes to boundary lines, symbols, and 
representative drawings. Such changes may also be demonstrated in any 
clear fashion.
    NI-Gas supports Sec. 154.201(b). NGSA approves of 201(b) (2) and 
(4). Columbia states that while it supports adherence to principles of 
disclosure and open communication with Commission staff and parties 
concerning calculations and workpapers, Columbia avers that this 
regulation is too broad and subjective. Columbia states that the 
determination whether the calculations are complete and logically 
follow so that anyone can recreate them, is a subjective standard which 
is particularly onerous given that an incomplete filing may be rejected 
pursuant to Sec. 154.5.
    The Commission disagrees with Columbia. It has been the 
Commission's experience that pipelines have not always included all of 
the calculations necessary to support the proposed rate modification 
even though the pipeline must have these calculations in order to 
establish the rates in its filing. The lack of these calculations 
causes unnecessary delay and raises questions about the filing. It is 
impossible for the parties to determine if the proposed rate is just 
and reasonable if the calculations are incomplete or unexplained.
    Section 154.201(b) serves two purposes: it gives specific guidance 
to the pipeline as to what is needed to fulfill the pipeline's 
obligation to support proposed rates; and, it gives interested parties 
useful information in a timely manner. This regulation should reduce 
the necessity for data requests.
    Columbia states that if this regulation is promulgated, pipelines 
should not be subject to additional data requests about calculations. 
Columbia's suggestion is not adopted. The Commission cannot anticipate 
all of the information the parties may need in a rate case. It would be 
improper to generalize that, under any circumstances, no pipeline would 
be subject to additional data requests. Eliminating the possibility of 
any data requests concerning the pipeline's rate calculations would 
restrict the parties' options unnecessarily.
    Pacific Northwest Commenters urge the Commission to require that 
each filing contain a summary customer impact comparison setting forth 
the amounts paid by customers under the current rates based on the most 
recent test period determinants compared to what they would pay under 
the proposed change based on the same determinants. Statements G-1 and 
G-2 provide this information. The Commission will not require the 
pipeline to provide an additional customer impact comparison. There 
should be sufficient information available through the filing to allow 
each customer to conduct its own comparison.
    Pacific Northwest Commenters request that the current provision in 
Sec. 154.63(e)(1) that pipelines include material reflecting rate 
fixing adjustments in accord with Commission orders be included here. 
AGD recommends that the regulation require a description of any Dth-
mile study relied upon by the applicant for the rate change.
    The regulations already require that the pipeline provide 
documentation to support proposed changes. It is not necessary to list 
each and every document that might be needed for such support. It is 
the pipelines' responsibility to provide the documents that prove that 
its proposed rate change is just and reasonable.
    The Commission modified proposed Sec. 154.301(c) to reinstate the 
original language regarding alternate material reflecting rate fixing 
adjustments. A regulation requiring a description of the Dth-mile study 
will not be adopted.
    b. Section 154.202 Filings to Initiate a New Rate Schedule. New 
Sec. 154.202 replaces current Sec. 154.62. The new section does not 
apply to initial executed service agreements. Very little data is 
currently required to support an initial rate schedule or executed 
service agreement. Because many services are now provided under blanket 
authorizations, there is no review prior to the tariff filing. Thus, 
the current filing requirements are no longer consistent with the needs 
of the Commission for reviewing new rate schedules. The new section 
relates to the requirements for a new rate schedule under the blanket 
authority granted under part 284 of this chapter as well as to other 
initial filings.
    NI-Gas states that Sec. 154.202(a)(1)(iv)(B) should be expanded to 
include information on 

[[Page 52973]]
surcharges and crediting. On the other hand, Williston states that 
Sec. 154.202(a) should be deleted because it requires filing data not 
previously required, is burdensome, and prolongs review by staff.
    Section 154.202(a) requires the pipeline to file basic information 
about the proposed service which the Commission needs to know to make 
an informed and timely decision. The current regulations are adapted 
for individually certificated services where the information would be 
provided in the certificate proceeding. Section 154.202(a) recognizes 
the transition from individually certificated services to blanket 
certificates. It requires less information than previously required for 
an individual certificate application. It is designed to provide 
Commission staff and others with enough information to review the rates 
and charges for an initial service or service provided under a blanket 
certificate authority. By requiring pipelines to submit this necessary 
information when they make their initial filing, the Commission avoids 
the need to formulate data requests which only delay the proceedings.
    NI-Gas' interest in the applicability of surcharges to the new 
service is understandable. However, no modifications to the proposed 
regulations are necessary to accomplish NI-Gas' goal. Section 154.107 
requires all surcharges applicable to a service to be displayed on the 
tariff sheet showing currently effective rates. If a new rate is 
proposed for the new service, a separate line or lines will appear on 
this tariff sheet. All applicable surcharges would be displayed in 
separate columns as provided under Sec. 154.107(d). Therefore, the 
surcharges applicable to the new service would be discernible. The 
Commission does not believe it is necessary to expand the list under 
proposed Sec. 154.202(a)(1)(iv) to list all of the possible affects of 
a new service upon existing shipper services since the regulations 
state that information is to be provided is ``including but not limited 
to'' the specific information noted. Any additional affects on existing 
service would be covered by this inclusive phrase.
    Panhandle states that the regulation should be clarified to 
establish that only where a pipeline is proposing to change a rate 
previously established in the section 7 proceeding should there be a 
section 4 obligation. Section 154.202(b) states that where a rate, 
service, or facility is certificated under section 7, the tariff sheets 
filed to implement the terms of the certificate must comply with the 
requirements for compliance filings. No change needs to be made to the 
regulations to accommodate Panhandle's position. This regulation 
creates an obligation applicable to initial rates and rates and charges 
for services under a blanket authorization. Any proposed rate or charge 
that differs from the rate or charge approved in a section 7 proceeding 
is governed by Sec. 154.202(b)(2).
    c. Section 154.203 Compliance Filings. Section 154.203 is a new 
section addressing filings that are made to comply with a Commission 
order. Filings made to comply with Commission orders must include only 
those changes required to comply with the order. Such compliance 
filings must not be combined with other rate or tariff change filings. 
A compliance filing that includes other changes or that does not comply 
with the applicable order in every respect may be rejected.
    APGA and NI-Gas support this regulation.
    Pacific Northwest Commenters states that compliance filings should 
be designated and noticed as such, and recognized as not mandating 
action within 30 days. The form of notice now requires the pipeline to 
designate compliance filings.
    CNG believes that Sec. 154.203(b) lacks flexibility. CNG states 
that an alternate or creative response to a Commission requirement may 
obviate the need for a rehearing request or court appeal. CNG argues 
that including related rate or tariff changes in a compliance filing 
saves parties time and money. On the other hand, Brooklyn Union 
requests confirmation that compliance filings that do not conform to 
the applicable order in all respects will be rejected.
    The regulation states that a compliance filing that includes other 
changes or that does not comply with the applicable order in every 
respect ``may be rejected.'' In practice, the Commission regularly 
rejects filings that go beyond the order. The Commission chose not to 
use the phrase ``will be rejected'' in order to allow for some 
flexibility to accommodate minor variations in special and rare 
circumstances. However, the Commission will not accept any compliance 
filing that contains any substantive difference from the underlying 
order.
    d. Section 154.204--Changes in Rate Schedules, Forms of Service 
Agreements, or the General Terms and Conditions. Section 154.204 
provides distinct requirements for filings to change rate schedules, 
forms of service agreements, or the general terms and conditions of a 
tariff.36 Such filings must explain the necessity for the change 
and the impact on existing customers.

    \36\This regulation appeared in the NOPR as Sec. 154.301.
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    NI-Gas states that the inclusion of the information required in 
Secs. 154.204 (b) and (c) will help in the timely analysis of tariff 
changes by interested parties.
    NDG supports the proposed requirement that the filing company must 
include with its filing an explanation of why the proposed change is 
necessary and the impact on existing customers. NDG also believes that 
several additional filing requirements would further improve the rate 
review process, including requiring the distribution of workpapers 
provided to FERC staff in support of a filing to customers. Pipelines 
should be required to (1) allow interested parties to notify the filing 
pipeline that they wish to receive a copy of the workpapers on the 
filing data, and (2) include with the copy of the filing served on 
interested parties a notice describing the content of the workpapers.
    It is unclear to what workpapers NDG refers. All workpapers 
referred to in Sec. 154.204 are to be submitted as part of the filing. 
Thus, the pipeline is already required to submit all workpapers.
    Generally, Columbia does not object to the requirements of this 
section. However, Columbia believes that much of the requested 
information is irrelevant to many tariff filings e.g., workpapers 
showing the estimated effect on revenues and costs over a 12-month 
period.
    The requirements of Sec. 154.204 are generally applicable. Further, 
the specific requirement to which Columbia refers has been a 
longstanding requirement for filings for changes other than in rate 
level.37 However, if a particular requirement does not happen to 
apply, a statement to that effect is all that is necessary.

    \37\See Sec. 154.63(b)(2).
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    e. Section 154.205 Changes Related to Suspended Tariffs, Executed 
Service Agreements or Parts Thereof. Section 154.205 replaces current 
Sec. 154.66.38 The change adds two exceptions to the rule 
prohibiting tariff filings during a suspension period. The exceptions 
are ``changes made under previously accepted tariff provisions 
permitting periodic limited rate changes'' and ``accepted limited rate 
changes.'' Section 154.205 recognizes that the Commission allows 
periodic limited rate changes pursuant to accepted tariff 

[[Page 52974]]
provisions and ACA and GRI surcharge changes to take place during the 
period of suspension. This reflects current Commission policy.

    \38\This regulation appeared in the NOPR as Sec. 154.204.
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    Williston commented that the provision in current Sec. 154.66 
providing that a proposed tariff or executed service agreement may be 
withdrawn during the suspension period with special permission should 
be retained. That provision has been reintroduced into the final rule.
    f. Section 154.206 Motion to Place Suspended Rates Into Effect. 
Section 154.206 replaces current Sec. 154.67(a).39 Current 
Sec. 154.67(b), Reports, is deleted. This section requires that, when 
rates have been suspended for more than a minimal period and the 
Commission has ordered changes or the rates include costs of facilities 
that are not in service, the motion to place suspended tariff sheets 
into effect must be filed at least one day prior to the date the sheets 
are to take effect. A motion is required where: The Commission has 
ordered changes; the rates include facilities that are not in service; 
or, the transmittal letter specifically reserves the pipeline's right 
to file a motion.

    \39\This regulation appeared in the NOPR as Sec. 154.205.
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    Section 154.7(a)(9) adds a new provision whereby the transmittal 
letter must include either a motion to place suspended rates into 
effect, or a specific statement that the pipeline reserves its right to 
file a later motion. If the pipeline includes a motion in its 
transmittal letter, then the proposed rates will go into effect at the 
end of the minimal suspension period. If the pipeline specifically 
states that it reserves its right to file a later motion, then the 
proposed rates will go into effect only after such later motion is 
filed. Also, if a pipeline fails to comply with Sec. 154.7(a)(9) by not 
including either a motion or a statement, the proposed rates will not 
go into effect until the pipeline files a motion.
    APGA requests that Sec. 154.206(a) be amended to make the form of 
motion clear. However, the Commission does not believe that it is 
necessary to standardize such a motion.
    The NOPR had proposed that when rates have been suspended for more 
than a minimal period and the Commission has ordered changes or the 
rates include costs of facilities that are not in service, the motion 
to place suspended tariff sheets into effect must be filed no less than 
30 days nor more than 60 days prior to the date the sheets would take 
effect. Columbia commented that the proposed requirement would cause 
pipelines to estimate test period data for that portion of the test 
period occurring after the date the pipeline must make the motion rate 
filing. Columbia stated that this would only be acceptable if the 
Commission accepted such estimates as of the end of the test period.
    CNG and Columbia recommended no change to the current practice of 
allowing pipelines to file motion rates one day before the effective 
date. CNG commented that the current rules work well but the proposed 
rule would require pipelines to rely on estimated plant balances in 
determining the level of plant in service at the end of the test 
period. Further, CNG stated, the pipeline would be unable to determine 
the status of negotiations 30 days in the future, and would be 
compelled to move to make the rate increase effective at the earliest 
possible date. In the alternative, CNG states, the longest notice 
period should be 6 to 10 days.
    In light of these comments, the revised regulation has been 
modified to be consistent with the current practice of allowing 
pipelines to file motion rates one day before the effective date. 
However, individual suspension orders may require pipelines to make 
compliance filings earlier, to reflect changes required by the 
Commission.
    Columbia states that Sec. 154.206(c) should not state ``for less 
than one day,'' but ``for one day.'' JMC suggests a change to ``one day 
or less.''
    Pacific Northwest Commenters suggest that the Commission retain the 
motion filing requirement for all suspensions of more than one day and 
delete the requirement for suspensions of one day or less. To comply 
with section 4 of the NGA, Pacific Northwest Commenters argue that the 
Commission should issue an express blanket grant of a motion for any 
filing suspended for one day or less. Pacific Northwest Commenters 
state that this approach would recognize the past practice of generally 
suspending rate increases for 5 months and other changes for less than 
one day. Thus, a pipeline could delay implementation where parties are 
resolving issues through negotiation. Pacific Northwest Commenters 
state that automatic implementation of a rate increase would restrict 
this flexibility.
    JMC supports the proposal to formalize the Commission's practice of 
not requiring a motion when rates are suspended for a minimal period.
    Panhandle states that the NGA requires that suspended rates only go 
into effect upon motion by the pipeline. Panhandle recommends that when 
the suspension period is minimal, the regulations should recognize that 
the transmittal letter constitutes the requisite motion unless the 
pipeline reserves the right to file a separate motion. This 
recommendation has not been adopted. Unless the pipeline reserves the 
right to file a separate motion, it must include a motion in the 
transmittal letter.
    JMC requests clarification that rates for separate, distinct 
classes of customers need not be suspended for the same time period nor 
be combined together for purposes of determining whether the proposed 
rate is a decrease or increase. The Commission's policy is that 
customers should only pay for the services they receive. Rates need not 
be aggregated for the purpose JMC suggests.40

    \40\See Tennessee Gas Pipeline Company, 62 FERC para.61,250 at 
62,642 (1993).
---------------------------------------------------------------------------

    The revised regulation is consistent with current Commission 
practice and the purposes of the NGA. Section 4(e) of the NGA 
authorizes the Commission to suspend operation of a schedule and defer 
the use of a rate pending a hearing ``but not for a longer period than 
five months beyond the time when it would otherwise go into 
effect.''41 If the proceeding has not been concluded and an order 
made at the expiration of the suspension period, the proposed change 
shall go into effect ``on motion of the natural gas company making the 
filing.''42 The NGA continues that refunds may be ordered ``where 
increased rates or charges are thus made effective.''43 
Historically, the Commission has considered the suspension of a rate as 
a necessary step to assure that refunds may be ordered when 
appropriate.

    \41\15 U.S.C. 717c(e).
    \42\Id.
    \43\Id.
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    When the maximum five month suspension is applied, the earliest the 
rates will become effective is on the day after the date the motion 
filing is made. Where the rates have been suspended for the maximum 
period, there is sufficient time for the pipeline to modify its 
proposal, if necessary, and file the motion. However, as a practical 
matter, where rates have been suspended for a minimal period as allowed 
under the statute, a hearing could not possibly be concluded by the 
expiration of the period. This regulation allows the pipeline to 
specify whether or not the filing itself acts as a motion.
    g. Section 154.207 Notice Requirements. Section 154.207 replaces 
current Sec. 154.22 and Sec. 154.51.44 The new section applies 
only to proposed changes. Reference to former Sec. 154.5, 

[[Page 52975]]
which is no longer in part 154, is removed.

    \44\This regulation appeared in the NOPR as Sec. 154.206.
---------------------------------------------------------------------------

    h. Section 154.208 Service on Customers and Other Parties. New 
Sec. 154.208 formally requires the filing company to serve its 
customers and state regulatory commissions on or before the filing 
date.45 The regulation requires that all customers and state 
commissions receive an abbreviated form of the filing. Customers and 
state commissions with an interest may then request a full copy. The 
pipeline must provide the full copy within 48 hours. However, pipelines 
must comply with any customer's standing request to receive a complete 
filing as the initial served filing.

    \45\This regulation appeared in the NOPR as Sec. 154.207.
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    The NOPR invited comments on whether the informational needs of 
customers and state regulatory commissions would be adequately 
fulfilled if the filing company was only required to serve the 
transmittal letter and provide the rest of the filing upon request. 
Some pipelines have used this procedure recently to minimize the costs 
of reproduction and mailing where their lists of shippers are quite 
large.
    MRT, El Paso, NGSA, and NET support serving only a transmittal 
letter to customers and state commissions on or before the filing date 
with complete copies provided on request. They state that serving 
complete copies wastes pipeline resources and annoys customers that are 
not interested.
    Columbia states that it is unduly burdensome to serve all filings 
on all customers and suggests that the regulation be modified to 
require service upon firm customers on the filing date. Columbia states 
that such service along with the form of notice pursuant to 
Sec. 154.209 is sufficient to assure adequate notice.
    AF&PA, Arizona Directs, AGD, Industrials, and New York oppose 
allowing pipelines to fulfill service by a transmittal letter. APGA 
states that the service of only the transmittal letter would be neither 
desirable nor lawful. APGA states that without a complete statement of 
proposed rates, the notice is not meaningful.
    Michigan and MoPSC state that state commissions should receive the 
full filing.
    Michigan states that, considering the time restraints in which the 
Commission must act and the delay of requesting full service, the 
burden to request full service should not be on the parties.
    Michigan, MoPSC, and New York suggest that the Commission require 
pipelines to provide state commissions and customers with notice of a 
filing 30 days prior to the filing date.
    Michigan and New York would like the pipelines to be required to 
serve both the state commission and the designated counsel by the next 
day.
    Pacific Northwest Commenters points out that ``service'' under 
Sec. 385.2010 (Rule 2010) may consist of merely depositing the filing 
in the mail which may take 3 or 4 days for delivery. To assure that 
customers get more timely notice and may prepare more complete comment 
and analysis, they suggest that pipelines be required to certify that 
arrangements have been made to assure receipt by customers no later 
than the next business day, that customers elect whether to receive 
full service or just transmittal letters, and that customers be able to 
designate two representatives to receive service. They also request 
that the Commission require pipelines to provide service of orders in 
specific cases in lieu of Commission service.
    APGA requests a requirement that pipelines must, at the request of 
a customer, provide next-day service to attorneys or consultants 
designated by customers.
    AGD states that the regulation should require simultaneous service 
upon the Commission and all customers except those known to prefer 
transmittal letter service.
    Columbia Distribution and NDG do not oppose offering the customers 
the option of receiving a transmittal letter instead of the full 
filing, however customers should be able to place a standing request 
for complete filings by the next day.
    Panhandle proposes that firm customers and state commissions 
receive full service at the time of filing but that interruptible 
customers receive an abbreviated service consisting of: The letter of 
transmittal, the Statement of Nature, Reason, and Basis, the changed 
tariff sheets, and the Notice. Notice would also be on the EBB.
    INGAA and ANR/CIG ask that pipelines be allowed to make an 
abbreviated form of service consisting of: The Letter of Transmittal; 
the Statement of Nature, Reason, and Basis; the changed tariff sheets; 
a summary cost-of-service and rate base; and, summary of magnitude of 
change. Customers with an interest may then request a full copy.
    El Paso suggests that the service obligation be fulfilled by 
posting on the EBB.
    In light of the responses to the NOPR, the revised regulation is a 
combination of the alternatives suggested by several commenters and 
represents a reasonable middle ground between requiring service of a 
complete filing and service of just the transmittal letter. The 
pipeline must provide the full copy within 48 hours if requested. 
Additionally, the pipeline must comply with any customer's standing 
request to receive a complete filing as the initial served filing. 
Customers are defined as customers of the pipeline with a contract for 
service as of the date of the rate case filing. While reducing the 
filing burden to the pipeline, this course assures that all interested 
parties receive complete notice adequate to making informed decisions 
about the proposal. Also, those parties that desire service of complete 
filings can make a standing request for such service in lieu of the 
abbreviated and 48-hour follow-up services.
    i. Section 154.209 Form of Notice for Federal Register. Section 
154.209 replaces current Sec. 154.28.\46\ The modified form reflects 
current practice. The form has been changed from that in the NOPR to 
distinguish compliance filings that do not require Commission action 
within 30 days from the date of filing, from other rate filings.

    \46\This regulation appeared in the NOPR as Sec. 154.208.
---------------------------------------------------------------------------

    Michigan and New York request that the notice be modified to 
contain a brief narrative discussing the financial impact of the 
proposed change on each class of service and any conditions of service 
affected by the change. Michigan and New York state that filings that 
fail to include such notice should be rejected. The Commission rejects 
this suggestion. This information can be derived from the filing that 
is being noticed. The purpose of the notice is merely to get the 
attention of interested parties who may then review the full filing.
    NI-Gas states that the form of notice should also include the name, 
address, telephone number, and FAX number of a contact person. This 
information is on the title page of the filing and does not need to be 
in the notice.
    The NOPR invited comments on whether the Federal Register notice is 
useful and should be retained in addition to the Commission's 
electronic notice. Columbia, Consumers Power, UDC, and Northwest/
Williams state that the Federal Register notice is useful and should be 
retained in addition to the Commission's electronic notice. El Paso 
recommends that, if paper copies of filings are required, the Federal 
Register notice should be the only document served on customers. The 
full filing would be available on the EBB. SoCal prefers the Commission 
CIPS as the 

[[Page 52976]]
source for postings rather than the Federal Register.
    Generally, these comments indicate that the Federal Register notice 
is useful and should be retained in addition to the Commission's 
electronic notice.
    j. Section 154.210 Protests, Interventions, and Comments. Section 
154.210 replaces current Sec. 154.27.47 The intervention, comment, 
and protest periods are to be standardized as has been the practice 
with oil pipeline tariff filings. Interventions, comments, and protests 
must be filed within 12 calendar days of the filing date and comments 
must be filed at the same time as interventions and protests.

    \47\This regulation appeared in the NOPR as Sec. 154.209.
---------------------------------------------------------------------------

    The NOPR had proposed that the interventions, comments, and 
protests be filed within ``10 days'' of the filing. Many commenters 
objected to changing from the former 15-day time period and argued that 
more time was needed to adequately review the more complete initial 
filings. Numerous alternatives were suggested for comment periods 
ranging from 10 to 30 days. The Commission has balanced the need to 
allow sufficient time for interested parties to review a filing with 
the need for the proceeding to progress swiftly. The use of the 12 
calendar day standard achieves this balance.
4. Subpart D--Material to be Filed With Changes
    a. Section 154.301 Changes in Rates. Section 154.301 establishes 
that subpart D pertains to rate change filings under the cost-of-
service methodology; i.e., all rate change filings except those filed 
under subparts E, F, and G.48 Subpart D is applicable to both rate 
increase and decrease filings. The current special filing requirements 
for ``minor pipelines'' are removed. Section 154.301(c) replaces 
current Sec. 154.63(e)(1). Minor rate increase filings, as now covered 
by Sec. 154.63(b)(4), and rate decreases have reduced filing 
requirements under Sec. 154.313. In addition, proposed changes other 
than to rate level must be made under subpart G, discussed infra.

    \48\This regulation appeared in the NOPR as Sec. 154.302.
---------------------------------------------------------------------------

    NI-Gas strongly supports the proposal that a pipeline must be 
prepared to prosecute its case based on the information included with 
its original filing. NI-Gas argues that this requirement will help with 
the initial review by parties; eliminate the first stage of many 
procedural schedules; prevent a pipeline from introducing new 
explanations, proposals, and evidence well into the course of a 
contested proceeding; and allow more comprehensive Commission review 
initially. AGD agrees that these regulations embody the proper approach 
to the rate filing process, and argues that there should be no 
reluctance on the Commission's part to reject incomplete rate filings 
or any pipeline's attempts to supplement rate filings.
    Conversely, INGAA believes the regulations severely restrict the 
pipeline's ability to defend its submitted rate case. INGAA suggests 
removing the word ``solely'' from this section (with regard to 
requiring the pipeline to rely solely on its initial filing to sustain 
its burden of proof on proposed changes) and broadening the material 
that would be admissible in the defense of a rate case. Panhandle 
believes requiring the pipeline to rely solely on its initial filing 
would actually increase the time and effort required of other parties 
and the Commission's staff. Panhandle maintains it is impossible to 
anticipate every issue the parties may raise, and that the regulations 
could be read to preclude the pipeline from filing supplemental direct 
or rebuttal testimony to address issues raised subsequent to the rate 
filing.
    Similarly, Columbia requests clarification that nothing bars a 
pipeline from filing answering and rebuttal testimony in its own rate 
case proceedings. Williston also seeks clarification that the filing of 
supplemental data by the company is not precluded. The Commission 
confirms that this regulation does not interfere with a company's 
rights, during a hearing, to respond to opposing testimony and 
evidence.
    The Commission agrees with the comments of NI-Gas and AGD, above. 
Further, the substantial body of rate proceeding case law as well as 
the practices that have developed in the prosecution of rate cases 
should provide a pipeline with knowledge of what issues must be 
developed in its case-in-chief.
    Panhandle requests confirmation that Sec. 154.301(c) relates only 
to proposed changes, and that the Commission does not intend by 
promulgating these new regulations to change the prior holdings of the 
courts or the Commission on the burden of going forward or the burden 
of proof. Panhandle also requests clarification that matters already 
sworn to in the filing need not be addressed again in Statement P.
    The requirements found in Sec. 154.301(c) that a pipeline must be 
prepared to go forward at hearing and sustain its burden of proof based 
on the materials in its filing are the same as those currently in 
effect in Sec. 154.63(e)(1), with some editorial changes and will be 
interpreted by the Commission in the same way.
    b. Section 154.302 Previously Submitted Material. Section 154.302 
replaces current Sec. 154.63(c)(1) and (2). A current FERC Form No. 2 
must accompany the filing.49

    \49\This regulation appeared in the NOPR as Sec. 154.303.
---------------------------------------------------------------------------

    NGT requests clarification that this regulation represents no 
change in current practice; submission of a copy of the Form No. 2 does 
not constitute part of the rate filing for which service may be 
required pursuant to Sec. 154.207.
    The Commission notes that the language of the revised regulation is 
essentially the same as the current section. The Commission clarifies 
that the FERC Form No. 2 remains an item by reference and does not 
constitute part of the filing for which service is required pursuant to 
Sec. 154.207.
    c. Section 154.303 Test Periods. Section 154.303 replaces current 
Sec. 154.63(e)(2)(i) and (ii). The section has been completely 
rewritten.50 The Commission clarifies that the pipeline must 
remove from rates moved into effect the cost of any facilities not 
certificated (where a certificate is required) and in service as of the 
end of the test period.

    \50\This regulation appeared in the NOPR as Sec. 154.304.
---------------------------------------------------------------------------

    National Fuel requested modification to the NOPR to clarify that 
adjustments to the base period may include costs for facilities that do 
not require a certificate and are in service by the end of the test 
period. Language to that effect has been incorporated into the final 
rule.
    INGAA contends that Sec. 154.303(c)(2) requires that a plant not 
certificated before the end of the test period must be excluded when 
motion rates are filed. INGAA states that it is impossible for a 
pipeline to estimate when the Commission will issue a certificate in a 
pending matter; and therefore, pipelines are forced to exclude the 
facilities in the compliance filing yet all other aspects of the 
pipeline's activities are updated to the end of the test period.
    NGT and Panhandle seek clarification that the new regulations 
permit the inclusion of costs of facilities that are expected to be in 
service by the end of the test period, regardless of the status of a 
pending certificate application. NGT urge that the last sentence of the 
revised regulation should be deleted.
    INGAA states that the regulation forces pipelines to exclude from 
the end of test period analysis of costs for certificated facilities. 
INGAA states a 

[[Page 52977]]
procedure should be adopted whereby a pipeline may reflect the cost of 
facilities in service prior to the end of the test period if the end of 
the test period is beyond the effective date of the proposed rates.
    NET suggests a clarification that permits adjustments for 
facilities for which a certificate application is pending, subject to 
the requirement of Sec. 154.303(c)(2) that such costs be excluded if 
the facilities are not in service by the end of the test period.
    In light of the above comments, the proposed regulation has been 
modified to allow adjustments for facilities for which a certificate 
application is pending, subject to the requirement of 
Sec. 154.303(c)(2) that such costs be excluded if the facilities are 
not in service by the end of the test period.
    Columbia urges the Commission to consider a more forward looking 
test period. That is, allow pipelines to project the more routine cost 
items (such as inflation and labor) one year beyond the end of the 
current nine-month test period. This comment is, in effect, seeking an 
extension of the test period. This the Commission is reluctant to do. 
The regulations are constructed so that the rate paid by a customer is 
based upon the costs incurred previously by the pipeline for providing 
the services to that customer. The adjustment period allows for the 
inclusion in rates of costs for items that are not a benefit to the 
rate payers at the time of filing but will be within a reasonable time 
thereafter. The Commission has set the cut off point for such costs at 
9 months past the end of the chosen base period. The commenters have 
not shown that this period is unreasonable.
    d. Section 154.304 Format of Statements, Schedules, Workpapers, and 
Supporting Data. Section 154.304 replaces current Sec. 154.63(c)(3) and 
Sec. 154.63(e)(4).51 The Commission requires a narrative 
explanation of each proposed adjustment to base period actual volumes 
and costs.

    \51\This regulation appeared in the NOPR as Sec. 154.305.
---------------------------------------------------------------------------

    INGAA states that the requirement to provide accounting workpapers 
to support data or summaries reflecting the pipeline's books of account 
will place a burden on the companies since the accounting workpapers 
could be voluminous. The information should only be provided when 
specifically requested by the Commission auditor. This suggestion has 
been adopted.
    With respect to statements, schedules, work papers and supporting 
data, NGSA recommends that the filing format be standardized by 
requiring that narrative explanations be placed at the beginning of the 
specific statement or schedule to which they apply. To reduce discovery 
burden rate case statement updates should be provided to parties 
specifically requesting them, as well as to the Commission. This 
suggestion has been adopted.
    e. Section 154.305 Tax Normalization. Section 154.305 replaces 
current Sec. 154.63a with revisions to clarify the section's 
applicability.52 Pipelines will continue to be required to use tax 
normalization to compute the income tax component of the cost-of-
service and to adjust rate base by accumulated deferred income taxes 
related to components of the cost-of-service.

    \52\This regulation appeared in the NOPR as Sec. 154.306.
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    f. Section 154.306 Cash Working Capital. Section 154.306 replaces 
current Sec. 154.63b.53

    \53\This regulation appeared in the NOPR as Sec. 154.307.
---------------------------------------------------------------------------

    g. Section 154.307 Joint Facilities. Section 154.307 replaces 
current Sec. 154.63(e)(3) with stylistic changes.54

    \54\This regulation appeared in the NOPR as Sec. 154.308.
---------------------------------------------------------------------------

    h. Section 154.308 Representation of Chief Accounting Officer. 
Section 154.308 replaces current Sec. 154.63(e)(5) with only stylistic 
changes.55

    \55\This regulation appeared in the NOPR as Sec. 154.309.
---------------------------------------------------------------------------

    i. Section 154.309 Incremental Expansions. Section 154.309 requires 
separate statements and schedules for incremental facilities, including 
those with Commission imposed at-risk provisions.56 In some cases, 
pipelines maintain independent rate schedules (incremental rates) that 
are based on the costs of specific facilities. Separate statements and 
schedules for such facilities need to be provided to permit a proper 
evaluation of the rates based on the costs of those facilities. When 
pipelines have been unable to fully subscribe certain construction 
projects, the Commission has permitted construction to go forward with 
the pipeline placed at-risk for recovery of the costs associated with 
the unsubscribed capacity. Separate statements and schedules for at-
risk facilities need to be provided so that the Commission can compare 
the revenue generated from the use of the facilities with the cost of 
the facilities, and determine whether to remove the at-risk condition.

    \56\This regulation appeared in the NOPR as Sec. 154.310.
---------------------------------------------------------------------------

    The Pacific Northwest Commenters object to the requirement that 
separate data be provided for major expansions since the pipeline's 
last rate case. They are concerned that this provision may impinge upon 
the development of policy in Docket No. PL94-4 on the pricing of 
pipeline facilities. Pacific Northwest Commenters suggest that until 
the Commission announces its policy, it would be better served to limit 
the scope of Sec. 154.309 to existing incrementally priced services. 
NGSA makes a similar argument.
    Since the NOPR was issued, the Commission has issued its policy 
statement regarding the pricing of pipeline facilities; and so, Pacific 
Northwest Commenters concerns are moot.57

    \57\Pricing Policy For New And Existing Facilities Constructed 
By Interstate Natural Gas Pipelines, Docket No. PL94-4-000; 
Statement of Policy, 71 FERC para.61,241 (1995).
---------------------------------------------------------------------------

    Northern Border argues that this section appears to require the 
filing of a rate case within a rate case for facilities certificated 
with at-risk provisions. Northern Border states that this section 
appears to require a complete set of filing exhibits to be created for 
each separate at-risk facility even if the at-risk condition is not 
likely to be triggered and/or the company is not requesting within a 
rate case filing to remove the at-risk provision. Northern Border 
proposes that, if an at-risk provision has been triggered or it is 
certain to be triggered during a reasonable forthcoming period, then 
the company should be required to include in its filing any necessary 
information to support it position in that regard.
    INGAA seeks clarification that the Commission did not intend for 
the pipeline to file separate schedules under Sec. 154.312 and 
Sec. 154.313 for each major expansion. INGAA proposes that Sec. 154.309 
be eliminated and that the Commission continue the current practice of 
including the information in Schedule C. Alternatively, the data 
required could be provided in summary form. Columbia does not object to 
providing certain summary schedules with respect to incremental and 
expansion facilities, but objects to the apparent requirement to 
provide a full filing pursuant to Sec. 154.312 and Sec. 154.313. 
Columbia supports INGAA's comments and further requests the Commission 
clarify what is meant by the term ``major expansion.''
    El Paso also argues that the regulations should provide for 
flexible exhibits that produce information sufficient to demonstrate 
the pipeline's position with respect to incremental, at-risk, and major 
expansions since the pipeline's last rate case.
    Great Lakes argues that this section: (1) Is premature until the 
Commission 

[[Page 52978]]
determines its course of action in Docket No. PL94-4; (2) fails to 
recognize that each cost may not be separately identifiable; and (3) 
magnifies the size of an applicant's filing (in Great Lakes's case, at 
least 7 separate sets of schedules and statements would be required). 
Great Lakes urges the Commission to delete proposed Sec. 154.309. 
TransCanada filed similar comments.
    NI-Gas supports the separate reporting of the costs associated with 
facilities subject to an at-risk condition. NI-Gas also states that a 
pipeline should be required to report the revenues associated with at-
risk or incremental facilities and the reasons why it allocated the 
revenues to those facilities, rather than unsubscribed ``general'' 
system capacity.
    The Commission did not eliminate proposed Sec. 154.309 as 
requested, but did modify this section in several respects. First, the 
Commission deleted the requirement that this section applies to ``every 
major expansion since the pipeline's rate case.'' This information may 
be too broad and need not be filed with the rate case filing. In this 
respect, the Commission notes that Sec. 154.312, Statement O, as 
modified by this rule, requires pipelines to list each major expansion 
and abandonment since the pipeline's last rate proceeding and provide 
the costs by function. This summary data should provide adequate 
information for parties in the proceeding to evaluate significant 
changes since the last rate case proceeding.
    The Commission will require that the pipeline provide a summary 
statement that lists the cost-of-service components and revenues 
associated with each incremental and at-risk facility in lieu of 
separately identifying each cost on the statements and schedules 
contained in Sec. 154.312 and Sec. 154.313. However, where applicable, 
appropriate cross references to Sec. 154.312 and Sec. 154.313 should be 
made. This change eliminates the bulk of the burden imposed by the 
section as proposed. The summary statement should provide pipelines 
with the flexibility sought by El Paso.
    Permitting the summary statement, in lieu of a separate 
identification of each cost and revenue contained on the statements and 
schedules in Sec. 154.312 and Sec. 154.313, balances the parties' needs 
for informative data, but will not be so burdensome as to require a 
``rate case within a rate case'' as suggested by some parties.
    Lastly, with respect to NI-Gas' request to include revenues 
associated with the incremental and at-risk facilities, the pipeline 
will need to cross reference the statements and schedules contained in 
Sec. 154.312 and 154.313. These sections include the recording of 
revenues (For example, Schedule G-4). Therefore, the information sought 
by NI-Gas will be provided in the pipeline's filing.
    j. Section 154.310 Zones. Section 154.310 requires a cost breakdown 
by zone if the pipeline maintains records of costs by zone.58

    \58\This regulation appeared in the NOPR as Sec. 154.311.
---------------------------------------------------------------------------

    Panhandle commented that proposed Sec. 154.310 and Sec. 154.312 
were inconsistent. Proposed Sec. 154.310 required cost-of-service by 
zone only if a pipeline proposes a zone rate method, while proposed 
Sec. 154.312 appeared to require a cost-of-service for each zone 
regardless of the underlying rate method. Panhandle suggested 
clarifying language. The Commission agrees with Panhandle. Section 
154.310 requires a cost-of-service by zone only if a pipeline maintains 
records of costs by zones and proposes a zone rate methodology based on 
these costs. Section 154.312, Schedule I-1 (c), has been modified as 
proposed by Panhandle.
    SoCal states that if the company files for zone rates, whether to 
continue existing zone rates or to establish zone rates, a cost 
breakdown should be mandatory. However, the Commission does not order 
companies to maintain plant accounts and cost-of-service by zone. This 
is an election made by the individual company. Section 154.312, 
Schedule I-3 (a) requires a company to show how the cost-of-service is 
allocated among rate zones by function. This schedule should give SoCal 
the information it seeks by zone.
    k. Section 154.311 Updating of Statements. The Commission requires 
certain Statements and Schedules to be updated, once, 45 days after the 
end of the test period.59 This provision has been changed from the 
NOPR which required the statements and schedules to be updated, 
quarterly, for each month of the test period.

