[Federal Register Volume 61, Number 48 (Monday, March 11, 1996)]
[Rules and Regulations]
[Pages 9613-9637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5165]



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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 154

[Docket No. RM95-3-001; Order No. 582-A]


Filing and Reporting Requirements for Interstate Natural Gas 
Company Rate Schedules and Tariffs Final Rule; Order on Rehearing

Issued: February 29, 1996.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule; Order on rehearing.

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SUMMARY: The Federal Energy Regulatory Commission is issuing an order 
on the requests for rehearing of Order No. 582, the final rule amending 
part 154 of the Commission's regulations under the Natural Gas Act. 
That order adopted 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. Also, minor modifications to the electronic 
filing instructions for tariff sheets are added as an appendix.

EFFECTIVE DATE: The revised regulations will become effective April 10, 
1996.

FOR FURTHER INFORMATION CONTACT: Richard A. White, Office of the 
General Counsel, Federal Energy Regulatory Commission, 888 First 
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 (202) 208-1397 if dialing locally or 1-800-856-3720 if dialing 
long distance. To access CIPS, set your communications software to 
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, 
no parity, 8 data bits, and 1 stop bit. The full text of this document 
will be available on CIPS indefinitely 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 the Public Reference Room at 888 First 
Street, NE., Washington, DC 20426.
    This order grants, in part, and denies, in part, requests for 
rehearing of Order No. 582 (Rule).1 That order adopted 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. Also, minor modifications to the electronic filing 
instructions for tariff sheets are added as an appendix.

    \1\ Filing and Reporting Requirements for Interstate Natural Gas 
Companies Rate Schedules and Tariffs, Order No. 582, 60 FR 52960 
(October 11, 1995), II FERC Stats. & Regs. para. 19,100-19,183 
(1995)(regulatory text), III FERC Stats. & Regs. para. 31,025 
(1995)(preamble). This order on rehearing is a companion to the 
order on rehearing, issued concurrently in Docket No. RM95-4-001, 
which concerns amendments to, among other things, the Uniform System 
of Accounts and FERC Form No. 2. Revisions to Uniform System of 
Accounts Forms, Statements, and Reporting Requirements for Natural 
Gas Companies, Order No. 581, 60 FR 53019 (October 11, 1995), 72 
FERC para. 61,301 (1995).
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I. Background

    On September 28, 1995, the Commission issued Order No. 582, the 
final rule in Docket No. RM95-3-000 revising part 154, Chapter I, Title 
18, Code of Federal Regulations. 2 This order responds to requests 
for rehearing or clarification of the Rule filed by Amoco Production 
Company, et al. (Amoco), American Forest and Paper Association, ANR 
Pipeline/Colorado Interstate Gas Co.(ANR/CIG), Associated Gas 
Distributors (AGD), Chevron, U.S.A. Inc. et al. (Chevron), Colorado 
Interstate Gas Company, Columbia Gas Transmission/Columbia Gulf 
Transmission, Great Lakes Gas Transmission (Great Lakes), Interstate 
Natural Gas Association of America (INGAA), JMC Power Projects, Natural 
Gas Supply Association (NGSA), Mississippi River Transmission Co. 
(MRT), Natural Gas Clearinghouse, Natural Gas Supply Association 
(NGSA), Panhandle Eastern Pipe Line, Texas Eastern Transmission Corp., 
and Williston Basin Interstate Pipeline Company.

    \2\ 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).
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II. Discussion

a. Section 154.1  Application; Obligation to File

1. Requests for Rehearing
    Section 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. 3 This 
requirement codified existing Commission policy. 4

    \3\ Section 154.1, Application; Obligation to file, requires:
    (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.
    (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 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.
    \4\ See, Tennessee Gas Pipeline Company, et al., 65 FERC para. 
61,356 (1993); reh'g denied, 67 FERC para. 61,196 (1994).
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    Amoco argues that the Rule violates section 4(c) of the NGA by 
allowing the interstate pipelines to make substantive deviations from 
pro forma contracts without honoring the statutory and regulatory duty 
to file contracts with the Commission so that the public and shippers 
can determine whether or not they have been subjected to undue 
discrimination.5

    \5\ The Commission has included as Sec. 154.1(b) the description 
of the purpose of part 154, which 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. 15 U.S.C. Sec. 717c(c). 

[[Page 9614]]

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    Amoco states that the regulatory text is correct as a matter of law 
and policy. However, Amoco states that the Commission eviscerated the 
regulation by not defining ``materiality,'' and eliminating the items 
most likely to be the instrument of undue discrimination and unjust and 
unreasonable terms and conditions from qualification as ``material 
deviations.'' Amoco took the items listed in the Preamble as not likely 
to trigger a filing, and argues that, under certain circumstances, 
unfair discrimination could occur.
    Amoco states that any material deviations from the tariff (which 
include those items excluded by dicta in Order No. 582) should be filed 
in order to be sure that there is no undue discrimination.
2. Commission Response
    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 pipeline's customers as to the 
rates, charges, services, or facilities, while minimizing the amount of 
paper filed with the Commission. 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. 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, unduly 
preferential, or otherwise unacceptable.
    Many commenters to the NOPR requested the Commission to be more 
specific as to what deviations or substantive additional provisions 
will trigger this filing requirement.6 To accommodate these 
requests the Preamble gave examples of provisions that would not 
normally be expected to be ``material'' deviations.7

    \6\ For example, Columbia requested 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. Amoco, et al., 
requested that the Commission clarify ``material deviations,'' such 
that contracts must be filed which provide for any difference (from 
that specified in the tariff) in maximum rates, rate design, 
balancing provisions, penalties, operational flexibility, or any 
other variation. On the other hand, IPAA stated that the legal 
concept of materiality may depend upon ``where one resides in the 
food chain'' and suggested that all deviating agreements be filed.
    \7\ III FERC Stats. & Regs. para. 31,025 at 31,385.
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    The Commission will clarify the prior order. To illustrate, a pro 
forma service agreement may contain blanks to be filled in, or ranges 
for terms of service (such as 950-1100 psi). A contract would be 
consistent with the tariff if, for example, it was completed by filling 
in the blanks or included terms that fall within the prescribed ranges. 
There is no need to burden the pipeline with filing all contracts that 
conform to the pro forma agreement that has been filed and approved by 
the Commission as a part of the tariff. Of course, where a contract 
conflicts with the tariff, the tariff controls until the contract is 
filed and accepted by the Commission. Thus, any contract which is not 
consistent with the pro forma service agreement must be filed with the 
Commission. The Commission is continuing to consider in another 
proceeding how much flexibility in contract terms should be permitted. 
On January 31, 1996, the Commission issued a policy statement that it 
is willing to entertain, on a shipper-by-shipper basis, requests to 
implement negotiated rates where customers retain the ability to choose 
a cost-of-service based tariff rate as a recourse.8 In that policy 
statement the Commission established a proceeding in Docket No. RM96-7-
000 to explore how much flexibility could be permitted, although it is 
likely in any event that case-by-case application will be necessary.

    \8\ Statement of Policy and Request for Comments in Docket Nos. 
RM95-6-000, Alternatives to Traditional Cost-of-Service Ratemaking 
for Natural Gas Pipelines; and, RM96-7-000, Regulation of Negotiated 
Transportation Services of Natural Gas Pipelines, 74 FERC para. 
61,076 (1996).
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b. Section 154.4  Electronic and Paper Media

    New Sec. 154.4 requires electronic media filings in addition to 
paper copies.9 Section 154.4(a) states that a pipeline must file 
information contained in spreadsheet format electronically and continue 
to serve customers with paper copies of filings, but it does not 
require a pipeline to provide such information to its customers in an 
electronic format.

    \9\ Section 154.4 provides, in pertinent part:
    (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.
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    APGA requests clarification that a pipeline must, upon request, 
provide such spreadsheet information, including all formulas embedded 
in the spreadsheet, to its customers in an electronic medium. In the 
alternative, APGA requests rehearing of this issue.
    In the Rule, the Commission adopted a tab delimited ASCII format 
for most numeric data and a format compatible with the filing company's 
spreadsheet application for Statements I, J, and those parts of 
Statement H containing state tax calculations.10 To the extent 
APGA's request seeks to expand the use of the format compatible with 
the filing company's spreadsheet application to other statements, the 
request is denied. The Commission adopted the tab delimited format as 
the default for numeric data because it was recommended by several 
parties in comments to the NOPR. It is also a more generic format 
capable of being read or created by several software packages. This 
allows greater access to the data to the general public without 
imposing the burden of buying and learning to use numerous proprietary 
spreadsheet packages. Since statements other than statements I, J, and 
parts of H do not generally contain complex formulae, the loss of the 
formulae will not impair review of the data.

    \10\ III FERC Stats. & Regs. para. 31, 025 at 31,435.
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    APGA's second request, that the electronic data be available from 
the pipeline if requested, is addressed in section II.i.5 of this 
order.

c. Section 154.5  Rejection of Filings

    Section 154.5 states that filings that fail to comply with part 154 
regulations may be rejected by the Director of the Office of Pipeline 
Regulation (Director) pursuant to the authority delegated to the 
Director in Sec. 375.307(b)(2).11

    \11\ Section 154.5 states:
    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.
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1. Requests for Rehearing
    INGAA argues that the regulation does not give sufficient guidance 
to the Director as to how to exercise this authority, even if this 
authority has not been changed or augmented by the Rule. INGAA seeks 
clarification that only patently deficient rate case filings can be 
rejected and that Staff would be required to make such a determination 
within 15 days of the filing date. INGAA states that this would give 
applicants and intervenors a level of assurance that a rate case filing 
will proceed on time under the indicated filing date, thus avoiding 
confusion as to when new rates would go into effect. Under INGAA's 
plan, if lesser deficiencies were found, the applicant would have 30 
days to rectify such deficiencies.
    ANR and CIG request that the Commission clarify that so long as 
there is no ``patent failure'' to comply with the Commission's 
requirements, any deficiency may be cured by the pipeline and the 
filing date will be the effective date of the filing.
    ANR and CIG further request that the Commission reconsider the 
decision not 

[[Page 9615]]
to set forth a procedure that would be followed if a filing is deemed 
not in compliance with the Commission's filing requirements. 
Specifically, ANR and CIG suggest that the Commission notify a pipeline 
in writing within 12 days of filing of a rate case of any deficiencies 
in the filing and allow the pipeline ten days to correct the deficiency 
or request a waiver of a filing requirement. ANR and CIG state that 
this procedure would still allow the Commission to act within 30 days 
of the pipeline's filing of the rate case. To the extent there is a 
change or addition to the filing, ANR and CIG suggest that intervenors 
and protestors be permitted to supplement their filings. ANR and CIG 
state that this procedure is consistent with the 12 day period in which 
interested parties may intervene, comment or protest under 
Sec. 154.210.
2. Commission Response
    Section 154.5 merely sets out, in the rate and tariff filing 
requirements, the existing power of the Director to reject tariff or 
rate schedule filings.12 Section 154.5 signals the Commission's 
intent to have the Director reject filings that do not comply with the 
filing requirements promulgated by this order.

    \12\ Section 375.307 delegates to the Director of the Office of 
Pipeline Regulation the authority to reject a tariff or rate 
schedule or filing if it patently fails to comply with applicable 
statutory requirements, and with all applicable Commission rules, 
regulations, and orders for which a waiver has not been granted.
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    To the extent that the requests for clarification only seek 
assurance that the regulation does not delegate any new power to the 
Director, they are granted. However, any specific guidelines or 
procedures to be followed by the Director in exercising this authority 
must be set out in part 375, not in the pipeline filing requirements.
    The purpose of the regulation is to indicate that the Director's 
power is to reject a filing based on the procedural inadequacy of the 
filing, not the substance. Only the Commission rejects on the basis of 
substance. When a rate filing is procedurally correct but is not 
sufficient to determine just and reasonableness, the appropriate action 
is for the Commission to reject the filing on the merits or to accept 
the filing but suspend the proposed rates pending a hearing. To the 
extent a filing does not include the information required by the 
regulations and is so deficient that it prejudices the Commission in 
the discharge of its duty to decide whether or not to investigate or 
suspend the increased rates, the Commission expects the Director to 
reject the filing.

d. 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.13

    \13\ Section 154.7 states, in pertinent part:
    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:
    * * * * *
    (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 
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.
    * * * * *
    (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.
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1. Transmittal Letter to Contain Quantified Summary
    Section 154.7(a)(6) requires the letter of transmittal to contain 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 appropriate.
    NGSA believes that the abbreviated form of the filing should 
contain a quantified summary of the proposed changes as well as a 
narrative summary. NGSA states that Sec. 154.7(a)(6) should require a 
table or listing of the cost of service, rate base and throughput 
underlying the proposed rates compared to the same information 
underlying the last rate found by the Commission to be just and 
reasonable. NGSA argues that such information would enable parties to 
readily ascertain the magnitude and the sources of the changes being 
proposed and, thus, negate the need on the part of many parties to 
receive a copy of the full filing. NGSA states that adding this small 
amount of quantified information to the abbreviated filing could reduce 
the number of full filings the pipelines are requested to provide.
    This request for rehearing is granted. The burden to the pipeline 
to provide the additional summary would be minimal. Although NGSA 
suggests that the information could reduce requests for full filings, 
the Commission accepts that, in some cases, the quantification summary 
may engender additional requests for full filings. Nonetheless, 
considering the short time period in which the Commission and 
interested parties have to review the filing, this additional 
information would, in most cases, speed processing and reduce requests 
for additional information or complete filings. The regulations will be 
amended such that a filing under subpart D requires a table or listing 
of the cost of service, rate base and throughput underlying the 
proposed rates compared to the same information underlying the last 
rate found by the Commission to be just and reasonable.
2. Motion to Place Reduced Rates Into Effect
    i. Request for rehearing. 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.
    JMC Power Projects states that the new regulation grants the 
pipeline the option as to when to file a motion to place suspended 
rates into effect--either in its initial letter of transmittal or 
later. JMC Power Projects argues that a pipeline proposing to decrease 
its rates admits that its current rates are unjust and unreasonable and 
has an incentive to delay placing suspended decreased rates into 
effect.
    JMC Power Projects seeks clarification that the motion of the 
pipeline to place suspended rates into effect pursuant to 
Sec. 154.206(b) is the same motion to be filed as part of the 
transmittal letter pursuant to Sec. 154.7(a)(9), and that the pipeline 
must file a motion to place the proposed rates into effect at the end 
of the suspension period. In the alternative, JMC Power Projects seek 
rehearing and requests that the Commission find that when a pipeline 
proposes a rate decrease, either no motion is necessary for the rates 
to go into effect or, if a motion is necessary, the pipeline must file 
a motion to place the suspended rates into effect at the end of the 
minimal suspension period.
    JMC Power Projects states that its interpretation of the new 
regulations to the effect that a pipeline is required to file a motion 
to place reduced rates into effect at the end of the suspension period 
is consistent with past Commission practice. JMC Power Projects states 
that allowing a pipeline to delay placing decreased rates into effect 
beyond the minimal suspension period is unjust and unreasonable, 
particularly when customers in such a situation are not afforded refund 
protection.
    ii. Commission response. JMC Power Projects is correct in stating 
that 

[[Page 9616]]
pipelines have an option to file a motion to place suspended rates into 
effect either in the letter of transmittal or later. Also, the motion 
of the pipeline referred to in Sec. 154.206(b) is the same motion 
referred to in Sec. 154.7(a)(9).
    However, the requested clarification that a pipeline is required to 
file a motion to place reduced rates into effect at the end of the 
suspension period is denied. The request is, in effect, asking for a 
special rule to govern proposed rate decreases. This is unnecessary as 
the revised regulation is consistent with 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.'' \14\ 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.'' \15\ The Act requires the motion; 
otherwise, the rates do not go into effect.

    \14\ 15 U.S.C. 717c(e).
    \15\ Id.
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    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.
    The NGA states that refunds may be ordered ``where increased rates 
or charges are thus made effective.'' \16\ Historically, the Commission 
has considered the suspension of a rate as a necessary step to assure 
that refunds may be ordered when appropriate. The refund is appropriate 
where the Commission ultimately determines that the proposed rate moved 
into effect at the end of the suspension period (motion rate) is too 
much of an increase over the last rate found to be just and reasonable 
(the refund floor). Thus, no refund is possible where a decrease is 
proposed. Even where the Commission ultimately finds that the rates 
should have been decreased further than proposed, the motion rate would 
be less than the refund floor.

    \16\ Id.
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    Usually the Commission accepts a proposed rate decrease without 
suspension. Where the Commission does not suspend the effective date of 
a proposed decrease, a section 4(e) motion is not required and the 
proposed decrease goes into effect on the date proposed by the pipeline 
in its filing. However, it may be appropriate, under certain 
circumstances to suspend a rate decrease and in such instances a motion 
to place the rates into effect would be required; for example, where it 
may not be clear initially if it is a rate decrease due to pancaked 
cases. Thus, the Commission will retain this option. Accordingly, the 
request for clarification that a pipeline is required to file a motion 
to place reduced rates into effect at the end of the suspension period, 
is denied.
3. Effective Date After Minimal Suspension
    ANR and CIG believe that in situations where the suspension period 
is likely to be minimal, pipelines will file the motion to place 
proposed rates into effect with the transmittal letter to ensure that 
the rates will be effective as soon as the suspension period ends. ANR 
and CIG ask whether it was the Commission's intent that, where the 
pipeline had reserved its right to file a later motion, the pipeline 
would lose a day or several days before rates were effective. If so, 
ANR and CIG request clarification and rehearing.
    The request for rehearing is denied. A suspended rate may not go 
into effect prior to the motion of the pipeline. The procedures for 
motioning rates into effect after suspension are the same regardless of 
the length of the suspension period. NGA section 4(e) \17\ requires 
that suspended rates are to go into effect ``on motion'' of the 
pipeline, not before the motion is made. Former Sec. 154.67(a) read 
that the proposed rate ``shall become effective as of the date of 
receipt of such motion by the Commission or the expiration of the 
suspension period, whichever is later.'' Therefore, where the pipeline 
includes a motion in its filing and the proposed rates are suspended 
for a minimal period, the rates will become effective on the date 
proposed. Where the pipeline reserves its right to file a later motion 
and the rates are suspended for a minimal period, the rates will go 
into effect, later, on motion of the pipeline, as is required by the 
NGA.