    \59\This regulation appeared in the NOPR as Sec. 154.312.
---------------------------------------------------------------------------

    In response to comments, the Commission agrees that quarterly 
updates are burdensome and will require only one update at the end of 
the test period.
    Northern Border states that this provision should not apply to 
pipelines with cost-of-service tariffs. Because such pipelines do not 
rely on test-year adjustments, updates would be burdensome and 
unnecessary. This section was created to govern the vast majority of 
the regulated entities that do not have cost-of-service tariffs. We 
agree that the update is not necessary for a pipeline with a cost-of-
service tariff. Therefore, Northern Border's request for a waiver of 
this section is granted.
    MoPSC requests clarification that the filing of updated material 
for the test period does not amend the company's direct case. MoPSC 
contends it is essential that the Commission clarify that the required 
filing of updated actuals will not amend/change a company's direct case 
and that updates are intended to provide the Commission and interested 
parties with additional information to help evaluate the projections 
and estimates used by a company in its direct case. The Commission 
grants both these clarifications.
    l. Section 154.312 Composition of Statements. Section 154.312 
replaces current Sec. 154.63(f) with revisions to the statements and 
schedules as discussed below.60 Many changes are self explanatory 
or merely editorial and are not discussed here.

    \60\This regulation appeared in the NOPR as Sec. 154.313.
---------------------------------------------------------------------------

    1. Schedule B. INGAA requests that regulatory assets and 
liabilities not be listed on Statement B unless entries specifically 
are reflected in the computation of rate base.
    The Commission agrees with INGAA's comments and clarifies that 
regulatory assets and liabilities should only be listed if the pipeline 
seeks recovery of these items in the computation of rate base.
    2. Schedule C. Columbia states that only the end of base period 
balances and test period adjustments and end of the test period 
balances should be reflected on this statement. The Commission 
disagrees. These beginning balances are currently required and have 
proved to be necessary for a complete analysis of the pipeline's plant 
and examination of specific plant changes.
    NGSA recommends that Account 117 include volumes, as well as costs, 
by subaccount and show activity by month for the base period, including 
Account 117.4 (gas owed to system gas). NGSA believes this modification 
is necessary to track the use of system gas.61 The Commission 
agrees with NGSA's recommendation that Account 117 should include 
volume data and show monthly activity to track the use of system gas. 
In this restructured era, an accurate accounting of system gas is 
important for the determination of the appropriate level for storage 
gas and of 

[[Page 52979]]
capacity retention. Proposed Statement C was modified accordingly.

    \61\NGSA in its comments to the companion rule suggested 
modifications to the Commission's proposal by retaining Account 117 
as ``Base Gas'' and Account 164 as ``Working Gas''.
---------------------------------------------------------------------------

    3. Schedule C-1, End of Base Period Plant Functionalized. Schedule 
C-1 does not refer to storage facilities as ``underground'' or 
``local'' and requires the showing of plant in service by functional 
classifications.
    INGAA states that the same information is proposed to be required 
by both Schedule C-1 and Statement I. INGAA's observation is correct, 
proposed Schedule C-1 and proposed Statement I were duplicative with 
regards to the requirements to reflect plant by zones and expansions. 
Therefore, these requirements have been removed from revised Schedule 
C-1.
    INGAA and Columbia commented that proposed Schedules C-1 and C-2 
appear to break information currently contained only in Schedule C-1 
into two schedules. INGAA recommended that proposed Schedule C-2 be 
deleted and the information be included in Schedule C-1 in order to 
avoid an unnecessary administrative burden.
    Proposed Schedule C-1 provided data on the functional gas plant for 
the base period. Proposed Schedule C-2 provided data on the functional 
gas plant for the test period. The Commission agrees with INGAA and 
Columbia that these schedules should be combined in order to avoid 
unnecessary administrative burden. Accordingly, Proposed Schedule C-1 
has been modified to include the data provided in Proposed Schedule C-
2. Proposed Schedule C-2 was deleted and all subsequent schedules 
renumbered.
    Columbia states that the only significant data necessary is total 
plant in service (as reflected in Account 101, et. seq.) and not data 
by Account 300, et seq. Columbia states that the language specifying 
that plant in service be detailed by account numbers should be deleted. 
The Commission did not adopt Columbia's suggestion. The current 
regulations require gas plant in service by plant account. The 
Commission has found that account balances for plant in service are 
critical to the analysis of changes in gas plant and determination of 
depreciable plant.
    4. Schedule C-2 (Proposed Schedule C-3). INGAA states that listing 
every work order separately will result in unneeded and unhelpful 
detail. INGAA suggested grouping by category of items whose cost is 
less than a threshold level of $500,000. To reduce administrative 
burdens, the Commission adopted INGAA's proposed modification to permit 
grouping by category of items where the cost is less than $500,000. 
Proposed Schedule C-2 was modified accordingly.
    Columbia states that this information is provided in Schedule C-1 
as plant adjustments and Schedule C-2 should be eliminated.
    The Commission agrees that the plant totals are included in 
Schedule C-1 as plant adjustment. However, the details of the plant 
adjustments (i.e., work orders) are not reflected. The components of 
these plant adjustments provide the data necessary to determine the 
accuracy of the proposed plant adjustments and to determine which 
additions are pending certificate authorizations.
    5. Schedule C-3 (Proposed Schedule C-4). Columbia and INGAA state 
that Schedule C-3 requires duplicate information and should be 
eliminated because the pipeline customers own the majority of the gas.
    This is true for those pipelines whose storage gas is owned by the 
customers. However, many pipelines still own a portion of the storage 
gas as base and system gas. Those pipelines must report this data.
    AGD and Brooklyn Union recommend that this schedule specify: (1) 
Monthly storage gas quantities; (2) the term ``storage projects owned'' 
be defined to include storage projects under contract to a pipeline; 
(3) data on customer-owned gas, separately states the amounts held in 
Account Nos. 117 and 164; and (4) pipeline owned and contracted storage 
volumes be shown separately for Account 117 gas and Account 164 gas. 
AGD concludes that these modifications will assist pipeline customers 
and Commission staff in analyzing a pipeline's usage of storage 
resources.
    Modifying the regulations as recommended by AGD and Brooklyn Union 
will aid in our investigation of the storage projects. The Commission 
clarifies that the term ``storage projects owned'' includes storage 
projects under contract to a pipeline. We note that customer-owned gas 
is not reflected on the pipeline's books and therefore, is not included 
in Account 117. Further, Schedule C-3 must reflect the monthly volume 
activity in Account 117 and separately state the amounts and volumes 
held in Account 117 for pipeline owned and contracted storage.
    Columbia requested that the Commission reestablish the ability to 
cross reference Schedule C-3 to FERC Form No. 2. The Commission agrees 
that FERC Form No. 2 is an integral part of the Commission's analysis 
of the pipeline's filing. Accordingly, the revised regulation 
reestablishes a pipeline's ability to cross reference Schedule C-3 with 
FERC Form No. 2.
    6. Schedule C-4 (Proposed Schedule C-5). Williston states that this 
schedule should be eliminated because the requested data is also 
provided in FERC Form No. 2. The Commission did not adopt Williston's 
suggestion. The Commission agrees with Williston that the information 
required on this schedule would be duplicative if the pipeline has not 
changed its procedures since it last filed FERC Form Nos. 2 and 2-A. 
Therefore, the Commission's clarifies that Schedule C-4 must be 
reported only if the pipeline has changed any of its procedures since 
the last filed FERC Form Nos. 2 or 2-A.
    7. Schedule C-5 (Proposed Schedule C-6). Columbia recommends that 
since Accounts 101 and 106 can only be included in a pipeline's gas 
operations, this schedule should be eliminated.
    Schedule C-5 is reported only if significant changes over $500,000 
have occurred since the end of the year reported in the company's last 
FERC Form No. 2.
    8. Schedule D. Columbia and INGAA recommend that only the base 
period adjustments and test period balances be reflected on this 
schedule. Furnishing these beginning balances is required by the 
current regulations. The Commission has found that the beginning 
balance is necessary for the analysis of the pipeline's plant reserve 
and examination of specific plant reserve changes.
    Columbia states that any authorized negative salvage value 
reflected as a separate part of Account 108, should be required only if 
the negative salvage value is defined and looking forward. Adopting 
Columbia's suggestion would also require creating a separate subaccount 
to specifically identify these amounts in the reserve account and 
enhance our analysis of the negative salvage account balance and 
associated rates. Accordingly, proposed Statement D was revised to 
require that any included negative salvage value must be separately 
maintained in a subaccount of Account 108.
    9. Schedules D-1 and D-2. Proposed Schedule D-1 required actual end 
of base period depreciation, depletion, and amortization balances by 
functional classifications. Proposed Schedule D-2 required projected 
end of test year balances for depreciation, depletion, and amortization 
by functional classifications. Columbia and INGAA state that Proposed 
Schedule D-2 should be deleted because the information is currently 
reported on Statement D.
    Proposed Schedule D-1 provides the functional gas plant for the 
base period and Proposed Schedule D-2 provides 

[[Page 52980]]
the functional gas plant for the test period. The Commission agrees 
with Columbia and INGAA that these schedules could be combined in order 
to avoid unnecessary administrative burden. Therefore, proposed 
Schedule D-2 was deleted and combined with Schedule D-1 and Schedule D-
3 was renumbered as Schedule D-2.
    10. Schedule D-2 (Proposed Schedule D-3). Williston states that 
this schedule should be eliminated because the data is also provided in 
FERC Form No. 2. However, Schedule D-2 (proposed Schedule D-3) is filed 
only if a policy change has been made effective since the last annual 
report on FERC Form No. 2 or 2-A was filed with the Commission. Thus, 
there is no need to make the change suggested by Williston.
    11. Statement E. Panhandle proposes to revise the instructions for 
Statement E to reinstate the deletion of the gas stored underground. In 
response to numerous commenters in the companion rule, the Commission 
decided to permit a pipeline, in its next rate filing, to choose either 
the fixed asset or the inventory model for storage accounting. 
Therefore, all current gas stored underground previously recorded in 
Account 164 will be recorded in Accounts 117.2, System Balancing Gas, 
and 117.3, Gas Stored in Reservoirs and pipelines-noncurrent. Account 
117.2 will be reflected in a pipeline's gas plant on Schedule C. Only 
gas for resale from underground stored recorded in Account 117.3 will 
be reported in Statement E. No additional recognition will be accorded 
system gas in working capital, since no working capital requirement 
should result from system balancing. Therefore, Statement E reinstates 
the gas for resale underground storage. If a pipeline believes it can 
show a working capital requirement for system gas, then the pipeline 
can file for cash working capital in accordance with Schedule E-1.
    Panhandle states that companies should continue to have the right 
to request working capital treatment for other items. The Commission 
clarifies that a company has the right to request any working capital 
treatment of any justifiable item and the Commission can rule on the 
appropriateness of that item based on the evidence presented.
    12. Schedule E-3. Northwest/Williams recommend that this schedule 
should only be submitted by a pipeline utilizing an authorized PGA 
mechanism. The Pacific Northwest Commenters recommend that Schedule E-3 
be submitted by any company which utilizes an authorized PGA mechanism 
or which utilizes storage for system balancing. In addition, Panhandle 
states that the instructions for Schedule E-3 should be revised by 
deleting the first sentence restricting this schedule of gas stored 
current to applicants utilizing a PGA mechanism.
    Currently, there are only two pipelines with authorized PGA 
mechanism and these pipelines have no storage. Thus, there is no reason 
to maintain this schedule as originally proposed.
    Panhandle does not support the change in accounting for storage and 
therefore believes current Schedule E-2 should be retained. Since 
pipelines may have gas for resale in underground storage, the current 
Schedule E-3 will need to be reinstated to allow the reporting of this 
gas. Thus current Schedule E-2, Storage Gas Inventory, is reinstated as 
revised Schedule E-3.
    14. Schedule E-4. NGSA recommends that Schedule E-4 (Storage 
Inventory) show and explain the source, pricing, each use of working 
gas (i.e., system balancing, working gas for sale, etc.) and be 
reconciled to Account 117.3 (injected base gas, recoverable) and 
Account 117.4 (gas owed to system gas). NGSA deems this modification 
necessary to track the use of system gas. (NGSA in its comments to the 
companion rule suggested retaining Account 117 as ``Base Gas'' and 
Account 164 as ``Working Gas''.) The Pacific Northwest Commenters 
believe that this information on storage inventory will be valuable for 
any pipeline utilizing storage to provide system balancing.
    The Commission agrees with NGSA's and Pacific Northwest's62 
comments that the tracking of system gas is important. The companion 
rule allows pipelines to use either the fixed asset model or the 
inventory method for storage accounting for system gas included in 
Account 117. Thus, system gas will be reported in Account 117.2 will be 
accounted for or tracked on Schedule C. Account 117.3 will be reported 
on Schedule E-3 and will reflect only gas for resale from underground 
storage. No working capital requirement results from Account 117.4. 
Therefore, proposed Schedule E-4 is not necessary and will be deleted.

    \62\See comments on Schedule E-3.
---------------------------------------------------------------------------

    15. Proposed Schedule E-5. INGAA states that proposed Schedule E-5 
shows cross-references to other schedules containing the computations 
and explanations, and so, this filing requirement should be made 
optional to serve pipelines filing a lead-lag study.
    Columbia states that the proposed schedule should be consolidated 
with Statement E or eliminated because it requires the components of 
working capital to be set forth in sufficient detail and contain cross 
references to other schedules containing the computations and 
components of working capital.
    The Commission agrees with INGAA's and Columbia's comments and 
incorporated the language of proposed Schedule E-5 into Statement E and 
did not promulgate proposed Schedule E-5.
    16. Statement F-2. NDG recommended requiring the filing pipeline to 
submit a table showing the pipeline's earned rate of return on rate 
base and earned return on equity for the base period. Thus, the 
Commission and interested parties would be able to (1) evaluate whether 
the Commission orders on previous rate filings have enabled the filing 
company to earn the Commission authorized return and (2) evaluate the 
pipeline's proposed revenue requirements.
    The Commission disagrees with NDG's recommendations to modify 
proposed Statement F-2. The information can be calculated from data 
available in FERC Forms No. 2 and 2-A.
    17. Statement G, Revenues, Credits, and Billing Determinants. 
Statement G replaces current Statement G (Gas operating revenues and 
sales volumes). The revised Statement G is a summary of information on 
all jurisdictional services. Statement G must be filed with the rate 
case. More specific information, in Schedules G-1 through 6, must be 
filed 15 days later. Schedules G-1 through 6 must also be served on 
parties that request such service within 15 days of the filing. The 
sixth paragraph of current Statement G(e), concerning credits, is now 
found in Statement G subparagraph (2). The Commission requires the 
allocated GSR component of IT rates to be unbundled and treated as a 
separate component for rate case filing purposes in order to better 
compare and reconcile the cost-of-service to revenues. AGD supports the 
portion of Statement G which provides that the filing must identify the 
GSR component of interruptible transportation revenue as a ``transition 
cost.''
    The Industrials suggest standardized customer names or some way to 
correlate data between Statement G and the proposed Index of Customers 
(Sec. 154.111). The Commission does not believe it is necessary to 
standardize names. Based on our experience, it is not difficult to 
correlate the names used in Schedules G-1 and G-2 with those in the 
Index of Customers.
    AGD recommends that Statement G be modified so that Statement G is 
required to be submitted to ``all Customers'' not 

[[Page 52981]]
just to ``all affected customers.'' Under the revised regulation, all 
customers who are customers of the pipeline on the date of the filing 
of the rate case will receive an abbreviated form of the filing. Any 
customer who has a standing request for service of the full filing will 
receive the full filing, including the summary Statement G on the date 
of the filing. Any other customer may request service of the complete 
filing and receive the complete filing (with the summary Statement G) 
within 48 hours of the request.
    INGAA proposes that Statement G only include totals by rate 
schedules and zones. Some pipelines proposed that detailed information 
only be provided for customers that pay the maximum rate and that 
aggregate information would be provided for customers that receive 
discounts.
    Panhandle, Great Lakes, and ANR/CIG state that the proposed 
regulations governing Statement G significantly expand the previous 
requirements and increase the burden on pipelines, without demonstrable 
benefit.
    CPCo and MGSCo believe that the Commission's proposed Statement G 
would require pipelines to reveal commercially sensitive information. 
Panhandle, INGAA, ANR/CIG, Great Lakes, and El Paso state that 
pipelines should not be required to disclose commercially sensitive 
information in Statement G. CPCo and MGSCo believe that the Commission 
proposal should be modified such that information that is truly 
commercially sensitive need not be provided until a protective 
agreement covering such has been signed by the parties.
    The Agreement filed by INGAA and AGD contained a detailed 
alternative structure for Statement G. ANR/CIG also suggested revisions 
to the Commission's proposed Statement G reporting requirements.
    In light of the above comments, proposed Statement G has been 
modified substantially. The Commission has required a summary Statement 
G to provide enough information to begin the analysis of the rate case. 
However, the customer specific information is not required immediately; 
and, is only served on customers requesting service. The Commission has 
not adopted commenters' position that such detailed information is 
generically confidential, privileged, or proprietary. Rather, the 
Commission concludes that, in the ordinary course, such information 
should be publically available.
    In support of the proposal in the AGD and INGAA Agreement that 
contracts, discount information, and specific customer information 
relating to revenue impact and billing determinants would be submitted 
under seal, the Agreement stated ``AGD and INGAA agree that the 
information discussed below is commercially-sensitive and that its 
publication in mandatory filings may be detrimental to competition. AGD 
and INGAA believe that the goals of the regulatory process can be 
achieved without divulging information which is commercially-
sensitive.''63

    \63\Agreement at 2. In the initial comments, INGAA had expressed 
similar objection to public disclosure, stating that the ``proposed 
disclosures would undermine the pipelines' competitive position and 
would eventually stymie the same market competition that the 
Commission strives to foster''. See pp. 3, 6, and 9.
---------------------------------------------------------------------------

    The request that portions of the filing be treated as confidential 
on a generic basis finds little support in either the statutory 
framework or precedent. The NGA, on its face in section 4, requires 
pipelines to file contracts when seeking a rate change. Section 4(c) of 
the NGA provides that the pipeline shall file, under the Commission's 
regulations, and shall:

    Keep open in convenient form and place for public inspection, 
schedules showing all rates and charges for any transportation or 
sale subject to the jurisdiction of the Commission, and the 
classifications, practices, and regulations affecting such rates and 
charges, together with all contracts which in any manner affect or 
relate to such rates, charges, classifications, and services.

If confidentiality is required as to any specific contract, 
Sec. 388.112 of the Commission's regulations sets forth the procedure 
to be followed.64

    \64\18 CFR 388.112.
---------------------------------------------------------------------------

    With the introduction of competition in the interstate sale of gas, 
the Commission has sustained the claim of confidentiality with respect 
to price information where the party lacks market power, because the 
information could be used by competitors to undercut that party's bids. 
There is a different answer for transportation-related information. 
Unless proven otherwise, there is a presumption that a pipeline still 
retains a substantial degree of market power in the transportation of 
natural gas. Therefore, the Commission cannot presume the existence of 
competition for transportation. When the claim of confidentiality has 
been asserted in Commission proceedings, the Commission has required 
the claim to be supported with specificity, rather than with vague and 
speculative allegations of competitive harm,65 since the 
Commission must ``balance the need for public disclosure against the 
harm caused by release of the information.''66 The Commission 
intends to apply this standard to the customer-specific information in 
Schedule G.

    \65\Trunkline Gas Company, 49 FERC para.61,227 (1989).
    \66\ANR Pipeline Co., 65 FERC para.61,280 at 62,305 (1993) 
(ANR).
---------------------------------------------------------------------------

    18. Schedule G-1, Base Period Revenues. Schedule G-1 requires data 
on actual revenues for all services and customers, rather than solely 
on sales revenues, as currently required by Schedule G(a), or solely 
aggregate transportation revenues, as currently required by Schedule 
G(c). Schedule G-1 also requires: (1) Identification of revenues by 
customer, by rate schedule, by month, and by billing determinant (not 
adjusted for discounting) which is similar to the data currently 
required by Schedule G(e) fifth paragraph; (2) separate identification 
of revenues for short-term firm transportation services; (3) capacity 
release information; (4) an identification of affiliated customers; and 
(5) identification of rate schedules, where revenues are credited as 
currently required by Schedule G(c).
    NI-Gas supports Schedule G-1, specifically the reporting of the 
actual revenues, including actual billing determinants. Panhandle 
states that base period data on revenues (Schedule G-1) serve no 
purpose in the design of rates and should not be required because rates 
are designed using base period volumes as the starting point for 
determining an appropriate level of test period volumes, but base 
period revenues are not used.
    The Commission disagrees. This information is needed to compare the 
level of revenue change. The Commission notes that Schedule G(1) 
reduces the burden by nearly half, compared to the current regulations, 
because a pipeline is no longer required to show existing rates with 
test period volumes and proposed rates with base period volumes.67

    \67\See current Sec. 154.63, Statement G (a) and (b).
---------------------------------------------------------------------------

    The Commission clarifies, as requested by AGD, that the reference 
to ``associated revenues'' in Schedule G-1 in connection with released 
capacity relates only to the pipeline's collection of commodity charges 
received from replacement shippers.
    Pacific Northwest suggested that the Commission clarify that the 
``separate identification'' of capacity release transactions means that 
pipelines are to group together base period services which were 
rendered for replacement customers, and indicate which customers 
released the capacity to the replacement customer. The Commission is 
not requiring the separate identification of transactions for 

[[Page 52982]]
replacement customers. Since ``replacement'' customers have become 
``primary'' customers of the pipeline, they will be identified in the 
same manner as all other ``primary'' customers. The Commission is, 
however, requesting summary information in Statement G on capacity 
release revenues and throughput in order to evaluate the effect of the 
secondary market on the level of other services, such as interruptible 
transportation.
    Pacific Northwest suggested changing the fifth sentence to: For 
transportation services provided through released capacity during the 
base period, identify the released usage quantities and associated 
revenues by rate schedule, by contract, by month, and totals for the 
base period, and identify the customer that released capacity. The 
proposed regulation was modified similarly to Pacific Northwest's 
suggestion.
    19. Schedule G-2, Adjustment Period Revenues. Schedule G-2 requires 
information similar to that required in Schedule G-1.
    Panhandle and Great Lakes state that the requirements of Schedule 
G-2 should be modified as there is no need to provide the requested 
information by customer since rates are designed by rate schedule, not 
by customer. This suggestion was not adopted. The Commission believes 
that the customers should know the specific impact of the changes. 
Further, the Commission observes, this requirement is contained in the 
current regulations and we have not been persuaded that a change is 
necessary.
    Williston states that Schedule G-2 requires that billing 
determinants not be adjusted for discounting. Williston believes that 
this could cause a distortion in the calculation of proper rate levels. 
However, such an adjustment is contemplated in Statement J-1. The 
purpose of Statement G is to show actual and estimated throughput 
levels, unadjusted for discounting.
    ANR/CIG state that Schedule G-2 does not necessarily allow for the 
validation of either cost-of-service data or proposed rate design, as 
there is no linkage between designed and discounted rates.
    The Commission finds that this data is necessary because revenue 
should match the cost-of-service plus any surcharges.
    ANR/CIG also state that Schedule G-2 requires a level of detail 
which is simply not available with regard to discounted services. The 
Commission believes that if a pipeline's rates reflect discounted 
services, detailed information to support such discounts must be 
provided. The Commission believes that discounting information is 
available if the pipeline's proposed rates simply reflect a 
continuation of the discounts experienced in the base period. If, 
however, the pipeline is projecting different types of discounting, the 
pipeline must provide data to support such discounting in Schedule G-2. 
Indeed, the Commission believes that this information is necessary for 
the pipeline to meet its burden of proof that proposed rates are just 
and reasonable.
    Third, ANR/CIG state that the requirements of Schedule G-2 
exacerbate the confidentiality concerns raised by the industry both at 
the pipeline and shipper levels. Instead, ANR/CIG suggest that the 
Commission should require a revenue study using maximum rates and 
design determinants. The Commission's position on confidentiality is 
discussed supra.
    Columbia states that including the effect of rates that may have 
been in effect for a limited period of time during the base period will 
only serve to distort the revenue comparison. The Commission disagrees. 
The base period is a snapshot of a period of time and provides a 
necessary reference point for determining the rates for a subsequent 
period.
    Great Lakes states that monthly adjustment period information would 
not be useful and should not be reported in Schedule G-2. The 
Commission disagrees. This monthly information is currently required by 
Sec. 154.63(f), Statement G(b), and is used in determining trends in 
throughput and whether seasonal rates are appropriate. There has been 
no persuasive argument to change this requirement.
    Pacific Northwest contends that pipelines should not be required to 
attempt to identify expected future capacity releases by each customer 
that is expected to release capacity; rather, the pipeline should be 
required only to identify a total expected level of capacity release 
activity based on experience in the base period as adjusted. The 
Commission disagrees. The base period identifies capacity release data 
by customer and the pipeline must justify any changes to base period 
services in order to adequately explain any proposed changes in rates. 
If the test period data is not provided with the level of detail 
required, customers would not be able to challenge the pipeline's 
projections with respect to their deliveries.
    NI-Gas and Pacific Northwest ask the Commission to clarify that 
pipelines are expected to include in the adjustment period a 
representative level of services for which there may not be firm 
contracts with primary terms extending to the test period, including 
interruptible and short-term firm services. The Commission believes 
this is already required by the regulations. Pipelines have always had 
the burden to propose throughput based on actual experience adjusted 
for known and measurable changes. If the pipeline provided 
interruptible and short-term firm services during the base period, but 
did not include representative levels for such services in the test 
period projections, it must justify the difference in Schedule G-3.
    Pacific Northwest suggests the Commission change the fifth sentence 
to read as follows: Show separately any projected or representative 
level of released capacity usage quantities (Unadjusted for 
discounting) and associated revenues by rate schedule, by contract, by 
month, and totals for the projected period. The Commission believes 
that the proposed language change improves the text of the regulation. 
Accordingly, this suggestion has been adopted.
    NGSA states that to reconcile cost allocation and revenue recovery, 
surcharge revenues should be separately shown for each applicable 
surcharge; to reduce the filing burden, Schedules G-1 (Base Period 
Revenues) and G-2 (Adjustment Period Revenues) should show total 
volumes and revenues by month, rate schedule (separately showing 
overrun and capacity release), rate charged and zone of receipt/zone of 
delivery (or other category by which rates are charged). NGSA asserts 
that information by customer should be available only upon specific 
request. These comments are supported by Chevron and generally 
supported by IPAA. The Commission notes that Statement G(A)(1) requires 
the separate identification of revenues from surcharges. Further, as 
noted earlier, the revised regulations only require the service of 
customer-specific information contained in Schedules G-1 and G-2 upon 
request.
    Arizona Directs pointed out that proposed Sec. 154.313(j)(6)(ii) 
appears to apply to all of Statement G and, if so, it should be 
separately stated. Referring to Schedules G-1 and G-2, Arizona Directs 
states that this data is extremely useful and should continue to be 
provided by pipelines in their rate filings. Customers should not need 
to make a specific request to obtain this information. Arizona Directs 
states the specificity of (Statement G) and other filing requirements 
will serve to 

[[Page 52983]]
eliminate much current confusion. Arizona Directs' comments have caused 
us to reconsider the need for this requirement. We have deleted the 
proposed Sec. 154.313(j)(6)(ii) from the final rule, and have moved the 
subject language to the front of Statement G. As explained earlier, 
parties may request Schedules G-1 and G-2 from the pipeline to obtain 
this information.
    The Industrials state that revenue from transportation services 
should be shown by delivery point and/or zone to enable interested 
parties to determine if portions of a pipeline's system have become no 
longer used and useful and to conduct the appropriate geographic market 
analyses if a pipeline argues that it should be subject to non-cost-
based ratemaking. The Commission believes that these suggestions are 
too burdensome. These regulations are only intended to cover filing 
requirements for cost-based rates.
    20. Schedule G-3. Schedule G-3 is a description of adjustments to 
the base period. Schedule G-3 replaces current Schedule G(e) third 
paragraph. Schedule G-3 requires quantification of the impact of each 
proposed change rather than providing only throughput and contract 
level differences. The Commission believes this requirement is 
necessary in order for a pipeline to meet its burden of proof with 
respect to changes to billing determinants. This schedule should reduce 
follow-up data requests and shorten the time required to analyze and 
evaluate the pipeline's proposed changes.
    ANR/CIG and Great Lakes state that the proposed Schedule J-1 seeks 
the same information as G-3, but on a summary level. ANR/CIG suggests 
moving the requirements of Schedule G-3 to Schedule J-1 in order to 
place the supporting calculations with the required summary and enhance 
the use of this data.
    Statement G shows throughput data while schedule J-1 shows the 
billing determinants used to develop rates. As explained at Schedule J-
1, the two sets of data do not always coincide. Thus, a reconciliation 
is needed. Because the two statements serve different purposes, the 
Commission will not require that they be consolidated. However, 
Proposed Schedule G-3 has been modified and no longer refers to 
``discounting.''
    Columbia states that this regulation could be interpreted to 
require that a determination be made as to the impact of each change in 
the cost-of-service on each customer. The Commission clarifies that the 
intent is not to require a determination to be made as to the impact of 
each change in the cost-of-service on each customer but rather to 
explain and justify each adjustment.
    AGD recommends that Schedule G-3 information be reported only by 
pipeline rate zone and by rate schedule. This proposal was not adopted 
as the NGA requires that the pipeline provide information necessary to 
meet the burden that proposed rates are just and reasonable. The 
required information is a necessary part of this proof.
    NI-Gas supports Schedule G-3, specifically the requirement that 
test period adjustments to base period billing determinants be 
explained.
    21. Schedule G-4, At-risk Revenue. Schedule G-4 compares revenues 
generated by ``at-risk'' facilities to the cost of those facilities, as 
specified in Sec. 154.310.
    Columbia contends that the at-risk revenue requirements of proposed 
Schedule G-4 are redundant and unnecessary given the present 
requirements for certification of new facilities and expansions. The 
Commission disagrees. The Commission believes that this requirement is 
an important one providing a single list in a rate case filing of all 
facilities that have an ``at-risk'' provision. This will ensure that 
the Commission and all parties are able to thoroughly evaluate whether 
the at-risk condition has been satisfied or should continue to apply to 
the pipeline.
    NI-Gas argues this schedule should specify the reasons why the 
pipeline has assigned the particular revenues to the at-risk 
facilities, rather than to general unsubscribed system capacity. This 
suggestion was not adopted because Schedule G-4 requires the pipeline 
to provide at-risk revenues by customer by rate schedule. If parties 
disagree with the pipeline's assignment of revenues to specific 
customers or rate schedules, they may challenge the pipeline on this 
issue in the litigated phase of the rate proceeding. Pipelines are 
encouraged to address this issue at the time they file to remove their 
at-risk conditions.
    22. Schedule G-5, Other Revenues. Schedule G-5 collects revenue 
data regarding the sale of products extracted from natural gas and 
other activities reported in Accounts 487-495. New requirements to 
quantify and explain changes to base period actuals and provide 
information about releases, penalties, cash outs, other imbalances, and 
exit fees are incorporated in this schedule. Revenues from 
miscellaneous services still must be reflected in Account 495. Further, 
pipelines must explain the circumstances relating to revenues from 
``special'' types of ``X'' rate schedules. Revenues from the release of 
Account 858 capacity must be reflected as a credit to Account 858 in 
both Schedule G-5 and Schedule I-4.
    Panhandle maintains that the information required by proposed 
Schedule G-5 should only be required of those pipelines who do not have 
separate tariff provisions dealing with the disposition of cashout 
revenues, exit fees, and penalty revenues. The Commission disagrees. 
The items identified by Panhandle would apply to some items included in 
Account 495--Other Revenues. However, Schedule G-5 also requires 
information on sales of products extractions, revenues from gas 
processed by others, incidental gasoline and oil sales, rents from gas 
properties and interdepartmental rents (Accounts 490-494). Not 
requiring the information if a pipeline has a tariff provision on a 
non-related item will prevent the Commission and parties from receiving 
an accurate portrait of the pipeline's revenues for base and test 
period. Further, the information on all of the accounts is necessary 
for auditing purposes. The requirement is not intended to modify the 
pipeline's existing tariff provisions on releases, cashouts, imbalances 
or exit fees.
    23. Statement H-1. Columbia and INGAA states that the proposal to 
identify specific months when a proposed test period adjustment will 
occur serves no purpose in Staff's rate analysis and the company would 
be required to speculate an event which places upon the company an 
unnecessary burden with no probable benefit or purpose and should be 
eliminated. The Commission agrees with Columbia and INGAA's comments 
and has eliminated the requirement to identify the month of the 
proposed test period adjustment.
    The Pacific Northwest Commenters suggest that if the Commission 
intends to deal with rate case issues expeditiously, the Commission 
should require a pipeline to provide more adjustment information on 
Operation and Maintenance Expenses, than required in the proposed 
Statement H-1 description.
    Proposed Statement H-1 requires a detailed explanation of the basis 
for each adjustment with supporting workpapers. If additional 
information is necessary, the parties can, through a data request, 
obtain the information. We want to reduce the filing burden, not 
increase it by requiring the filing of more adjustment information.
    24. Schedule H-1(1). AGD recommends that expenses associated with 
project development including engineering, administrative and legal, 
and market development expenses be separately itemized by project. AGD 
is 