    \17\ 15 U.S.C. Sec. 717c(e).
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4. Quarterly List of Tariff Sheets
    In its Initial Comments, AGD recommended a general reporting 
obligation for a pipeline to provide to its customers, quarterly, a 
list of currently effective tariff sheets, whether or not the pipeline 
files any rate increase applications. The Rule states that AGD's 
suggested summary appears in Sec. 154.7 and thus, what AGD seeks is 
already required. AGD maintains on rehearing that its recommendation 
has not been satisfied by the indicated regulation nor by any other 
part of Order No. 582.
    Many pipelines voluntarily provide their customers with such a 
list. However, the Commission declines to burden all pipelines with 
this obligation. Customers may keep abreast of developments affecting 
pipeline services by monitoring the ``summary of changes or additions 
made to a tariff'' required by Sec. 154.7(a)(6) when a pipeline files 
for a change. Further, this information is available to the public on 
the Commission's bulletin board system by accessing the FERC Automated 
System for Tariff Retrieval (FASTR).

e. Section 154.101  Form

    Williston Basin points out that Sec. 154.101 contains a 
typographical error. As written, it requires that the paper copy of a 
tariff sheet be reproduced on 8\1/2\ by 11 inch sheets of paper with 
margins of \1/4\ inches on the top, bottom, and left sides, and a 
margin of \1/2\ inch on the right side. The NOPR stated that there is 
to be a 1 and \1/4\ inch margin on the left side of the sheet.
    Williston Basin is correct. The regulation has been modified to 
require that the margins on the top, left, and bottom of the tariff 
sheet must be 1\1/4\ inches.

f. Section 154.107  Currently Effective Rates

    New Sec. 154.107 governs the tariff sheets setting forth the 
natural gas company's currently effective rates. Section 154.107(b) 
requires that all rates be stated in thermal units.\18\

    \18\ Section 154.107(b) provides that ``[a]ll 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.''
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1. Requests for Rehearing
    Great Lakes requests clarification or rehearing on the grounds that 
sufficient time is needed to permit pipelines to identify and resolve 
the issues related to conversion to thermal units, and to modify 
existing contractual and tariff provisions where the current 
arrangements are in volumetric units. Great Lakes states that the 
contractual changes necessary to fully convert to thermal rates may 
result in a reallocation of costs to effectuate the change in rates.
    Great Lakes requests clarification that conversion to thermal units 
can be implemented through a compliance filing made under Sec. 154.203; 
and, that any rates restated in thermal units can utilize the cost of 
service and billing units (converted to dekatherms) underlying the 
filing pipeline's currently effective rates.
    Chevron, USA Inc., and Shell Western E&P Inc. (Designated Shippers) 
argue 

[[Page 9617]]
that to require a change in these rates, the Commission must find 
substantial evidence that stating rates on an Mcf basis is no longer a 
just and reasonable practice.\19\

    \19\Designated Shippers cite to Mobil Oil Corp. v. FPC, 483 F.2d 
1238 (D.C. Cir. 1973).
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    The Rule states that the Commission ``does not intend to actively 
enforce this section until one year after the effective date of this 
rule.'' \20\ Designated Shippers maintain that this delay in 
enforcement does not adequately address the hardships faced by these 
shippers or give the affected parties a forum to address the 
significant factual determinations that will have to be made in 
converting rates and capacity entitlements from Mcf units to a thermal 
basis. Designated Shippers state that these determinations are all the 
more critical on pipelines where the heating value of the gas varies 
widely from receipt point to receipt point, and where contract 
capacity, denominated in Mcf units, will have to be converted. 
Designated Shippers argue that the proper forum for determining these 
facts is an individual pipeline rate case.

    \20\ III FERC Stats. & Regs. para. 31,025 at 31,392.
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    If the Commission does not grant rehearing, Designated Shippers 
request clarification that implementing Order No. 582 will not require 
an effective rate increase for any individual shipper or result in the 
infringement of any shipper's contract rights. Designated Shippers 
state that if a conversion is made at the average Btu factor being 
shipped through the pipeline, some shippers will benefit, and other 
shippers will be harmed.
2. Commission Response
    The Commission is committed to standardization of business 
practices in the natural gas industry. Most recently, the Commission 
underscored that commitment in its advance notice of proposed 
rulemaking for standards for business practices of interstate natural 
gas pipelines:

    As a result of restructuring, the gas industry is becoming a 
national marketplace. In order to establish a more efficient and 
seamless pipeline grid, where buyers can easily and efficiently 
obtain and transport gas from all potential sources of supply, the 
development of standardized methods of conducting business along 
with standardized methods of communication is critical. Without 
common business practices and a common language for communication, 
the speed and efficiency with which shippers can transact business 
across multiple pipelines is now, and will continue to be, severely 
compromised. The industry must expeditiously complete 
standardization of crucial business practices to make the promise of 
a restructured and integrated pipeline grid a reality. Accordingly, 
the Commission intends to establish, by rule, standards governing 
pipelines' conduct of crucial business practices and the electronic 
means by which pipelines will exchange information with their 
customers and third-parties.\21\

    \21\ 73 FERC para. 61,104 (1995).

    At a conference held on September 21, 1995, to examine the 
industry's progress towards standardization, one participant pointed 
out the failure of the industry to decide on whether to require 
nominations to be reported in Mcf or MMBtu as an example of the lack of 
standardization in the industry.\22\ The Commission's adoption of the 
provision at Sec. 154.107 requiring rates to be stated in MMBtu or Dth 
is an outgrowth of its conviction that standardized business practices 
are essential to an integrated national pipeline grid.

    \22\ Id. at 61,323.
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    Further, staff reviewed the tariffs of 11 pipelines which state 
rates exclusively on the basis of Mcf. All but three assure redelivery 
of thermally equivalent volumes. In other words, the pipeline 
redelivers a sufficient volume (in Mcf) to ensure the natural gas 
delivered contains the same heating value as the natural gas received. 
In this case, there is no guarantee that the volume (in Mcf) delivered 
will exactly equal the volume (in Mcf) received. The requirement that 
natural gas be redelivered in thermally equivalent volumes underscores 
the nature of the commodity being traded. Natural gas is of worth 
because of its heating content. The true commodity is the heating value 
of the natural gas. Rates should be reflective of the true commodity 
traded.
    Stating rates in MMBtu or Dth as opposed to Mcf could cause some 
shippers to pay higher rates, but any such proposed rate changes will 
not be made without Commission review to ensure they are just and 
reasonable. All pipelines making the switch must file appropriate 
revisions to their tariffs. At that time, parties can raise their 
concerns about paying higher rates as a result of conversion to thermal 
units. All such concerns will be addressed when the Commission 
determines whether the proposed rates are just and reasonable. All 
issues regarding implementation of Sec. 154.107(b) can be addressed in 
the individual proceeding to effectuate the new thermal rates. 
Therefore, the Commission will not grant rehearing.
    We grant Great Lakes' request for clarification that a pipeline may 
file to state its rates on a thermal basis under Sec. 154.107 without 
filing a major rate case filing under subpart D.\23\

    \23\ Trailblazer Pipeline Company and Canyon Creek Compression 
Company have filed to restate their rates on a thermal basis in 
compliance with Order No. 582. Neither did so in a general rate 
proceeding.
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g. Section 154.109  General Terms and Conditions

    Section 154.109 requires that a pipeline set forth in its tariff 
its discount policy and the order in which each pipeline charge will be 
discounted.\24\ The Rule stated that Sec. 154.109(c) merely formalizes 
the Commission's policy on recognition of discounts as enunciated in 
Natural.\25\

    \24\ Section 154.109(c) provides:
    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.
    \25\ III FERC Stats. & Regs. para. 31,025 at 31,394 (citing 
Natural Gas Pipeline Company of America (Natural), 69 FERC para. 
61,029, (1994), reh'g, 70 FERC para. 61,317 (1995)). Under the 
policy, ``[t]he first item of the overall reservation charge 
discounted will be the GRI surcharge (for member pipelines), 
followed by the base rate reservation charge, Account No. 858 or 
other 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.'' 69 FERC at 61,117 n.23.
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    PEC seeks clarification that the decision in Natural left 
individual pipelines free to argue, based on their individual facts and 
circumstances, that the order of discounting in Natural did not apply. 
INGAA seeks clarification, or in the alternative rehearing, that this 
provision does not apply to existing tariff provisions that provide for 
a permanent discount mechanism negotiated between parties in a previous 
regulatory proceeding. The Commission clarifies that if a pipeline's 
tariff contains an existing provision governing the order of discounts, 
accepted by the Commission, no modification to the tariff provision is 
required under Sec. 154.109. The Commission further clarifies that a 
pipeline, in a filing to comply with this section, may attempt to show 
that an order of discounting other than that set forth in Natural 
should apply.

h. Section 154.206  Motion to Place Suspended Rates Into Effect

1. Effective Date Where Modifications are Ordered
    Section 154.206(a) 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 

[[Page 9618]]
be filed at least one day prior to the date the sheets are to take 
effect.\26\

    \26\ Section 154.206 states, in pertinent part:
    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 pipeline 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.
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    i. Requests for rehearing. AGD is concerned that the regulations do 
not adequately assure pipeline compliance with whatever conditions or 
requirements for changes in rates that may have been imposed by the 
Commission's suspension order. AGD recommends that, in situations where 
the Commission has required changes in the filed rates, a minimum 
period of 14 days be fixed as the time between the filing of a motion 
to place rates in effect and the proposed effective date. AGD also 
recommends that the provision recommended in its Initial Comments be 
added to Section 154.206(a). \27\

    \27\ That proviso states:
    Provided, however, that no rates will be made effective pursuant 
to motion until after the party proposing a rate change has 
satisfied all conditions imposed by the Commission with regard to 
the contents of the rate increase filing.
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    AGD points out that the preamble to the Rule states that 
``individual suspension orders may require pipelines to make compliance 
filings earlier, to reflect changes required by the Commission.'' \28\ 
However, AGD states that this language is not a satisfactory answer to 
the problem because the regulations governing the time of motions 
placing rates in effect provides only 24 hours within which the 
pipeline's compliance with the Commission's required changes in its 
rate filing can be determined. AGD states that there is no assurance 
that, in individual cases, sufficient time will be provided to 
ascertain that the pipeline's compliance with Commission-mandated 
changes in its rates has occurred. AGD states that there is no 
regulatory bar to the pipeline's ability to place in effect, after the 
suspension period, rates which do not comply with the changes mandated 
by the Commission's suspension order.

    \28\ III FERC Stats. & Regs. para. 31,025 at 31,400.
---------------------------------------------------------------------------

    ii. Commission response. 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. AGD's Initial Comments had proposed 
that in addition to the 30-60 day opportunity to ascertain whether 
pipeline compliance with any Commission-ordered changes in its rates 
had occurred, that the regulations also include a provision which 
negated the pipeline's ability to place into effect any suspended rates 
which did not reflect changes the Commission had ordered. 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.
    CNG and Columbia recommended no change to the practice of allowing 
pipelines to file motion rates one day before the effective date. CNG 
commented that 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 light of these comments to 
the NOPR, the revised regulation was modified to continue the current 
practice of allowing pipelines to file motion rates one day before the 
effective date.
    The modifications requested by AGD are denied. AGD is incorrect in 
stating the there is no ``regulatory bar'' to the pipeline's ability to 
place in effect, after the suspension period, rates which do not comply 
with the changes mandated by the Commission's suspension order. 
Pursuant to Sec. 154.206, the motion must be accompanied by revised 
tariff sheets reflecting any changes ordered by the Commission. A 
motion that does not reflect the ordered changes would be in violation 
of the Commission order and the subject rates would be unlawful.
2. Withdrawal After Minimal Suspension
    Section 154.206(c) provides that where the rate is suspended 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 rate into 
effect at the end of the suspension period, the change will go into 
effect, subject to refund, on the authorized effective date.
    ANR and CIG seek clarification that if the pipeline includes a 
motion with the transmittal letter, and the Commission accepts the 
filing but requires changes to the pipeline's proposal, the pipeline 
will still have the option of withdrawing its motion before the rates, 
with the Commission modifications, go into effect.
    This clarification is denied. As discussed above, the pipeline may 
choose to reserve its right to file a later motion and rates, suspended 
for a minimal period, will go into effect, later, on motion of the 
pipeline. Where the pipeline chooses to include a motion in its filing 
and the proposed rates are suspended for a minimal period, the rates 
will become effective on the date proposed. However, the pipeline may 
condition its motion on the Commission's accepting the proposed filing 
without modification.
    i. 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. The regulation requires that all customers and state commissions 
receive an abbreviated form of the filing.\29\ Customers and state 

[[Page 9619]]
commissions with an interest may then request a full copy. The pipeline 
must serve 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. Customers are defined as customers 
of the pipeline with a contract for service as of the date of the rate 
case filing.\30\

    \29\ Section 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.
    \30\ III FERC Stats. & Regs. para. 31,025 at 31,403.
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2. Service Group
    NGSA asks the Commission to include ``economically impacted 
parties'' as part of Sec. 154.208. NGSA states that some gas producers 
effect title transfer of their gas either at the wellhead or at the 
outlet of a non-jurisdictional gas gathering system. NGSA states that 
because gas producer prices and wellhead operations are affected by the 
rates, terms and conditions of the pipeline's tariff, they should enjoy 
the full rights of any other potential intervenor to a rate case, 
including the expeditious receipt of the pipeline's rate case 
documents. NGSA states that ``economically impacted parties'' includes 
those purchasers of short-term released capacity who may not have ``a 
contract for service as of the date of the rate case filing.'' NGSA 
states that economically impacted parties should not be excluded from 
receiving the pipeline's rate case filing or because the timing of the 
rate case does not coincide with the timeframe specified within a 
contract.
    America Forest and Paper Associates (AF&PA) requests that on 
rehearing the Commission revise Sec. 154.208 to provide that, in 
addition to customers and affected state commissions, the pipelines 
must serve tariff filings on interested parties, such as trade 
associations and customer groups, and their representatives. AF&PA 
argues that trade associations and customer groups play an important 
role in proceedings before the Commission and enable the Commission to 
conduct an efficient decision-making process by allowing it to consider 
the views of many interested parties channeled through one source.
    On the other hand, Columbia states that the requirement to serve 
even the abbreviated copy upon all customers is unduly burdensome. To 
illustrate, Columbia states that, Columbia Transmission, in addition to 
its firm customers, presently serves 300 interruptible transportation 
customers, and Columbia Gulf serves 200 interruptible customers. 
Columbia continues to believe that the Rule should be modified to 
require service only upon firm customers and affected state commissions 
on the filing date. Columbia states that service effected in this 
manner, along with the form of notice pursuant to Sec. 154.209, is 
sufficient to assure adequate notice.
    The requests for rehearing are denied. 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. While reducing the filing burden to the 
pipeline, this course assures that all current customers and state 
regulatory commissions receive complete notice adequate to making 
informed decisions about the proposal. Adding or deleting recipients to 
the required service list would upset the balance achieved by the 
regulation.
3. ``Served'' or ``Received''
    NGSA requests that the Commission clarify or modify Sec. 154.208(c) 
so that pipelines are required to send the full rate case filing to a 
requestor such that it is received within 48 hours of their request. 
APGA and NGSA state that Sec. 154.208(c) permits the pipelines to 
engage regular U.S. postal services 48 hours after the request had been 
made and receive the full filing two or three days after it is 
postmarked. APGA and NGSA believe that the existence of overnight 
express delivery services makes it possible for parties to receive a 
full filing within 48 hours of their request.
    The request for rehearing is denied. Rule 2010 governing the timing 
of service states that service is made when the document is deposited 
in the mail or delivered in another manner.\31\ The increased burden of 
requiring pipelines to ensure delivery within 48 hours is out of 
balance to the potential benefit to parties receiving the documents 
earlier. However, while not required, parties may agree to arrange for 
overnight delivery. It would be reasonable to expect the recipient to 
bear the cost of this additional service.

    \31\ 18 CFR 385.2010.
---------------------------------------------------------------------------

4. Service Recipient
    APGA states that it is the customer's representative or agent, 
i.e., attorney or consultant, who has the most urgent need to review a 
complete copy of the filing in order to have time to prepare a motion 
to intervene, protest or comments within the deadline provided by the 
Rule for the filing of such pleadings. APGA requests that the 
Commission clarify that a customer may designate a representative or 
agent also to receive service of a complete copy of a rate filing on or 
before the filing date. In the alternative, APGA requests rehearing of 
this issue.
    The request is granted in part. In past practice, a party could 
designate a recipient at the time it files an intervention or when the 
service list is created at hearing. Now that the filing company must 
serve its customers on or before the filing date, there must be a 
procedure for designating service recipients at the earlier time. The 
regulation will be revised to provide that a customer may designate a 
representative or agent to receive service on or before the filing date 
as suggested by APGA. The filing company is required to serve only one 
copy per customer, not multiple copies. However, while not required, 
parties may agree to arrange for multiple recipients or copies. It 
would be reasonable to expect the recipient to bear the cost of this 
additional service.
5. 48 Hours
    Columbia Gas Transmission Corporation and Columbia Gulf 
Transmission Company (Columbia) and INGAA request clarification that 
the parties may interpret Sec. 154.208(c), requiring action within 48 
hours, to mean two business days, thereby removing the concern that 
responsive action need not be taken on holidays or weekends.
    Columbia's concern is unnecessary. Rule 2007 provides that ``any 
period of time'' prescribed by a Commission rule is computed to exclude 
the day of the act or event from which the time period begins. Further, 
the last day of the time period is not included if it is a weekend or 
holiday, in which case the period ends at the close of business on the 
next day that is not a weekend or holiday.\32\ Nonetheless, to avoid 
any confusion the regulations will be revised to state that the 
pipeline must respond to such requests within two business days.