[[Page 52984]]
concerned that a pipeline may be accruing expenses over its cash 
expenditures. AGD recognizes that some accruals may be in order, 
however, it seeks data that will allow customers to test whether a 
pipeline is inflating its expenses in order to increase its rates. AGD 
recommends that the Commission require a pipeline to reconcile its base 
period expenses with actual cash expenditures as a part of Schedule H-
1(1).
    The Commission agrees with AGD's recommendation to require a 
pipeline to reconcile the base period expenses to actual cash 
expenditures. Proposed Schedule H-1 requires the disclosure and 
explanation of any special accruals and will be modified to require 
identification of all accruals which will met the AGD's recommendation.
    25. Schedules H-1(1)(c), H-1(3)(a), and H-1(3)(b). Northwest/
Williams recommends that Schedules H-1(1)(c), H-1(2)(a), and H-1(2)(b) 
should only be submitted by a pipeline utilizing an authorized PGA 
mechanism.
    The Commission rejects Northwest/Williams' recommendation. 
Compressor fuel usage is reflected on these schedules and is used to 
determine the appropriate fuel retention percentage whether or not a 
pipeline has an authorized PGA mechanism.
    Williston states that because fuel costs are recovered by a 
separate mechanism under a pipeline's existing tariff such costs should 
not be subject to review. Therefore, Schedule H-1(1)(c) should be 
eliminated. However, Williston contends volume data should be provided 
for gas balance purposes.
    The Commission must review all fuel costs, whether recovered in a 
separate mechanism or not. Fuel usage is an important element of a 
pipeline's costs and though these costs may be tracked, a pipeline's 
tracker may require a redetermination of the base level in a rate 
proceeding. This data is reflected on Schedule H-1(1)(c) and therefore, 
can not be eliminated. Since both volumes and costs are recorded in the 
fuel accounts, the data is readily available. Thus, Schedule H-1(1)(c) 
will continue to reflect both volumes (quantities) and costs 
(expenses).
    NGSA recommends that the following be grouped together and 
reconciled with purchased gas costs and other fuel reimbursement: 
Schedule H-1(1)(c) expenses and associated quantities applicable to 
Account Nos. 810, 811, and 812; Schedule H-1(3)(a) accounts used to 
record fuel use or gas losses; and Schedule H-1(3)(b) account used to 
record other gas supply expenses. NGSA maintains this modification 
would allow pipeline gas use to be better understood and tracked.
    We agree with NGSA that these schedules could be grouped together. 
However, we would prefer not to mix the fuel use schedule with the 
system gas reimbursement and exchange gas schedules. Since both 
Proposed Schedules H-1(3)(a) and (b) present primarily system gas 
transactions, we will combine them into a new schedule incorporating 
the same reporting requirements. Proposed Schedule H-1(1)(c) which 
reflects the company-used gas will not be revised.
    Columbia states with the advent of Order No. 636 and the 
elimination of the merchant function throughout the industry, the need 
to retain gas for operations is nearly universal. Because the rate that 
shippers pay for the gas that is ultimately retained by a pipeline 
varies, the rate assigned for reflecting an expense for gas used on the 
system in Schedules H-1 and H-1(1)(c) is not meaningful for purposes of 
reporting expenses in these schedules.
    The Commission agrees with Columbia. However Schedule H-1(1)(c) 
does not require the rate assigned for reflecting an expense for gas 
used on the system. Only the costs (expenses) and volumes (quantities) 
are required.
    26. Schedules H-1(2)(a) and H-1(2)(b). These schedules were 
required for pipelines with Commission approved PGA clauses in their 
tariffs. Since these schedules would apply to only two pipelines, there 
is no reason to maintain them in the regulations. The data reported on 
these schedules will be gathered through the data request process. 
Thus, Schedules H-1(2)(a) and H-1(2)(b) are deleted. All subsequent 
schedules will be renumbered.
    27. Schedule H-1(2) [Proposed Schedule H-1(3)].  Columbia 
recommends that Schedule H-1(3) be eliminated because the data is also 
provided in FERC Form No. 2.
    The Commission disagrees with Columbia that the data reflected on 
Schedule H-1(2) is provided in FERC Form No. 2. The data in the FERC 
Form No. 2 is reported on a calendar year basis and may not reflect the 
base period of a proposed rate filing.
    28. Schedule H-1(2)(j) [Proposed Schedule H-1(3)(k)]. NGSA 
recommends that proposed Schedule H-1(3)(k) be expanded under (iv) to 
require a pipeline to: (1) Document and demonstrate the derivation of 
the allocation bases used to allocate costs among affiliated companies; 
(2) identify (by account number) all costs paid to, or received from 
affiliated companies which are included in a pipeline's cost-of-service 
for both the base and test periods; and (3) explain each test period 
adjustment to base period actuals for intercompany costs included in 
the cost-of-service. NGSA considers this information necessary where a 
pipeline has affiliated gas related companies providing non-
jurisdictional services (e.g., marketing and gathering).
    The Commission recognizes that NGSA's recommendations would provide 
valuable information on the non-jurisdictional services of a pipeline. 
As recommended by NGSA, the language in paragraph (iv) of Schedule H-
1(2)(j) will be modified to incorporate NGSA's recommendations (1) and 
(2). Statement H-1 requires an explanation of all adjustments, and 
therefore, NGSA's recommendation (3) is not necessary.
    The Pacific Northwest Commenters recommends that the Commission 
ensure that Schedule H-1(3)(k) or a separate schedule provides: (1) 
Complete and clear disclosure of all corporate overheads allocated to a 
pipeline; (2) a full explanation of the service provided; (3) a 
demonstration that such service is not duplicative of functions 
performed by the pipeline itself; and (4) the savings that result from 
sharing such services with other corporate affiliates. In addition, the 
Pacific Northwest Commenters recommend that where a pipeline uses an 
allocation formula, the pipeline must show all calculations using the 
formula.
    Pacific Northwest Commenters's recommendations raise a valid area 
of concern regarding pipelines' overhead allocation. However, requiring 
a pipeline to provide the requested level of detail would be extremely 
labor intensive and it would be difficult for a pipeline to determine 
the savings without a costly study. We will clarify our instructions to 
incorporate language requiring a complete and clear disclosure of all 
corporate overhead allocated to the company with calculations 
underlying all allocation formulas.
    AGD states in order to determine how joint costs are allocated 
between a pipeline and its affiliated entities, the Commission should 
clarify its regulations by declaring that a pipeline bears the burden 
of proving that all charges from affiliates and all overhead charges 
are just and reasonable, including per book amounts. AGD further 
recommends that a pipeline's failure to fully support charges from 
affiliates and overhead allocations should be grounds for summary 
rejection of any claimed amounts, including amounts taken from its 
books.
    The Commission agrees with AGD and clarifies that a pipeline bears 
the 

[[Page 52985]]
burden of proving that all charges from affiliates and all overhead 
charges are just and reasonable. However, AGD's recommendation for 
summary rejection of any claimed amounts would be prejudging a 
pipeline's case prior to a appropriate hearing before this Commission. 
The Commission disagrees with this recommendation.
    Columbia and INGAA state that this schedule is voluminous and 
usually the only item of importance is overhead allocations, which are 
detailed on Schedule H-1(3)(f) (Account 923). They recommend that 
Schedule H(1)-(3)(k) should reflect only total amounts, not monthly 
amounts, and should reflect only major intercompany transactions. This 
can be accomplished by increasing the minimum dollar level reported to 
$500,000.
    Intercompany transactions affect many operating accounts, not just 
Account 923. However, to the extent details of intercompany 
transactions affecting Account 923 are provided in Schedule H-1(2)(j), 
pipelines may group all such transactions together in Schedule H-
1(2)(e). The Commission must scrutinize affiliate transactions, 
particularly those with marketing affiliates. Therefore, a high 
threshold is not appropriate.
    Panhandle states that a complete explanation and workpapers 
supporting each adjustment to base period expenses are already required 
by instructions for Statement H-1. There is no need to report these 
same adjustments separately in Schedule H-1(3)(k). The proposed 
regulation does not provide any justification or explanation for this 
added burden on the filing company.
    Proposed Schedule H-1(3)(k) is a workpaper reporting the details of 
these intercompany and interdepartmental transactions, by account. 
Statement H-1 reports only the actual book balances for operating 
expense accounts and proposed adjustments to these accounts. The 
account details are necessary to determine the appropriateness of the 
individual charges, which is only available on this schedule. Thus, the 
Commission will not revise Schedule H-1(2)(j) to reflect Panhandle's 
recommendation.
    Panhandle states that the additional requirement to report charges 
or credits to associated or affiliated companies should not be adopted 
since the amounts charged to affiliates are not included in O&M 
Expenses for the cost-of-service to the pipeline and are irrelevant to 
a determination of the pipeline's rates. Panhandle asserts further that 
the reporting of this data will add significantly to a pipeline's 
burden without providing any demonstrated need for the data.
    The Commission disagrees with Panhandle. Credits for charges to 
affiliates reduce the pipeline's operating expenses and therefore, are 
relevant to rate determinations. This requirement to report charges or 
credits to associated or affiliated companies is not a new requirement, 
and Panhandle has not provided a sufficient argument to change this 
requirement.
    29. Schedule H-1(2)(k) [Proposed Schedule H-1(3)(l)]. Panhandle 
states that the details of all lease payments over $500,000 are not 
required by Order No. 636, nor does this data appear to be required by 
any current articulated ratemaking policy of the Commission. Panhandle 
states that the Commission is imposing a significant new reporting 
burden without an explanation of why the information in Schedule H-
1(3)(k) is needed or how it is significant. Panhandle states that the 
requirement should be deleted or limited to leases applicable to gas 
operations. The Commission clarifies that this schedule is for 
reporting only the leases applicable to gas operations.
    30. Schedule H-2(1). Northwest/Williams states that the information 
included on Schedule H-2(1) can be found on other statements or 
schedules.
    Williston notes that Schedule H-2(1) rarely, if ever, draws 
inquiry. Williston believes the information on this schedule serves no 
regulatory purpose and should be deleted.
    The Commission's disagrees with Northwest/Williams and Williston 
that the information on Schedules H-2(1), H-3(3), and H-3(4) are not 
useful in evaluating a rate filing or serves no regulatory purpose. 
Schedules H-2(1) provides the reconciliation of depreciable plant to 
the gas plant reflected in Schedule C-1. The Commission is unaware of 
this information being available in another schedule.
    31. Statement H-3. NGSA recommends that Proposed Sec. 154.305, Tax 
Normalization, be incorporated into the instructions for income taxes 
under Sec. 154.312, Statement H-3. The Commission agrees with NGSA and 
modified Statement H-3, accordingly.
    32. Schedules H-3(1)-(3). Columbia avers that Schedules H-3(1) 
through (3) are rarely relied upon and should be eliminated and asks 
that the Commission clarify the exact intent of this schedule with 
respect to the proposed changes to Sec. 154.306(d)(2).
    INGAA states that Schedule H-3(1) is seldom used in rate analysis 
and should be deleted from the filing requirements. Columbia and INGAA 
states that virtually all interstate gas companies utilize ``full 
normalization'' concept in computing income taxes, therefore no 
differences exist and Schedule H-3(2) should be deleted from the 
filing.
    Northwest/William states that Schedule H-3(3) is not useful in 
evaluating a rate filing. Williston notes that Schedule H-3(3) rarely, 
if ever, draw inquiry. Williston believes the information on this 
schedule serve no regulatory purpose and should be deleted.
    Schedules H-3(1) was intended to report the reconciliation of book 
and taxable net income for a pipeline. The data as reported rarely 
reflect the same time period as the base period of the rate filing. 
Thus, we find the information has limited use in the overall analysis 
by our staff. Therefore, we have deleted Schedule H-3(1).
    Proposed Schedule H-3(2) had required reporting the differences 
between book and tax depreciation on a straight-line basis and the 
excess of liberalized depreciation for tax purposes. As noted by INGAA, 
most pipelines utilize the ``full normalization'' concept in computing 
income taxes, therefore no differences exist. Thus, the Commission will 
delete Schedule H-3(2) in the final rule.
    Proposed Schedule H-3(3) (New Schedule H-3(1)) reflects the state 
income taxes paid during the current and/or previous year covered by 
the test period. This is the only schedule of a rate filing where state 
income taxes paid by state are reflected. A thorough evaluation of the 
state tax rates, allocation factors, etc. is necessary to complete our 
analysis of a rate filing.
    33. Schedule H-3(4). Columbia recommends that the regulatory asset 
or liability, net of deferred tax amounts, be included in a 
reconciliation of Schedule H-3(4) or a workpaper be established to 
support the calculation of the regulatory asset or liability on 
Schedule B-2.
    The Commission agrees with Columbia that the regulatory asset or 
liability net of deferred tax amounts should be included in a 
reconciliation of Schedule H-3(4) or as a workpaper to support the 
calculation if included on Schedule B-2, if recovery of these costs are 
included in the computation of rate base. However, the gross amounts 
should also be included.
    Williston notes that Schedule H-3(4) rarely, if ever, draws 
inquiry. Williston believes the information on this schedule serves no 
regulatory purpose and should be deleted.
    Schedule H-3(4) presents accumulated deferred income taxes for the 
latest reporting period reflected on Statement B, Rate Base. The 
information 

[[Page 52986]]
reported on this schedule is vital for the determination of a 
pipeline's appropriate rate base level and will not be deleted. 
Proposed Schedule H-3(4) is renumbered Schedule H-3(2).
    34. Schedule H-4. INGAA states that the value of identifying the 
amounts expended or accrued during the rate period would not be 
comparative. This is so because there is usually an overlapping of a 
payment year and the reported year in a rate filing.
    Proposed Schedule H-4, except for editorial revisions, is identical 
to the prior regulations. INGAA's arguments have not persuaded us that 
there is no longer a need for this information to be reported. The 
amounts reflected on this schedule provide the Commission with a 
beginning point in the overall analysis of other taxes by furnishing 
the expended and accrued taxes for the base period.
    35. Schedule I-1, Functionalization of Cost-of-Service. Schedule I-
1 replaces current Statement I (Allocation of overall cost-of-service). 
The information on jurisdictional and nonjurisdictional sales 
allocation is eliminated as no longer needed.
    Schedule I-1(c) requires a pipeline that maintains its records by 
zones and proposes a zone rate methodology to provide functionalized 
costs for each zone. NGSA suggests that Schedule I-1 (c) should only be 
required for pipelines which separate their cost-of-service by zones. 
This is already the case. Section 154.310 requires a cost-of-service by 
zone only if a pipeline maintains records of costs by zones and 
proposes a zone rate methodology based on these costs. (See the 
discussion of Sec. 154.310.)
    NGSA also states that on Schedule I-1 (d), pipelines should be 
required to show the basis for allocating all costs (A&G, working 
capital) among functions. This showing will be required by the new 
regulations as it is required by the current regulations.
    36. Schedules I-2(i) and (ii). Schedules I-2(i) and (ii) replace 
present Schedule I-2. Schedule I-2(iii) requires an explanation of all 
changes in classification from the pipeline's currently effective 
rates. This information is required by current Schedule K-2, but is 
often difficult to distinguish from other information.
    INGAA, ANR, and CIG state that in Schedule I-2, classification of 
administrative and general expenses by account serves no useful purpose 
in rate analysis. Columbia notes that the classification of A&G costs 
by account is not useful if the pipeline allocates on a direct labor 
basis because the classification is fixed and recoveries occur through 
the demand charge. The Commission disagrees. A&G costs by account, are 
used to determine whether costs should be allocated by plant or direct 
labor under the Kansas-Nebraska method. Accordingly, the proposed 
requirement to provide A&G costs by account has not been removed.
    NGSA states that Schedule I-2 should require the classification of 
revenue credits by account. Revenue credits generally include Accounts 
490-495. The amounts reflected in several of these accounts (such as 
Account 492-Incidental Gasoline and Oil Sales) would ordinarily be 
classified as variable costs. However, the revenues from Account 493-
Rent From Gas Property would be classified as a fixed cost. Thus, a 
breakout of the classification of revenue credits by account is needed. 
The Commission modified proposed Schedule I-2 accordingly.
    37. Schedule I-3, Allocation of Cost-of-Service. Schedule I-3 
replaces current Schedule J. Schedule I-3(ii) bridges the gap between 
the cost-of-service and rates. The information required is now filed 
under current Schedule K-1. Schedule I-3(ii) follows a more logical 
order. It also recognizes that there are often several allocation steps 
before rates are actually calculated. Schedule I-3(iii) requires the 
formulae and allocation determinants. Schedule I-3(iv) requires an 
explanation of any changes from the current methodology, as is required 
under current Schedule K-2.
    38. Schedule I-4, Transmission and Compression of Gas by Others 
(Account 858). Schedule I-4 replaces current Schedule I-4. The 
revisions reflect current operations. Schedule I-4(i) requires 
information on the expiration date of each contract with an upstream 
pipeline. This will provide the Commission with information about the 
status of contracts. Schedule I-4(iii) requires the pipeline to report 
monthly usage volumes and monthly costs. Schedule I-4(v) requires 
minimal information about capacity release. It does not request any 
information on the identity of the contracting party. The information 
on revenues for releases is necessary to ensure that the pipelines' 
customers that pay the Account 858 costs receive a credit for revenue 
from capacity releases made by the pipeline of this upstream capacity.
    AGD states that Schedule I-4 should require the reporting of rates 
that are in effect subject to refund and a statement of last approved 
rates. AGD avers that the additional information will notify parties of 
any refund contingencies reflected in the pipeline's Account 858 costs 
and will provide a basis for the Commission to order the flowthrough of 
refunds to customers. The Commission declines to add this 
administrative burden. Such information is not generally required for a 
rate case.
    Northwest/Williams states that Schedule I-4 is no longer needed in 
an Order No. 636 environment. The Commission disagrees. Several 
pipelines retain capacity on upstream pipelines for operational 
purposes. This statement is needed to ensure that the level of such 
Account 858 costs is appropriate. We note that pipelines that do not 
retain upstream capacity for operational purposes do not need to file 
this information.
    The Industrial Groups note that proposed Schedule I-4(d) required 
monthly ``revenues'' but should refer to ``costs.'' The regulation has 
been corrected.
    39. Schedule I-5. Current Schedule I-5 requiring information on 
meters, is deleted.
    The NOPR had proposed a new Schedule I-5, Three-day peak 
deliveries, to replace current Schedule I-6. However, in light of 
comments and reconsideration, the Commission has determined that the 
information on 3-day peak deliveries is no longer generally useful in a 
rate case.68

    \68\Pipelines with non-jurisdictional sales must provide this 
data in Statement J.
---------------------------------------------------------------------------

    Northwest/Williams notes that, in a restructured environment, 
contract demand or MDQs are the primary basis for the design of firm 
transportation reservation charge, therefore the average 3-day peak 
information is not required for rate design for many pipelines. 
Northwest/Williams is generally correct; however, if a pipeline 
allocates costs on the basis of 3-day peaks, it must provide the basis 
for such allocation in Schedule I-3(c).
    40. Schedule I-5, Gas Balance. Schedule I-5 replaces current 
Schedule I-7 with the deletion of that schedule's last sentence.69

    \69\This schedule appeared in the NOPR as proposed Schedule I-6.
---------------------------------------------------------------------------

    Williston commented that this schedule should be deleted because it 
does not provide useful information for the design of base rates and 
requires information also required in FERC Form No. 2. Williston is 
mistaken. This schedule shows the pipeline's actual and projected 
physical operations. Such information assists the Commission and 
parties in evaluating whether the pipeline's rate design is appropriate 
for its operating characteristics. For example, if transportation 
throughput during the winter is significantly higher than during the 
summer, seasonal rates 

[[Page 52987]]
may be appropriate. Further, FERC Form No. 2 does not provide test 
period data.
    41. Statement J, Comparison and Reconciliation of Estimated 
Revenues With Cost-of-service. Statement J replaces current Statement 
K. Statement J will provide the same type of comparison as the current 
schedule, except that Schedule J specifically requires that Schedule G-
2 must be compared to Statement I. Statement J also requires that 
surcharges be reflected and recognizes that they are not derived from 
the cost-of-service, but are jurisdictional revenues. Also, discounting 
adjustments are provided in this statement.
    42. Schedule J-1, Summary of Billing Determinants. Schedule J-1 
will help correlate the volumes in Schedule G to the volumes used to 
develop rates.
    ANR and CIG state that this schedule seeks the same information as 
Schedule G-3, but on a summary level, therefore, the requirements of 
Schedule G-3 should also apply to Schedule J-1 so that the supporting 
calculations are provided with the summary. Williston states that this 
schedule duplicates existing information in Schedule G and should be 
deleted. The Commission disagrees. Schedule G-3 provides detailed 
information for each proposed adjustment to actual base period billing 
determinants while the information in Schedule J-1 is summarized for 
rate design purposes. Each schedule is retained because each serves a 
different purpose.
    Columbia states that the requirement to include surcharges as part 
of the revenues in Schedule G needlessly complicates the reconciliation 
process. Columbia advocates ignoring surcharges of limited duration or 
those subject to intermittent changes.
    The Commission recognizes that surcharges are not part of the cost-
of-service; however, surcharge information enables the Commission and 
parties to verify whether discounts are attributed to base rates or 
surcharges consistent with Sec. 154.109.
    AGD states that requirements should be supplemented to facilitate 
reconciliation calculations. AGD recommends requiring the pipeline to 
include a summary by rate schedule and by zone of billing determinant 
adjustments provided in Statement G. The Commission disagrees. As 
stated above, all reconciliations to billing determinants in the design 
of rates, including discounting adjustments, must take place in 
Statement J, not Statement G.
    43. Schedule J-2, Derivation of Rates. Schedule J-2 replaces 
current Schedule K-1. Schedule J-2 more clearly specifies what 
information is required and requires that costs and billing 
determinants be cross-referenced.
    44. Schedule J-2(iii). Schedule J-2(iii) requires the same 
information as current Schedule K-2.
     Pacific Northwest Commenters states that the Commission should 
expand the requirements to include a full narrative of the method used 
and step-by step calculations for each rate component of each rate. The 
Commission notes that such narratives are already required by Schedule 
G-3 and Sec. 154.201(b)(2).
    Columbia seeks clarification that the rate component referenced 
relates to a reservation/usage distinction and not a distinction based 
on the individual components of the cost-of-service. Columbia's 
interpretation is correct.
    NI-Gas suggests that pipelines be required to include schedules 
with Statement I that specify the impact of each proposed change in 
functionalization, classification, allocation or rate design. NI-Gas 
also suggests that the explanation of changes in rate derivation 
required by Schedule J-2 provide the impact on shippers of each change. 
Such impacts and explanations are not required under the current 
regulations and would be too burdensome as a generally applicable 
requirement. Section 154.201 (b)(2) requires a pipeline to support rate 
changes with step-by-step calculations and a written narrative to allow 
the parties to duplicate the pipeline's calculations. Section 154.313, 
Statements I and J, set out guidelines on how a pipeline should present 
its rate case. These requirements should provide sufficient information 
for a party to compute the impact of each change. Moreover, as the need 
arises, additional information may be provided through discovery at a 
hearing.
    The Industrial Groups state that this schedule should incorporate 
the Schedule K-2 requirements verbatim. The Commission did not adopt 
this suggestion because such requirements are found in 
Sec. 154.201(b)(2) and so, no change is necessary.
    45. Statement P. AGD, APGA, Consumers Power, Brooklyn Union, IPAA, 
JMC, Michigan, Pacific Northwest Commenters, Columbia Distribution, LDC 
Caucus, NDG, SoCal, and UDC support the initial filing of Statement P 
as part of the pipeline's rate filing. Many of these commenters note 
that Statement P is the key element in understanding a pipeline's rate 
filing. The availability of a properly prepared Statement P will help 
the pipeline's customers identify the real issues presented by the rate 
filing in time for the issues to be raised in initial interventions and 
pleadings. In addition, by requiring that Statement P be filed with the 
rate case, the number of protests should be reduced, since intervenors 
will only have to file protests when warranted, rather than 
protectively. IPAA states that filing Statement P with the rate case 
will allow for more expeditious processing of rate cases and will 
shorten the time period during which shippers can be held hostage to 
unjust and unreasonable rates collected subject to refund. The LDC 
Caucus notes that many state Public Utility Commissions (PUCs) require 
Local Distribution Companies (LDCs) to file testimony concurrently with 
their rate cases. Finally, Brooklyn Union notes in support of the 
proposed Statement P requirement, that the Commission's regulations 
require electric utilities to file testimony with rate increase 
filings.
    ANR/CIG, INGAA, NGT and Panhandle suggest, as an alternative, that 
a two-phase filing of Statement P be considered. In Phase I, pipelines 
would file testimony with the rate case concerning the rate case issues 
for which refunds are not a remedy. In Phase II, 15 or 30 days later, 
the pipeline would file remaining testimony on the ``boiler plate'' 
issues of cost-of-service, billing-determinants levels, rate base, etc.
    Columbia questions whether filing Statement P with the rate case 
filing has any significant benefit or purpose. Columbia supports 
maintaining the old rule (15-day lag) with respect to cost-of-service 
and rate testimony, but would not object to the new rule with respect 
to issues where rate refunds are not an adequate remedy.
    KNI contends that the extra 15 days presently allowed for filing 
Statement P provides time to develop more comprehensive and detailed 
testimony than would otherwise be produced if Statement P had to be 
submitted concurrently with all other schedules. KNI contends that more 
``polished'' testimony is likely to reduce discovery requests.
    MRT submits that requiring testimony to be filed concurrently with 
a rate case would create an enormous and unnecessary burden on 
pipelines. If, however, the Commission requires Statement P to be filed 
concurrently, then MRT proposes that the Commission take additional 
actions to reduce the burden. MRT requests that the Commission amend 
Sec. 154.304(a)(1) to lengthen the time from the last day of the base 
period to the filing date from 4 months to 5 months. Alternatively, MRT 
requests that pipelines not be required to file all schedules and 

[[Page 52988]]
statements with the rate case. Rather, schedules ``which are not 
essential to the Commission's development of a suspension order'' 
should be delayed until 15 days after the initial filing.
    Panhandle is concerned about the requirement that a pipeline must 
be prepared to sustain its burden of proof on the proposed changes 
solely on the basis of the prepared testimony submitted with its 
initial rate case filing. Panhandle states that this requirement could 
be interpreted to require a pipeline to anticipate and address every 
issue which may be raised in the rate case. In addition, Panhandle is 
concerned about the proposed regulation could be interpreted to 
preclude a pipeline from filing either supplemental direct or rebuttal 
testimony to address issues raised subsequent to the rate filing. 
Panhandle states that if the proposed regulations on Statement P are 
adopted, they should be clarified to make it clear that the pipeline 
has the right to file both supplemental and rebuttal testimony. 
Panhandle also states that if it is required to make its case-in-chief 
solely on the Statement P evidence, then the Staff and intervenors 
should not be allowed to use actual information for the test period as 
the basis of their testimony to show that the pipeline's estimates 
should be rejected and substituted with ``better'' actual numbers.
    A filing pipeline has the statutory burden to support its rates as 
just and reasonable. The Commission emphasizes that it expects 
pipelines to make their case-in-chief at the outset of the case and not 
rely on supplemental and rebuttal testimony for that purpose. However, 
as a proceeding progresses through the hearing process, the need may 
arise for the pipeline to supplement its prepared testimony and to 
present testimony in rebuttal to the adverse positions of others.
    m. Section 154.313  Schedules for Minor Rate Changes. The 
Commission intends that the filing burden for minor rate increases and 
rate decreases be less than that for other rate changes.\70\ Minor rate 
increases usually relate to a few schedules and are designed to bring 
such schedules into harmony with general tariff policy, to eliminate 
inequities, and to achieve other formal adjustments, in cases where any 
increase in revenue is subordinate to some other purpose. They include 
changes that are not designed to provide general revenue increases such 
as to offset increased costs or otherwise achieve a fair return on the 
overall jurisdictional business. Increases in rates or charges which, 
for the test period, do not exceed the smaller of $1,000,000 or 5 
percent of the revenues under the jurisdiction of the Commission will 
be considered minor. A change in rate level, no part of which directly 
or indirectly results in any increased charge to a customer or class of 
customers, will also be considered a minor rate change.

    \70\This regulation appeared in the NOPR as Sec. 154.314.
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    MoPSC recommends that the specific words ``rate decrease'' be added 
to Sec. 154.313, to clarify what requirements are applicable for rate 
decrease applications. In addition, MoPSC believes the threshold 
definition for minor rate changes is too broad. MoPSC recommends a 
minor rate decrease be redefined as ``a change which does not increase 
a company's revenues by $1,000,000 and does not directly or indirectly 
increase a rate or charge to any customer by more than 2%''.
    Comments concerning the threshold definition were considered. 
However, in light of the probable burden of reporting the rate impact 
to specific customers the threshold was not revised.
    NDG states that while the net impact of the ``minor'' change on the 
pipeline's customers in aggregate may be minimal, the impact on 
individual customers may be significant. NDG proposes that the standard 
for what constitutes a ``minor'' rate change be based on the magnitude 
of individual customer specific impacts resulting from the filing. Thus 
any rate change which increases a single customer's costs by more than 
the lesser of $250,000 or 10% of the amount previously being charged 
for the effected services, should be considered to be a major rate 
change and should be required to be supported by the full filing 
requirements.
    The Commission notes that the requirements for rate decrease 
filings should be clarified. These filings must meet the same criteria 
as rate increase filings, i.e., increases or decrease in rates or 
charges which, for the test period, do not exceed the smaller of 
$1,000,000 or 5 percent of the revenues under the jurisdiction of the 
Commission will be considered minor.
    Northern Border states that proposed Secs. 154.301, 154.311, and 
154.312 appear to have overlooked the ratemaking circumstances for 
pipelines utilizing a cost-of-service form of tariff. Northern Border 
believes Sec. 154.313 (minor increases) is designed for stated rate 
tariffs and would not be appropriate for the cost-of-service form of 
tariff. Therefore, Northern Border recommends that the Commission 
reinstate Statement N for pipelines with the cost-of-service form of 
tariff.
    With regards to Northern Border's comments recommending the 
reinstatement of Statement N for pipeline with the cost-of- service 
form of tariffs, the Commission understands the particular problems 
relating to this pipeline. Because of the nature of cost-of-service 
tariffs, Northern Border would only file under Sec. 154.314 when 
changes in approved rate of return or services are proposed. Any other 
filings to recoup costs are considered limited section 4 filings and 
would not be affected by this section. Cost-of-service tariff holders 
filings under this section must request a waiver of the test period 
adjustments and updating, since these pipelines are required to recover 
only actual costs, not adjusted costs. Therefore, the Commission will 
not provide any specific revisions for cost-of-service tariff holders.
    n. Section 154.314  Other Support for a Filing. Section 154.314 
provides that any company filing for a rate change is responsible for 
preparing prior to filing, and maintaining, workpapers sufficient to 
support the filing.\71\ In addition to the workpapers, the NOPR 
provided that certain other material, related to the test period, must 
be provided, such as copies of monthly financial reports prepared for 
management purposes, and copies of accounting analyses of balance sheet 
accounts.

    \71\This regulation appeared in the NOPR as Sec. 154.315.
---------------------------------------------------------------------------

    INGAA is opposed to the submission of financial reports prepared 
for management and the accounting analysis of such financial 
statements. INGAA states that this information is sensitive and is not 
generally provided to the general public.
    The requirement to provide this other material to the Commission 
upon request has been removed from the revised regulation. This 
information can be obtained by any party through discovery after a rate 
case has been set for hearing.
 5. Subpart E--Limited Rate Changes
    a. Section 154.401  RD&D Expenditures. Section 154.401 replaces 
current Sec. 154.38(d)(5).
    b. Section 154.402  ACA Expenditures. Section 154.402 replaces 
current Sec. 154.38(d)(6).
    c. Section 154.403  Periodic Rate Adjustments. New Sec. 154.403 
governs the passthrough, on a periodic basis, of a single cost item or 
revenue item not otherwise covered by subpart E, such as remaining 
purchased gas adjustment mechanisms, fuel loss and unaccounted-

[[Page 52989]]
for gas, and transition cost filings. These new regulations are 
consistent with current Commission policy governing these filings and 
generally reflect currently effective tariff provisions.
     The requirements of this section are subdivided into two parts. 
The initial part sets forth the minimum general requirements the 
pipeline must meet if it proposes, or the Commission requires, a 
periodic passthrough mechanism in the future. Significant among the new 
requirements of this section is the requirement to include a sample 
calculation in the tariff of the periodic rate change methodology. This 
sample calculation will assist the Commission and interested parties in 
understanding the proposal and ensure that the tariff language 
adequately explains the calculation steps. Further, it will provide a 
template for future filings under the tariff provision.
    The general requirements portion of Sec. 154.403 also include the 
requirement that all periodic rate change mechanisms include a 
description of the timing and methodology of the adjustments, including 
a description of all mathematical calculations. No steps should be 
excluded. Given the numbers from the source documents, anyone reading 
the tariff should be able to arrive at the rate component by following 
the steps described in the tariff.
    The second portion of Sec. 154.403 addresses the information to be 
submitted with each filing. The filings should contain workpapers which 
show the calculations described by the tariff. The Commission intends 
to collect sufficient supporting calculations to show a clear path from 
the source data to the rate component.
    Pacific Northwest Commenters generally support the proposed rules 
governing filings to track specific cost items where permitted. 
However, they believe the rules should be clarified to provide that (1) 
the general terms and conditions for a tracker must be approved and 
effective before a rate change is filed, and (2) any filing of a rate 
change under a tracker should include a summary table showing the 
impact on customers.
    The proposed regulation was not modified as Pacific Northwest 
Commenters suggest. Commonly, a cost tracker is adopted during a 
general rate proceeding where the tracker can be established prior to 
its use. The parties subject to the tracker have ample opportunity to 
explore issues related to the tracker in the rate proceeding. Further, 
there should be sufficient data available in the filing, tariff, and 
service agreement to permit each customer to determine the impact of 
the tracker adjustments. No customer impact statement will be required.
    CNG requests clarification to assure that these new requirements 
will not be retroactively applied to existing tariff provisions. The 
Commission affirms that any tariff provisions which have been approved 
will not be reviewed anew to determine their compliance with these 
regulations. Any future filings under currently effective tariff 
provisions must comply with Sec. 154.403(d), however.
    INGAA wants the Commission to expand the items tracked (allowed for 
periodic rate adjustments) to include costs incurred to comply with 
governmental regulations under federal and state environmental and 
safety laws. Pipelines should be afforded the option of a limited 
Section 4 filing or a deferred account to recover costs associated with 
compliance with environmental and safety regulations without incurring 
the costs of filing a full rate case.
    KNI would also like to see recovery of Department of Transportation 
(D.O.T.) pipeline user fees via a periodic rate adjustment (tracker). 
D.O.T. user fees are presently recovered as part of the cost-of-service 
reflected in the demand charge; however, these fees are similar to ACA 
and GRI charges and should be similarly tracked and recovered through a 
surcharge. KNI argues that, as it stands now, any changes in D.O.T. 
fees can only be reflected in rates by making a general rate case 
filing. KNI maintains that use of a tracker would avoid the need for a 
rate case filing to recover the significant increase in these federal 
taxes currently under consideration.
    The Commission is not adopting regulations for each different type 
of cost or revenue tracked. By adopting a generally applicable 
provision, the Commission avoids having to modify its regulations every 
time a new cost is tracked or ceases being tracked.
    The Commission is adopting regulations to be generally applicable. 
The specific types of costs or revenues subject to these regulations 
are not an issue for this rulemaking. Instead, pipelines may propose 
trackers for costs incurred to comply with governmental regulations 
under federal and state environmental and safety laws, such as D.O.T. 
user fees, in individual proceedings.
    NGSA states that, for clarity and to ensure that the filings 
contain the proper information necessary to evaluate the proposed 
changes, the regulations should be written separately for the types of 
filings to which they apply (i.e., fuel filings, GSR filings, Account 
858 filings, IT revenue credit filings, etc.). NGSA suggests the 
following items be required with filings made under this section:

    a. Reconciliation information for the past period which compares 
the volumes and revenues actually recovered to the volumes and costs 
used to design the rates previously in effect, with discounted 
transactions separately identified, and showing any past period 
underrecovery to be included in the new rate;
    b. Actual data on costs incurred since the last filing, compared 
to the costs on which the previous rates were based;
    c. Derivation of any discounting adjustment included in the 
proposed rates, citing the authority under which such adjustment is 
being made;
    d. Citations to data sources and approval order for data used 
which is derived elsewhere; and
    e. Requirement that costs, volumes, allocation and rate design 
be shown by zone of receipt/zone of delivery or other category used 
to charge rates, where appropriate.