    \32\ 18 CFR 385.2007(a).
---------------------------------------------------------------------------

6. Electronic Version
    NGC argues that the Commission erred by failing to require 
interstate pipelines to provide shippers with an electronic version of 
their filing. NGC states that the provision does not require pipelines 
to honor a customer's request to receive a copy of the filing in 
electronic format.
    NGC states that rather than forcing customers to wait until the 
tariff data is entered into the Commission's FASTR system, which can 
take weeks, customers should have instant access to the full filing, 
through the acquisition of 

[[Page 9620]]
the data in a standardized electronic format directly from the 
applicant. NGC states that since the pipelines are already required to 
file electronically, there will be little added burden or cost to 
making electronic versions of their filings available.
    Under Secs. 154.4 and 154.209 of the regulations, pipelines must 
file the form of notice, tariff sheets, and statements and workpapers 
required by subpart D of the regulations electronically. In Order No. 
582, the Commission recognized that both the electronic and paper 
versions of the filing represent the official filing.\33\ Parties 
receiving service under Sec. 154.208 have a right to receive all or 
part of the official filing depending on their election. Since the 
electronic portion of the filing is part of the official filing, 
service would include the pertinent parts of the electronic version of 
the filing. However, in recognition that not all parties would be 
interested in receiving the electronic portion of the filing, a party 
may ask not to receive the electronic portion of the filing, if that is 
its wish.

    \33\ III FERC Stats. and Regs., para. 31,025 at 31,437.
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j. Section 154.210  Protests, Interventions, and Comments

    Section 154.210 states that 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.\34\

    \34\ Section 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.
---------------------------------------------------------------------------

    APGA seeks rehearing on this issue and reiterates its request that 
parties be allowed a minimum of 15 days to file interventions.
    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 
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. The request for rehearing is denied.

k. Section 154.301  Changes in Rates

    PEC Pipelines request clarification as to what items are considered 
``rate fixing adjustments'' and which are not.\35\ PEC Pipelines 
requests clarification that cost-of-service items, contract demand 
levels, and throughput are not ``rate fixing adjustments,'' for 
purposes of this requirement. PEC Pipelines state that the mere fact 
that an element of cost-of-service--such as labor costs--has increased 
is not the type of ``rate fixing adjustment'' that should trigger an 
additional workpaper requirement. PEC Pipelines state that the same is 
true with respect to contract demand levels and throughput. PEC 
Pipelines state that the level of O&M expenses and throughput are 
already covered by the schedules set forth under Sec. 154.312, 
Composition of Statements. On the other hand, PEC Pipelines state, 
certain items do affect the setting of the unit rate, such as cost 
allocation and rate design; logically, these items are those that 
should be considered ``rate fixing adjustments'' as addressed in 
Sec. 154.301(c).

    \35\ Section 154.301 (c) provides:
    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.)
---------------------------------------------------------------------------

    In response to PEC Pipelines' concern the Commission will revise 
this section by substituting the term ``change in rates or charges'' 
for ``rate fixing adjustments.'' This change is more in line with the 
current terminology where parties no longer refer to ``fixing'' a rate 
but ``making'' a rate change. The Commission agrees with PEC Pipelines 
that the mere fact that an element of the cost-of-service has increased 
does not trigger an additional workpaper requirement. Pipelines need to 
file alternate material when they are proposing a ratemaking change 
that is inconsistent with a prior Commission decision directly 
involving the filing company. Further, as the Commission does not 
require that a specific rate of return must be used in subsequent 
filings, the parenthetical language is removed because it is not 
necessary and may cause confusion.

l. Section 154.303  Test Periods.

    Although Sec. 154.303 is a complete redraft of former 
Sec. 154.63(e)(2) (i) and (ii), the revised regulation maintains the 
same time scheme for the test period.36 The test period consists 
of a base period followed by an adjustment period. 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 four 
months prior to the filing date. The adjustment period is a period of 
up to nine months immediately following the base period.

    \36\ Section 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.
---------------------------------------------------------------------------

    Section 154.303 clarifies that the pipeline must remove from rates 
moved 

[[Page 9621]]
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.
1. Base Period
    MRT and Williston Basin request that the Commission grant rehearing 
and amend Sec. 154.303(a)(1) to lengthen the time from the last day of 
the base period to the filing date from four months to five months. MRT 
states that no pipeline would need to wait the full five months to 
file, but for pipelines with small staffs, like MRT, an additional 
month would greatly facilitate the timely filing of a high-quality 
initial filing and Statement P. Williston Basin argues that no 
justification has been given in Order No. 582 for reducing the already 
limited amount of time which a pipeline has to prepare its rate 
filings.
    These requests, in effect, seek to set the test period back one 
month. This the Commission is reluctant to do. The regulations are 
constructed so that the rate paid by a customer is based upon 
representative costs recently incurred by the pipeline for providing 
the services to that customer. The regulations continue to set the 
cutoff date for these representative costs at four months before the 
filing. MRT and Williston Basin have not shown that this period is 
unreasonable.
2. Costs of Facilities for Which a Certificate Application is Pending
    i. Requests for rehearing. Williston Basin seeks rehearing of the 
requirements of Sec. 154.303(c). Section 154.303(c)(1) permits a 
pipeline to include, in adjustments to the base period, costs of 
facilities for which a certificate application is pending. Section 
154.303(c)(2) requires that when a pipeline files a motion to place the 
proposed rates into effect, the tariff 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.
    Williston Basin states that there is a problem where a pipeline 
files its motion to put its proposed rates into effect before the end 
of the adjustment period. In those circumstances, Williston Basin 
argues, the pipeline should be permitted to include the cost of the 
facilities estimated to be in service at the end of the adjustment 
period, subject to true-up when the actual costs are known.
    Williston Basin states that if the Commission suspends the proposed 
rates for one day but the adjustment period does not end for another 
five months, the pipeline would not be able to include the costs of 
facilities under construction for any of that five-month period even if 
the facilities are in service by the end of the adjustment period. 
Likewise, Williston Basin states, if the rates are suspended until the 
end of the adjustment period, the pipeline's motion filing would still 
be made before the end of the adjustment period and the exact costs of 
the facilities would not be known on the day the motion is made.
    PEC states that the Commission should clarify that it did not 
intend to depart from past practice in promulgating Sec. 154.303 and 
except from its Sec. 154.303(c)(2) requirement costs associated with 
routine facility construction. PEC states that the clarified regulation 
would read as follows:

    When a pipeline files a motion to place rates into effect, the 
filing must be revised to exclude the costs associated with any 
facilities for which specific certificate authorization is required 
but is not expected to be granted or not in service by the end of 
the test period.

    PEC states that the Commission should also clarify that costs 
through the end of the test period (not the earlier of the effective 
date or the end of the test period as stated in Order No. 582) may be 
included in rates. PEC states that if the Commission does not so 
clarify its regulations, the end of test period analysis will be skewed 
because not all of the costs of facilities at the end of the test 
period will be included, leading to mismatches in elements of cost of 
service. PEC argues that costs applicable to new facilities could be 
excluded on grounds that the facilities were not in service on an 
effective date occurring earlier than the end of the test period, even 
though volumes applicable to transportation through the facilities 
would be reflected in rates if the deliveries commenced prior to the 
end of the test period. PEC states that the basic objective of 
synchronizing all rate elements at the end of the test period will be 
thwarted. PEC states that the proposed revised Sec. 154.303(c)(2) would 
correct this inconsistency.
    ii. Commission response. These requests are granted. The regulation 
will be revised to return to the previous practice. Typically, at the 
end of the suspension period, the pipeline files a motion to place the 
proposed rates, as adjusted for any Commission determinations, into 
effect. The requirement that the motion rates not include costs through 
the end of the test period, when the effective date is earlier, negates 
the ability, otherwise provided by the regulations, to adjust 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. Accordingly, the regulation 
will be changed to allow a pipeline to file a motion to place rates 
into effect that include costs associated with facilities not in 
service as of the effective date subject to removal of such costs where 
the facilities are not in service by the end of the test period.

m. Section 154.304  Format of Statements, Schedules, Workpapers, and 
Supporting Data

    Section 154.304 requires a narrative explanation of each proposed 
adjustment to base period actual volumes and costs.37 The Rule 
indicated the Commission's intention to adopt two of NGSA's 
suggestions; 38 however, these changes did not appear in the 
regulatory text. The Commission is amending Secs. 154.304 and 154.311 
to reflect NGSA's suggestions that narrative explanations be placed at 
the beginning of the specific statements to which they apply and that 
statement updates be provided to parties specifically requesting them.

    \37\ Section 154.304(b) provides:
    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.
    \38\ III FERC Stats. & Regs. para. 31,025 at 31,405.
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n. Section 154.305  Tax Normalization

    Section 154.305 requires pipelines 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.
    On rehearing, APGA requests that the Commission promulgate 
amendments to its regulations to curtail the practice whereby pipelines 
eliminate or reduce their accumulated deferred income tax (ADIT) 
account balance, which is typically deducted from rate base, and 
correspondingly increase their rate base and hence their return, when a 
pipeline undergoes a merger.
    The request for rehearing is denied. Because the request concerns a 
ratemaking policy, it is beyond the scope of this rulemaking.

o. Section 154.311  Updating of Statements

    Certain Statements and Schedules must be updated, once, 45 days 
after the end of the test period. 

[[Page 9622]]

    INGAA requests clarification that the Commission did not intend 
nine 12-month running totals but rather intended a monthly total for 
each month in the nine-month period with a single set of updates 
encompassing a 12-month period. Second, INGAA states that the 45-day 
update requirement is insufficient time for this much data to be 
assembled since the books will not close until at least 10-15 days past 
the end of the test period. INGAA requests clarification that a period 
of 75 days be given for such updates. Third, INGAA urges the Commission 
to authorize the Director of OPR and presiding ALJ to suspend or 
terminate the update requirements if a settlement is pending approval, 
hearings have been completed, or an ALJ's decision is pending. INGAA 
states that updates in these situations would serve no purpose.
    The Commission did not intend that updates would have nine 
different 12-month running totals for each month since updates would be 
filed 45 days after the end of the test period. Also, updates must 
include a monthly total for each month in the nine-month period with a 
single set of updates encompassing a 12-month period. INGAA's request 
for clarification on this issue is granted.
    INGAA's suggestion of 75 days in lieu of 45 days will not be 
adopted. The Commission staff works expeditiously to complete the 
review of a pipeline's rate filing and prepare the preliminary staff 
position, testimony and exhibits. Companies have access to the data for 
updates within 10 to 15 days of closing and thus could file within the 
45 day period seemingly without undue hardship. Thus, adding 30 
additional days to the process would merely delay the case without a 
corresponding benefit.
    We agree with INGAA's reasoning on the suspension of updates. The 
Secretary has the authority to grant extensions of time. The 
regulations will be revised to recognize the Secretary's authority to 
extend the time for the updates.
    The Rule states that among the statements and schedules to be 
updated are H-1(3)(a) through H-1(3)(1). Williston Basin seeks 
clarification that the reference is to H-1(2)(a) through H-1(2)(k). 
Williston Basin is correct. The reference is being changed to H-1(2)(a) 
through H-1(2)(k).

p. Section 154.312  Composition of Statements

1. Schedule D-1
    The PEC Pipeline Group suggests that the filings would be more 
comprehensible and consistent if Sec. 154.312, Schedule D-1, were 
amended to include the functionalization of the as adjusted test period 
accumulated reserve for depreciation and amortization. PEC Pipeline 
Group also suggests a new Schedule D-3 showing the depreciation reserve 
balance applicable to the portion of the depreciation rate not yet 
approved. PEC Pipeline Group also suggests that Schedule D-1 should not 
be part of the workpapers.
    Schedule D-1 will be amended to include the functionalization of 
the as adjusted test period accumulated reserve for depreciation and 
amortization. However, a new Schedule D-3 is not necessary since the 
information required to reflect the depreciation reserve balance 
applicable to the depreciation rate not yet approved can be shown on 
the same schedule. Schedule D-1 is properly a workpaper since it 
reflects supporting data for Statement D.
2. Statement G, Revenues, Credits, and Billing Determinants
    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.
    i. Delayed filing of schedules. APGA states that, now that the 
Commission under Order No. 636 has relieved pipelines of mandatory 
triennial rate filings, the pipeline is generally in complete control 
of the date on which it makes a rate filing, and there is no reason to 
conclude that it is burdensome to file the information required in 
Schedule G-1 through G-6 at the same time as the rate filing. APGA 
states that most of the information required to be filed in those 
schedules should be easily accessible by the pipeline directly from its 
computer database, with little or no analysis required.
    APGA states that by permitting certain information to be filed 
after the filing date, the Commission is taking away with one hand what 
it has given customers with the other in requiring that a pipeline's 
Statement P testimony be filed concurrently with the rate case. In 
light of the Commission's requirement that this customer-specific 
information need only be served upon affected customers and those 
customers requesting service, APGA argues that the Commission should 
grant rehearing and require the information submitted under Schedules 
G-1 through G-6 to be filed concurrently with a pipeline's rate filing.
    APGA's request for rehearing is denied. 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 filed 15 days later to ease the 
burden of the compilation of such large scale information on the filing 
pipeline.
    ii. Confidentiality. ANR and CIG join INGAA in urging the 
Commission to reconsider and incorporate the confidentiality provisions 
of the INGAA/AGD agreement in a final rule on rehearing.39 In the 
alternative, ANR and CIG request that the Commission permit pipelines 
to have the option, in all instances where customer specific 
information is called for (for example, in the schedules required in 
Statement G, the Index of Customers and Form 2 Revenues and Discounts), 
of using customer codes to identify customers.

    \39\ Specifically, the Agreement recommends that the Commission 
allow pipelines to serve Schedules G(1) and G(2) to requesting 
parties under a protective agreement document reached through 
negotiation between the pipeline and intervenors in the rate case. 
In the event that parties could not agree to such a document prior 
to filing, the pipeline would use the protective agreement employed 
for similar purposes in the pipeline's most recent rate case.
---------------------------------------------------------------------------

    The PEC Pipeline Group disagrees with the Commission's position 
regarding pipelines' market power in today's market and regulatory 
environment. The PEC Pipeline Group states that pipelines compete with 
one another and with customers using capacity on pipeline systems in 
new and innovative ways under the auspices of Order No. 636; and, non-
pipeline entities use capacity release and the ``gray'' market to 
compete with pipelines. PEC Pipeline Group states that the customers 
have a stake in avoiding public disclosure of the information because 
competitors of a customer will know what the pipeline expects to charge 
that customer over a future period of time, not just historically. PEC 
Pipeline Group requests clarification that coding and the projection of 
commodity billing determinants by rate schedule are appropriate to use 
in preparing Statement G and the related schedules. Alternatively, the 
PEC Pipeline Group requests clarification that the Commission 
recognizes the potential harmful effects on competition that public 
disclosure of test period information has and will thus entertain 

[[Page 9623]]
with favor, taking into account potential anticompetitive effects, 
requests for confidential treatment on a broad basis.
    These requests are denied for the reasons discussed, at length, in 
the Rule.40 The type of information for which PEC Pipeline seeks 
confidential treatment is the type of information that section 4(c) of 
the NGA requires pipelines to make publicly available.41 If 
confidentiality is sought as to test period information, Sec. 388.112 
sets out the procedure to be followed.

    \40\ III FERC Stats. & Regs. para. 31,025 at 31,412-3.
    \41\ For a full discussion on this issue, see ANR Pipeline 
Company, 65 FERC para. 61,280 at 62,304-7 (1993).
---------------------------------------------------------------------------

    iii. Capacity Release. Statement G requires that the pipeline 
provide: (1) Total revenues by rate schedule and by receipt and 
delivery rate zones, if applicable; and (2) billing determinants 
(demand and commodity) by rate schedule and by receipt and delivery 
rate zones, if applicable. Schedule G-3 also requires that the pipeline 
specify, quantify and justify each proposed adjustment including 
capacity release.
    ANR and CIG seek clarification that the requirements of Statement 
G, relative to capacity release, requires only summary level total 
revenue and billing determinants by receipt and delivery rate zones, if 
applicable, and does not require such information for each capacity 
release transaction. In the alternative, ANR and CIG seek rehearing if 
Statement G would require data for each capacity release transaction. 
ANR and CIG state that, since most capacity release transactions are 
for a term of a month or less, requiring detail for each capacity 
release transaction would be unduly burdensome, for example: based upon 
current experience, ANR would have about 1000 capacity release 
contracts for the base period; CIG would have approximately 400 
capacity release contracts for the base period. ANR and CIG state that 
if revenue and billing determinants of releasing shippers are not 
reduced for capacity release, then capacity release data is needed only 
for the design of usage rates. In such instances, ANR and CIG state 
capacity release data need only be provided by receipt and delivery 
rate zone, if applicable.
    ANR and CIG are correct. The Commission clarifies that Statement G, 
relative to capacity release, requires only summary level total revenue 
and billing determinants by receipt and delivery rate zones by 
releasing shipper. It does not require such information for each 
capacity release transaction.
3. Schedule G-2
    Schedule G-2 shows revenue and billing determinants by month, by 
customer name, by rate schedule, by receipt and delivery zone, if 
applicable, by major rate component and totals for the adjustment 
period. Great Lakes agrees that this requirement may be appropriate to 
the extent that a customer's adjusted throughput varies by month/
season. However, Great Lakes states, in the absence of such a 
variation, the monthly breakdown of adjustment period throughput does 
not serve any useful purpose and creates unnecessary paperwork. Great 
Lakes requests clarification that no monthly breakdown is required if 
the pipeline provides a written statement that its projected annual 
throughput is evenly distributed over each month of the adjustment 
period.
    The request for rehearing is denied. There is no need to make a 
generic change in the Rule. However, a pipeline demonstrating that its 
projected annual throughput is evenly distributed by months, may ask 
for a waiver of the monthly filing requirements.
4. Schedules G-5 and I-4
    Revenues from the release by the pipeline of transportation and 
compression capacity it holds on other pipelines (Account 858 capacity) 
must be reflected as a credit to Account 858 in Schedule I-4 and also 
as revenue in Schedule G-5 (Other Revenues).
    INGAA seeks clarification that revenues from capacity release are 
not double counted. INGAA states that, while inclusion of such revenues 
as a credit against Account 858 costs is appropriate, Schedule I-4 in 
Section 154.312(o)(4)(v) requires that revenues from released capacity 
be reflected, separately, in Schedule G-5. INGAA states that under this 
methodology, revenues from released capacity would count twice against 
cost of service; once as a credit towards Account 858 costs and second 
as other revenue. INGAA requests that the requirement to include these 
amounts in Statement G-5 be removed.
    The Commission agrees that these revenues should not be double 
counted. However, the revenues must be shown in both Schedules I-4 and 
G-5. If the revenues are credited to the cost of service in Schedule G-
5, then these revenues shown in Account 858 may be removed from the 
total costs claimed on Schedule I-4. However, if they are not reflected 
as a credit to the cost of service through Schedule G-5, then they must 
be counted as a credit in Schedule I-4 and Account 858.
5. Schedule H-1(1)
    Schedule H-1 requires identification and explanation of all accrual 
or other normalizing accounting entries reflected in the applicant's 
base period expenses.
    In response to a comment, the Commission revised proposed Schedule 
H-1(1) to require the disclosure and explanation of all accruals, not 
just special accruals reflected in the monthly per book expenses in 
order to allow customers to test whether a pipeline is inflating its 
expenses in order to increase its rates.42