    NGSA suggests several specific modifications to the proposed 
regulations in Sec. 154.403. Section 154.403(c) directs the pipeline to 
include in its tariff information about the mechanism which will be 
used to adjust the pipeline's rates. The Commission anticipates that 
all the information NGSA seeks will be available through the tariff or 
in the filing. No modification to the regulations is required.
    Northern Border recommends eliminating the requirement that a 
company that recovers fuel use and unaccounted-for gas in-kind state 
its reimbursement percentages in its tariff. Northern Border prefers 
that pipelines be allowed to show such changes by posting on the EBBs, 
in lieu of numerous and untimely tariff filings. Northern Border 
maintains that due to the operation of its system, percentages change 
monthly or more often, and changes are computed and implemented within 
one week. Northern Border currently uses its EBB in such a manner, and 
it is considered an efficient and accepted practice by its customers.
    By far, the most common practice among pipelines is to state their 
fuel reimbursement percentages in the tariffs. The Commission is 
adopting the regulation to reflect this common practice. The manner in 
which Northern Border posts its fuel reimbursement percentages has 
already been approved by the Commission and the Commission does not 
intend to apply this regulation to pipelines with approved tariffs that 
provide otherwise.
    Northwest/Williams believes that the requirement that tariffs 
contain step-by-step descriptions of the amounts 

[[Page 52990]]
calculated and of the flowthrough mechanism is burdensome because it 
will require many pages of text and will be difficult to predict every 
possible scenario that might impact the calculations. Northwest/
Williams would like to see the step-by-step descriptions eliminated and 
a general description included in the tariff instead, with any further 
explanations handled through data requests or informal technical 
conferences. Williston also requests deletion of the step-by-step 
description requirement because it is unnecessary and will clutter the 
tariff making it inflexible and potentially unworkable.
    Columbia argues that a clarification is necessary because, as 
drafted, the regulations could be read to require that a pipeline 
incorporate into each rate schedule ``a sample calculation in the 
tariff provision governing the periodic rate change methodology.'' 
Similarly, El Paso argues that no sample mathematical calculations 
should be required in the tariff. El Paso states it is unclear what the 
Commission wants included in the tariffs, but El Paso opposes inclusion 
of a sample calculation because it would duplicate information already 
provided in the workpapers of each filing and use of the Commission's 
software does not allow for the use of special characters, resulting in 
a difficult and burdensome task which will reduce the reader's ability 
to understand the information provided.
    Individual shippers that are asked to pay a rate have a right to 
know how the rate is derived without having to seek basic information 
about the rate derivation through data requests and technical 
conferences. Requiring the tariff to contain a clear statement of how a 
rate is calculated is not unreasonable. As we stated in the preamble to 
the NOPR, these new regulations are consistent with current Commission 
policy and generally reflect currently effective tariff provisions that 
include a general description of the calculations.
    Columbia and El Paso are correct: the preamble states that a sample 
calculation will be included in the tariff. However, the regulations do 
not reflect this provision. In this case, the preamble is in error. No 
further action is required.
    NI-Gas finds the increased specificity in periodic rate adjustments 
is an improvement over existing practice. NI-Gas maintains, however, 
that shippers subject to pipeline trackers should be able to argue that 
they are entitled to refunds from pre-tracker periods. Otherwise, 
pipelines will have a strong incentive to allocate refunds to pre-
tracker periods, while agreeing to higher rates for tracked periods. As 
a general matter, NI-Gas asserts that pipeline shippers do not have the 
means to aggressively participate in all proceedings which give rise to 
or affect tracked costs.
    The section to which NI-Gas refers, Sec. 154.403(d)(4), is not 
intended to apply to refunds due as a result of a Commission 
determination that increased rates or charges are not justified or to 
refunds approved by the Commission as part of a settlement. The 
reference to the return of revenues in this section refers to revenues 
subject to a revenue crediting mechanism approved under this section. 
The section underscores the precept that the effect of any new rate 
recovery mechanism is prospective not retroactive.
    Finally, Foothills filed comments to state that it does not oppose 
the deletion of Secs. 154.201 through 154.213 of the regulations with 
regard to the tracker mechanism that allows pipeline shippers to track 
ANGTS charges in their own rates. Foothills states these regulations 
are unnecessary in the post-Order No. 636 period because interstate 
pipelines are no longer in the merchant business and no longer hold 
capacity on third-party pipelines. Foothills emphasizes its continued 
reliance, however, on the Commission's unwavering support of the ANGTS 
project. As stated previously, the Commission continues to support the 
ANGST project.
6. Subpart F--Refunds and Reports
    a. Section 154.501 Refunds. Section 154.501 replaces current 
Sec. 154.67(c). The refund carrying charge rule, currently 
Sec. 154.38(d)(4), applies to all refunds. The new section reflects 
current Commission policy.
    The Commission has added a requirement for pipeline refunds to be 
made within 60 days of the order date to ensure refunds are disbursed 
on a timely basis. Refunds received by the pipeline must be disbursed 
within 30 days of receipt. This period of time should be adequate to 
disburse refunds.
    Section 154.501(c) is added to reflect current Commission policy 
with respect to supplier refunds which apply to the period during which 
the company had a purchased gas adjustment clause in its tariff. 
Instructions regarding the contents of a refund report are added to 
provide additional guidance.
    INGAA argues that the Commission's refund policy should not 
obligate pipelines to refund amounts that have not been collected in 
full. Section 154.501(a)(1) sets a 60-day refund period. This provision 
may require pipelines to pay out refunds before surcharges recover the 
full amount of the refunds. INGAA suggests removing the 60-day limit or 
specifying that refunds will only be paid out to the extent the amounts 
have been collected in full.
    INGAA also urges the Commission to delete the proposal in 
Sec. 154.501(a)(2) that any natural gas company must refund to its 
jurisdictional customers the jurisdictional portion of any refund it 
receives within 30 days of receipt. In the alternative, INGAA suggests 
allowing pipelines a reciprocal right to surcharge jurisdictional 
customers, if they are subject to paying a higher rate to upstream 
pipelines, within the 30 days.
    ANR/CIG argue that the proposed language mandates the institution 
of a one-way tracker and imposes the obligation on a pipeline to pass 
through refunds to customers in 30 days, but does not provide the 
pipeline with a reciprocal right to begin surcharging jurisdictional 
customers within 30 days if the pipeline is subjected to paying a 
higher rate to another pipeline for services. ANR/CIG states that this 
should only be imposed if it tracks both the refunds received by the 
pipeline and the cost increases incurred by the pipeline for particular 
services.
    Panhandle argues that this section should be limited to refunds of 
costs tracked in the pipeline's rates or for which the pipeline has a 
pre-existing refund obligation. Otherwise, Panhandle states, the 
section may be interpreted to require vendor refunds, or rebates from 
manufacturers or suppliers when no such refunds are required under the 
law. Panhandle proposes the following revision to Sec. 154.501(a)(2):

    ``Any natural gas company must refund to its jurisdictional 
customers the jurisdictional portion of any refund it receives which 
is required by prior Commission order to be flowed through to its 
jurisdictional customers or is an amount previously included in a 
tracker filing and charged and collected from jurisdictional 
customers within thirty days of receipt.''

    Williston opposes the 30-day time period, arguing that it may not 
be enough time within which to issue refunds. Williston states that the 
time period should be the same as in Sec. 154.501(a), 60 days. Columbia 
also recommends that the 30-day period be extended to ``within 60 days 
of receipt'' to allow for refunds received shortly before bills are 
issued to be disbursed as billing credits with the second billing after 
receipt of the refund.
    CNG urges the Commission to revise the proposal to provide that 
each pipeline's current tariff should control 

[[Page 52991]]
the timing and method of flowing through refunds from other pipelines.
    Northwest suggests adding language regarding normalization of 
income tax timing differences in paragraph (d) similar to that proposed 
in Sec. 154.403(c)(7).
    AGD recommends that the Commission eliminate the 30-day lag in the 
pipeline's obligation to submit its report explaining its refund of 
excessive charges. AGD states that the refund report should be in hand 
before the refund check is cashed as the cashing of a check may be 
treated legally as full compensation by the pipeline. Pacific Northwest 
Commenters recommend refund reports be served on all customers, 
interested state commissions, and designated representatives. Williston 
asserts a provision should be added to Sec. 154.501(e) providing that 
each shipper will only be provided with its applicable portion of the 
refund report in order to ensure that confidentiality of commercially 
sensitive information is maintained.
    Williston argues that refunds should be required only upon issuance 
of a final Commission order. Williston states that, when a pipeline 
requests rehearing or circuit court review of a Commission order, 
refunds should be deferred until after the final order to avoid the 
necessity for further refunds or rebilling of prematurely refunded 
amounts.
    Williston also suggests that Secs. 154.501(d)(1) and (2) be deleted 
from the regulations as no they are no longer necessary. Pacific 
Northwest Commenters urge the Commission to add a new 
Sec. 154.501(a)(3) requiring that a pipeline offer its customers the 
option of electronic transfer of the refund amount on the date refunds 
are made.
    In response to INGAA's request, the Commission clarifies that a 
pipeline is not required to pay out a refund until it recovers the full 
amount of the refund through its rates.
    The Commission agrees with Panhandle that the language of 
Sec. 154.501(a)(2) should be clarified. It was not the Commission's 
intention to require refunds of vendor refunds or manufacturer rebates. 
Rather, the section is intended to apply to refunds required by the 
Commission and passed through by the pipeline to its customers.
    Several commenters seek a different time period for disbursement of 
refunds the pipeline has received. The Commission will adopt a single 
standard which will be generally applicable. For refunds received from 
an upstream supplier, thirty days should not be unduly burdensome. 
However, since many pipelines have currently effective tariff 
provisions providing for a different time period or passthrough by a 
deferred account surcharge, the regulatory text will be modified to 
grandfather these provisions. This modification will result in the 
least disruption.
    The Commission disagrees with the position that Sec. 154.501(a)(2) 
represents a one-way tracker. The refunds which are the subject of this 
section are required to be passed through by Commission order as 
clarified above. Cost increases must be filed for by the pipeline 
before being passed through according to section 4 of the NGA. If the 
pipeline wishes to institute a tracker, it must file tariff provisions 
with the Commission to do so.
    The language regarding normalization of income tax timing 
differences found in Sec. 154.403(c)(7) is inappropriate here. Refunds 
do not give rise to a tax timing difference which would affect carrying 
charge calculations.
    The Commission generally has provided for a 30-day time period 
between the date when refunds are ordered and the date when and the 
report of the refund must be filed.72 Thirty days is a reasonable 
period to provide the report. The Commission reviews refund reports for 
accuracy. If as a result of its review, the Commission finds that a 
pipeline has failed to accurately compute a refund, the pipeline will 
be directed to correct the deficiency.

    \72\See, e.g., Trunkline Gas Company, 62 FERC para.61,199 
(1992), and Florida Gas Transmission Co., 71 FERC para.61.363 
(1995).
---------------------------------------------------------------------------

    Two commenters address the issue of service. The regulations have 
been revised such that all parties that have standing requests for full 
refund report service will receive a copy of a pipeline's entire refund 
report. Otherwise, parties receiving the refund will receive an 
abbreviated form of the refund report.
    The Commission will not adopt Williston's suggestion. If a pipeline 
believes there is confidential material in a particular refund report, 
the pipeline may request that the Commission treat all or part of the 
report as confidential pursuant to Sec. 388.112 of the Commission's 
regulations.
    The date for disbursement of the refund whether after a final 
Commission order or otherwise is properly the subject of the proceeding 
in which the refund obligation arises. The Commission will not adopt 
language in the regulations mandating a specific date.
    Williston suggests removing the portion of the proposed regulations 
which govern the interest level used to calculate interest on refunds 
pre-dating September 30, 1979. Upon further reflection, the Commission 
believes the possibility of requiring refunds dating back to this time 
period are remote. These sections of the proposed regulations have been 
removed.
    The Commission notes that several pipelines have provisions in 
their tariffs offering their customers the option of receiving refunds 
by electronic transfer.73 At this point, the Commission prefers 
that the pipelines and their customers work out procedures for 
electronic funds transfers where appropriate. For this reason, the 
regulations will not mandate electronic funds transfers.

    \73\See, e.g., ANR Pipeline Co., Original Sheet No. 146, Second 
Revised Volume No. 1, Columbia Gas Transmission Corp., Second 
Substitute Original Sheet No. 331, Second Revised Volume No. 1, and 
Panhandle Eastern Pipe Line Co., Original Sheet No. 287, First 
Revised Volume No. 1.
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    b. Section 154.502  Reports. New Sec. 154.502 requires that tariffs 
include information about reports required by the Commission.
    Arizona Directs approve of the provision as a convenient reference 
point for a description of all reports required by the Commission to be 
filed by the pipeline on a periodic basis. They recommend, as a 
modification, that pipelines be required to state in their tariffs the 
name, address, and phone number of the company representative who 
should be contacted if copies of a particular report are desired.
    INGAA states that the requirement to include descriptions of all 
filed reports in pipelines' tariffs is redundant and should be deleted. 
The Commission already publishes a directory of all reports that 
interstate pipeline companies are required to file. INGAA states that 
this regulation is too broad and will lead to a significant increase in 
the size of tariff filings because the reports could conceivably 
include periodic, yet short-term, reports that are required for 
environmental compliance during a certificate proceeding. National Fuel 
argues that this provision should either be eliminated or its scope 
narrowed to reports arising out of litigated or settled rate 
proceedings.
    INGAA misinterprets the scope of this regulation. The regulation is 
not intended to include a list of reporting requirements already set 
forth in the Commission's regulations. This section of the regulations 
applies to periodic reports required by a Commission order or a 
settlement in a proceeding initiated under part 154 or part 284. For 
example, during restructuring several pipelines 

[[Page 52992]]
were required to submit reports when they issued an operational flow 
order. The regulations are clarified to more clearly reflect the scope 
of this requirement.
    The information on the title page of the tariff contains the name, 
address, and, as modified, the telephone number of an individual to 
whom communications concerning the tariff should be directed. This 
individual should be able to respond to inquiries regarding reports 
filed consistent with this section of the regulations.
7. Subpart G--Other Tariff Changes
    a. Section 154.601  Change in Executed Service Agreement. Section 
154.601 replaces current Sec. 154.63(d)(2). The section concerns 
executed service agreements ``on file with the Commission'' and does 
not refer to ``well names.''
    b. Section 154.602  Cancellation or Termination of a Tariff, 
Executed Service Agreement or Part Thereof. Section 154.602 replaces 
current Sec. 154.64. The section does not require sales information. It 
does require a list of the affected customers and the contract demand 
under the service to be canceled.
    INGAA and Panhandle object to the new requirement that a natural 
gas company must provide notice to the Commission at least 30 days 
prior to the effective date of a proposed cancellation or termination 
of an effective tariff or contract because these transactions have been 
pre-granted abandonment under each pipeline's blanket certificate. In 
the alternative, Panhandle seeks clarification of this provision.
    This requirement is not new but is a revised version of the current 
requirement at Sec. 154.64. It only applies to (1) tariff sheets on 
file with the Commission, and (2) service agreements that are on file 
with the Commission and not subject to pre-granted abandonment. Except 
for the reduction in filing requirements, the Commission does not 
anticipate any change in the operation of this provision.
    c. Section 154.603  Adopting of a Tariff by a Successor. Section 
154.603 replaces current Sec. 154.65. The section concerns adopted 
tariffs or contracts ``on file with the Commission'' as opposed to any 
tariff or contracts.

C. Comments Requesting Further Changes

     Most suggestions for additional regulations are discussed with the 
regulation they would logically follow or supplement. Several 
additional suggestions are addressed below.
    Columbia proposes a requirement that Staff issue a written 
settlement position within 60 days of the initial suspension order. AGD 
suggests a rule requiring that Staff serve top sheets within 60 days of 
the issuance of the suspension order. APGA recommends that the 
Commission adopt a rule requiring submission of Staff top sheets within 
120 days of a filing. Panhandle suggests that an appropriate time for 
the Staff to file its position would be four months after the filing 
date. To be useful, such Staff top sheets should conform in all 
material respects to the proposed Sec. 154.301 and Sec. 154.304 
standards, i.e. to reflect all changes reasonably expected as to any 
adjustments it is proposing to the company's filing along with 
supporting work papers and formulae for any calculations upon which it 
is relying. Further, Staff should be required to either accept the 
company's position or provide a fully supported alternative position. 
Michigan urges that the Commission reinstate the practice of 
establishing a date for service of top sheets as a part of this 
rulemaking. Michigan notes that revised filing requirements will: (1) 
Streamline the discovery process by providing Commission Staff and 
interveners with information much sooner than current procedures, and 
(2) result in the expeditious resolution of rate cases.
    Staff initial settlement positions, or ``top sheets,'' have long 
assisted the settlement process. The Commission expects that the timely 
service of top sheets will assist parties in cases set for hearing in 
the future as well, and the Commission will endeavor to continue that 
practice. However, the Commission declines to establish a rigid 
deadline for service of top sheets because of the variety of 
circumstances that may arise in particular cases.
    AGD requests regulations such that rulings on certain issues can be 
secured before the end of the suspension period and whereby the 
Commission may instruct the ALJ to resolve certain issues within 
specified deadlines as justified by circumstances. JMC suggests 
establishing procedures for staff to routinely examine rates to 
determine if they are just and reasonable, under section 5. JMC also 
suggests conditioning all settlement approvals upon the pipeline's 
agreement to make a general section 4 rate case within 3 years. The 
Commission will not adopt these suggestions at this time.
    Northern Border states that its tariff is different from the 
industry standard and requests reinstatement of regulations (Statement 
N) that are appropriate for a cost-of-service tariff.
    SoCal urges the Commission to encourage pipelines to have pre-
filing meetings with customers. NDG suggests regulations requiring 
pipelines to include a description of the workpapers in the filing, 
serve parties workpapers on the filing date, and supply information on 
the electronic format. NDG suggests that pipelines requesting 
confidential treatment must include a confidentiality agreement in 
their filings. NDG suggests that every section 4 filing contain a 
capacity release log for the base period and a table showing earned 
rate of return on equity for the base period. These are also helpful 
suggestions and may be considered at a later time, but will not be 
adopted here.
    NDG suggests that a request for blanket waiver of regulations not 
be allowed but pipelines must specifically identify what waivers are 
required. This has been adopted in Sec. 154.7(a)(7).

D. Electronic Filing

1. Industry-Wide Conference
    The Commission recognizes that changes to these regulations and to 
the forms in the companion rule necessitate modifications to the 
electronic formats for the affected filings and forms. To ensure the 
widest possible input, the NOPR directed Commission staff to convene a 
technical conference to obtain the participation of the industry and 
other users of the filed information in designing the electronic filing 
requirements. The conference was held on April 4, 1995 (conference), 
and provided an excellent start to the process of modifying the 
Commission's electronic filing requirements to complement the revisions 
to the regulations set forth in the companion rules. Most of the 
comments to the NOPR addressed issues discussed at the conference.
    As a result of the conference and comments to the NOPR, the 
Commission is able to make a number of decisions related to electronic 
filing in this rule. The only electronic filing requirements affected 
by this rule deal with the form of notice, the tariff sheets and the 
statements and worksheets required under subpart D. The electronic 
filing requirements for FERC Forms 2, 2A, 11, discount rate reports, 
and Index of Customers are dealt with in our companion rulemaking. No 
changes are proposed for the electronic form of notice.
    The Commission will adopt a tab delimited ASCII format for most 
numeric data and a format compatible with the filing company's 
spreadsheet 

[[Page 52993]]
application for selected statements required by subpart D of part 
154.74

    \74\ASCII American Standard Code for Information Interchange can 
convey only letters, punctuation and certain symbols. It does not 
convey how the document should be formatted or what fonts to use. A 
delimited file is created by keypunching a series of symbols using 
commas, tab, or some other symbol to designate the space at the end 
of a word or number (thus, ``tab delimited,'' ``comma delimited,'' 
etc.)
---------------------------------------------------------------------------

    The electronic tariff sheet formats are modified as proposed in the 
NOPR. However, as Columbia suggested in its comments, the electronic 
tariff sheet formats are modified further in this final rule to 
accommodate Sec. 154.102(e)(5) which requires a FERC citation in the 
margin of the tariff sheet. The FERC Automated System for Tariff 
Retrieval (FASTR) software is modified for the change also. The 
modification will not affect the software's ability to read, display, 
or print tariff sheets filed pursuant to the pre-existing requirements.
    The Commission will adopt submittal on diskette as the standard 
medium on which pipelines will submit their reports and filings. CD-ROM 
will be accepted as well.
    Other issues remain. Therefore, the Commission directs staff to 
convene another technical conference in order to resolve the 
outstanding electronic filing issues jointly with the industry. This 
second conference is to be held as soon as possible after issuance of 
this rule.
2. Delayed Implementation of Electronic Filing Requirements
    Many commenters urge the Commission to delay implementation of the 
revised electronic filing requirements until after the final rule is 
issued and procedures and formats have been further developed.
    INGAA suggests a grace period during which a pipeline could file a 
rate case under either the current or revised regulations depending on 
its progress in making the necessary changes to its data acquisition 
and accounting systems. In its comments, Great Lakes argued for an 
immediate suspension of the current electronic filing requirements, 
stating the current filing requirements are obsolete. Great Lakes 
argued that the suspension would not have prejudiced any party wishing 
to review a pipeline's rate application but simply would have moved the 
suspension date forward.
    The Commission did not suspend the electronic filing requirements 
at the time Great Lake's comments were filed. The Commission disagreed 
with Great Lakes' contention that the electronic filing requirements 
were obsolete. The Commission noted in the NOPR the possibility of 
suspending the electronic filing requirements due to the fact that the 
paper filing requirements in this rule could be made effective before 
the electronic filing requirement specifications could be made ready. 
Until that time, however, the Commission continued to derive benefits 
from the existing electronic filing requirements. Therefore, the 
Commission declined to act on Great Lakes' request. That request is 
denied.
    The Commission will not adopt INGAA's suggestion to allow filing a 
rate case under the old or new regulations depending on the pipeline's 
capabilities. However, since all of the revisions to the electronic 
filing requirements will not be completed by the issuance date of this 
rule, the Commission is suspending the requirement to submit the 
filings made pursuant to subpart D electronically until the new 
electronic filing requirements are fully developed. During the 
suspension, only paper copies of the filings under subpart D are 
required. The electronic version of the tariff sheets and the notice of 
filing must continue to be filed electronically.
3. Software
    Northwest/Williams suggests retaining only that portion of the rate 
case requirements referred to as ``File 3.''75 Northwest/Williams 
lists numerous shortcomings with the Commission's current rate case 
filing requirements and software and questions whether the Commission 
uses the data.

    \75\For general rate cases, three files are filed 
electronically. File 1 consists of the filing in a standard format 
designated by the Commission for use by all companies. The 
Commission provides edit check and print software. File 2 contains 
the footnotes for File 1. File 3 contains the rate filing in a 
format preferred by the company (``free form''). This data is 
converted to an ASCII file and appears exactly as the hard copy.
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    With the exception of the tariff sheets and notice of filing, all 
of the current electronic filing instructions, including those 
Northwest/Williams finds objectionable, will be revised. The Commission 
intends to seek the cooperation of the industry in developing the file 
structure required for each filing or form. The Commission does not 
intend to develop form fill, edit, or print software for use by the 
natural gas industry. Allowing private industry to develop software is 
the most cost-effective and efficient process. Software developed by 
the Commission would need to accommodate all potential users. The 
Commission believes that any such product would unnecessarily restrict 
the flexibility of individual companies. Accordingly, the Commission 
will not attempt to develop the associated software but will allow the 
industry to develop software that meets the requirements of both the 
company and the regulations.
4. Using Rich Text Format for Text
    Several alternatives for electronic filing formats were discussed 
at the conference. Many pipelines recommended the use of Rich Text 
Format (RTF) for text.76 INGAA states that use of RTF for text is 
most efficient since it allows any party to access the files using 
commonly available software packages.

    \76\RTF permits the transfer of word files that have embedded 
text enhancement such as bold or underscoring. RTF was developed by 
Microsoft as a word processing document-exchange format and is 
available royalty free. It permits documents to be exchanged among 
diverse platforms. Since its inception it has gained most prominence 
as a format for the creation of Graphical-User-Interface based 
``Help'' files. Apparently, this is related in part to its support 
of hyper-text.
---------------------------------------------------------------------------

    The Commission is seeking to adopt a format for text that is 
compatible with use in a database, does not lead to excess errors in 
the text after conversion, and is available through several software 
packages. In light of comments strongly recommending RTF, the 
Commission staff has considered the efficacy of RTF for reporting 
text.77 The conference participants should address alternatives to 
RTF and whether: the data would be error free when translated, 
translation would be available in the most popular word processing 
programs, and RTF text would be usable in databases. Further, the basic 
issue of when to employ RTF and when to employ delimited ASCII must be 
resolved to ensure uniform treatment.

    \77\RTF is essentially a primitive example of a genre called 
text markup languages. It allows both the content and the appearance 
of a body of text to be represented as a stream of plain ASCII text, 
unlike a typical word processor document which consists of text 
interleaved with binary control information. The text stream is made 
up of special reserved commands and delimiters interspersed with the 
actual text. White space in the file is essentially ignored; line, 
paragraph, and page breaks are controlled by RTF commands, as are 
fonts, colors, margins, tabstops, and every other characteristic of 
text appearance you can imagine.
    PC Magazine, February 7, 1995, v14, n3, p. 267.
---------------------------------------------------------------------------

5. Appropriate Format for Numeric Data
    Comments regarding the appropriate format to adopt for numeric data 
broke down into two camps--those supporting delimited ASCII and those 
arguing for a spreadsheet format.
    Many pipelines recommended the use of delimited formats for numeric 
files. INGAA states that use of ASCII delimited formats for numeric 
files 

[[Page 52994]]
allows any party to access the files using commonly available software 
packages. Panhandle and Williston agree noting that a delimited format 
permits columnar data fields to be imported and exported into and out 
of most off-the-shelf spreadsheet and database applications. Panhandle 
and INGAA note that many pipelines recommended at the conference that 
electronic filing requirements should allow a pipeline to use its 
current hardware. Delimited ASCII would allow them to do so.
    Several pipelines argued against submission of numeric data in a 
spreadsheet format. Northwest states that submitting its rate case in 
spreadsheet format would require 23 diskettes. INGAA notes that 
pipelines, regulatory agencies, and intervenors employ a wide range of 
software and hardware products, sometimes using different releases of a 
single software package. Panhandle states that mandating particular 
application software with which to manipulate data would force parties 
to use a single format, and restrict parties' ability to use data filed 
with the Commission. Several commenters object to providing data with 
formulas and linkages embedded. INGAA notes that these equations tend 
to be complex, cumbersome, and hard to follow even in modest rate case 
filings. As an alternative, INGAA suggests that formulas could be 
provided in written form. Northwest argues that formulas and links 
developed by Northwest should remain confidential and proprietary and 
so, Northwest might seek copyrights on such information.
    On the other hand, several commenters argue that numeric data 
should be filed in a spreadsheet format with formulas and links intact. 
The Industrials, AGD, and APGA urge that pipelines be required to 
submit spreadsheets with embedded formulas and linkages. The 
Industrials argue that having PC-compatible spreadsheet files with 
formulas and linkages intact available to customers and intervenors 
will speed the processing of rate cases and allow many issues to be 
resolved in the suspension order.
    The Industrials argue that the formulas which substantiate rate 
increase proposals are not proprietary. Requiring parties, including 
staff, to input all the figures from the rate case and spend weeks and 
rounds of testimony to recreate the pipeline's computations is grossly 
inefficient and unduly burdensome. The Industrials state that the 
regulations should explicitly state that the filing must be in 
spreadsheet format with formulas and linkages intact; and, that failure 
to do so is grounds for rejection. Industrials state that receiving the 
rate case in a manipulable format will be critical given the 10-day 
period for comment and protest.
    Williston notes that using the formats of the software the pipeline 
employs, the tab-delimited format, or RTF allows use of pre-determined 
row/column identifier formats. However, free form type structures 
should be utilized as much as possible to allow for the myriad of 
differences among the various pipelines' data processing requirements. 
Williston does not oppose filing data in the format of the application 
software it uses; provided numerical data does not include formulas or 
links.
    One of the stated goals of the conference was to ensure that all 
spreadsheets contain the underlying formulas and links. Delimited 
formats are not capable of transmitting formulas and equations. The 
Commission agrees with the parties arguing for a spreadsheet format 
where the formulas in the workpaper or statement are important to the 
understanding of the pipeline's filing. To be useful, the data, 
required in subpart D, by Statements I and J and the state tax 
formulations in Statement H, must be received with the formulas 
included. These formulas are necessary to understand the pipeline's 
position with respect to cost allocation and rate design. In section 4 
rate cases, the Commission has routinely obtained the formulas through 
data requests asking that the information be in spreadsheet form. The 
requirement that the initial filing be in spreadsheet format avoids the 
burden of having the same data submitted once as a tab delimited file 
and again, in response to a data request, in spreadsheet form, in order 
to capture the formulas. Accordingly, Statements I and J and a portion 
of H, containing state tax formulations submitted pursuant to subpart 
D, must be filed in the same format generated by the spreadsheet 
software used to create the statement or workpaper. These spreadsheets 
must include all the formulas and all links to other spreadsheets filed 
in the same rate case.
    The Commission will not require the entire rate case to be filed in 
spreadsheet form. The other statements in the rate case generally do 
not contain formulas of a complex nature. These remaining statements 
will be filed in tab delimited ASCII format. As noted by some of the 
commenters, a delimited ASCII format for numeric data provides a format 
which can be written or read by several software packages on multiple 
platforms.
    As suggested by several commenters, the Commission is specifying 
``tab'' delimited ASCII formats for all other numeric data to ensure 
uniformity in filing. Adopting a delimited ASCII format without 
specifying the delimiters would lead to confusion.
    NDG suggests that, upon request by an interested party, the 
pipeline be required to supply copies of the spreadsheets, models, and 
databases relied upon to prepare the filing in an electronic format, 
including all accompanying workpapers. This requirement would shorten 
the time necessary to analyze a rate case. The Commission is not 
convinced that this requirement must be made a part of the regulations. 
The underlying spreadsheets, models, and databases relied upon to 
prepare the filing in an electronic format may be discoverable at 
hearing if found necessary in a particular case.
6. Security and Reliability of Data
    Williston and INGAA urge the Commission to adopt procedures to 
ensure the integrity of electronic filings and the security of any 
confidential data. Panhandle adds that the Commission should safeguard 
against accidental publishing of confidential data submitted 
electronically.
    Confidential data filed with the Commission electronically will 
receive the same level of care extended to confidential data filed on 
paper. Any pipeline seeking confidential treatment for electronically 
filed data should adhere to the requirements of Sec. 385.112.
7. Submission of Data to the Commission
    Panhandle supports continuing data submission via diskettes, while 
permitting other options such as CD-ROM or high-speed 
telecommunications. Williston and El Paso also support the use of 
telecommunications for submission and dissemination of electronically 
filed data. However, Williston does not support the use of EDI for the 
filings under subpart D.78 If telecommunication is not used, 
Williston suggests use of CD-ROM as an alternative to diskettes.

    \78\Electronic Data Interchange (EDI) is a means by which 
computers exchange information over communication lines using 
standardized formats. For example, the capacity release data posted 
on a pipeline's electronic bulletin board is also available in 
downloadable files that conform to the standards for EDI promulgated 
by the American National Standards Institute (ANSI) Accredited 
Standards Committee (ASC).
---------------------------------------------------------------------------

    El Paso states that the Commission could permit the filing of a 
document by upload to the OPR bulletin board. Northwest suggests that, 
considering the prominence of electronic mail and internet, eventually, 
pipelines should 

[[Page 52995]]
transmit information only electronically. Sending an electronic version 
with paper available upon request would save money on postage and 
paper. El Paso requests that the Commission permit the filing of 
documents by electronic means only and eliminate, or reduce, the 
requirement to file paper copies.
    The Commission will continue to require paper filings to accompany 
Form No. 2, Form No. 2A, Form No. 11, discount rate reports, and rate 
case filings. At the conference, the parties should consider whether 
any submission (such as the discount rate report) could effectively be 
filed through electronic media only. Continuing the paper copies for 
some filings and forms does not signal the Commission's unwillingness 
to eventually forgo paper versions of these filings and forms at some 
future time. The Commission intends to continue to work with the 
industry to overcome the technological and procedural hurdles 
associated with telecommunications and enhance the reliance on 
electronic filings.
    Currently, electronic filings are submitted commonly on diskette. 
Continuation of diskette submission is appropriate as the standard 
means of submission since there continues to be substantial support for 
use of diskettes. The Commission will also permit submission on CD-
ROM.79 The Commission intends to continue to work with the 
industry to overcome the technological and procedural hurdles 
associated with telecommunications. The Commission agrees with comments 
by Williston and will not adopt EDI for natural gas rate cases. Many 
schedules are not standardized and are not compatible with this 
alternative.

    \79\Technical specifications for CD-ROM submission will appear 
in the electronic filing instructions for each individual form or 
filing.
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8. Dissemination of Data by the Commission
    Panhandle and Williston suggest that the Commission disseminate 
filed information. Applicants could provide electronic information on a 
voluntary basis. INGAA supports the increased dissemination of filed 
documents through the Commission; similar to the successful example of 
electronic dissemination of tariff sheets. INGAA and Williston suggest 
the elimination of hard copy dissemination whenever possible.
    The Commission will continue to make paper copies of filings 
available since all members of the public are not prepared to rely 
solely on electronic dissemination. However, except in rare cases where 
the file size makes downloading impractical, the Commission intends to 
disseminate all filed electronic data to the general public through the 
Commission's gas pipeline data bulletin board. Dissemination 
electronically by the Commission will greatly reduce demands on the 
pipelines for such information in either paper or electronic form.
    The Registry recommends the rate case data be made available to 
intervenors in a rate case in zipped (compressed) files on 3.5'' 
diskettes in both edit protected and edit enabled modes in at least one 
of the following three applications: Excel, Lotus and, 
QuattroPro.80 Where edit-protection cannot be password locked, the 
diskette should be marked appropriately. The uncompressed file names 
should appear on the label or sleeve wrapper of the diskette.

    \80\The National Registry of Capacity Rights (The Registry) 
filed comments in Docket No. RM95-4-000. However, this comment 
related solely to rate case filings and, therefore, is addressed 
here.
---------------------------------------------------------------------------

    The Industrials argue that, while there are good grounds for 
submitting a password protected version of the filing, the pipeline 
should give Commission staff and, upon request, others, a version 
without such password protection. The unprotected version should be 
available through downloadable electronic postings and/or on diskette.
    Password protection or other forms of security should be discussed 
at the conference. However, as long as a paper copy is available, there 
is a reliable way to check the accuracy of the electronic data. Both 
the electronic data and the paper version of the filing are part of the 
official filing and should contain the same information.
    The Commission will not favor one commercial vendor over another; 
and so, will not adopt a specific file compression or spreadsheet 
software. When the pipeline has a file it believes needs to be 
compressed, the pipeline should contact the Commission to determine if 
the Commission can accommodate the file compression the pipeline 
chooses to use. The Commission will accept rate case data in the file 
form generated by the spreadsheet used by the filing pipeline.
    Northwest asserts that only those electronic filings that do not 
contain formulas and links should be accessible to the public. The 
Commission disagrees, if the spreadsheets do not contain confidential 
data, there is no reason why they cannot be released to the public as 
submitted.
9. Fees for Costs of Electronic Filing
    Panhandle asserts that the Commission should permit pipelines to 
assess fees to recover the costs of implementing and providing the new 
data requirements. However, the issue of cost recovery for implementing 
the electronic filing requirements is dealt with more appropriately in 
a rate proceeding and not in this rulemaking.

V. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (RFA)81 requires agencies to 
prepare certain statements, descriptions, and analyses of proposed 
rules that will have a significant economic impact on a substantial 
number of small entities. The Commission is not required to make such 
analyses if a rule would not have such an effect.

    \81\5 U.S.C. 601-612.
---------------------------------------------------------------------------

    The Commission does not believe that this rule will have such an 
impact on small entities. Most filing companies regulated by the 
Commission do not fall within the RFA's definition of small 
entity.82 Further, the filing requirements of small entities are 
reduced by the rule. Therefore, the Commission certifies that this rule 
will not have a significant economic impact on a substantial number of 
small entities.

    \82\5 U.S.C. 601(3), citing to section 3 of the Small Business 
Act, 15 U.S.C. 632. Section 3 of the Small Business Act defines a 
``small-business concern'' as a business which is independently 
owned and operated and which is not dominant in its field of 
operation.
---------------------------------------------------------------------------

VI. Environmental Statement

    The Commission has excluded certain actions not having a 
significant effect on the human environment from the requirement to 
prepare an environmental assessment or an environmental impact 
statement.83 No environmental consideration is raised by the 
promulgation of a rule that is clarifying, corrective, or procedural or 
that does not substantially change the effect of legislation or 
regulations being amended.84 The instant rule changes the 
information to be filed, and the manner by which that information is 
filed, with the Commission but does not substantially change the effect 
of the underlying legislation or the regulations being replaced or 
revised. Accordingly, no environmental consideration is necessary.

    \83\18 CFR 380.4.
    \84\18 CFR 380.4(a)(2)(ii). 

[[Page 52996]]

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VII. Information Collection Statement

    The Office of Management and Budget's (OMB) regulations85 
require that OMB approve certain information and recordkeeping 
requirements imposed by an agency. The information collection 
requirements in this final rule are contained in the following: FERC 
Form 542 ``Gas Pipeline Rates: Initial Rates, Rate Change and Rate 
Tracking'' (1902-0070); FERC Form 542A Tracking and Recovery of Alaska 
Natural Gas Transportation System'' (1902-0129); FERC Form 543 ``Gas 
Pipeline Rates: Rate Tracking, Formal Rates'' (1902-0152); FERC Form 
544 ``Gas Pipeline Rates: Rate Change, Formal Rates'' (1902-0153); FERC 
Form 545 ``Gas Pipeline Rates: Rate Change, Nonformal Rates'' (1902-
0154); FERC Form 546 ``Certificated Rate Filings: Gas Pipeline Rates'' 
(1902-0155); and, FERC Form 547 Gas Pipeline Rates: Refund Report 
Requirements'' (1902-0084).

    \85\5 CFR 1320.13.
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    By this rule, the Commission is modernizing 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 is revising its regulations in part 154 to 
focus on transportation services instead of pipeline sales activities. 
The revised filing requirements will improve the internal support of a 
pipeline's filing and facilitate more rapid settlement or adjudication 
of pipeline rate proposals. The Commission's Office of Pipeline 
Regulation uses the data in rate proceedings to review rate and tariff 
changes by natural gas companies for the transportation of gas and for 
general industry oversight under the Natural Gas Act. The Commission's 
Office of Economic Policy also uses this data in its analysis of 
interstate natural gas pipelines.
    The Commission is submitting to the Office of Management and Budget 
a notification of these collections of information. Interested persons 
may obtain information on these reporting requirements by contacting 
the Federal Energy Regulatory Commission, 888 First 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, DC 20503, (Attention: Desk Officer for Federal Energy 
Regulatory Commission) FAX: (202)395-5167. You shall not be penalized 
for failure to respond to this collection of information unless the 
collection of information displays a valid OMB control number.

VIII. Effective Date

    The final rule will be effective November 13, 1995.

List of Subjects in 18 CFR Part 154

    Natural gas companies, Rate schedules and tariffs.

By the Commission.
Lois D. Cashell,
Secretary.
    For the reasons set out in the preamble, 18 CFR part 154 is revised 
to read as follows.

PART 154--RATE SCHEDULES AND TARIFFS

Subpart A--General Provisions and Conditions

Sec.
154.1  Application; Obligation to file.
154.2  Definitions.
154.3  Effective tariff.
154.4  Electronic and paper media.
154.5  Rejection of filings.
154.6  Acceptance for filing not approval.
154.7  General requirements for the submission of a tariff filing or 
executed service agreement.
154.8  Informal submission for staff suggestions.

Subpart B--Form and Composition of Tariff

154.101  Form.
154.102  Title page and arrangement.
154.103  Composition of tariff.
154.104  Table of contents.
154.105  Preliminary statement.
154.106  Map.
154.107  Currently effective rates.
154.108  Composition of rate schedules.
154.109  General terms and conditions.
154.110  Form of service agreement.
154.111  Index of customers.
154.112  Exception to form and composition of tariff.

Subpart C--Procedures for Changing Tariffs

154.201  Filing requirements.
154.202  Filings to initiate a new rate schedule.
154.203  Compliance filings.
154.204  Changes in rate schedules, forms of service agreements, or 
the general terms and conditions.
154.205  Changes related to suspended tariffs, executed service 
agreements, or parts thereof.
154.206  Motion to place suspended rates into effect.
154.207  Notice requirements.
154.208  Service on customers and other parties.
154.209  Form of notice for Federal Register.
154.210  Protests, interventions, and comments.

Subpart D--Material to be Filed With Changes

154.301  Changes in rates.
154.302  Previously submitted material.
154.303  Test periods.
154.304  Format of statements, schedules, workpapers and supporting 
data.
154.305  Tax normalization.
154.306  Cash working capital.
154.307  Joint facilities.
154.308  Representation of chief accounting officer.
154.309  Incremental expansions.
154.310  Zones.
154.311  Updating of statements.
154.312  Composition of Statements.
154.313  Schedules for minor rate changes.
154.315  Other support for a filing.

Subpart E--Limited Rate Changes

154.400  Additional requirements.
154.401  RD&D expenditures.
154.402  ACA expenditures.
154.403  Periodic rate adjustments.

Subpart F--Refunds and Reports

154.501  Refunds.
154.502  Reports.

Subpart G--Other Tariff Changes

154.600  Compliance with the subparts.
154.601  Change in executed service agreement.
154.602  Cancellation or termination of a tariff, executed service 
agreement or part thereof.
154.603  Adoption of the tariff by a successor.
    Authority: 15 U.S.C. 717-717w; 31 U.S.C. 9701; 42 U.S.C. 7102-
7352.

Subpart A--General Provisions and Conditions


Sec. 154.1  Application; Obligation to file.

    (a) The provisions of this part apply to filings pursuant to 
section 4 of the Natural Gas Act.
    (b) Every natural gas company must file with the Commission and 
post in conformity with the requirements of this part, schedules 
showing all rates and charges for any transportation or sale of natural 
gas subject to the jurisdiction of the Commission, and the 
classifications, practices, rules, and regulations affecting such 
rates, charges, and services, together with all contracts related 
thereto.
    (c) No natural gas company may file, under this part, any new or 
changed rate schedule or contract for the performance of any service 
for which a certificate of public convenience and necessity or 
certificate amendment must be obtained pursuant to section 7(c) of the 
Natural Gas Act, until such certificate has been issued.
    (d) For the purposes of paragraph (b) of this section, any contract 
that conforms to the form of service agreement that is part of the 
pipeline's tariff pursuant to Sec. 154.110 does not 

[[Page 52997]]
have to be filed. Any contract or executed service agreement which 
deviates in any material aspect from the form of service agreement in 
the tariff is subject to the filing requirements of this part.


Sec. 154.2  Definitions.

    (a) Contract means any agreement which in any manner affects or 
relates to rates, charges, classifications, practices, rules, 
regulations, or services for any transportation or sale of natural gas 
subject to the jurisdiction of the Commission. This term includes an 
executed service agreement.
    (b) FERC Gas Tariff or tariff means a compilation, either in book 
form or on electronic media, of all of the effective rate schedules of 
a particular natural gas company, and a copy of each form of service 
agreement.
    (c) Form of service agreement means an unexecuted agreement for 
service included as an example in the tariff.
    (d) Post means: to make a copy of a natural gas company's tariff 
and contracts available during regular business hours for public 
inspection in a convenient form and place at the natural gas company's 
offices where business is conducted with affected customers; and, to 
mail to each affected customer and interested state commission a copy 
of the tariff, or part thereof. Mailing must be accomplished by U.S. 
Mail, unless some other method is agreed to by the parties.
    (e) Rate schedule means a statement of a rate or charge for a 
particular classification of transportation or sale of natural gas 
subject to the jurisdiction of the Commission, and all terms, 
conditions, classifications, practices, rules, and regulations 
affecting such rate or charge.
    (f) Filing date means the day on which a tariff, or part thereof, 
or a contract is received in the Office of the Secretary of the 
Commission for filing in compliance with the requirements of this part.


Sec. 154.3  Effective tariff.

    (a) The effective tariff of a natural gas company is the tariff 
filed pursuant to the requirements of this part, and permitted by the 
Commission to become effective. A natural gas company must not directly 
or indirectly, demand, charge, or collect any rate or charge for, or in 
connection with, the transportation or sale of natural gas subject to 
the jurisdiction of the Commission, or impose any classifications, 
practices, rules, or regulations, different from those prescribed in 
its effective tariff and executed service agreements on file with the 
Commission, unless otherwise specifically permitted by order of the 
Commission.
    (b) No tariff provision may purport to change an effective rate or 
charge except in the manner provided in section 4 of the Natural Gas 
Act, and the regulations in this part. The tariff may not provide for 
any rate or charge to be automatically changed by an index or other 
periodic adjustment, without filing for a rate change pursuant to these 
regulations.


Sec. 154.4  Electronic and paper media.

    (a) General rule. All statements filed pursuant to subpart D of 
this part, and all workpapers in spreadsheet format, and tariff sheets 
other than those in Volume No. 2, must be submitted on electronic 
media. Filings pursuant to this part 154 must also include the 
prescribed number of paper copies. Tariffs, rate schedules, and 
contracts, or parts thereof, and material related thereto, including 
any change in rates, notice of cancellation or termination, and 
certificates of adoption, must be submitted to the Commission in an 
original and 5 paper copies, except that filings pursuant to subpart D 
of this part must be submitted in an original and 12 paper copies.
    (b) All filings must be signed in compliance with the following.
    (1) The signature on a filing constitutes a certification that: The 
signer has read the filing signed and knows the contents of the paper 
copies and electronic media; the paper copies contain the same 
information as contained on the electronic media; the contents as 
stated in the copies and on the electronic media are true to the best 
knowledge and belief of the signer; and, the signer possesses full 
power and authority to sign the filing.
    (2) A filing must be signed by one of the following:
    (i) The person on behalf of whom the filing is made;
    (ii) An officer, agent, or employee of the governmental authority, 
agency, or instrumentality on behalf of which the filing is made; or,
    (iii) A representative qualified to practice before the Commission 
under Sec. 385.2101 of this chapter who possesses authority to sign.
    (c) Electronic media suitable for Commission filings are listed in 
the instructions for each form and filing. Lists of suitable electronic 
media are available upon request from the Commission. The formats for 
the electronic filing and paper copy can be obtained at the Federal 
Energy Regulatory Commission, Public Information and Reference Branch, 
888 First Street, NE., Washington, D.C. 20426.
    (d) Where to file. The electronic media, the paper copies and 
accompanying transmittal letter must be submitted in one package to: 
Office of the Secretary, Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, D.C. 20426.
    (e) Waiver. A natural gas company may request a waiver of the 
requirement to submit filings by electronic media, by filing an 
original and 5 copies of a request for waiver. The request must 
demonstrate that the natural gas company does not have, and is unable 
to acquire, the technical capability to file the information on 
electronic media.


Sec. 154.5  Rejection of filings.

    A filing that fails to comply with this part may be rejected by the 
Director of the Office of Pipeline Regulation pursuant to the authority 
delegated to the Director in Sec. 375.307(b)(2) of this chapter.


Sec. 154.6  Acceptance for filing not approval.

    The acceptance for filing of any tariff, contract or part thereof 
does not constitute approval by the Commission. Any filing which does 
not comply with any applicable statute, rule, or order, may be 
rejected.


Sec. 154.7  General requirements for the submission of a tariff filing 
or executed service agreement.

    The following must be included with the filing of any tariff, 
executed service agreement, or part thereof, or change thereto.
    (a) A letter of transmittal containing:
    (1) A list of the material enclosed,
    (2) The name of a responsible company official to whom questions 
regarding the filing may be addressed, with a telephone number at which 
the official may be reached,
    (3) The date on which such filing is proposed to become effective,
    (4) Reference to the authority under which the filing is made, 
including the specific section of a statute, subpart of these 
regulations, order of the Commission, provision of the company's 
tariff, or any other appropriate authority. If an order is referenced, 
the letter must include the citation to the FERC Reports, the date of 
issuance, and the lead docket number of the proceeding in which the 
order was issued.
    (5) A list of the tariff sheets enclosed,
    (6) A statement of the nature, the reasons, and the basis for the 
filing. The statement must include a summary of the changes or 
additions made to the tariff or executed service agreement, as 

[[Page 52998]]
appropriate. A detailed explanation of the need for each change or 
addition to the tariff or executed service agreement must be included. 
The natural gas company also must note all relevant precedents relied 
upon to prepare its filing.
    (7) Any requests for waiver. A request for waiver must include a 
reference to the specific section of the statute, regulations, or the 
company's tariff from which waiver is sought, and a justification for 
the waiver.
    (8) Where the natural gas company proposes a new rate, 
identification of the last rate, found by the Commission to be just and 
reasonable, that underlies the proposed rate.
    (9) A motion, in case of minimal suspension, to place the proposed 
rates into effect at the end of the suspension period; or, a specific 
statement that the pipeline reserves its right to file a later motion 
to place the proposed rates into effect at the end of the suspension 
period.
    (b) A certification of service pursuant to Sec. 154.2(d) to all 
customers on the service list and interested state commissions.


Sec. 154.8  Informal submission for staff suggestions.

    Any natural gas company may informally submit a proposed tariff or 
any part thereof or material relating thereto for the suggestions of 
the Commission staff prior to filing. Opinions of the Commission staff 
are not binding upon the Commission.

Subpart B--Form and Composition of Tariff


Sec. 154.101  Form.

    The paper copies of the tariff must be printed, typewritten, or 
otherwise reproduced on 8\1/2\ by 11 inch sheets of a durable paper so 
as to result in a clear and permanent record. The sheets of the tariff 
must be ruled to set off borders of \1/4\ inches on top, bottom, and 
left sides and \1/2\ inch on the right side, and punched (3 holes) on 
the left side.


Sec. 154.102  Title page and arrangement.

    (a) The title page must show on the front cover:

FERC Gas Tariff

[Volume number. For example: ``Original Volume No. 1''] of [Name of 
Natural-Gas Company]
Filed with The Federal Energy Regulatory Commission
    (b) If the tariff consists of two or more volumes, the volumes must 
be identified by ``(Original) Volume No. (1)'', directly below the 
words ``FERC Gas Tariff.''
    (c) When any volume of a tariff is to be superseded or replaced in 
its entirety, the replacing volume must show prominently on the title 
page the volume number being superseded or replaced. For example:

FERC Gas Tariff

First Revised Volume No. 1 (Supersedes Original Volume No. 1)
    (d) The first page must be a title page which must carry the 
information shown in paragraph (b) of this section and, in addition, 
the name, title, and address, telephone number, and facsimile number of 
the person to whom communications concerning the tariff should be sent. 
If the address is a post office box number, a street address must also 
be included.
    (e) All sheets must have the following information placed in the 
margins:
    (1) Identification. At the left, above the top marginal ruling, the 
exact name of the company must be shown, under which must be set forth 
the words ``FERC Gas Tariff,'' together with volume identification.
    (2) Numbering of sheets. Except for the title page, at the right 
above the top marginal ruling, the sheet number must appear after the 
words ``(Original) Sheet No.(number).'' All sheets must be numbered in 
the manner set forth in the Tariff Sheet Pagination Guidelines 
contained in the instructions for filing natural gas company tariffs on 
electronic media.
    (3) Issuing officer and issue date. On the left below the lower 
marginal ruling, must be placed ``Issued by'': followed by the name and 
title of the person authorized to issue the sheet. Immediately below 
must be placed ``Issued on'' followed by the date of issue.
    (4) Effective date. On the right below the lower marginal ruling 
must be placed ``Effective'': followed by the specific effective date 
proposed by the company.
    (5) Tariff Sheets filed to comply with Commission orders. Tariff 
sheets which are filed to comply with Commission orders must carry the 
following notation in the bottom margin: ``Filed to comply with order 
of the Federal Energy Regulatory Commission, Docket No. (number), 
issued (date), (FERC Reports citation).''


Sec. 154.103  Composition of tariff.

    (a) The tariff must contain sections, in the following order: A 
table of contents, a preliminary statement, a map of the system, 
currently effective rates, composition of rate schedules, general terms 
and conditions, form of service agreement, and an index of customers.
    (b) Rate schedules must be grouped according to class and numbered 
serially within each group, using letters before the serial number to 
indicate the class of service. For example: FT-1, FT-2 may be used for 
firm transportation service; IT-1, IT-2 may be used for interruptible 
transportation service; X-1, X-2 may be used for schedules for which 
special exception has been obtained.


Sec. 154.104  Table of contents.

    The table of contents must contain a list of the rate schedules, 
sections of the general terms and conditions, and other sections in the 
order in which they appear, showing the sheet number of the first page 
of each section. The list of rate schedules must consist of: The 
alphanumeric designation of each rate schedule, a very brief 
description of the service, and the sheet number of the first page of 
each rate schedule.


Sec. 154.105  Preliminary statement.

    The preliminary statement must contain a brief general description 
of the company's operations and may also contain a general explanation 
of its policies and practices. General rules and regulations, and any 
material necessary for the interpretation or application of the rate 
schedules, may not be included in the preliminary statement.


Sec. 154.106  Map.

    (a) The map must show the general geographic location of the 
company's principal pipeline facilities and of the points at which 
service is rendered under the tariff. The boundaries of any rate zones 
or rate areas must be shown and the areas or zones identified. The 
entire system should be displayed on a single map. In addition, a 
separate map should be provided for each zone.
    (b) The map must be provided on paper only.
    (c) The map must be revised to reflect any major changes. The 
revised map must be filed no later than April 30 of the calendar year 
after the major change.


Sec. 154.107  Currently effective rates.

    (a) This section of the tariff must present the currently effective 
rates and charges under each rate schedule.
    (b) All rates must be stated clearly in cents or dollars and cents 
per thermal unit. The unit of measure must be stated for each component 
of a rate.
    (c) A rate having more than one part must have each component set 
out separately under appropriate headings (e.g., ``Reservation 
Charge,'' ``Usage Charge.'')
    (d) Where a component of a rate is adjusted pursuant to a mechanism 


[[Page 52999]]
approved under subpart E of this part, the adjustment must be stated in 
a separate column on the rate sheet.
    (e) Exception to paragraph (d) of this section. Where the rate 
component is an Annual Charge Adjustment or Gas Research Institute 
surcharge approved by the Commission, the adjustment or surcharge may 
be stated in a footnote on the rate sheet.
    (f) A total rate, indicating the sum of the rate components under 
paragraph (c) of this section plus the adjustments under paragraph (d) 
of this section, must be shown in the last column at the end of a line 
for a rate, so that a reader can readily determine the separate 
components comprising the total rate for a service.


Sec. 154.108  Composition of rate schedules.

    The rate schedule must contain a statement of the rate or charge 
and all terms and conditions governing its application, arranged as 
follows:
    (a) Title. Each rate schedule must have a title consisting of a 
designation of the type or classification of service (see 
Sec. 154.103(b)), and a statement of the type or classification of 
service to which the rate is applicable.
    (b) Availability. This paragraph must describe the conditions under 
which the rate is offered, including any geographic zone limitations.
    (c) Applicability and character of service. This paragraph must 
fully describe the kind or classification of service to be rendered.
    (d) Summary of rates. This paragraph must briefly set forth all 
components of the rates, refer to the location of the rates in the 
Currently Effective Rates, and provide a description of the calculation 
of the monthly charges for each rate component.
    (e) Other provisions. All other major provisions governing the 
application of the rate schedule, such as determination of billing 
demand, contract demand, heat content, and measurement base, must be 
set forth with appropriate headings or incorporated by reference to the 
applicable general terms and conditions.
    (f) Applicable terms and conditions. This paragraph either states 
that all of the general terms and conditions set forth in the tariff 
apply to the rate schedule, or specifies which of the general terms and 
conditions do not apply.


Sec. 154.109  General terms and conditions.

    (a) This section of the tariff contains terms and conditions of 
service applicable to all or any of the rate schedules. Subsections and 
paragraphs must be numbered for convenient reference.
    (b) The general terms and conditions of the tariff must contain a 
statement of the company's policy with respect to the financing or 
construction of laterals including when the pipeline will pay for or 
contribute to the construction cost. The term ``lateral'' means any 
pipeline extension (other than a mainline extension) built from an 
existing pipeline facility to deliver gas to one or more customers, 
including new delivery points and enlargements or replacements of 
existing laterals.
    (c) The general terms and conditions of the tariff must contain a 
statement of the order in which the company discounts its rates and 
charges. The statement, specifying the order in which each rate 
component will be discounted, must be in accordance with Commission 
policy.


Sec. 154.110  Form of service agreement.

    The tariff must contain an unexecuted pro forma copy of each form 
of service agreement. The form for each service must refer to the 
service to be rendered and the applicable rate schedule of the tariff; 
and, provide spaces for insertion of the name of the customer, 
effective date, expiration date, and term. Spaces may be provided for 
the insertion of receipt and delivery points, contract quantity, and 
other specifics of each transaction as appropriate.


Sec. 154.111  Index of customers.

    (a) If a pipeline is in compliance with the reporting requirements 
of Sec. 284.106 or Sec. 284.223 of this chapter, then an index of 
customers need not be provided in the tariff.
    (b) If all of a pipeline's jurisdictional transportation and sales 
are pursuant to part 157 of this chapter, then an index of customers 
must be provided that contains: a list of the pipeline's firm 
transportation, storage, and sales customers, and the rate schedule 
number for the services for which the shippers are contracting; the 
effective date of the contract; the expiration date of the contract; if 
the service is transportation or sales, the maximum daily contract 
demand under the contract; and, if the service is storage, the maximum 
storage quantity. Specify units of measurement when reporting contract 
quantities.
    (c) The index of customers must be kept current by filing new or 
revised sheets, semi-annually. One filing must coincide with the filing 
of the natural gas company's FERC Form No. 2 or 2-A with a proposed 
effective date of June 1. The other filing must be made six months 
later with a proposed effective date of December 1. The Index of 
Customers must contain a list of the contracts in effect as of the 
filing date.


Sec. 154.112  Exception to form and composition of tariff.

    (a) The Commission may permit a special rate schedule to be filed 
in the form of an agreement in the case of a special operating 
arrangement, previously certificated pursuant to part 157 of this 
chapter, such as for the exchange of natural gas. The special rate 
schedule must contain a title page showing the parties to the 
agreement, the date of the agreement, a brief description of services 
to be rendered, and the designation: ``Rate Schedule X-[number].'' 
Special rate schedules may not contain any supplements. Modifications 
must be by revised or insert sheets. Special rate schedules must be 
included in Volume No. 2 of the tariff. Volume No. 2 must contain a 
table of contents which is incorporated with the table of contents of 
Volume No. 1.
    (b) Contracts for service pursuant to part 284 of this chapter that 
deviate in any material aspect from the form of service agreement must 
be filed. Such non-conforming agreements must be referenced in FERC 
Volume No. 1.

Subpart C--Procedures for Changing Tariffs


Sec. 154.201  Filing requirements.

    In addition to the requirements of subparts A and B of this part, 
the following must be included with the filing of any tariff, executed 
service agreement, or part thereof, that changes or supersedes any 
tariff, contract, or part thereof, on file with the Commission.
    (a) A marked version of the pages to be changed or superseded 
showing additions and deletions. All new numbers and text must be 
marked by either highlight, background shading, bold, or underline. 
Deleted text and numbers must be indicated by strike-through. A marked 
version of the pages to be changed must be included in each copy of the 
filing required by these regulations.
    (b) Documentation whether in the form of workpapers, or otherwise, 
sufficiently detailed to support the company's proposed change.
    (1) The documentation must include but is not limited to the 
schedules, workpapers, and supporting documentation required by these 
rules and regulations and the Commission's orders.
    (2) All rate changes in the filing must be supported by step-by-
step mathematical calculations and sufficient 

[[Page 53000]]
written narrative to allow the Commission and interested parties to 
duplicate the company's calculations.
    (3) Any data or summaries included in the filing purporting to 
reflect the books of account must be supported by accounting workpapers 
setting forth all necessary particulars from which an auditor may 
readily verify that such data are in agreement with the company's books 
of account. All statements, schedules, and workpapers must be prepared 
in accordance with the classifications of the Commission's Uniform 
System of Accounts. Workpapers in support of all adjustments, 
computations, and other information, properly indexed and cross-
referenced to the filing and other workpapers, must be available for 
Commission examination.
    (4) Where a rate, cost, or volume is derived from another rate, 
cost, or volume, the derivation must be shown mathematically and be 
accompanied by a written narrative sufficient to allow the Commission 
and interested parties to duplicate the calculations. If the derivation 
is due to a load factor adjustment, application of a percentage, or 
other adjusting factor, the pipeline must also note or explain the 
origin of the adjusting factor.
    (5) Where workpapers show progressive calculations, any 
discontinuity between one working paper and another must be explained.


Sec. 154.202  Filings to initiate a new rate schedule.

    (a) When the filing is to initiate a new service authorized under a 
blanket authority in part 284 of this chapter, the filing must comply 
with the requirements of this paragraph.
    (1) Filings under this paragraph must:
    (i) Adhere to the requirements of subparts A, B, and C of this 
part;
    (ii) Contain a description of the new service, including, but not 
limited to, the proposed effective date for commencement of service, 
applicability, whether the service is interruptible or firm, and the 
necessity for the service;
    (iii) Explain how the new service will differ from existing 
services, including a concise description of the natural gas company's 
existing operations;
    (iv) Explain the impact of the new service on existing firm and 
interruptible customers, including but not limited to:
    (A) The adequacy of existing capacity, if the proposed service is a 
firm service, and
    (B) The effect on receipt and delivery point flexibility, 
nominating and scheduling priorities, allocation of capacity, operating 
conditions, and curtailment, for any new service;
    (v) Include workpapers that detail the computations underlying the 
proposed rate under the new rate schedule; or, if the rate is a 
currently effective rate, include the appropriate reference and an 
explanation of why the rate is appropriate;
    (vi) Give a justification, similar in form to filed testimony in a 
general section 4 rate case, explaining why the proposed rate design 
and proposed allocation of costs are just and reasonable;
    (vii) If the costs relating to existing services are reallocated to 
new services, explain the method for allocating the costs and the 
impact on the existing customers;
    (viii) Include workpapers showing the estimated effect on revenue 
and costs over the twelve-month period commencing on the proposed 
effective date of the filing.
    (ix) List other filings pending before the Commission at the time 
of the filing which may significantly affect the filing. Explain how 
the instant filing would be affected by the outcome of each related 
pending filing;
    (2) Any interdependent filings must be filed concurrently and 
contain a notice of the interdependence.
    (b) If a new service, facility, or rate is specifically authorized 
by a Commission order pursuant to section 7 of the Natural Gas Act, 
with the filing of tariff sheets to implement the new rate schedule, 
the natural gas company must:
    (1) Comply with the requirements of Sec. 154.203; and
    (2) Where the rate or charge proposed differs from the rate or 
charge approved in the certificate order, the natural gas company must: 
Show that the change is due to a rate adjustment under a periodic rate 
change mechanism previously accepted under Sec. 154.403 which has taken 
effect since the certificate order was issued; or, show that the rate 
change is in accordance with the terms of the certificate, and provide 
workpapers justifying the change.


Sec. 154.203  Compliance filings.

    (a) In addition to the requirements of subparts A, B, and C of this 
part, filings made to comply with orders issued by the Commission, 
including those issued under delegated authority, must contain the 
following:
    (1) A list of the directives with which the company is complying;
    (2) Revised workpapers, data, or summaries with cross-references to 
the originally filed workpapers, data, or summaries;
    (b) Filings made to comply with Commission orders must include only 
those changes required to comply with the order. Such compliance 
filings may not be combined with other rate or tariff change filings. A 
compliance filing that includes other changes or that does not comply 
with the applicable order in every respect may be rejected.


Sec. 154.204  Changes in rate schedules, forms of service agreements, 
or the general terms and conditions.

    A filing to revise rate schedules, forms of service agreements, or 
the general terms and conditions, must:
    (a) Adhere to the requirements of subparts A, B, and C, of this 
part;
    (b) Contain a description of the change in service, including, but 
not limited to, applicability, necessity for the change, identification 
of services and types of customers that will be affected by the change;
    (c) Explain how the proposed tariff provisions differ from those 
currently in effect, including an example showing how the existing and 
proposed tariff provisions operate. Explain why the change is being 
proposed at this time;
    (d) Explain the impact of the proposed revision on firm and 
interruptible customers, including any changes in a customer's rights 
to capacity in the manner in which a customer is able to use such 
capacity, receipt or delivery point flexibility, nominating and 
scheduling, curtailment, capacity release;
    (e) Include workpapers showing the estimated effect on revenues and 
costs over the 12-month period commencing on the proposed effective 
date of the filing. If the filing proposes to change an existing 
penalty provision, provide workpapers showing the penalty revenues and 
associated quantities under the existing penalty provision during the 
latest 12-month period; and
    (f) List other filings pending before the Commission which may 
significantly affect the filing.


Sec. 154.205  Changes related to suspended tariffs, executed service 
agreements, or parts thereof.

    (a) Withdrawal of suspended tariffs, executed service agreements, 
or parts thereof. A natural gas company may not, within the period of 
suspension, withdraw a proposed tariff, executed service agreement, or 
part thereof, that has been suspended by order of the Commission, 
except by special permission of the Commission granted upon application 
therefor and for good cause shown. 

[[Page 53001]]

    (b) Changes in suspended tariffs, executed service agreements, or 
parts thereof. A natural gas company may not, within the period of 
suspension, file any change in a proposed tariff, executed service 
agreement, or part thereof, that has been suspended by order of the 
Commission, except by special permission of the Commission granted upon 
application therefor and for good cause shown.
    (c) Changes in tariffs, executed service agreements, or parts 
thereof continued in effect, and which were to be changed by the 
suspended filing. A natural gas company may not, within the period of 
suspension, file any change in a tariff, executed service agreement, or 
part thereof, that is continued in effect by operation of the order of 
suspension, and that was proposed to be changed by the suspended 
filing, except:
    (1) Under a previously approved tariff provision permitting a 
limited rate change, or
    (2) By special permission of the Commission.


Sec. 154.206  Motion to place suspended rates into effect.

    (a) If, prior to the end of the suspension period, the Commission 
has issued an order requiring changes in the filed rates, or the filed 
rates recover costs for facilities not certificated and in service as 
of the proposed effective date, in order to place the suspended rates 
into effect, the pipelne must file a motion at least one day prior to 
the effective date requested by the pipeline. The motion must be 
accompanied by revised tariff sheets reflecting any changes ordered by 
the Commission or modifications approved by the Commission during the 
suspension period under Sec. 154.205. The filing of the revised tariff 
sheets must:
    (1) Comply with the requirements of subparts A, B, and C of this 
part;
    (2) Identify the Commission order directing the revision;
    (3) List the modifications made to the currently effective rate 
during the suspension period, the docket number in which the 
modifications were filed, and identify the order permitting the 
modifications.
    (b) Where the Commission has suspended the effective date of a 
change of rate, charge, classification, or service for a minimal period 
and the pipeline has not included a motion in its transmittal letter, 
or has specified in its transmittal letter pursuant to 
Sec. 154.7(a)(9), that it reserves its right to file motion to place 
the proposed change of rate, charge, classification, or service into 
effect at the end of the suspension period, the change will go into 
effect, subject to refund, upon motion of the pipeline.
    (c) Where the Commission has suspended the effective date of a 
change of rate, charge, classification, or service for a minimal period 
and the pipeline has included, in its transmittal letter pursuant to 
Sec. 154.7(a)(9), a motion to place the proposed change of rate, 
charge, classification, or service into effect at the end of the 
suspension period, the change will go into effect, subject to refund, 
on the authorized effective date.


Sec. 154.207  Notice requirements.

    All proposed changes in tariffs, contracts, or any parts thereof 
must be filed with the Commission and posted not less than 30 days nor 
more than 60 days prior to the proposed effective date thereof, unless 
a waiver of the time periods is granted by the Commission.


Sec. 154.208  Service on customers and other parties.

    (a) On or before the filing date, the company must serve, upon all 
customers as of the date of the filing and all affected state 
regulatory commissions, an abbreviated form of the filing consisting 
of: The Letter of Transmittal; the Statement of Nature, Reason, and 
Basis; the changed tariff sheets; a summary of the cost-of-service and 
rate base; and, summary of the magnitude of the change.
    (b) On or before the filing date, the company must serve a full 
copy of the filing upon all customers and state regulatory commissions 
that have made a standing request for such service.
    (c) Within 48 hours of receiving a request for a complete copy from 
any customer or state commission that has not made a standing request, 
the company must serve a full copy of any filing.


Sec. 154.209  Form of notice for Federal Register.

    The company must file a form of notice suitable for publication in 
the Federal Register. The company must also submit a copy of the notice 
on a separate 3\1/2\'' diskette in ASCII format. Each diskette must be 
labelled with the name of the company and the words ``notice of 
filing.'' The notice must be in the following form:

United States of America Federal Energy Regulatory Commission

(Name of Company)    Docket No.

Notice of Proposed Changes in FERC Gas Tariff (or Notice of Compliance 
Filing)

    Take notice that on (date),(name of company) tendered for filing 
as part of its FERC Gas Tariff, Volume No. (number), the following 
tariff sheets, to become effective (insert effective date). (List 
tariff sheets). [The following language in the first paragraph 
applies only to compliance filings.] (Name of company) asserts that 
the purpose of this filing is to comply with the Commission's order 
issued (insert issue date), in (docket). [The following language in 
the first paragraph applies only to rate change filings.] The 
proposed changes would (increase/decrease) revenues from 
jurisdictional service by (dollar amount) based on the 12-month 
period ending (date), as adjusted. [For proposed changes other than 
changed rates and charges, the company must state concisely the 
nature of these changes.]

[The company must briefly describe the reasons for the proposed 
changes in the second paragraph.]

    Any person desiring to be heard or to protest this filing should 
file a motion to intervene or protest with the Federal Energy 
Regulatory Commission, Washington, DC 20426, in accordance with 
Sec. 385.214 and Sec. 385.211 of the Commission's rules and 
regulations. All such motions or protests must be filed on or before 
(insert date 12 days after filing date). Protests will be considered 
by the Commission in determining the appropriate action to be taken, 
but will not serve to make protestants parties to the proceeding. 
Any person wishing to become a party must file a motion to 
intervene. Copies of this filing are on file with the Commission and 
are available for public inspection in the Public Reference Room.


Sec. 154.210  Protests, interventions, and comments.

    (a) Unless the notice issued by the Commission provides otherwise, 
any protest, intervention or comment to a tariff filing made pursuant 
to this part must be filed in accordance with Sec. 385.211 of this 
chapter, not later than 12 days after the subject tariff filing. A 
protest must state the basis for the objection. A protest will be 
considered by the Commission in determining the appropriate action to 
be taken, but will not serve to make the protestant a party to the 
proceeding. A person wishing to become a party to the proceeding must 
file a motion to intervene.
    (b) Any motion to intervene must be filed not later than 12 days 
after the subject tariff filing in accordance with Sec. 385.214 of this 
chapter.

Subpart D--Material To Be Filed With Changes


Sec. 154.301  Changes in rates.

    (a) Except for changes in rates pursuant to subparts E, F and G, of 
this part, any natural gas company filing for a change in rates or 
charges, except for a minor rate change, must submit, in addition to 
the material required by subparts A, B, and C of this part, the 
Statements and Schedules described in Sec. 154.312.

[[Page 53002]]

    (b) A natural gas company filing for a minor rate change must file 
the Statements and Schedules described in Sec. 154.313.
    (c) A natural gas company filing for a change in rates or charges 
must be prepared to go forward at a hearing and sustain, solely on the 
material submitted with its filing, the burden of proving that the 
proposed changes are just and reasonable. The filing and supporting 
workpapers must be of such composition, scope, and format as to 
comprise the company's complete case-in-chief in the event that the 
change is suspended and the matter is set for hearing. If the rate 
fixing adjustments presented are not in full accord with any prior 
Commission decision directly involving the filing company, the company 
must include in its working papers alternate material reflecting the 
effect of such prior decision. (For purposes of this section, rate of 
return is not a rate fixing adjustment.)


Sec. 154.302  Previously submitted material.