    \42\ III FERC Stats. & Regs. para. 31,025 at 31,417.
---------------------------------------------------------------------------

    i. Explanation of all accruals. A. Requests for rehearing. Great 
Lakes argues that this section should not require the explanation of 
all accruals. Great Lakes argues that numerous accruals are necessarily 
recorded for items such as payroll, insurance, taxes, etc. Great Lakes 
states that separately identifying and explaining all base period 
accruals would be very time consuming and burdensome; and that, 
disclosure of meaningful data can be accomplished much more efficiently 
by adhering to the requirements set forth in both the Commission's 
previous regulations and the NOPR. Great Lakes states that adherence to 
this requirement, in addition to the Commission staff's audit and data 
request procedure, is more than sufficient to meet the commenter's 
concerns without requiring the burdensome production of data, the 
usefulness of which is questionable at best. PEC argues that there is 
no evidence that routine true-ups cause special ratemaking concerns and 
the original language should be reinstated.
    ANR and CIG also seek rehearing on these grounds and add that a 
rate case filing is not the proper forum for the disclosure and 
explanation of all accruals because such evaluation is currently 
performed by the Commission's Office of Chief Accountant (OCA) Staff 
and a company's external accounting firm. ANR and CIG also seek 
clarification or rehearing concerning whether the new rule requires a 
pipeline to explain the accruals appearing in every month in the base 
period. Since most of the individual monthly accruals will have been 
paid during the base or test period, and therefore there should be no 
question regarding inflation of such expenses, the only explanation of 
accruals that would be of value to any extent would be those that are 
recorded at the end of the test period. Thus, ANG and CIG state, to the 
extent that the rule requires an explanation of accruals, the 

[[Page 9624]]
explanation should only be with respect to accruals remaining on the 
books at the end of the test period.
    Williston Basin seeks rehearing of the requirement that certain 
expenses be stated on a cash basis. Schedule H-1(1) requires that 
pipelines reconcile their base period expenses to actual case 
expenditures. Williston Basin states that this imposes an enormous 
burden on pipelines as it conflicts with the method by which pipelines 
maintain their accounts under the Uniform System of Accounts.43 
Williston Basin states that recording these types of items on a cash 
basis would violate the Uniform System of Accounts and require 
companies to maintain two sets of accounting records: one which 
complies with the Uniform System of Accounts and one from which the H 
Schedules can be prepared. Williston Basin states that instead of 
adopting Schedule H-1(1) as written in Order No. 582, the Commission 
should adopt Schedule H-1(1) as written in the NOPR, whereby only 
``special accruals'' would be reconciled rather than ``all accruals.''

    \43\ According to the Uniform System of Accounts: ``The utility 
is required to keep its accounts on the accrual basis. This requires 
the inclusion in its accounts of all known transactions of 
appreciable amount which affect the accounts.'' 18 CFR Part 201, 
General Instruction No. 11. Under accrual accounting, assets and 
liabilities are recognized as they occur--not when they are paid. 
For example, the expense and liability for payroll taxes are 
recorded at the time the associated payroll is recorded, not when 
the taxes are paid. Similarly, the expense and liability for receipt 
of purchased materials is recorded when the materials are received. 
It is at the time of that the obligation to the vendor is 
established. Other examples of where the liability accrued precedes 
the actual cash payment include interest expense, income taxes, 
prepaid insurance, pension costs, post retirement benefit costs, and 
use taxes.
---------------------------------------------------------------------------

    B. Commission response. These requests for rehearing are granted. 
Under accrual accounting, many expenses are accrued one month and paid 
the next. With thousands of accrued entries on the books of most 
pipelines, the additional disclosure requirements included in Schedule 
H-1(1) regulations would be extremely lengthy, burdensome and, except 
for project development expenses, unnecessary. In addition, many of the 
accruals would have been paid during the base period, and thus present 
no danger of expense inflation. The only explanation of accruals that 
might be of value would be that of expenses recorded at the end of the 
base period. Accordingly, Schedule H-1(1) will be modified such that 
only ``special accruals'' are reconciled.
    ii. Project development costs. INGAA seeks clarification that 
Schedule H-1(1) regulations apply only to project development costs, as 
the Commission indicated in the preamble, and that these regulations 
should apply only to accruals remaining on the books at the end of the 
base period. This clarification is granted and Schedule H-1(1) is 
amended accordingly.
6. Schedule H-1(1)(c)
    Schedule H-1(1)(c) requires a pipeline to show expenses and 
associated quantities applicable to Accounts 810, 811 and 812. 
Williston Basin seeks rehearing of this requirement. Williston Basin 
states that the cost portion of this schedule should be eliminated 
because fuel costs are recovered by a separate mechanism under 
Williston Basin's existing tariff and such costs should, therefore, not 
be subject to review here. Alternatively, Williston Basin states that 
if a pipeline's fuel reimbursement tracker does not require a 
redetermination of the base level of gas in a rate proceeding, the 
Commission should not require that the pipeline provide this 
information.
    Williston Basin's request for rehearing is denied. As noted in the 
Rule, the Commission must review all fuel costs, whether recovered in a 
separate mechanism or not.44 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. Since both volumes and costs are recorded in the fuel 
accounts the data are readily available.

    \44\ III FERC Stats. & Regs. para. 31,025 at 31,417.
---------------------------------------------------------------------------

7. Schedules H-1(2)(j)(iv)
    Schedule H-1(2)(j)(iv) requires that a pipeline document the 
derivation of the allocations used to appropriate costs among 
affiliated companies. The pipeline must also 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.
    INGAA requests that Schedule H-1 be amended such that documentation 
demonstrating the derivation of allocation bases with underlying 
calculations are to be provided, as they are today, during discovery. 
INGAA states that requiring all pipelines to provide this information 
with the original rate case filing is unduly burdensome because there 
are numerous types of costs allocated between divisions or companies, 
each with its own ``allocation basis and underlying calculations.'' 
INGAA states that in addition to reducing the burden on pipelines, 
providing the information during discovery would allow the data to be 
tailored better to the needs of intervenors and the nature of the 
pipeline.
    Rehearing is granted. The Commission agrees with INGAA that 
providing this type of information with the initial filing is not 
generally necessary. Schedule H-1(2)(j)(iv) will be amended by removing 
the requirement to provide documentation of the derivation of 
allocation bases.
8. 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.)
9. Schedule I-1 (d)
    NGSA 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. NGSA states that the experience of its member companies is 
that the ``common and joint costs'' required by Schedule I often do not 
include A&G. Thus, the method used by the company to allocate A&G must 
be ascertained by means of the discovery process. NGSA submits that to 
explicitly include A&G in these regulations would clarify the 
requirement, and reduce discovery burden and delay in the rate case 
proceeding, and provide parties with important information with respect 
to an increasingly important category of costs.
    The Commission agrees with NGSA that Schedule I often does not 
include the allocation of A&G and this allocation should be included. 
Accordingly, Schedule I-1(d) will be revised to include the allocation 
of A&G.
10. Statement O
    NGSA requests that the rate history filing requirement be retained 
but modified to require the company to show its rate history only since 
its last major rate filing in Statement O. NGSA submits that retention 
of this limited 

[[Page 9625]]
form of the rate history requirement does not represent a burden on the 
pipeline, and provides parties with important summary information, 
difficult to obtain by other means, regarding the levels and effective 
periods for rates which have been in effect since the company's last 
filing.
    NGSA's request is denied. One purpose of the rule was to eliminate 
any unnecessary burdens of production to the pipeline company. This 
involves avoiding the duplication of information that can be gathered 
from another source. The history provided by Statement O is not relied 
on in the Commission analysis of a rate proceeding and is available 
through the Commission Issuance Posting System (CIPS).
11. Statement P
    In the past, pipelines filed their Statement P testimony 15 days 
after filing the rate proposal. 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.
    Williston Basin seeks rehearing of this requirement. Williston 
Basin states that the removal of this 15-day period unnecessarily 
shortens the period in which a pipeline must prepare and file a rate 
case. Williston Basin states that the Commission should grant rehearing 
so as not to place additional burdens on companies in preparing the 
voluminous statements and schedules that must accompany rate case 
filings.
    This request is denied for the reasons discussed in the Rule. 
45 The Commission's experience is that Statement P provides the 
most comprehensive description of the proposed rate change. 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. 46

    \45\ III FERC Stats. & Regs. para. 31,025 at 31,382 and 31,424.
    \46\ Statement P requires the pipeline to:
    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.
---------------------------------------------------------------------------

    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 merits determinations (Statement P) to the Commission 
and other parties sooner than under the current regulations.