    (a) If all, or any portion, of the information called for by this 
part has already been submitted to the Commission within six months of 
the filing date of this application, or is included in other data filed 
pursuant to this part, specific reference thereto may be made in lieu 
of resubmission.
    (b) If a new FERC Form No. 2 or 2-A is required to be filed within 
60 days from the end of the base period, the new FERC Form No. 2 or 2-A 
must be filed concurrently with the rate change filing. There must be 
furnished to the Director, Office of Pipeline Regulation, with the rate 
change filing, one copy of the FERC Form No. 2 or 2-A.


Sec. 154.303  Test periods.

    Statements A through M, O, P, and supporting schedules, in 
Sec. 154.312 and Sec. 154.313, must be based upon a test period.
    (a) If the natural gas company has been in operation for 12 months 
on the filing date, then the test period consists of a base period 
followed by an adjustment period.
    (1) The base period consists of 12 consecutive months of the most 
recently available actual experience. The last day of the base period 
may not be more than 4 months prior to the filing date.
    (2) The adjustment period is a period of up to 9 months immediately 
following the base period.
    (3) The test period may not extend more than 9 months beyond the 
filing date.
    (4) The rate factors (volumes, costs, and billing determinants) 
established during the base period may be adjusted for changes in 
revenues and costs which are known and measurable with reasonable 
accuracy at the time of the filing and which will become effective 
within the adjustment period. The base period factors must be adjusted 
to eliminate nonrecurring items. The company may adjust its base period 
factors to normalize items eliminated as nonrecurring.
    (b) If the natural gas company has not been in operation for 12 
months on the filing date, then the test period must consist of 12 
consecutive months ending not more than one year after the filing date. 
Rate factors may be adjusted as in paragraph (a)(4) of this section but 
must not be adjusted for occurrences anticipated after the 12-month 
period.
    (c)(1) Adjustments to base period experience, or to estimates where 
12 months' experience is not available, may include the costs for 
facilities for which either a permanent or temporary certificate has 
been granted, provided such facilities will be in service within the 
test period; or a certificate application is pending. The filing must 
identify facilities, related costs and the docket number of each such 
outstanding certificate. Subject to paragraph (c)(2) of this section, 
adjustments to base period experience, or to estimates where 12 months' 
experience is not available, may include any amounts for facilities 
that require a certificate of public convenience and necessity, where a 
certificate has not been issued by the filing date but is expected to 
be issued before the end of the test period. Adjustments to base period 
may include costs for facilities that do not require a certificate and 
are in service by the end of the test period.
    (2) When a pipeline files a motion to place the rates into effect, 
the filing must be revised to exclude the costs associated with any 
facilities not in service as of the earlier of the effective date or 
the end of the test period.
    (d) The Commission may allow reasonable deviation from the 
prescribed test period.


Sec. 154.304  Format of statements, schedules, workpapers and 
supporting data.

    (a) All statements, schedules, and workpapers must be prepared in 
accordance with the Commission's Uniform System of Accounts.
    (b) The data in support of the proposed rate change must include 
the required particulars of book data, adjustments, and other 
computations and information on which the company relies, including a 
detailed narrative explanation of each proposed adjustment to base 
period actual volumes and costs.
    (c) Book data included in statements and schedules required to be 
prepared or submitted as part of the filing must be reported in a 
separate column or columns. All adjustments to book data must also be 
reported in a separate column or columns so that book amounts, 
adjustments thereto, and adjusted amounts will be clearly disclosed. 
All adjustments must be supported by a narrative explanation.
    (d) Certain of the statements and schedules of Sec. 154.313 are 
workpapers. Any data or summaries reflecting the books of account must 
be supported by accounting workpapers setting forth all necessary 
particulars from which an auditor may readily identify the book data 
included in the filing and verify that such data are in agreement with 
the company's books of account.


Sec. 154.305  Tax normalization.

    (a) Applicability. An interstate pipeline must compute the income 
tax component of its cost-of-service by using tax normalization for all 
transactions.
    (b) Definitions.
    (1) Tax normalization means computing the income tax component as 
if transactions recognized in each period for ratemaking purposes are 
also recognized in the same amount and in the same period for income 
tax purposes.
    (2) Commission-approved ratemaking method means a ratemaking method 
approved by the Commission in a final decision. This includes a 
ratemaking method that is part of an approved settlement or arbitration 
providing that the ratemaking method is to be effective beyond the term 
of the settlement or arbitration.
    (3) Income tax purposes means for the purpose of computing actual 
income tax under the provisions of the Internal Revenue Code or the 
income tax provisions of the laws of a State or political subdivision 
of a State (including franchise taxes).
    (4) Income tax component means that part of the cost-of-service 
that covers income tax expenses allowable by the Commission.
    (5) Ratemaking purposes means for the purpose of fixing, modifying, 
accepting, approving, disapproving, or rejecting rates under the 
Natural Gas Act.
    (6) Tax effect means the tax reduction or addition associated with 
a specific expense or revenue transaction.
    (7) Transaction means an activity or event that gives rise to an 
accounting entry. 

[[Page 53003]]

    (c) Reduction of, and addition to, Rate Base. (1) The rate base of 
an interstate pipeline using tax normalization under this section must 
be reduced by the balances that are properly recordable in Account 281, 
``Accumulated deferred income taxes-accelerated amortization 
property''; Account 282, ``Accumulated deferred income taxes--other 
property'': and Account 283, ``Accumulated deferred income taxes--
other.'' Balances that are properly recordable in Account 190, 
``Accumulated deferred income taxes,'' must be treated as an addition 
to rate base. Include, as an addition or reduction, as appropriate, 
amounts in Account 182.3, Other regulatory assets, and Account 254, 
Other regulatory liabilities, that result from a deficiency or excess 
in the deferred tax accounts (see paragraph (d) of this section) and 
which have been, or are soon expected to be, authorized for recovery or 
refund through rates.
    (2) Such rate base reductions or additions must be limited to 
deferred taxes related to rate base, construction, or other costs and 
revenues affecting jurisdictional cost-of-service.
    (d) Special rules. (1) This paragraph applies:
    (i) If the rate applicant has not provided deferred taxes in the 
same amount that would have accrued had tax normalization always been 
applied; or
    (ii) If, as a result of changes in tax rates, the accumulated 
provision for deferred taxes becomes deficient in, or in excess of, 
amounts necessary to meet future tax liabilities.
    (2) The interstate pipeline must compute the income tax component 
in its cost-of-service by making provision for any excess or deficiency 
in deferred taxes.
    (3) The interstate pipeline must apply a Commission-approved 
ratemaking method made specifically applicable to the interstate 
pipeline for determining the cost-of-service provision described in 
paragraph (d)(2) of this section. If no Commission-approved ratemaking 
method has been made specifically applicable to the interstate 
pipeline, then the interstate pipeline must use some ratemaking method 
for making such provision, and the appropriateness of such method will 
be subject to case-by-case determination.
    (4) An interstate pipeline must continue to include, as an addition 
or reduction to rate base, any deficiency or excess attributable to 
prior flow-through or changes in tax rates (paragraphs (d)(1)(i) and 
(d)(1)(ii) of this section), until such deficiency or excess is fully 
amortized in accordance with a Commission approved ratemaking method.


Sec. 154.306  Cash working capital.

    A natural gas company that files a tariff change under this part 
may not receive a cash working capital adjustment to its rate base 
unless the company or other participant in a rate proceeding under this 
part demonstrates, with a fully developed and reliable lead-lag study, 
a net revenue receipt lag or a net expense payment lag (revenue lead). 
Any demonstrated net revenue receipt lag will be credited to rate base; 
and, any demonstrated net expense payment lag will be deducted from 
rate base.


Sec. 154.307  Joint facilities.

    The Statements required by Sec. 154.312 must show all costs 
(investment, operation, maintenance, depreciation, taxes) that have 
been allocated to the natural gas operations involved in the subject 
rate change and are associated with joint facilities. The methods used 
in making such allocations must be provided.


Sec. 154.308  Representation of chief accounting officer.

    The filing must include a statement executed by the chief 
accounting officer or other authorized accounting representative of the 
filing company representing that the cost statements, supporting data, 
and workpapers, that purport to reflect the books of the company do, in 
fact, set forth the results shown by such books.


Sec. 154.309  Incremental expansions.

    (a) For every expansion for which incremental rates are charged, 
the company must provide a summary with applicable cross-references to 
Sec. 154.312 and Sec. 154.313, of the costs and revenues associated 
with the expansion, until the Commission authorizes the costs of the 
incremental facilities to be rolled-in to the pipeline's rates. For 
every expansion that has an at-risk provision in the certificate 
authorization, the costs and revenues associated with the facility must 
be shown in summary format with applicable cross-references to 
Sec. 154.312 and Sec. 154.313, until the Commission removes the at-risk 
condition.
    (b) The summary statements must provide the formulae and explain 
the bases used in the allocation of common costs to each incremental 
facility.


Sec. 154.310  Zones.

    If the company maintains records of costs by zone, and proposes a 
zone rate methodology based on these costs, the statements and 
schedules in Sec. 154.312 and Sec. 154.313 must reflect costs detailed 
by zone.


Sec. 154.311  Updating of statements.

    (a) Certain statements and schedules in Sec. 154.312, that include 
test period data, must be updated with actual data by month and must be 
resubmitted in the same format and with consecutive 12 month running 
totals, for each month of the adjustment period. The updated statements 
or schedules must be filed 45 days after the end of the test period. 
The updated filing must reference the associated docket number and must 
be filed in the same format, form, and number as the original filing.
    (b) The statements and schedules in Sec. 154.312 to be updated are: 
Statements C, D and H-4; Schedules B-1, B-2, C-3, D-2, E-2, E-4, G-1, 
G-4, G-5, G-6, H-1 (1)(a), H-1 (1)(b), H-1 (1)(c), H-1 (3)(a) through 
H-1 (3)(l), H-2 (1), H-3 (3), I-4, and I-6.


Sec. 154.312  Composition of Statements.

    (a) Statement A. Cost-of-service Summary. Summarize the overall gas 
utility cost-of-service: operation and maintenance expenses, 
depreciation, taxes, credits to cost-of-service, and return as 
developed in other statements and schedules.
    (b) Statement B. Rate Base and Return Summary. Summarize the 
overall gas utility rate base shown in Statements C, D, E, and 
Schedules B-1 and B-2. Show the application of the claimed rate of 
return to the overall rate base.
    (1) Schedule B-1. Accumulated Deferred Income Taxes (Account Nos. 
190, 282, and 283). Show monthly book balances of accumulated deferred 
income taxes for each of the 12 months during the base period. List all 
items for which the accumulated deferred income taxes are calculated. 
In adjoining columns, show additions and reductions for the adjustment 
period balance and the total adjusted balance. Separately identify the 
individual components and the amounts in these accounts that the 
company seeks to include in its rate base.
    (2) Schedule B-2. Regulatory Asset and Liability. If the pipeline 
seeks recovery of such balances in rate base, show monthly book 
balances of regulatory assets (Account 182.3) and liabilities (Account 
254) for each of the 12 months during the base period. In adjoining 
columns, show additions and reductions for the adjustment period 
balance and the total adjusted balance. Separately identify the 
individual components and the amounts in these accounts that the 
company seeks to include in its rate base. Identify any specific 
Commission authority that 

[[Page 53004]]
required the establishment of these amounts. Regulatory asset or 
liability net of deferred tax amounts should be included. Also, 
separately state the gross amounts of the regulatory asset and 
liability.
    (c) Statement C. Cost of Plant Summary. Show the amounts of gas 
utility plant classified by Accounts 101, 102, 103, 104, 105, 106, 107, 
117.1, and 117.2 as of the beginning of the 12 months of actual 
experience, the book additions and reductions (in separate columns) 
during the 12 months, and the book balances at the end of the 12-month 
period. In adjoining columns, show the claimed adjustments, if any, to 
the book balances and the total cost of plant to be included in rate 
base. For Account 117, also provide the volumes by subaccount. State 
the method used for accounting for system gas recorded in Account 
117.2. Explain all adjustments in the following schedules.
    (1) Schedule C-1. End of Base and Test Period Plant Functionalized. 
Demonstrate the ending base and test period balances for Plant in 
Service, in columnar form, by detailed plant account prescribed by the 
Commission's Uniform System of Accounts for Natural Gas Companies (part 
201 of this chapter) with subtotals by functional classifications, 
e.g., Intangible Plant, Manufactured Gas Production Plant, Natural Gas 
Production and Gathering Plant, Products Extraction Plant, Storage 
Plant, Transmission Plant, Distribution Plant, and General Plant. Show 
zones, to the extent required by Sec. 154.310, and expansions, to the 
extent required by Sec. 154.309. Separately identify those facilities 
and associated costs claimed for the test period that require 
certificate authority but such authority has not been obtained at the 
time of filing. Give the docket number of the certificate proceeding.
    (2) Schedule C-2. Show, for Accounts 106 and 107, a list of work 
orders claimed in the rate base. Give the work order number, docket 
number, description, amount of each work order, and the amounts of each 
type of undistributed construction overhead. Work orders amounting to 
$500,000 or less may be grouped by category of items.
    (3) Schedule C-3. A cross-reference to updated information in the 
company's FERC Form No. 2 may be substituted for this Schedule. Give 
details of each storage project owned and storage projects under 
contract to the company, showing cost by major functions. Show base and 
system gas storage quantities and associated costs by account for the 
test period and for the 12 months of actual experience with monthly 
inputs and outputs to system gas.
    (4) Schedule C-4. This schedule is part of the workpapers. State 
the methods and procedures followed in capitalizing the allowance for 
funds used during construction and other construction overheads. This 
schedule must be provided only in situations when the pipeline has 
changed any of its procedures since the last filed FERC Forms No. 2 or 
2-A.
    (5) Schedule C-5. This schedule is part of the workpapers. Set 
forth the cost of Plant in Service carried on the company's books as 
gas utility plant which was not being used in rendering gas service. 
Describe the plant. This schedule must be provided only if there is a 
significant change of $500,000 or more since the end of the year 
reported in the company's last FERC Form No. 2 or 2-A.
    (d) Statement D. Accumulated Provisions for Depreciation, 
Depletion, and Amortization. Show the accumulated provisions for 
depreciation, depletion, amortization, and abandonment (Account 108, 
detailed by functional plant classification, and Account 111), as of 
the beginning of the 12 months of actual experience, the book additions 
and reductions during the 12 months, and the balances at the end of the 
12-month period. In adjoining columns, show adjustments to these ending 
book balances and the total adjusted balances. All adjustments must be 
explained in the supporting material. Any authorized negative salvage 
must be maintained in a separate subaccount of Account 108. For each 
functional plant classification, show depreciation reserve associated 
with offshore and onshore plant separately. The following schedules and 
additional material must be submitted as part of Statement D:
    (1) Schedule D-1. This schedule is part of the workpapers. Show the 
depreciation reserve book balance applicable to that portion of the 
depreciation rate not yet approved by the Commission, the depreciation 
rates, the docket number of the order approving such rate, and an 
explanation of any difference. Reflect actual end of base period 
depreciation reserve functionalized. Show accumulated depreciation and 
amortization, in columnar form, for the ending base and test period 
balances by functional classifications of Accumulated Depreciation 
reserve. (Examples are provided in Schedule C-1). For each functional 
plant classification, show depreciation reserve associated with 
offshore and onshore plant separately.
    (2) Schedule D-2. This schedule is part of the workpapers. Give a 
description of the methods and procedures used in depreciating, 
depleting, and amortizing plant and in recording abandonments. This 
schedule must be filed only if a policy change has been made effective 
since the period covered by the last annual report on FERC Form No. 2 
or 2-A was filed with the Commission.
    (e) Statement E. Working Capital. Show the components of working 
capital in sufficient detail to explain how the amount of each 
component was computed. Components of working capital, other than cash 
working capital, may include an allowance for the average of 13 monthly 
balances of materials and supplies and prepayments actually expended 
and gas for resale. To the extent the applicant files to adjust the 
average of any 13 monthly balances, workpapers must be submitted that 
support the adjustment(s). Show the computations, cross-references, and 
sources from which the data used in computing claimed working capital 
are derived. The following schedules and material must be submitted as 
part of Statement E:
    (1) Schedule E-1. Show the computation of cash working capital 
claimed as an adjustment to the gas company's rate base. Any adjustment 
to rate base requested must be based on a fully-developed and reliable 
lead-lag study. The components of the lead-lag study must include 
actual total company revenues, purchased gas costs, storage expense, 
transportation and compression of gas by others, salaries and wages, 
administrative and general expenses, income taxes payable, taxes other 
than income taxes, and any other operating and maintenance expenses for 
the base period. Cash working capital allowances in the form of 
additions to rate base may not exceed one-eighth of the annual 
operating expenses, as adjusted, net of non-cash items.
    (2) Schedule E-2. Set forth monthly balances for materials, 
supplies, and prepayments in such detail as to disclose, either by 
subaccounts regularly maintained on the books or by analysis of the 
principal items included in the main account, the nature of such 
charges.
    (3) Schedule E-3. For FERC Accounts 117.3, 164.1, 164.2 and 164.3, 
show the quantities and the respective costs of natural gas stored at 
the beginning of the test period, the input, output and balance 
remaining in Dth and associated costs by months. The method of pricing 
input, output and balance, and the claimed adjustments shall be 
disclosed and clearly and fully explained. 

[[Page 53005]]
Pipelines using the inventory method for system gas should not include 
any system gas inventory balances in this schedule.
    (f) Statement F-1. Rate of Return Claimed. Show the percentage rate 
of return claimed and the general reasons therefor. Where any component 
of the capital of the filing company is not primarily obtained through 
its own financing, but is primarily obtained from a company by which 
the filing company is controlled, as defined in the Commission's 
Uniform System of Accounts, then the data required by these statements 
must be submitted with respect to the debt capital, preferred stock 
capital, and common stock capital of such controlling company or any 
intermediate company through which such funds have been secured. 
Furnish the Commission staff a copy of the latest prospectus issued by 
the filing natural gas company, any superimposed holding company, or 
subsidiary companies.
    (g) Statement F-2. Show
    (1) The capitalization, capital structure, cost of debt capital, 
preferred stock capital, and the claimed return on stockholders' 
equity;
    (2) The weighted cost of each capital class based on the capital 
structure; and,
    (3) The overall rate of return claimed.
    (h) Statement F-3. Debt Capital. Show the weighted average cost of 
debt capital based upon the following data for each class and series of 
long-term debt outstanding according to the balance sheet, as of the 
end of the 12-month base period of actual experience and as of the end 
of the 9-month test period.
    (1) Title.
    (2) Date of issuance and date of maturity.
    (3) Interest rate.
    (4) Principal amount of issue: Gross proceeds; Underwriters' 
discount or commission: Amount; Percent gross proceeds; Issuance 
expense: Amount; Percent gross proceeds; Net proceeds; Net proceeds per 
unit.
    (5) Cost of money: Yield to maturity based on the interest rate and 
net proceeds per unit outstanding determined by reference to any 
generally accepted table of bond yields. The yield to maturity is to be 
expressed as a nominal annual interest rate. For example, for bonds 
having semiannual payments, the yield to maturity is twice the 
semiannual rate.
    6) If the issue is owned by an affiliate, state the name and 
relationship of the owner.
    (7) If the filing company has acquired, at a discount or premium, 
some part of its outstanding debt which could be used in meeting 
sinking fund requirements, or for other reasons, separately show: The 
annual amortization of the discount or premium for each series of debt 
from the date of reacquisition over the remaining life of the debt 
being retired; and, the total discount and premium, as a result of such 
amortization, applicable to the test period.
    (i) Statement F-4. Preferred Stock Capital. Show the weighted 
average cost of preferred stock capital based upon the following data 
for each class and series of preferred stock outstanding according to 
the balance sheet, as of the end of the 12-month base period of actual 
experience and as of the end of the nine-month test period.
    (1) Title.
    (2) Date of issuance.
    (3) If callable, call price.
    (4) If convertible, terms of conversion.
    (5) Dividend rate.
    (6) Par or stated amount of issue: Gross proceeds; Underwriters' 
discount or commission: Amount; Percent gross proceeds; Issuance 
expenses: Amount; Percent gross proceeds; Net proceeds; Net proceeds 
per unit.
    (7) Cost of money: Annual dividend rate divided by net proceeds per 
unit.
    (8) State whether the issue was offered to stockholders through 
subscription rights or to the public.
    (9) If the issue is owned by an affiliate, state the name and 
relationship of the owner.
    (j) Statement G. Revenues, Credits, and Billing Determinants.
    (1) Show in summary format the information requested below on 
revenues, credits and billing determinants for the base period and the 
base period as adjusted. Explain the basis for adjustment to the base 
period. The level of billing determinants should not be adjusted for 
discounting.
    (i) Revenues. Provide the total revenues, from jurisdictional and 
non-jurisdictional services, classified in accordance with the 
Commission's Uniform System of Accounts for the base period and for the 
base period as adjusted. Separate operating revenues by major rate 
component (e.g., reservation charges, demand charges, usage charges, 
commodity charges, injection charges, withdrawal charges, etc.) from 
revenues received from penalties, surcharges or other sources (e.g., 
ACA, GRI, transition costs). Show revenues by rate schedule and by 
receipt and delivery rate zones, if applicable. Show separately the 
revenues for firm services under contracts with a primary term of less 
than one year. For services provided through released capacity, 
identify total revenues by rate schedule and by receipt and delivery 
rate zones, if applicable.
    (ii) Credits. Show the principal components comprising each of the 
various items which are reflected as credits to the cost-of-service in 
preparing Statement A, Overall Cost-of-service for the base period and 
the base period as adjusted. Any transition cost component of 
interruptible transportation revenue must not be treated as operating 
revenues as defined above.
    (iii) Billing Determinants. Show total reservation and usage 
billing determinants for the base period and the base period as 
adjusted, by rate schedule by receipt and delivery rate zones, if 
applicable. Show separately the billing determinants for firm services 
under contracts with a primary term of less than one year. For services 
provided through released capacity, identify billing determinants by 
rate schedule and by receipt and delivery rate zones, if applicable.
    (2) The Schedules G-1 through G-6 must be filed at the FERC and 
served on all state commissions having jurisdiction over the affected 
customers within fifteen days after the rate case is filed. Schedules 
G-1 through G-6 must also be served on parties that request such 
service within 15 days of the filing of the rate case.
    (i) Schedule G-1. Base Period Revenues. For the base period, show 
total actual revenues and billing determinants by month by customer 
name, by rate schedule, by receipt and delivery zone, if applicable, by 
major rate component (e.g., reservation charges) and totals. Billing 
determinants must not be adjusted for discounting. Provide actual 
throughput (i.e., usage or commodity quantities, unadjusted for 
discounting) and actual contract demand levels (unadjusted for 
discounting). Provide this information separately for firm service 
under contracts with a primary term of less than one year. Separate 
operating revenues from revenues received from surcharges or other 
sources (e.g., ACA, GRI, transition costs). Identify customers who are 
affiliates. Identify rate schedules under which costs are allocated and 
rate schedules under which revenues are credited for the base period 
with cross-references to the other filed statements and schedules.
    (ii) Schedule G-2. Adjustment Period Revenues.
    (A) Show revenues and billing determinants by month, by customer 
name, by rate schedule, by receipt and delivery zone, if applicable, by 
major rate component (e.g., reservation charges) and totals for the 
base period 

[[Page 53006]]
adjusted for known and measurable changes which are expected to occur 
within the adjustment period computed under the rates expected to be 
charged. Billing determinants must not be adjusted for discounting. 
Provide projected throughput (i.e., usage or commodity quantities, 
unadjusted for discounting) and projected contract demand levels 
(unadjusted for discounting). Provide this information separately for 
firm service under contracts with a primary term of less than one year. 
Separate operating revenues from revenues received from surcharges or 
other sources (e.g., ACA, GRI, transition costs). Identify customers 
who are affiliates. Identify rate schedules under which costs are 
allocated and rate schedules under which revenues are credited for the 
adjustment period with cross-references to the other filed statements 
and schedules.
    (B) Provide a reconciliation of the base period revenues and 
billing determinants and the revenues and billing determinants for the 
base period as adjusted.
    (iii) Schedule G-3. Specify, quantify, and justify each proposed 
adjustment (capacity release, plant closure, contract termination, 
etc.) to base period actual billing determinants, and provide a 
detailed explanation for each factor contributing to the adjustment. 
Include references to any certificate docket authorizing changes. 
Submit workpapers with all formulae.
    (iv) Schedule G-4. At-Risk Revenue. For each instance where there 
is a separate cost-of-service associated with facilities for which the 
applicant is ``at risk,'' show the base period and adjustment period 
revenue by customer or customer code, by rate schedule, by receipt and 
delivery zone, if applicable, and as 12-month totals. Provide this 
information by month unless otherwise agreed to by interested parties 
and if monthly reporting is consistent with past practice of the 
pipeline. However, if seasonal services are involved, or if billing 
determinants vary from month to month, the information must be provided 
monthly. Provide projected throughput (i.e., usage or commodity 
quantities, unadjusted for discounting) and projected contract demand 
levels (unadjusted for discounting).
    (v) Schedule G-5. Other Revenues.
    (A) Describe and quantify, by month, the types of revenue included 
in Account Nos. 490-495 for the base and test periods. Show revenues 
applicable to the sale of products. Show the principal components 
comprising each of the various items which are reflected as credits to 
cost-of-service in Statement A.
    (B) To the extent the credits to the cost-of-service reflected in 
Statement A differ from the amounts shown on Schedule G-5, compare and 
reconcile the two statements. Quantify and explain each proposed 
adjustment to base period actuals. For Account No. 490, show the name 
and location of each product extraction plant processing gas for the 
applicant, and the inlet and outlet monthly dth of the pipeline's gas 
at each plant. Show the revenues received by the applicant by product 
by month for each extraction plant for the base period and proposed for 
the test period.
    (C) Separately state each item and revenue received for the 
transportation of liquids, liquefiable hydrocarbon, or nonhydrocarbon 
constituents owned by shippers. For both the base and test periods, 
indicate by shipper contract: The quantity transported and the revenues 
received.
    (D) Separately state the revenues received from the release by the 
pipeline of transportation and compression capacity it holds on other 
pipeline systems. The revenues must equal the revenues reflected on 
Schedule I-4(iv).
    (vi) Schedule G-6. Miscellaneous Revenues. Separately state by 
month the base and adjustment period revenues and the associated 
quantities received as penalties from jurisdictional customers; the 
revenues received from cash outs and other imbalance adjustments; and, 
the revenues received from exit fees.
    (k) Statement H-1. Operation and Maintenance Expenses. Show the gas 
operation and maintenance expenses according to each applicable account 
of the Commission's Uniform System of Accounts for Natural Gas 
Companies. Show the expenses under columnar headings, with subtotals 
for each functional classification, as follows: Operation and 
maintenance expense by months, as booked, for the 12 months of actual 
experience, and the 12-month total; adjustments, if any, to expenses as 
booked; and, total adjusted operation and maintenance expenses. Provide 
a detailed narrative explanation of, and the basis and supporting 
workpapers for, each adjustment. The following schedules and additional 
material must be submitted as part of Statement H-1:
    (1) Schedule H-1 (1). This schedule is part of the workpapers. Show 
the labor costs, materials and other charges (excluding purchased gas 
costs) and expenses associated with Accounts 810, 811, and 812 recorded 
in each gas operation and maintenance expense account of the Uniform 
System of Accounts. Show these expenses, under the columnar headings, 
with subtotals for each functional classification, as follows: 
Operation and maintenance expenses by months, as booked, for the 12 
months of actual experience, and the 12-month total; adjustments, if 
any, to expenses as booked; and total adjusted operation and 
maintenance expenses. Disclose and explain all accrual or other 
normalizing accounting entries for internal purposes reflected in the 
monthly expenses presented per book. Explain any amounts not currently 
payable, except depreciation charged through clearing accounts, 
included in operation and maintenance expenses.
    (2) Schedule H-1 (1)(a). Labor Costs.
    (3) Schedule H-1 (1)(b). Materials and Other Charges (Excluding 
Purchased Gas Costs and items shown in Schedule H-1 (1)(c)).
    (4) Schedule H-1 (1)(c). Quantities Applicable to Accounts Nos. 
810, 811, and 812. Show the quantities for each of the contra-accounts 
for both base and test periods.
    (5) Schedule H-1 (2). This schedule is part of the workpapers. 
Show, for the 12 months of actual experience and claimed adjustments: A 
classification of principal charges, credits and volumes; particulars 
of supporting computations and accounting bases; a description of 
services and related dollar amounts for which liability is incurred or 
accrued; and, the name of the firm or individual rendering such 
services. Expenses reported in Schedules H-1 (2)(a) through H-1 (2)(k) 
of $100,000 or less per type of service may be grouped.
    (6) Schedule H-1 (2)(a). Accounts 806, 808.1, 808.2, 809.1, 809.2, 
813, 823, and any other account used to record fuel use or gas losses. 
Provide details of each type of expense.
    (7) Schedule H-1 (2)(b). Accounts 913 and 930.1. Advertising 
Expenses. Disclose principal types of advertising such as TV, 
newspaper, etc.
    (8) Schedule H-1 (2)(c). Account 921. Office Supplies and Expenses.
    (9) Schedule H-1 (2)(d). Account 922. Administrative Expenses 
Transferred Credit.
    (10) Schedule H-1 (2)(e). Account 923. Outside Services Employed.
    (11) Schedule H-1 (2)(f). Account 926. Employee Pensions and 
Benefits.
    (12) Schedule H-1 (2)(g). Account 928. Regulatory Commission 
Expenses.
    (13) Schedule H-1 (2)(h). Account 929. Duplicate Charges. Credit.
    (14) Schedule H-1 (2)(i). Account 930.2. Miscellaneous General 
Expenses.
    (15) Schedule H-1 (2)(j). Intercompany and Interdepartmental 
Transactions. Provide a complete disclosure of all corporate overhead 

[[Page 53007]]
allocated to the company. If the expense accounts contain charges or 
credits to and from associated or affiliated companies or nonutility 
departments of the company, submit a schedule, or schedules, as to each 
associated or affiliated company or nonutility department showing:
    (i) The amount of the charges, or credits, during each month and in 
total for the base period and the adjustment period.
    (ii) The FERC Account No. charged (or credited).
    (iii) Descriptions of the specific services performed for, or by, 
the associated/affiliated company or nonutility department.
    (iv) The bases used in determining the amounts of the charges 
(credits). Explain, document, and demonstrate the derivation of the 
allocation bases with underlying calculations used to allocate costs 
among affiliated companies, and identify (by account number) all costs 
paid to, or received from affiliated companies which are included in a 
pipeline's cost-of-service for both the base and test periods.
    (16) Schedule H-1 (2)(k). Show all lease payments applicable to gas 
operation contained in the operation and maintenance accounts. Leases 
of $500,000 or less may be grouped by type of lease.
    (l) Statement H-2. Depreciation, Depletion, Amortization and 
Negative Salvage Expenses. Show, separately, the gas plant 
depreciation, depletion, amortization, and negative salvage expenses by 
functional classifications. For each functional plant classification, 
show depreciation reserve associated with offshore and onshore plant 
separately. Show, in separate columns: expenses for the 12 months of 
actual experience; adjustments, if any, to such expense; and, the total 
adjusted expense claimed. Explain the bases, methods, essential 
computations, and derivation of unit rates for the calculation of 
depreciation, depletion, and amortization expense for the 12 months of 
actual experience and for the adjustments. The amounts of depreciable 
plant must be shown by the functions specified in paragraph C of 
Account 108, Accumulated Provisions for Depreciation of Gas Utility 
Plant, and Account 111, Accumulated Provision for Amortization and 
Depletion of Gas Utility Plant, of the Commission's Uniform System of 
Accounts for Natural Gas Companies, and, if available, for each 
detailed plant account (300 Series) together with the rates used in 
computing such expenses. Explain any deviation from the rates 
determined to be just and reasonable by the Commission. Show the rate 
or rates previously used together with supporting data for the new rate 
or rates used for this filing. The following schedule and additional 
material must be submitted as a part of Statement H-2:
    (1) Schedule H-2 (1). Depreciable Plant.
    (i) Reconcile the depreciable plant shown in Statement H-2 with the 
aggregate investment in gas plant shown in Statement C, and the expense 
charged to other than prescribed depreciation, depletion, amortization, 
and negative salvage expense accounts. Identify the amounts of plant 
costs and associated plant accounts used as the bases for depreciation 
expense charged to clearing accounts. For each functional plant 
classification, show depreciation reserve associated with offshore and 
onshore plant separately.
    (ii) Schedule H-2 (1) must be updated, as set forth in 
Sec. 154.310, with actual depreciable plant and reconciled with updated 
Statement C.
    (m) Statement H-3. Income Taxes. Show the computation of allowances 
for Federal and State income taxes for the test period based on the 
claimed return applied to the overall gas utility rate base. To 
indicate the accounting classification applicable to the amount 
claimed, the computation of the Federal income tax allowance must show, 
separately, the amounts designated as current tax and deferred tax. 
Section 154.306, Tax Normalization, is incorporated in these 
instructions by reference. All the requirements of this section apply 
to Schedule H-3. The following schedules and additional material must 
be submitted as a part of Statement H-3:
    (1) Schedule H-3 (1). This schedule is part of the workpapers. Show 
the income tax paid each State in the current and/or previous year 
covered by the test period.
    (2) Schedule H-3 (2). This schedule is part of the workpapers. Show 
the computation of an updated reconciliation between book depreciable 
plant and tax depreciable plant and accumulated provision for deferred 
income taxes, for the base period or latest calendar or fiscal year 
(depending on the company's reporting period). Regulatory asset or 
liability net of deferred tax amounts should be included in this 
reconciliation. Also, separately state the gross amounts of the 
regulatory asset and liability.
    (n) Statement H-4. Other Taxes. Show the gas utility taxes, other 
than Federal or state income taxes, in separate columns, as follows: 
Tax expense per books for the 12 months of actual experience 
(separately identify the amounts expensed or accrued during the 
period); adjustments, if any, to amounts booked; and, the total 
adjusted taxes claimed. Show the kind and amount of taxes paid under 
protest or in connection with taxes under litigation. Show taxes by 
state and by type of tax. The following schedules and additional 
material must be submitted as a part of Statement H-4:
    (1) Schedule H-4. This schedule is part of the workpapers. Show the 
computations of adjusted taxes claimed in Statement H(4).
    (o) Statement I. Statement I consists of the following Schedules:
    (1) Schedule I-1. Functionalization of Cost-of-service. Show the 
overall cost-of-service contained in Statement A as supported by 
Statements B, C, D, E, G (revenue credits), and H:
    (i) Schedule I-1(a). Separate overall cost-of-service by function 
of facility.
    (ii) Schedule I-1(b). Separate the transmission, storage, and 
gathering facilities between incremental and non-incremental 
facilities. If the pipeline proposes to directly assign the costs of 
specific facilities, it must provide a separate cost-of-service for 
every directly assigned facility (e.g., lateral or storage field).
    (iii) Schedule I-1(c). If the pipeline maintains records of costs 
by zone and proposes a zone rate methodology based on those costs 
separately state transmission, storage, and gathering costs, for each 
zone.
    (iv) Schedule I-1(d). Show the method used to allocate common and 
joint costs to various functions. Provide the factors underlying the 
allocation of general costs (e.g., miles of pipe, cost of plant, 
labor). Show the formulae used and explain the bases for the allocation 
of common and joint costs.
    (2) Schedule I-2. Classification of Cost-of-service.
    (i) For each functionalized cost-of-service provided in Schedule I-
1 (a), (b), and (c), show the classification of costs between fixed 
costs and variable costs and between reservation costs and usage costs. 
The classification must be for each element of the cost-of-service 
(e.g., depreciation expenses, state income taxes, revenue credits). For 
operation and maintenance expenses and revenue credits, the 
classification must be provided by account and by total.
    (ii) Explain the basis for the classification of costs.
    (iii) Explain any difference between the method for classifying 
costs and the classification method underlying the pipeline's currently 
effective rates.
    (3) Schedule I-3. Allocation of Cost-of-service. 

[[Page 53008]]

    (i) If the company provides gas sales and transportation as a 
bundled service, show the allocation of costs between direct sales or 
distribution sales and the other services. If the company provides 
unbundled transportation, show the allocation of costs between services 
with cost-of-service rates and services with market-based rates, 
including products extraction, sales, and company-owned production. If 
the cost-of-service is allocated among rate zones, show how the 
classified cost-of-service is allocated among rate zones by function. 
If the pipeline proposes to establish rate zones for the first time, or 
to change existing rate zone boundaries, explain how the rate zone 
boundaries are established.
    (ii) Show how the classified costs of service provided in Schedule 
I-2 or Schedule I-3 (i) are allocated among the pipeline's services and 
rate schedules.
    (iii) Provide the formulae used in the allocation of the cost-of-
service. Provide the factors underlying the allocation of the cost-of-
service (e.g., contract demand, annual billing determinants, three-day 
peak). Provide the load factor or other basis for any imputed demand 
quantities.
    (iv) Explain any changes in the basis for the allocation of the 
cost-of-service from the allocation methodologies underlying the 
currently effective rates.
    (4) Schedule I-4. Transmission and Compression of Gas by Others 
(Account 858). Provide the following information for each transaction 
for the base and adjustment period:
    (i) The name of the transporter.
    (ii) The name of the rate schedule under which service is provided, 
and the expiration date of the contract.
    (iii) Monthly usage volumes.
    (iv) Monthly costs.
    (v) The monthly revenues for volumes flowing under released 
capacity. The revenues in Schedule I-4 (iv) must also be reflected, 
separately, as a credit in Schedule G-5.
    (5) Schedule I-5. Gas Balance. Show by months and total, for the 12 
months of actual experience, the company's Gas Account, in the form 
required by FERC Form No. 2 pages 520 and 521. Show corresponding 
estimated data, if claimed to be different from actual experience. 
Provide the basis for any variation between estimated and actual base 
period data.
    (p) Statement J. Comparison and Reconciliation of Estimated 
Operating Revenues With Cost-of-service. Compare the total revenues by 
rate schedule (Schedule G-2) to the allocated cost-of-service 
(Statement I). Identify any surcharges that are reflected in Statement 
N or in Statement I.
    (1) Schedule J-1. Summary of Billing Determinants. Provide a 
summary of all billing determinants used to derive rates. Provide a 
reconciliation of customers' total billing determinants as shown on 
Schedule G-2 with those used to derive rates in Schedule J-2. Provide 
an explanation of how any discount adjustment is developed. If billing 
determinants are imputed for interruptible service, explain the method 
for calculating the billing determinants.
    (2) Schedule J-2. Derivation of Rates. Show the derivation of each 
rate component of each rate. For each rate component of each rate 
schedule, include:
    (i) A reference (by page, line, and column) to the allocated cost-
of-service in Statement I.
    (ii) A reference to the appropriate billing determinants in 
Schedule J-1.
    (iii) Explain any changes in the method used for the derivation of 
rates from the method used in developing the underlying rates.
    (q) Statement K. [Reserved]
    (r) Statement L. Balance Sheet. Provide a balance sheet in the form 
prescribed by the Commission's Uniform System of Accounts for Natural 
Gas Companies as of the beginning and end of the base period. Include 
any notes. If the natural gas company is a member of a group of 
companies, also provide a balance sheet on a consolidated basis.
    (s) Statement M. Income Statement. Provide an income statement, 
including a section on earnings, in the form prescribed by the 
Commission's Uniform System of Accounts for Natural Gas Companies for 
the base period. Include any notes. If the natural gas company is a 
member of a system group of companies, provide an income statement on a 
consolidated basis.
    (t) Statement N. [Reserved]
    (u) Statement O. Description of Company Operations. Provide a 
description of the company's service area and diversity of operations. 
Include the following:
    (1) Only if significant changes have occurred since the filing of 
the last FERC Form No. 2 or 2-A, provide a detailed system map.
    (2) A list of each major expansion and abandonment since the 
company's last general rate case. Provide brief descriptions, 
approximate dates of operation or retirement from service, and costs 
classified by functions.
    (3) A detailed description of how the company designs and operates 
its systems. Include design temperature.
    (v) Statement P. Explanatory Text and Prepared Testimony. Provide 
copies of prepared testimony indicating the line of proof which the 
company would offer for its case-in-chief in the event that the rates 
are suspended and the matter set for hearing. Name the sponsoring 
witness of all text and testimony. Statement P must be filed 
concurrently with the other schedules.


Sec. 154.313  Schedules for minor rate changes.

    (a) A change in a rate or charge that, for the test period, does 
not increase the company's revenues by the smaller of $1,000,000 or 5 
percent is a minor rate change. A change in a rate level that does not 
directly or indirectly result in an increased rate or charge to any 
customer or class of customers is a minor rate change.
    (b) In addition to the schedules in this section, filings for minor 
rate changes must include Statements L, M, O, P, I-1 through I-4, and J 
of Sec. 154.312.
    (c) The schedules of this section must contain the principal 
determinants essential to test the reasonableness of the proposed minor 
rate change. Any adjustments to book figures must be separately stated 
and the basis for the adjustment must be explained.
    (d) Schedules B-1, B-2, C, D, E, H, H-2, and H-4 of Sec. 154.313, 
must be updated with actual data by month and must be resubmitted in 
the same format and with consecutive 12 month running totals, for each 
month of the adjustment period. The updated statements or schedules 
must be filed 45 days after the end of the test period. The updated 
filing must reference the associated docket number and must be filed in 
the same format, form, and number as the original filing.
    (e) Composition of schedules for minor rate changes.
    (1) Schedule A. Overall Cost-of-service by Function. Summarize the 
overall cost-of-service (operation and maintenance expenses, 
depreciation, taxes, return, and credits to cost-of-service) developed 
from the supporting schedules below.
    (2) Schedule B. Overall Rate Base and Return. Summarize the overall 
gas utility rate base by function. Include the claimed rate of return 
and show the application of the claimed rate of return to the overall 
rate base.
    (3) Schedule B-1. Accumulated Deferred Income Taxes (Account Nos. 
190, 281, 282, and 283). Show monthly book balances of accumulated 
deferred income taxes for each of the 12 months during the base period. 
In adjoining columns, show additions and reductions for the adjustment 
period balance and the total adjusted balance. 

[[Page 53009]]

    (4) Schedule B-2. Regulatory Asset and Liability. Show monthly book 
balances of regulatory asset (Account 182.3) and liability (Account 
254) for each of the 12 months during the base period. In adjoining 
columns, show additions and reductions for the adjustment period 
balance and the total adjusted balance. Only include these accounts if 
recovery of these balances are reflected in the company's costs. 
Identify the specific Commission authority which required the 
establishment of these accounts.
    (5) Schedule C. Cost of Plant by Functional Classification as of 
the End of the Base and Adjustment Periods.
    (6) Schedule D. Accumulated Provisions for Depreciation, Depletion, 
Amortization, and Abandonment by Functional Classifications as of the 
Beginning and as of the End of the Test Period.
    (7) Schedule E. Working Capital. Show the various components 
provided for in Sec. 154.312, Statement E.
    (8) Schedule F. Show the rate of return claimed with a brief 
explanation of the basis.
    (9) Schedule G. Revenues and Billing Determinants.
    (i) Show in summary format the information requested below on 
revenues and billing determinants for the base period and the base 
period as adjusted. Schedule G must be submitted to all customers of 
the pipeline that received service during the base period or are 
expected to receive service during the base period as adjusted and on 
State commissions having jurisdiction over the affected customers.
    (A) Revenues. Provide the total revenues by rate schedule from 
jurisdictional services, classified in accordance with the Commission's 
Uniform System of Accounts for the base period and for the base period 
as adjusted. Separate operating revenues by major rate component (e.g., 
reservation charges, demand charges, usage charges, commodity charges, 
injection charges, withdrawal charges, etc.) from revenues received 
from penalties, surcharges or other sources (e.g., ACA, GRI, transition 
costs). For services provided through released capacity, identify total 
revenues by rate schedule and by receipt and delivery rate zones, if 
applicable.
    (B) Billing Determinants. Show total reservation and usage billing 
determinants by rate schedule for the base period and the base period 
as adjusted. For services provided through released capacity, identify 
total billing determinants by rate schedule and by receipt and delivery 
rate zones, if applicable.
    (ii) Schedule G-1 must be filed at the Commission and on all state 
commissions having jurisdiction over the affected customers within 15 
days after the rate case is filed. Schedule G-1 must also be served on 
parties that request such service within 15 days of the filing of the 
rate case.
    (A) Schedule G-1. Adjustment Period Revenues.
    (1) Show revenues and billing determinants by month, by customer 
name, by rate schedule, by major rate component (e.g., reservation 
charges) and totals for the base period adjusted for known and 
measurable changes which are expected to occur within the adjustment 
period computed under the rates expected to be charged. Show commodity 
billing determinants by rate schedule. Billing determinants must not be 
adjusted for discounting. Provide projected throughput (i.e., usage or 
commodity quantities, unadjusted for discounting) and projected 
contract demand levels (unadjusted for discounting). Separate operating 
revenues from revenues received from surcharges or other sources (e.g., 
ACA, GRI, transition costs). Identify customers who are affiliates. 
Identify rate schedules under which costs are allocated and rate 
schedules under which revenues are credited for the adjustment period 
with cross-references to the other filed statements and schedules.
    (2) Provide a reconciliation of the base period revenues and 
billing determinants and the revenues and billing determinants for the 
base period as adjusted.
    (10) Schedule H. Operation and Maintenance Expenses. Show the gas 
operation and maintenance expenses according to each applicable account 
of the Commission's Uniform System of Accounts for Natural Gas 
Companies. The expenses must be shown under appropriate columnar-
headings, by labor, materials and other charges, and purchased gas 
costs, with subtotals for each functional classification: Operation and 
maintenance expense by months, as booked, for the 12 months of actual 
experience, and the total thereof; adjustments, if any, to expenses as 
booked; and, total adjusted operation and maintenance expenses claimed. 
Explain all adjustments. Specify the month or months during which the 
adjustments would be applicable.
    (11) Schedule H-1. Workpapers for Expense Accounts. Furnish 
workpapers for the 12 months of actual experience and claimed 
adjustments and analytical details as set forth in Sec. 154.312, 
Schedule H-1 (3).
    (12) Schedule H-2. Depreciation, Depletion, Amortization and 
Negative Salvage Expenses. Show, separately, the gas plant 
depreciation, depletion, amortization, and negative salvage expenses by 
functional classifications. For each functional plant classification, 
show depreciation reserve associated with offshore and onshore plant 
separately. The bases, methods, essential computations, and derivation 
of unit rates for the calculation of depreciation, depletion, 
amortization, and negative salvage expenses for actual experience must 
be explained.
    (13) Schedule H-3. Income Tax Allowances Computed on the Basis of 
the Rate of Return Claimed. Show the computation of allowances for 
Federal and State income taxes based on the claimed return applied to 
the overall gas utility rate base.
    (14) Schedule H-3 (1). This schedule is part of the workpapers. 
Show the computation of an updated reconciliation between book 
depreciable plant and tax depreciable plant and accumulated provision 
for deferred income taxes, for the base period or latest calendar or 
fiscal year (depending on the company's reporting period).
    (15) Schedule H-4. Other Taxes. Show the gas utility taxes, other 
than Federal or state income taxes in separate columns, as follows: Tax 
expense per books for the 12 months of actual experience;) adjustments, 
if any, to amounts booked; and, the total adjusted taxes claimed. 
Provide the details of the kind and amount of taxes paid under protest 
or in connection with taxes under litigation. The taxes must be shown 
by states and by kind of taxes. Explain all adjustments.


Sec. 154.314  Other support for a filing.

    (a) Any company filing for a rate change is responsible for 
preparing prior to filing, and maintaining, workpapers sufficient to 
support the filing.
    (b) If the natural gas company has relied upon data other than 
those in Statements A through P in Sec. 154.312 in support of its 
general rate change, such other data must be identified and submitted.

Subpart E--Limited Rate Changes


Sec. 154.400  Additional requirements.

    In addition to the requirements of subparts A, B, and C of this 
part, any proposal to implement a limited rate change must comply with 
this subpart.


 Sec. 154.401  RD&D expenditures.

    (a) Requirements. Upon approval by the Commission, a natural gas 
company may file to recover research, 

[[Page 53010]]
development, and demonstration (RD&D) expenditures in its rates under 
this subpart.
    (b) Applications for rate treatment approval. (1) An application 
for advance approval of rate treatment may be filed by a natural gas 
company for RD&D expenditures related to a project or group of projects 
undertaken by the company or as part of a project undertaken by others. 
When more than one company supports an RD&D organization, the RD&D 
organization may submit an application that covers the organization's 
RD&D program. Approval by the Commission of such an RD&D application 
and program will constitute approval of the individual companies' 
contributions to the RD&D organization.
    (2) An application for advance approval of rate treatment must 
include a 5-year program plan and must be filed at least 180 days prior 
to the commencement of the 5-year period of the plan.
    (3) A 5-year program plan must include at a minimum:
    (i) A statement of the objectives for the 5-year period that 
relates the objectives to the interests of ratepayers, the public, and 
the industry and to the objectives of other major research 
organizations.
    (ii) Budget, technical, and schedule information in sufficient 
detail to explain the work to be performed and allow an assessment of 
the probability of success and a comparison with other organizations' 
research plans.
    (iii) The commencement date, expected termination date, and 
expected annual costs for individual RD&D projects to be initiated 
during the first year of the plan.
    (iv) A discussion of the RD&D efforts and progress since the 
preparation of the program plan submitted the previous year and an 
explanation of any changes that have been made in objectives, 
priorities, or budgets since the plan of the previous year.
    (v) A statement identifying all jurisdictional natural gas 
companies that will support the program and specifying the amounts of 
their budgeted support.
    (vi) A statement identifying those persons involved in the 
development, review, and approval of the plan and specifying the amount 
of effort contributed and the degree of control exercised by each.
    (c) Applications must describe the RD&D projects in such detail as 
to satisfy the Commission that the RD&D expenditures qualify as valid, 
justifiable, and reasonable.
    (d) Within 120 days of the filing of an application for rate 
treatment approval and a 5-year program plan, the Commission will state 
its decision with respect to acceptance, partial acceptance, or 
rejection of the plan, or, when the complexity of issues in the plan so 
requires, will set a date certain by which a final decision will be 
made, or will order the matter set for hearing. Partial rejection of a 
plan by the Commission will be accompanied by a decision as to the 
partial level of acceptance which will be proportionally applied to all 
contributions listed for jurisdictional companies in the plan. Approval 
by the Commission of a 5-year plan constitutes approval for rate 
treatment of all projects identified as starting during the first year 
of the approved plan. Continued rate treatment will depend upon review 
and evaluation of subsequent annual applications and 5-year program 
plans.


Sec. 154.402  ACA expenditures.

    (a) Requirements. Upon approval by the Commission, a natural gas 
pipeline company may adjust its rates, annually, to recover from its 
customers annual charges assessed by the Commission under part 382 of 
this chapter pursuant to an annual charge adjustment clause (ACA 
clause). The ACA clause must be filed with the Commission and indicate 
the amount of annual charges to be flowed through per unit of energy 
sold or transported (ACA unit charge). The ACA unit charge will be 
specified by the Commission at the time the Commission calculates the 
annual charge bills. A company must reflect the ACA unit charge in each 
of its rate schedules applicable to sales or transportation deliveries. 
The company must apply the ACA unit charge to the usage component of 
rate schedules with two-part rates. A company may recover annual 
charges through an ACA unit charge only if its rates do not otherwise 
reflect the costs of annual charges assessed by the Commission under 
Sec. 382.106(a) of this chapter. The applicable annual charge, required 
by Sec. 382.103 of this chapter, must be paid before the company 
applies the ACA unit charge.
    (b) Application for Rate Treatment Authorization. A company seeking 
authorization to use an ACA unit charge must file with the Commission a 
separate ACA tariff sheet containing:
    (1) A statement that the company is collecting an ACA per unit 
charge, as approved by the Commission, applicable to all the pipeline's 
sales and transportation schedules,
    (2) The per unit charge of the ACA,
    (3) The proposed effective date of the tariff change (30 days after 
the filing of the tariff sheet, unless a shorter period is specifically 
requested in a waiver petition and approved), and
    (4) A statement that the pipeline will not recover any annual 
charges recorded in FERC Account 928 in a proceeding under subpart D of 
this part.
    (c) Changes to the ACA unit charge must be filed annually, to 
reflect the annual charge unit rate authorized by the Commission each 
fiscal year.


Sec. 154.403  Periodic rate adjustments.

    (a) This section applies to the passthrough, on a periodic basis, 
of a single cost item or revenue item for which passthrough is not 
regulated under another section of this subpart, and to revisions on a 
periodic basis of a gas reimbursement percentage.
    (b) Where a pipeline recovers fuel use and unaccounted-for natural 
gas in kind, the fuel reimbursement percentage must be stated in the 
tariff either on the tariff sheet stating the currently effective rate 
or on a separate tariff sheet in such a way that it is clear what 
amount of natural gas must be tendered in kind for each service 
rendered.
    (c) A natural gas company that passes through a cost or revenue 
item or adjusts its fuel reimbursement percentage under this section, 
must state within the general terms and conditions of its tariff, the 
methodology and timing of any adjustments. The following must be 
included in the general terms and conditions:
    (1) A statement of the nature of the revenue or costs to be flowed 
through to the customer;
    (2) A statement of the manner in which the cost or revenue will be 
collected or returned, whether through a surcharge, offset, or 
otherwise;
    (3) A statement of which customers are recipients of the revenue 
credit and which rate schedules are subject to the cost or fuel 
reimbursement percentage;
    (4) A statement of the frequency of the adjustment and the dates on 
which the adjustment will become effective;
    (5) A step-by-step description of the manner in which the amount to 
be flowed through is calculated and a step-by-step description of the 
flowthrough mechanism, including how the costs are classified and 
allocated. Where the adjustment modifies a rate established under 
subpart D of this part, the methodology must be consistent with the 
methodology used in the proceeding under subpart D of this part;
    (6) Where costs or revenue credits are accumulated over a past 
period for periodic recovery or return, the past period must be defined 
and the 

[[Page 53011]]
mechanism for the recovery or return must be detailed on a step-by-step 
basis. Where the natural gas company proposes to use a surcharge to 
clear an account in which the difference between costs or revenues, 
recovered through rates, and actual costs and revenues accumulate, a 
statement must be included detailing, on a step-by-step basis, the 
mechanism for calculating the entries to the account and for passing 
through the account balance.
    (7) Where carrying charges are computed, the calculations must be 
consistent with the methodology and reporting requirements set forth in 
Sec. 154.501 using the carrying charge rate required by that section. A 
natural gas company must normalize all income tax timing differences 
which are the result of differences between the period in which expense 
or revenue enters into the determination of taxable income and the 
period in which the expense or revenue enters into the determination of 
pre-tax book income. Any balance upon which the natural gas company 
calculates carrying charges must be adjusted for any recorded deferred 
income taxes.
    (8) Where the natural gas company discounts the rate component 
calculated pursuant to this section, explain on a step-by-step basis 
how the natural gas company will adjust for rate discounts in its 
methodology to reflect changes in costs under this section.
    (9) If the costs passed through under a mechanism approved under 
this section are billed by an upstream natural gas company, explain how 
refunds received from upstream natural gas companies will be passed 
through to the natural gas company's customers, including the 
allocation and classification of such refunds;
    (10) A step-by-step explanation of the methodology used to reflect 
changes in the fuel reimbursement percentage, including the allocation 
and classification of the fuel use and unaccounted-for natural gas. 
Where the adjustment modifies a fuel reimbursement percentage 
established under subpart D of this part, the methodology must be 
consistent with the methodology used in the proceeding under subpart D 
of this part;
    (11) A statement of whether the difference between quantities 
actually used or lost and the quantities retained from the customers 
for fuel use and loss will be recovered or returned in a future 
surcharge. Include a step-by-step explanation of the methodology used 
to calculate such surcharge. Any period during which these differences 
accumulate must be defined.
    (d) Filing requirements.
     (1) Filings under this section must include:
     (i) A summary statement showing the rate component added to each 
rate schedule with workpapers showing all mathematical calculations.
    (ii) If the filing establishes a new fuel reimbursement percentage 
or surcharge, include computations for each fuel reimbursement or 
surcharge calculated, broken out by service, classification, area, 
zone, or other subcategory.
    (iii) Workpapers showing the allocation of costs or revenue credits 
by rate schedule and step-by-step computations supporting the 
allocation, segregated into reservation and usage amounts, where 
appropriate.
    (iv) Where the costs, revenues, rates, quantities, indices, load 
factors, percentages, or other numbers used in the calculations are 
publicly available, include references by source.
    (v) Where a rate or quantity underlying the costs or revenue 
credits is supported by publicly available data (such as another 
natural gas company's tariff or EBB), the source must be referenced to 
allow the Commission and interested parties to review the source. If 
the rate or quantity does not match the rate or quantity from the 
source referenced, provide step-by-step instructions to tie the rate in 
the referenced source to the rate in the filing.
    (vi) Where a number is derived from another number by applying a 
load factor, percentage, or other adjusting factor not referenced in 
paragraph (d)(1)(i) of this section, include workpapers and a narrative 
to explain the calculation of the adjusting factor.
    (2) If the natural gas company is adjusting its rates to reflect 
changes in transportation and compression costs paid to others:
    (i) The changes in transportation and compression costs must be 
based on the rate on file with the Commission. If the rate is not on 
file with the Commission or a discounted rate is paid, the rate 
reflected in the filing must be the rate the natural gas company is 
contractually obligated to pay;
    (ii) The filing must include appropriate credits for capacity 
released under Sec. 284.243 of this chapter with workpapers showing the 
quantity released, the revenues received from the release, the time 
period of the release, and the natural gas pipeline on which the 
release took place; and,
    (iii) The filing must include a statement of the refunds received 
from each upstream natural gas company which are included in the rate 
adjustment. The statement must conform to the requirements set forth in 
Sec. 154.501.
    (3) If the natural gas company is reflecting changes in its fuel 
reimbursement percentage, the filing must include:
    (i) A summary statement of actual gas inflows and outflows for each 
month used to calculate the fuel reimbursement percentage or surcharge. 
For purposes of establishing the surcharge, the summary statement must 
be included for each month of the period over which the differences 
defined in paragraph (c) of this section accumulate.
    (ii) Where the fuel reimbursement percentage is calculated based on 
estimated activity over a future period, the period must be defined and 
the estimates used in the calculation must be justified. If any of the 
estimates are publicly available, include a reference to the source.
    (4) The natural gas company must not recover costs and is not 
obligated to return revenues which are applicable to the period pre-
dating the effectiveness of the tariff language setting forth the 
periodic rate change mechanism, unless permitted or required to do so 
by the Commission.

Subpart F--Refunds and Reports


Sec. 154.501  Refunds.

    (a) Refund obligation. (1) Any natural gas company that collects 
rates or charges pursuant to this chapter must refund that portion of 
any increased rates or charges either found by the Commission not to be 
justified, or approved for refund by the Commission as part of a 
settlement, together with interest as required in paragraph (d) of this 
section. The refund plus interest must be distributed as specified in 
the Commission order requiring or approving the refund, or if no date 
is specified, within 60 days of the order. However, the pipeline is not 
required to make any refund until it has collected the refundable money 
through its rates.
    (2) Any natural gas company must refund to its jurisdictional 
customers the jurisdictional portion of any refund it receives which is 
required by prior Commission order to be flowed through to its 
jurisdictional customers or represents the refund of an amount 
previously included in a filing under Sec. 154.403 and charged and 
collected from jurisdictional customers within thirty days of receipt 
or other time period established by the Commission or as established in 
the pipeline's tariff.
    (b) Costs of Refunding. Any natural gas company required to make 
refunds 

[[Page 53012]]
pursuant to this section must bear all costs of such refunding.
    (c) Supplier Refunds. The jurisdictional portion of supplier 
refunds (including interest received), applicable to periods in which a 
purchased gas adjustment clause was in effect, must be flowed through 
to the natural gas company's jurisdictional gas sales customers during 
that period with interest as computed in paragraph (d) of this section.
    (d) Interest on Refunds. Interest on the refund balance must be 
computed from the date of collection from the customer until the date 
refunds are made as follows:
    (1) At an average prime rate for each calendar quarter on all 
excessive rates or charges held (including all interest applicable to 
such rates and charges) on or after October 1, 1979. The applicable 
average prime rate for each calendar quarter must be the arithmetic 
mean, to the nearest one-hundredth of one percent, of the prime rate 
values published in the Federal Reserve Bulletin, or in the Federal 
Reserve's ``Selected Interest Rates'' (Statistical Release G, 13), for 
the fourth, third, and second months preceding the first month of the 
calendar quarter.
    (2) The interest required to be paid under paragraph (d)(1) of this 
section must be compounded quarterly.
    (3) The refund balance must be either:
    (i) The revenues resulting from the collection of the portion of 
any increased rates or charges found by the Commission not to be 
justified; or
    (ii) An amount agreed upon in a settlement approved by the 
Commission; or
    (iii) The jurisdictional portion of a refund the natural gas 
company receives.
    (e) Unless otherwise provided by the order, settlement or tariff 
provision requiring the refund, the natural gas company must file a 
report of refunds, within 30 days of the date the refund was made, 
which complies with Sec. 154.502 and includes the following:
    (1) Workpapers and a narrative sufficient to show how the refunds 
for jurisdictional services were calculated;
    (2) Workpapers and a narrative sufficient to determine the origin 
of the refund, including step-by-step calculations showing the 
derivation of the refund amount described in paragraph (d)(3) of this 
section, if necessary;
    (3) References to any publicly available sources which confirm the 
rates, quantities, or costs, which are used to calculate the refund 
balance or which confirm the refund amount itself. If the rate, 
quantity, cost or refund does not directly tie to the source, a 
workpaper must be included to show the reconciliation between the rate, 
quantity, cost, or refund in the natural gas company's report and the 
corresponding rate, quantity, cost or refund in the source document;
    (4) Workpapers showing the calculation of interest on a monthly 
basis, including how the carrying charges were compounded quarterly;
    (5) Workpapers and a narrative explaining how the refund was 
allocated to each jurisdictional customer. Where the numbers used to 
support the allocation are publicly available, a reference to the 
source must be included. Where the allocation methodology has been 
approved previously, a reference to the order or tariff provision 
approving the allocation methodology must be included.
    (6) A letter of transmittal containing:
    (i) A list of the material enclosed;
    (ii) The name and telephone number of a company official who can 
answer questions regarding the filing;
    (iii) A statement of the date the refund was disbursed;
    (iv) A reference to the authority by which the refund is made, 
including the specific subpart of these regulations, an order of the 
Commission, a provision of the company's tariff, or any other 
appropriate authority. If a Commission order is referenced, include the 
citation to the FERC Reports, the date of issuance, and the docket 
number;
    (v) Any requests for waiver. Requests must include a reference to 
the specific section of the statute, regulations, or the company's 
tariff from which waiver is sought, and a justification for the waiver.
    (7) A certification of service to all affected customers and 
interested state commissions.
    (f) Each report filed under paragraph (e) of this section must be 
posted no later than the date of filing. Each report must be posted to 
all recipients of a share of the refund and all state commissions whose 
jurisdiction includes the location of any recipient of a refund share 
that have made a standing request for such full report.
    (g) Recipients of refunds and state commissions that have not made 
a standing request for such full report shall receive an abbreviated 
report consisting of the items listed in Sec. 154.501 (e)(5) and 
(e)(6).


Sec. 154.502  Reports.

    (a) When the natural gas company is required, either by a 
Commission order or as a part of a settlement in a proceeding initiated 
under this part 154 or part 284 of this chapter, to make a report on a 
periodic basis, details about the nature and contents of the report 
must be provided in an appropriate section of the general terms and 
conditions of its tariff.
    (b) The details in the general terms and conditions of the tariff 
must include the frequency and timing of the report. Explain whether 
the report is filed annually, semi-annually, monthly, or is triggered 
by an event. If triggered by an event, explain how soon after the event 
the report must be filed. If the report is periodic, state the dates on 
which the report must be filed.
    (c) Each report must include:
    (1) A letter of transmittal containing:
    (i) A list of the material enclosed;
    (ii) The name and telephone number of a company official who can 
answer questions regarding the filing;
    (iii) A reference to the authority by which the report is made, 
including the specific subpart of these regulations, an order of the 
Commission, a provision of the company's tariff, or any other 
appropriate authority. If a Commission order is referenced, include the 
citation to the FERC Reports, the date of issuance, and the docket 
number;
    (iv) Any requests for waiver. Requests must include a reference to 
the specific section of the statute, regulations, or the company's 
tariff from which waiver is sought, and a justification for the waiver.
    (2) A certification of service to all affected customers and 
interested state commissions.
    (d) Each report filed under paragraph (b) of this section must be 
posted no later than the date of filing.

Subpart G--Other Tariff Changes


Sec. 154.600  Compliance with other subparts.

    Any proposal to implement a tariff change other than in rate level 
must comply with subparts A, B, and C of this part.


Sec. 154.601  Change in executed service agreement.

    Agreements intended to effect a change or revision of an executed 
service agreement on file with the Commission must be in the form of a 
superseding executed service agreement only. Service agreements may not 
contain any supplements, but may contain exhibits which may be 
separately superseded. The exhibits may show, among other things, 
contract demand delivery points, delivery pressures, names of 
industrial customers of the distributor-customer, or names of 
distributors (with one distributor named as agent where delivery to 
several distributors is effected at the same delivery points). 

[[Page 53013]]



Sec. 154.602  Cancellation or termination of a tariff, executed service 
agreement or part thereof.

    When an effective tariff, contract, or part thereof on file with 
the Commission, is proposed to be canceled or is to terminate by its 
own terms and no new tariff, executed service agreement, or part 
thereof, is to be filed in its place, the natural gas company must 
notify the Commission of the proposed cancellation or termination on 
the form indicated in Sec. 250.2 or Sec. 250.3 of this chapter, 
whichever is applicable, at least 30 days prior to the proposed 
effective date of such cancellation or termination. With such notice, 
the company must submit a statement showing the reasons for the 
cancellation or termination, a list of the affected customers and the 
contract demand provided to the customers under the service to be 
canceled. A copy of the notice must be duly posted.


Sec. 154.603  Adoption of the tariff by a successor.

    Whenever the tariff or contracts of a natural gas company on file 
with the Commission are to be adopted by another company or person as a 
result of an acquisition, or merger, authorized by a certificate of 
public convenience and necessity, or for any other reason, the 
succeeding company must file with the Commission, and post within 30 
days after such succession, a certificate of adoption on the form 
prescribed in Sec. 250.4 of this chapter. Within 90 days after such 
notice is filed, the succeeding company must file a revised tariff with 
the sheets bearing the name of the successor company.

    Note: These appendices will not be published in the Code of 
Federal Regulations.

                               Appendix A                               
------------------------------------------------------------------------
            Prior regulation                    Revised regulation      
------------------------------------------------------------------------
Sec. 154.1.............................  Sec. 154.1,                    
                                         Sec. 154.4.                    
Sec. 154.11............................  Sec. 154.2(e).                 
Sec. 154.12............................  Sec. 154.2(a).                 
Sec. 154.13............................  Sec. 154.2(c).                 
Sec. 154.14............................  Sec. 154.2(b).                 
Sec. 154.15............................  Sec. 154.2(f).                 
Sec. 154.16............................  Sec. 154.2(d).                 
Sec. 154.21............................  Sec. 154.3.                    
Sec. 154.22............................  Sec. 154.1(c),                 
                                         Sec. 154.207.                  
Sec. 154.23............................  Sec. 154.6.                    
Sec. 154.24............................  Sec. 154.6.                    
Sec. 154.25............................  Sec. 154.8.                    
Sec. 154.26............................  Sec. 154.4.                    
Sec. 154.27............................  Sec. 154.210.                  
Sec. 154.28............................  Sec. 154.209.                  
Sec. 154.31............................  Removed.                       
Sec. 154.32............................  Sec. 154.101.                  
Sec. 154.33............................  Sec. 154.102.                  
Sec. 154.34............................  Sec. 154.103.                  
Sec. 154.35............................  Sec. 154.104.                  
Sec. 154.36............................  Sec. 154.105.                  
Sec. 154.37............................  Sec. 154.106.                  
Sec. 154.38(d)(1)......................  Sec. 154.107.                  
Sec. 154.38(d)(2)......................  Sec. 154.107.                  
Sec. 154.38(d)(3)......................  Sec. 154.3.                    
Sec. 154.38(d)(4)......................  Sec. 154.501.                  
Sec. 154.38(d)(5)......................  Sec. 154.401.                  
Sec. 154.38(d)(6)......................  Sec. 154.402.                  
Sec. 154.38(e).........................  Deleted.                       
Sec. 154.38............................  Sec. 154.108.                  
Sec. 154.39............................  Sec. 154.109.                  
Sec. 154.40............................  Sec. 154.110.                  
Sec. 154.41............................  Sec. 154.111.                  
Sec. 154.42............................  Removed.                       
Sec. 154.51............................  Sec. 154.207.                  
Sec. 154.52............................  Sec. 154.112.                  
Sec. 154.61............................  Removed.                       
Sec. 154.62............................  Sec. 154.202.                  
Sec. 154.63(b)(1)......................  Sec. 154.7.                    
Sec. 154.63(b)(1)(v)...................  Sec. 154.201(a).               
Sec. 154.63(c)(1)......................  Sec. 154.302.                  
Sec. 154.63(c)(2)......................  Sec. 154.302.                  
Sec. 154.63(c)(3)......................  Sec. 154.314.                  
Sec. 154.63(d)(2)......................  Sec. 154.601.                  
Sec. 154.63(e)(1)......................  Sec. 154.301(c).               
Sec. 154.63(e)(2)(i)...................  Sec. 154.303.                  
Sec. 154.63(e)(2)(ii)..................  Sec. 154.303.                  
Sec. 154.63(e)(3)......................  Sec. 154.307.                  
Sec. 154.63(e)(4)......................  Sec. 154.304,                  
                                         Sec. 154.201(b)(3)             
Sec. 154.63(e)(5)......................  Sec. 154.308.                  
Sec. 154.63(f).........................  Sec. 154.312.                  
Sec. 154.63a...........................  Sec. 154.305.                  
Sec. 154.63b...........................  Sec. 154.306.                  
Sec. 154.64............................  Sec. 154.602.                  
Sec. 154.65............................  Sec. 154.603.                  
Sec. 154.66............................  Sec. 154.205.                  
Sec. 154.67............................  Sec. 154.206.                  
Sec. 154.67(b).........................  Deleted.                       
Sec. 154.67(c).........................  Sec. 154.501.                  
------------------------------------------------------------------------
New sections of part 154: 203, 204, 208, 301, 309, 310, 311, 313, 314,  
  403, 502.                                                             


                               Appendix B                               
                   Commenters to Docket No. RM95-3-000                  
American Forest and Paper      American Forest.                         
 Association.                                                           
American Gas Association.....  AGA.                                     
American Public Gas            APGA.                                    
 Association.                                                           
ANR Pipeline/Colorado          ANR/CIG.                                 
 Interstate Gas Co.                                                     
Application Solutions &        ASTI.                                    
 Technologies Inc.                                                      
Arizona Direct Customers       Arizona Directs.                         
 (Arizona Public Service Co./                                           
 Phelps Dodge Corp./Salt                                                
 River Agric. Improvement and                                           
 Power District).                                                       
Associated Gas Distributors..  AGD.                                     
Association of Texas           Texas Intrastates.                       
 Intrastate Natural Gas                                                 
 Pipelines.                                                             
Brooklyn Union Gas...........  Brooklyn Union.                          
Cascade Natural Gas Corp/      Pacific Northwest Commenters.            
 Northwest Natural Gas Corp/                                            
 Washington Natural Gas Co./                                            
 Washington Water Power Co./                                            
 Northwest Industrial Gas                                               
 Users.                                                                 
Chevron, U.S.A...............  Chevron.                                 
CINergy Corp (Cincinnati Gas   CINergy.                                 
 & Electric/The Union Light,                                            
 Heat and Power Company/                                                
 Lawrencebury Gas Company).                                             
CNG Transmission Corp........  CNG.                                     
Columbia Gas Distribution      Columbia Distribution.                   
 Companies.                                                             
Columbia Gas Transmission/     Columbia.                                
 Columbia Gulf Transmission.                                            
Consumers Power Co./Michigan   Consumers Power.                         
 Gas Storage Co.                                                        
Electronic Bulletin Board      EBB Working Group.                       
 Working Group.                                                         
El Paso Natural Gas Co.......  El Paso.                                 
Enogex Inc...................  Enogex.                                  
Enron Interstate Pipelines     Enron.                                   
 (Northern Natural Gas Co./                                             
 Transwestern Pipeline Co./                                             
 Florida Gas Trans. Co./Black                                           
 Marlin Pipeline Co.).                                                  
Equitable Gas Storage........  Equitable.                               
Foothills Pipe Lines, Ltd./     Foothills.                              
 Alaskan Northwest Natural                                              
 Gas Transportation Company.                                            
Freeport Interstate Pipeline   Freeport.                                
 Co.                                                                    
Gaslantic Corp...............  Gaslantic.                               
Great Lakes Gas Transmission   Great Lakes.                             
 Limited Partnership.                                                   
Independent Petroleum          IPAA.                                    
 Association of America.                                                

[[Page 53014]]
                                                                        
Interstate Natural Gas         INGAA.                                   
 Association of America.                                                
JMC Power Projects...........  JMC.                                     
KN Interstate Gas              KNI.                                     
 Transmission.                                                          
KN Energy....................  KN.                                      
Kern River Gas Transmission    Kern River.                              
 Company.                                                               
LDC Caucus...................  LDC Caucus.                              
Michigan Public Service        Michigan.                                
 Commission/State of Michigan.                                          
MidCon Corp., Natural Gas      MidCon.                                  
 Pipeline Corp, MidCon Gas                                              
 Services Corp.                                                         
Mississippi River              MRT.                                     
 Transmission Co.                                                       
NorAM Gas Transmission Co....  NGT.                                     
Missouri Public Service        MoPSC.                                   
 Commission.                                                            
National Fuel Gas Supply Corp  National Fuel.                           
National Registry of Capacity  Registry.                                
 Rights.                                                                
Natural Gas Supply             NGSA.                                    
 Association.                                                           
Northern Border Pipeline       Northern Border.                         
 Company.                                                               
Northern Distributor Group...  NDG.                                     
Northwest Pipeline Corp/       Williams.                                
 Williams Natural Gas Co.                                               
Panhandle Eastern Pipeline/    Panhandle.                               
 Trunkline Gas Company/Texas                                            
 Eastern Transmission/                                                  
 Algonquin Gas Transmission.                                            
Pacific Gas and Electric       PG&E.                                    
 Company.                                                               
Process Gas Consumers Group/   Industrials.                             
 American Iron & Steel Inst.                                            
 Georgia Industrial Group.                                              
Producer-Marketer              PMTG.                                    
 Transportation Group.                                                  
Public Service Commission of   Nevada.                                  
 Nevada.                                                                
Public Service Commission of   New York.                                
 the State of New York.                                                 
Southern California Gas        SoCal.                                   
 Company.                                                               
Tennessee Gas Pipeline/        Tennessee.                               
 Midwestern Gas Transmission/                                           
 East Tennessee Natural Gas.                                            
Texas Gas Transmission Corp..  Texas Gas.                               
TransCanada PipeLines Ltd....  TransCanada.                             
Transcontinental Gas Pipeline  Transco.                                 
 Corp.                                                                  
Transok, Inc.................  Transok.                                 
United Distribution Companies  UDC.                                     
United States Department of    USDOE.                                   
 Energy.                                                                
M.H. Whittier Corp...........  Whittier.                                
Williston Basin Interstate     Williston.                               
 Pipeline Company.                                                      
Williams Natural Gas Co......  Williams.                                



Appendix C--Tariff Filing Formats

Explanation of Changes

Background

    On June 8, 1989, we issued the ``Notice of availability of 
record formats and hard copy filing formats for certificate and 
tariff filings'' in Docket No. RM87-17-000. On August 31, 1989, we 
issued a revision entitled ``Notice of availability of print 
software and corrected formats for rate, tariff, and certificate 
filings''. On February 28, 1990, we issued the ``Notice of Tariff 
Retrieval System Software Availability,'' otherwise referred to as 
the FASTR software package.
    The following document includes updated electronic tariff filing 
formats as well as the revised tariff pagination guidelines that was 
mailed to most gas pipeline companies on May 13, 1992, modified only 
for readability. The revised formats take into consideration 
improvements in the FASTR software which reads the tariff ASCII 
files submitted by the companies to the Commission. Companies are 
strongly encouraged to use the FASTR software to (1) maintain their 
own tariff database, (2) generate the paper copies of the tariff 
sheets submitted with filings, and (3) pre-check the electronic 
tariff filings for errors prior to submittal.

Summary of Changes

     References to the requirement that all companies must 
restate their tariffs electronically with the filing of a rate case 
or restatement of base rates after October 31, 1989, has been 
removed. All companies who have not yet restated their paper tariffs 
electronically must do so on or before 120 days after the date of 
issuance of a final rule in Docket No. RM95-3-000;
     Electronic filings must be submitted on diskette, 
preferably a 3.5'' High Density diskette. The Commission will no 
longer accept tariff sheets filed on 9-track tape or 18-track 
cartridge. This modification will not be burdensome since it is very 
rare for the Commission to receive tariff sheets now on anything but 
diskette;
     Standard Form 277 is no longer required (Transmittal 
Form for Describing Computer Magnetic Tape File Properties) since we 
are requiring all tariff sheets to be filed on diskette;
     The Company Header Record (TF01) and Tariff Volume 
Header Record (TF02) should be included only once per filing, 
dataset, and tariff volume.
     The Superseded Sheet Header Record, (TF04) can be 
omitted with ``Original'' sheets. The Issuing Officer Header Record, 
(TF05) and The Date and Docket Header Record, (TF06) are required 
only with the first sheet, unless this information changes on a 
subsequent sheet in the dataset. Previously this information was 
required for every sheet. Companies may still report these records 
with every sheet if complying with this new requirement necessitates 
a change to the company's data-entry software. The intent of this 
change was to reduce the burden on those companies who must key in 
the information required in these records for each sheet.
     Exhibit A, Magnetic Tape Procedures is removed since we 
no longer accept tariff sheets on magnetic tape. Diskette Filing 
Procedures are moved from Exhibit B to Exhibit A.
     Tariff Sheet Pagination Guidelines are moved to Exhibit 
B from Exhibit C. Examples demonstrating the tariff sheet pagination 
guidelines are added to assist companies applying the guidelines.
     Certain editorial changes have been made for clarity.

Natural Gas Pipeline Company Tariff Filings

Revised

Docket No. RM

This Document Replaces the Tariff Filing Record Formats Issued August 
31, 1989

General Information

I. Purpose

     All companies which maintain a gas tariff with the Federal 
Energy Regulatory Commission (FERC) are required to submit, along 
with the paper copies, an electronic version of all tariff filings 
pursuant to section 385.2011 of the Commission's regulations. 
Companies are required to have an electronic version of their entire 
gas tariff (excluding Volume No. 2 contractual rate schedules) on 

[[Page 53015]]
file with FERC on or before 120 days after the issuance of a final rule 
in Docket No. RM95-3-000. This form does not modify the existing 
tariff sheet format required in section 154.102 or section 385.2003 
for tariff sheets filed on paper. Nor does it modify the requirement 
in section 154.201(a) to file a marked paper version of the pages to 
be changed by showing additions and deletions using highlighting, 
background shading, bold text, or underlined text.

II. Who Must File

    All companies who are required to maintain a FERC Gas Tariff on 
file with the FERC.

III. What To Submit

    All proposed revisions to the FERC Gas Tariff will be submitted 
in conformance with this form. Such proposed revisions include, but 
are not limited to, rate changes pursuant to a Section 4 filing or 
changes in service pursuant to a certificate issued as a result of a 
section 7 proceeding. Upon request of the Secretary of the FERC, 
companies must submit such additional supporting and clarifying data 
and information as may be specified.
    All data will be submitted on diskette(s), preferably 3.5'' High 
Density diskettes, and must conform to the specific instructions 
provided in Exhibit A. The diskette(s) must be accompanied by paper 
copies of the information submitted on the diskette. The paper 
copies must conform in all respects to the requirements of sections 
154 and 157 and will consist of the required number of copies of the 
transmittal letter, the tariff sheets, the certification of service, 
and a form of notice suitable for publication in the Federal 
Register.
    The letter of transmittal and the certification of service will 
be submitted on paper only. The letter of transmittal must include 
the subscription provided in section 385.2005(a). The subscription 
provided must state, in addition to the requirement in section 
385.2005(a), that the paper copies contain the same information as 
the diskette(s) and that the signer has read and knows the contents 
of the paper copies and that the contents as stated in the paper 
copies are true to the best knowledge and belief of the signer.
    Respondents claiming that information is privileged must file in 
accordance with section 385.1112; otherwise, all data submitted will 
be considered non-privileged and will be made available to the 
public upon request.

IV. When To Submit

    The tariff sheets should be filed with the Commission at the 
time the company proposes a change in service or rate. The notice 
period should be consistent with the Commission's regulations.

V. Where To Submit

    (1) Submit this report to: Office of the Secretary, Federal 
Energy Regulatory Commission, Room 3110, 825 N. Capitol Street, NE., 
Washington, DC 20426.
    (2) Hand deliveries may be made to the same address.

General Instructions

    (1) Schedule TF. Records TF01 through TF06 and the text line 
records are intended to capture all of the tariff elements which the 
pipeline has historically filed as part of its FERC Gas Tariff. 
Record TF01 identifies the company and the filing date. Record TF02 
captures information about the tariff volume; and Records TF03, 
TF04, TF05, and TF06 contain requisite marginal information for an 
individual tariff sheet. The actual tariff sheet text will follow 
Record TF06.
    Each tariff sheet should be identified by the nature of the 
sheet, and assigned the appropriate ``Text ID'' from among those 
listed in the layout for Record TF03. For example, a tariff sheet 
which includes the table of contents must be assigned Text ID = 
``1''. The text of a tariff sheet should include any footnotes 
applicable to the individual tariff sheet. When filing the tariff 
sheet on paper, footnotes should appear inside the ruled borders 
required by section 154.101.
    All of the marginal information required under 18 CFR 154.102(d) 
is to be included only in the tariff sheet header records. These 
header records will be utilized to print a hard copy with the 
appropriate marginal information.
    If a tariff sheet is filed to be read vertically in hard copy, 
this is referred to hereinafter as ``Portrait'' orientation. If the 
sheet will be read horizontally, the orientation is referred to as 
``Landscape''. The requirements of section 154.102(d) imply that the 
length of a line of actual text is 6.75 inches in Portrait 
orientation, and 10.0 inches in Landscape. The pitch, the number of 
print characters per horizontal inch (cpi); the number of lines per 
vertical inch (lpi); and the page orientation for printing the 
tariff sheet must be given in the first Tariff Sheet Header Record, 
(Record TF03). The number of characters per horizontal inch (cpi) 
must not exceed 17. The acceptable lines per vertical inch are 6 or 
8. The maximum line length and lines per page for Portrait and 
Landscape orientation are as follows:

----------------------------------------------------------------------------------------------------------------
                                             Maximum line length (characters)            Maximum lines per page 
         Page orientation          -----------------------------------------------------------------------------
                                       10cpi        12cpi        15cpi        17cpi         6lpi         8lpi   
----------------------------------------------------------------------------------------------------------------
Vertical (Portrait)...............           65           79           98          112           50           70
Horizontal (Landscape)............           98          118          148          168           31           44
----------------------------------------------------------------------------------------------------------------

    (2) Record Types. Records must be filed in the following order:
    Company Header Record (TF01): One record per dataset.
    Volume Header Record (TF02): One record per volume. All pages 
for the same volume will be grouped together. If more than one 
dataset is required for the filing of a volume, this record must 
appear in each dataset. Note: When more than one dataset is needed 
to accommodate a filing, name the datasets in accordance with the 
instructions in Exhibit A.

    Note: The appropriate tariff sheet header records must precede 
each tariff sheet!
    Sheet Header Record (TF03): One record per sheet.
    Superseded Sheet Header Record (TF04): This record pertains to 
the superseded sheet information. One record per sheet unless there 
is no superseded sheet (e.g., Original and Substitute Original 
sheets). In that case, this record may be omitted.
    Issuing Officer Header Record (TF05): One record per filing, 
unless the filing contains sheets that reference more than one 
issuing officer or the tariff sheets are submitted in more than one 
dataset. Optionally, this record may precede every tariff sheet 
filed.
    Date and Docket Header Record (TF06): One record per filing, 
unless the effective date or other information in this record 
changes from sheet to sheet or the tariff sheets are submitted in 
more than one dataset. Optionally, this record may precede every 
tariff sheet filed.
    Text Line Records: The actual tariff sheet text. Note: any 
special codes placed in the text (such as bold, italic, underline, 
etc.) are removed when converting to ASCII format.
    (3) Numeric Fields. All numeric fields in Records TF01 through 
TF06 must not be left blank, and must be right justified unless 
indicated otherwise. The following conventions should be followed in 
preparing each header record in the filing:
    (A) If a numeric data item is not applicable to the respondent, 
enter the numeric value ``0'' in the field provided for this data 
item.
    (B) Do not include commas in reporting any numeric value.
    (C) Report all dates as six digit numerics (month, day, year, 
MMDDYY).
    (4) Pipeline Company ID. Use the code for the pipeline as 
contained in the Buyer Seller Code List, U.S. Department of Energy's 
publication DOE/EIA-0176. A code may be obtained by calling EIA at 
(202) 586-8841.
    (5) Record Lengths. Do not pad the end of data records with 
blanks.

Specific Instructions

    (1) Effective Date. The date, given as month, day, and year, on 
which the respondent expects the filing to be put into effect 
subject to the concurrence of the FERC.
    (2) Tariff Volume Number. The number of the volume to which the 
tariff sheets belong. For example, if the volume is labeled ``First 
Revised Volume No. 1'', report a ``1'' in this field.
    (3) Tariff Volume Revision Number. Report the number of the 
revision. For example, if the tariff volume is labelled ``Second 
Revised 

[[Page 53016]]
Volume No. 1'', report a ``2'' in this field. If the tariff volume is 
an original volume, report a zero in this field.
    (4) Tariff Volume ID. Report the full tariff volume name in this 
field. For example, if the volume is labelled ``First Revised Volume 
No. 1'', report ``First Revised Volume No. 1'' in this field.
    (5) Sheet Number. Report the number of the tariff sheet being 
filed. For example, if the sheet is numbered ``First Revised Sheet 
No. 3 superseding Original Sheet No. 3'', report a ``3'' in this 
field.
    (6) Sheet Revision Number. Report the number of the revision. 
For example, if the tariff sheet is numbered ``Second Substitute 
Third Revised Sheet No. 4 superseding Second Revised Sheet No. 4'', 
report a ``3'' in this field. If this is an original tariff sheet, 
report a ``0'' in this field.
    (7) Sheet ID. Report the full designation for the tariff sheet 
being reported. For example, if the sheet is designated ``First 
Revised Sheet No. 3 superseding Original Sheet No. 3'', report 
``First Revised Sheet No. 3'' in this field. If the Sheet ID exceeds 
the allowed 40 character positions for this item, use the 
``Abbreviation Conventions List'' at Exhibit C.
    (8) Superseded Sheet ID. Report the full designation for the 
tariff sheet being superseded. For example, if the tariff sheet 
being filed is designated ``First Revised Sheet No. 3 superseding 
Original Sheet No. 3'', report ``Original Sheet No. 3'' in this 
field. If the Superseded Sheet ID exceeds the allowed 40 character 
positions for this item, use the ``Abbreviation Conventions List'' 
at Exhibit C.
    (9) First Superseded Sheet Number. When a single sheet 
supersedes a range of sheets (such as canceling a rate schedule or 
reserving sheets for future use), report the number of the first 
sheet in the range. Otherwise this field may be left blank.
    (10) Last Superseded Sheet Number. When a single sheet 
supersedes a range of sheets (such as canceling a rate schedule or 
reserving sheets for future use), report the number of the last 
sheet in the range. Otherwise this field may be left blank.
    (11) Alternate Sheet ID. When filing primary and alternative 
tariff sheets, the sheets are uniquely identified by reporting 
``00'' in this field for the primary sheet, ``01'' for the first 
alternate, ``02'' for the second alternate, and so on.
    (12) Issuing Officer. Report the name and title of the person 
authorized to issue the tariff sheet.
    (13) Issue Date. The date given as month, day, and year when the 
tariff sheet is issued.
    (14) Order Reference. For tariff sheets which are filed to make 
rate schedules or provisions ordered by the Commission effective, 
report the Docket Number and the date of such order. (If more than 
one docket applies, report the lead docket relating to the filing 
company in the proceeding.)
    (15) FERC Cite. Enter the numbers of the cite to the FERC 
Reports in this field as follows: For a citation which appears as 12 
FERC para.34,567, enter all of the numbers but none of the letters, 
symbols, or commas. It will appear as 1234567.

                                   Electronic Tariff File Layout--Schedule TF                                   
----------------------------------------------------------------------------------------------------------------
                                        Character                                                               
                 Item                    position             Data type                       Comments          
----------------------------------------------------------------------------------------------------------------
                                            (1) Company Header Record                                           
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Schedule ID..........................          1-2  Character....................  Sch = TF.                    
Record ID............................          3-4  Numeric......................  Code--01.                    
Company ID...........................         5-10  Numeric......................  Company code from buyer/     
                                                                                    seller code list, see       
                                                                                    general instruction 4.      
Date Submitted.......................        11-16  Numeric......................  Month, day and year report is
                                                                                    filed (mmddyy).             
Company Name.........................        17-65  Character....................  Name of filing company.      
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                             (2) Volume Header Record                                           
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Schedule ID..........................          1-2  Character....................  Sch = TF.                    
Record ID............................          3-4  Numeric......................  Code = 02.                   
Tariff Volume Number.................          5-8  Character....................  See specific instruction 2.  
Tariff Volume Revision Number........         9-11  Numeric......................  See specific instruction 3.  
Tariff Volume ID.....................        12-51  Character....................  See specific instruction 4.  
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                             (3) Sheet Header Record                                            
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Schedule ID..........................          1-2  Character....................  Sch = TF.                    
Record ID............................          3-4  Numeric......................  Code = 03.                   
Sheet Number.........................         5-12  Character....................  See specific instruction 5.  
Sheet Revision Number................        13-15  Numeric......................  See specific instruction 6.  
Alternate Sheet ID...................        16-17  Numeric......................  See specific instruction 11. 
Text ID..............................        18-19  Numeric......................  0 = Title Page.              
                                                                                   1 = Table of Contents.       
                                                                                   2 = Preliminary Statement.   
                                                                                   3 = Rate Sheets.             
                                                                                   4 = Rate Schedule Text.      
                                                                                   5 = General Terms and        
                                                                                    Conditions.                 
                                                                                   6 = Form of Service          
                                                                                    Agreements.                 
                                                                                   7 = Index of Customers.      
                                                                                   8 = Other Indices.           
                                                                                   9 = Other Tariff Sheets.     
                                                                                   10 = Sheets Reserved for     
                                                                                    Future Use.                 
Orientation..........................           20  Character....................  P = Portrait.                
                                                                                   L = Landscape.               
Pitch................................        21-22  Numeric......................  Characters per Horizontal    
                                                                                    Inch = 10, 12, 15, or 17.   
Lines Per Inch.......................           23  Numeric......................  Lines per Vertical Inch = 6  
                                                                                    or 8.                       
Sheet ID.............................        24-63  Character....................  See specific instruction 7.  
                                                                                                                
----------------------------------------------------------------------------------------------------------------
 
[[Page 53017]]
                                                                                                                
                                       (4) Superseded Sheet Header Record                                       
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Schedule ID..........................          1-2  Character....................  Sch = TF.                    
Record ID............................          3-4  Numeric......................  Code = 04.                   
First Superseded Sheet Number........         5-12  Character....................  See specific instruction 9.  
Last Superseded Sheet Number.........        13-20  Character....................  See specific instruction 10. 
Superseded Sheet ID..................        21-60  Character....................  See specific instruction 8.  
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                        (5) Issuing Officer Header Record                                       
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Schedule ID..........................          1-2  Character....................  Sch = TF.                    
Record ID............................          3-4  Numeric......................  Code = 05.                   
Issued By............................         5-58  Character....................  Name and title of issuing    
                                                                                    official; see specific      
                                                                                    instruction 12.             
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                        (6) Date and Docket Header Record                                       
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Schedule ID..........................          1-2  Character....................  Sch = TF.                    
Record ID............................          3-4  Numeric......................  Code = 06.                   
Date Issued..........................         5-10  Numeric......................  (mmddyy); see specific       
                                                                                    instruction 13.             
Order Date...........................        11-16  Numeric......................  (mmddyy); see specific       
                                                                                    instruction 14.             
Docket Number........................        17-36  Character....................  See specific instruction 14. 
Effective Date.......................        37-42  Numeric......................  (mmddyy); see specific       
                                                                                    instruction 1.              
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                  (7) FERC Cite                                                 
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Schedule ID..........................          1-2  Character....................  Sch = TF.                    
Record ID............................          3-4  Numeric......................  Code = 07.                   
FERC Cite............................        43-49  Numeric......................  See specific instruction 15. 
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                           (8) Sheet Text Line Records                                          
                                                                                                                
----------------------------------------------------------------------------------------------------------------
   Each entire record consists of the text of the corresponding line of the tariff sheet, without prefix of any 
                                                      kind.                                                     
----------------------------------------------------------------------------------------------------------------



Exhibit A--Diskette Filing Procedures

    Diskette(s) containing the information specified for each record 
ID of the tariff filing filed with the FERC must conform with the 
following requirements:
    (1) The character code for representing all data should be the 
American National Standard Code for Information Interchange (ASCII) 
as defined in FIPS PUB 1-2. An exception will be made for the cents 
( cents) symbol, which should be coded as hexadecimal 8B, or decimal 
155, as defined in the IBM-US (PC-8) symbol set. Note that there are 
symbol sets which define it differently.
    (2) The definitions, instructions, and schedule ID/record ID 
data layouts for this form specify explicitly the data items to be 
reported and the sequence for recording the information on the 
diskette(s). The information required for a tariff filing should be 
recorded on the diskette(s) exactly as specified in the data layout 
for each schedule/record and in accordance with the general 
instructions.
    (3) All tariff sheets filed under a given docket number should 
all be included in the same ``file'' or data set, if possible. 
(Large files may be split as a matter of convenience or diskette 
size limitation). The file should be named: ``TFMMDDYY.ASC'' where 
``TF'' stands for ``Tariff Filing'', and ``MMDDYY'' is the two digit 
month, day, and year the tariff filing is submitted. If more than 
one tariff filing is made on the same day, the subsequent filings 
should be given file names ``TFMMDDYY.BSC'', ``TFMMDDYY.CSC'', etc., 
where ``BSC'' indicates the second filing of the day, ``CSC'' the 
third filing, etc. The file name for each submission should be 
included in the transmittal letter accompanying the respondent's 
filing.
    (4) Each logical record must be terminated by a CR (ASCII 
carriage return--13 decimal, OD hexadecimal). An ASCII line feed 
(LF) following a CR is accepted but not required as part of 
termination. Do Not pad the end of data records with spaces.
    (5) Do not omit any numeric item. Numeric items do not require 
leading zeros unless specifically noted in the description of the 
data item. See the General Instructions of this form for detailed 
instructions for recording numeric data on the diskette(s).
    (6) When refiling a diskette only to correct an electronic data 
error on the electronic version of a tariff sheet and not in the 
paper version, use the same file name, pagination and submittal 
date.
    (7) Each diskette must state on the label that tariff sheets are 
enclosed. If more than one diskette is necessary to accommodate a 
filing, the diskettes should be numbered 1 of N, 2 of N, etc., where 
N is the total number of diskettes.

Exhibit B--Tariff Sheet Pagination Guidelines

    Section 154.102(d)(2) of the Commission's regulations requires 
companies to number their tariff sheets as provided below.
    (1) Original Sheets. Paginate a sheet as ``Original Sheet No. 
________'' when the sheet number has not been used previously in the 
tariff volume. When filing an entire original or revised tariff 
volume, all sheets should be paginated as ``Original Sheet No. 
________'' unless the sheet falls within the exception under 
Guideline (11).
    (2) Revised Sheets. Designate a sheet as ``Revised'' if it is 
(a) filed in a different proceeding than the sheet it is superseding 
or (b) filed in the same proceeding but given a new proposed 
effective date. Each subsequent ``Revised'' pagination should be 
numbered sequentially. (See Examples 1 and 2.)
    (3) Substitute Sheets. Designate a sheet as ``Substitute 
________ Revised Sheet No. ________'' if it is filed to replace a 
sheet filed in the same proceeding with the same effective date. If 
a substitute sheet needs to be replaced, paginate the new sheet as 
``Second Substitute,'' and so on. (See Example 1.) 

[[Page 53018]]

    (4) Superseded Sheets. Designate as the superseded sheet the 
most recent sheet filed in a different proceeding effective or 
proposed to be effective on the same day or on a day prior to the 
new sheet. This means when filing a substitute sheet the designated 
superseded sheet stays the same. Provided that the sheet does not 
fall under the exception in guideline (9). Never designate a 
rejected or suspended sheet as the superseded sheet. However, if a 
sheet designated as superseded is subsequently rejected, it is not 
necessary to refile solely to correct the superseded sheet 
designation. (See Example 1.)
    (5) Rejected Sheets. If a sheet is rejected by order of the 
Commission, do not reuse the pagination of the rejected sheets. 
Designate a sheet ``Substitute'' if it is filed to replace a 
rejected sheet in the same proceeding, but do not designate a 
rejected sheet as the superseded sheet. Refer to Guidelines (3) and 
(4).
    (6) Alternate Sheets. When filing two versions of a proposed 
tariff sheet, designate the sheets `` ________ Revised Sheet No. 
________'' and ``Alternate ________ Revised Sheet No. ________.'' 
Paginate a replacement alternate sheet ``Sub Alternate.''
    (7) Inserted Sheets. Designate sheets inserted between two 
consecutively numbered sheets using an uppercase letter following 
the first sheet number (e.g., sheets inserted between sheets 8 and 9 
would be 8A, 8B, etc.). For sheets inserted between two 
consecutively lettered sheets, add a ``.'' followed by a two digit 
number (e.g., sheets inserted between sheets 8A and 8B would be 
8A.01 through 8A.99). For further insertions, add a lowercase letter 
(e.g., between sheets 8A.01 and 8A.02 would be 8A.01a, 8A.01b, 
etc.).
    (8) Pre-dated Sheets. When a sheet is filed with a proposed 
effective date which pre-dates the effective date of a suspended or 
effective sheet with the same number filed in a different 
proceeding, designate the new sheet ``________ Rev________ Revised 
Sheet No. ________'' where the second and third blanks are numbered 
the same as the sheet with the later effective date and the first 
blank contains ``1st,'' ``2nd,'' etc. Commonly, this situation 
occurs when a sheet is suspended for five months and subsequent 
sheets need to be made effective prior to the date the suspended 
sheet becomes effective. (See Example 3.) Note: When using the ``1st 
Rev'' pagination, drop extraneous words if the superseded sheet 
provides the same information. (See Example 4.)
    (9) Retroactive Sheets. When filing a retroactive change back to 
a certain date, all sheets which are or were in effect from that 
date forward need to be changed. The first sheet should be 
designated either as ``Substitute'' in accordance with Guideline (3) 
above or ``________ Rev'' in accordance with Guideline (8), 
depending on whether the retroactive filing is in the same docket as 
or a different docket from the sheet being replaced. The rest of the 
sheets should be designated as a ``Substitute'' of each sheet 
already on file. For the first new sheet in the series of sheets, 
the superseded sheet shall be designated in accordance with 
Guideline (4) above. However, the remainder of the sheets in the 
series should supersede each other in order, even though they are 
all filed in the same docket. In this way, the ``superseded'' 
designation will reflect the last sheet in effect on each given 
effective date. (See Examples 5 and 6.)
    (10) Canceled Sheets. When filing to cancel a rate schedule, 
file one sheet with a new revision number and the sheet number of 
the first canceled sheet. Designate as superseded ``Sheet Nos. 
________-________'' where the blanks refer to the first and last 
canceled sheet numbers in a series. The specific pagination of each 
individual canceled sheet should be included in the body of the 
tariff sheet. When using the formerly canceled sheet numbers, refer 
to the pagination of the sheets listed in the body of the canceling 
sheet, and paginate each sheet with the next higher revision number. 
See Example 8.
    (11) Sheets Reserved For Future Use. When reserving a number of 
sheets for future use, file one sheet paginated ``Sheet Nos. 
________-________'', where the blanks refer to the first and last 
reserved sheet numbers in series. In the body of the sheet state 
``Reserved for Future Use.'' (See Example 9.) Note: in the 
electronic tariff sheet records, report the first sheet number in 
the series in the ``Sheet No.'' field and the full pagination in the 
``Sheet ID'' field.
    (12) Abbreviations. Pagination cannot exceed 40 characters. 
Abbreviate from left to right using the Abbreviation Conventions 
List in Exhibit C. Abbreviate only as needed to reduce the 
pagination to 40 characters or less. (See Example 7.) Electronic and 
paper versions of a tariff sheet must be paginated exactly alike, 
including abbreviations.

Example 1

    ``Original Sheet No. 4'' is filed in Docket No. CP94-44-000 to be 
effective January 1, 1994. Subsequently, a sheet filed in Docket RP94-
1-000 is to be effective February 1, 1994. Paginate that sheet ``First 
Revised Sheet No. 4 superseding Original Sheet No. 4.'' A mistake is 
discovered and a corrected sheet needs to be filed in Docket No. RP94-
1-001. Paginate that sheet ``Substitute First Revised Sheet No. 4 
superseding Original Sheet No. 4.'' Note the superseded sheet is from 
the prior proceeding.

----------------------------------------------------------------------------------------------------------------
                                                                                                    Superseded  
             Docket                 Filed      Effective                Pagination                    sheet     
----------------------------------------------------------------------------------------------------------------
CP94-44-000....................     11/30/93       1/1/94  Original............................                 
RP94-1-000.....................     12/31/93       2/1/94  First Revised.......................  Original.      
RP94-1-001.....................      2/15/94       2/1/94  Sub First Revised...................  Original.      
----------------------------------------------------------------------------------------------------------------

Example 2

    ``Second Revised Sheet No. 4'' is filed in Docket No. TM94-1-77-000 
to be effective April 1, 1994. Subsequently, a sheet is filed in Docket 
No. RS94-1-50-000 to be effective on the same date. Paginate that sheet 
with the next revision number, ``Third Revised Sheet No. 4'' even 
though it is to be effective on the same date.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Docket                      Filed      Effective                     Pagination                              Superseded sheet          
--------------------------------------------------------------------------------------------------------------------------------------------------------
TM94-1-77-000...........................      2/28/94       4/1/94  Second Revised...............................  Sub First Revised.                   
RS94-1-50-000...........................      3/31/94       4/1/94  Third Revised................................  Second Revised.                      
--------------------------------------------------------------------------------------------------------------------------------------------------------

Example No. 3

    ``Fourth Revised Sheet No. 4'' is filed July 31, 1994, in Docket 
No. RP94-134-000 to be effective September 1, 1994. An order suspends 
this sheet until February 1, 1995. Subsequently two filings are to be 
made effective prior to February 1, 1995. Paginate these sheets as 
``1st Rev Third Revised Sheet No. 4'' and ``2nd Rev Third Revised Sheet 
No. 4.'' When filing to move the suspended tariff sheet into effect, 
paginate the revised tariff sheet as ``Sub Fourth Revised Sheet No. 
4''. Note: using the alpha-numeric ``1st, 2nd'' for the additional 
revision number assists in keeping the pagination clear.

                                                                                                                                                        

[[Page 53019]]
----------------------------------------------------------------------------------------------------------------
            Docket                Filed      Effective               Pagination               Superseded sheet  
----------------------------------------------------------------------------------------------------------------
RP94-134-000.................      7/31/94       2/1/95  Fourth Revised...................  Third Revised.      
TM94-2-77-000................      8/31/94      10/1/94  1st Rev Third Revised............  Third Revised.      
TM94-3-77-000................     10/31/94      11/1/94  2nd Rev Third....................  1st Rev Third.      
RP94-134-001.................      1/31/95       2/1/95  Sub Fourth Revised...............  2nd Rev Third.      
----------------------------------------------------------------------------------------------------------------



Example 4

    When needing to insert a sheet between ``Third Revised'' and ``Sub 
Alt Second Revised'' with the designation 1st Rev Sub Alt Second 
Revised, paginate the new sheet ``1st Rev Second Revised'' (dropping 
``Sub Alt'' from the name), and designate the superseded sheet ``Sub 
Alt Second Revised.'' In the alternative, the abbreviations in Exhibit 
C may be used.

Example No. 5

    The sheet given in Example No. 1, ``Sub First Revised Sheet No. 4'' 
filed in Docket No. RP94-1-001 is in effect February 1, 1994, subject 
to the resolution of issues. A year later, settlement is reached 
resulting in a restatement of base rates back to that date. The revised 
sheets filed under Docket No. RP94-1-002 (using prior examples):

--------------------------------------------------------------------------------------------------------------------------------------------------------
               Docket                    Filed      Effective                           Pagination                                Superseded sheet      
--------------------------------------------------------------------------------------------------------------------------------------------------------
RP94-1-002..........................      4/15/95       2/1/94  2nd Sub First Revised.....................................  Original.                   
                                                        4/1/94  Sub Second Revised........................................  2nd Sub First               
                                                        4/1/94  Sub Third Revised.........................................  Sub Second                  
                                                       10/1/94  Sub 1st Rev Third Revised.................................  Sub Third.                  
                                                       11/1/94  Sub 2nd Rev Third.........................................  1st Rev Third.              
                                                        2/1/95  2nd Sub Fourth Revised....................................  2nd Rev Third.              
--------------------------------------------------------------------------------------------------------------------------------------------------------

Example No. 6

    Continuing from Example 5, a subsequent tracker filing retroactive 
to November 1, 1994:

--------------------------------------------------------------------------------------------------------------------------------------------------------
              Docket                   Filed      Effective                          Pagination                                 Superseded sheet        
--------------------------------------------------------------------------------------------------------------------------------------------------------
TM96-1-77-000.....................      4/30/95      11/1/94  3rd Rev Third Revised...................................  Sub 2nd Rev Third               
                                                      2/1/95  3rd Sub Fourth Revised..................................  3rd Rev Third.                  
--------------------------------------------------------------------------------------------------------------------------------------------------------

Example No. 7

    Abbreviate ``Fourth Revised Twenty-Third Revised Sheet No. 4'' as 
``4th Rev Twenty-Third Revised Sheet No. 4.''

Example No. 8

    To cancel Rate Schedule X-26 which consists of Original Sheet No. 
10, First Revised Sheet Nos. 11 through 36, Substitute First Revised 
Sheet No. 37, and Second Revised Sheet Nos. 38 and 39, file ``First 
Revised Sheet No. 10:''
    My Pipeline Company, FERC Gas Tariff, Original Volume No. 1

First Revised Sheet No. 10 Superseding Sheet Nos. 10 Through 39
Notice of Cancellation
    Rate Schedule X-26, Exchange Agreement with YOUR Pipeline Company, 
Dated January 1, 1980.
    The following tariff sheets have been superseded:

Original Sheet No. 10
First Revised Sheet Nos. 11 through 36
Substitute First Revised Sheet No. 37
Second Revised Sheet Nos. 38 and 39

Example No. 9

    Your general terms and conditions end on page 75 and you want to 
reserve sheets 76 through 99 for future use:
    My Pipeline Company, FERC Gas Tariff, Original Volume No. 1

Sheet Nos. 76 through 99
Sheet Nos. 76 through 99 are reserved for future use.

Exhibit C--Abbreviation Conventions List

Substitute: Sub
Alternate: Alt
Revised: /
First, Second, etc.: 1st, 2nd, etc.
Sheet No.: (omit these words)

[FR Doc. 95-24723 Filed 10-10-95; 8:45 am]
BILLING CODE 6717-01-P