q. 154.314  Other Support for a Filing

    The Rule does not require pipelines to file monthly financial 
reports prepared for management purposes and copies of accounting 
analyses of balance sheet accounts. 47

    \47\ III FERC Stats. & Regs. para. 31,025 at 31,425.
---------------------------------------------------------------------------

    APGA requests that the Commission grant rehearing and require 
pipelines to file financial reports as an integral part of a Section 4 
rate filing. APGA submits that a pipeline's financial statements are 
essential to an understanding of a pipeline's rate of return 
presentation and should be available up front to the parties to a rate 
proceeding. APGA states that if information contained in such reports 
is deemed commercially sensitive by the pipeline, it may file such 
information under seal subject to a protective agreement.
    APGA's request is denied. This data is not generally necessary in 
the early part of the process. Such information may be obtained through 
discovery after a rate case has been set for hearing.

r. 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-for gas, and transition cost filings.
1. Requests for Rehearing
    NGSA requests that the Commission reconsider NGSA's suggestions for 
periodic rate filing requirements, summarized in the Rule. 
Specifically, NGSA suggested 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 is concerned that where information is not required, it is not 
likely to be supplied. For example, NGSA states that the regulations do 
not require companies to include actual fuel used and fuel retained 
from shippers under the existing fuel rates when filing for new fuel 
retention rates. Thus, NGSA states, parties do not know if the 
pipeline's existing fuel rates have overrecovered or underrecovered 
actual fuel costs, and may have no actual basis on which to evaluate 
the proposed rates. NGSA states that, pursuant to Sec. 154.403(d)(3)), 
actual data are not required by the regulations where the proposed 
rates are based on estimates. Consequently, NGSA states, for filing 
under this subpart where discovery is not available to interested 
parties, there may be no way of obtaining the needed information. NGSA 
states that this circumstance would occur, for example, where the 
filing has not been set for hearing or where the parties had not 
previously agreed to a submission of the data.
2. Commission Response
    Section 154.403 is intended to cover a disparate array of potential 
cost recovery or revenue credit surcharges, in addition to fuel 
reimbursement mechanisms. The regulations adopted are intended to 
ensure the widest possible applicability.
    The Rule states that the information NGSA seeks will be available 
in the filings under this subpart. 48 NGSA requests that the 
regulations be revised to require reconciliation information for the 
past period which compares the volumes and revenues actually recovered 
to the volumes and costs use to design the rates previously in effect. 
Section 154.403(c)(6) already requires that where costs or revenue 
credits are accumulated over a past period for periodic recovery or 
return, the tariff must include provisions to define the past period, 
to detail the mechanism for recovering the cost or revenue, to describe 
the mechanism for calculating the entries to the deferral account and 
for passing through the account balance. Where necessary, the 
information NGSA seeks would be covered in the tariff provision 
required by Sec. 154.403(c)(6).

    \48\ III FERC Stats. & Regs. para. 31,025 at 31,427.
    
[[Page 9626]]

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    Similarly, while the derivation of discounting adjustments is not 
specifically listed under the filing requirements in Sec. 154.403(d), 
Sec. 154.403(c)(8) requires the tariff to provide, on a step-by-step 
basis, how the pipeline's methodology for calculating its surcharge 
will be affected by rate discounts. The pipeline must then follow this 
methodology when it files to change its rates. When the pipeline files 
to establish its methodology in the tariff, sufficient detail must be 
incorporated in the tariff to establish the step-by-step calculation 
methodology. It is in fashioning the tariff provision that detailed 
information requirements will be established such as those NGSA would 
include in the regulations. It is not, therefore, necessary for the 
regulations to explicitly require discounted transactions to be 
separately identified. Nor is it necessary to modify the regulations to 
include the requirement that the derivation of any discounting 
adjustment be included in the proposed rates.
    Some of the data NGSA wishes the regulations to require are already 
explicitly required by the new regulations. For example, 
Sec. 154.403(d)(1)(ii) requires computations to be shown for each 
surcharge or fuel reimbursement percentage to be applied. The 
computations should be broken down by service, classification, area, 
zone, or other subcategory as appropriate. Therefore, NGSA's request 
that the regulations require costs, volumes, allocation, and rate 
design be shown by zone of receipt/zone of delivery or other category 
used to charge rates would be redundant. In addition, 
Secs. 154.403(d)(1) (iv) and (v) require the pipeline to cite the 
source of the costs, revenues, rates, quantities, indices, load 
factors, percentages, or other numbers used in the calculations. NGSA's 
request that citations to data sources be required is, therefore, 
already in the regulations.
    Section 154.403(c)(5) requires a step-by-step description of the 
cost calculation and flowthrough methodology to be included in the 
tariff. Any comparison between actual costs incurred and the costs 
underlying the previous rate may be appropriate for inclusion in the 
methodology required by the referenced section. That determination must 
be made at the time the tariff language setting forth the methodology 
is accepted.

s. Section 154.501(a)

    Section 154.501(a) states that ``[t]he 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.''
1. Refund Upon Final Order
    Williston Basin states that refunds should be required only upon 
the issuance of the final Commission order in the proceeding. Williston 
Basin states that in an instance where a pipeline requests rehearing or 
appellate review of a Commission order imposing refund liability, the 
refund should be deferred until after final ruling to avoid the 
necessity for further refunds or for the required rebilling of 
prematurely refunded amounts. Williston Basin states that it has become 
increasingly difficult, if not impossible, to collect prematurely 
refunded amounts from transient shippers.
    Williston Basin states that shippers are well protected from any 
delay they might experience in receiving their refunds since they 
receive interest on the amount which the pipeline must refund; thus, 
they are made whole for any overpayment amounts which the pipeline 
held. Williston Basin states that if pipelines are forced prematurely 
to make refunds before a final, nonappealable agency order is issued 
pipelines could be left holding an empty bag as they would have to 
track down shippers that may no longer exist to recover these premature 
refunds.
2. Commission Response
    Section 154.501(a) was patterned in part after former 
Sec. 154.67(c). Former Sec. 154.67(c) noted that the date of any refund 
would be determined in a final Commission order. Section 154.501(a) 
retained this provision but added that if no specific date is set, the 
refund must be made within 60 days of the order. The regulation did not 
specify the procedure to follow in an instance where a pipeline 
requests rehearing or appellate review of a Commission order imposing 
refund liability. To avoid any confusion, the regulation will be 
revised to read that in the event no date for the refund is set by the 
Commission order establishing the refund obligation, the refund must be 
made within 60 days of a final Commission order. For purposes of this 
section, final order will mean an order no longer subject to rehearing. 
Williston Basin's request that the refund disbursement be delayed until 
after judicial review is denied as inconsistent with the NGA. 49

    \49\ Section 19(c) of the NGA provides that:
    The filing of an application for rehearing under subsection (a) 
shall not, unless specifically ordered by the Commission, operate as 
a stay of the Commission's order. The commencement of proceedings 
under subsection (b) of this section shall not, unless specifically 
ordered by the court, operate as a stay of the Commission's order. 
Waiting to disburse a refund until after appeals court review would 
entail undue delay and would be inconsistent with current practice. 
15 U.S.C. 717r(c).
---------------------------------------------------------------------------

t. Section 501(d)

1. Higher Interest Rate
    AGD proposes procedures to reduce the level and duration of 
excessive pipeline rate increases including an amendment to 
Sec. 154.501(d). AGD proposes that the Commission exercise its 
discretion to prescribe a higher interest rate to apply to refunds of 
pipeline's excessive charges. The proposed percentage AGD recommends is 
one that would be high enough to deter the pipeline from seeking 
excessive rate increases so that such increases are limited to those 
which can be fully justified. AGD states that such an interest rate 
would be equal to the rate of return on equity sought by the pipeline 
in its rate filing. AGD states that this interest rate would be a 
significant deterrent to a pipeline's unsubstantiated rate increase 
proposal and provide the pipeline with a necessary incentive to 
cooperate with its customers in the early disposition of its rate 
increase proposal, an incentive that no longer exists under the SFV 
rate design standard.
2. Commission Response
    AGD seeks to change the Commission's provision for carrying charges 
under Sec. 154.501(d) from a vehicle to ensure compensation for the 
time value of money into an incentive mechanism for modest rate 
increase proposals on the part of the pipelines. The Commission does 
not intend to change any substantive ratemaking policies through this 
Rule. Thus, AGD's request is beyond the scope of the Rule and is 
denied.
3. Surcharges
    ANR and CIG request clarification that the Commission's intent is 
to allow pipelines, that are required to pay surcharges to other 
pipelines as a result of a Commission order, to recover such surcharges 
from customers within 30 days of the pipeline paying such charges 
through the mechanism of a limited section 4 filing.50

    \50\ For example, in Docket No. RP91-143-027, 72 FERC para. 
61,081 (Remand Order), the Commission directed Great Lakes to 
effectuate refunds and surcharges to expansion and pre-expansion 
shippers, respectively. Under the clarification sought by ANR and 
CIG, pipelines that incur surcharges pursuant to the Remand Order 
could file limited section 4 filings seeking authority to increase 
their rates to pass through to their shippers the amount of the 
Great Lakes surcharge, and such authority would be granted.

[[Page 9627]]

    If such clarification is denied, ANR and CIG request rehearing 
stating that the change to Sec. 154.501 improperly mandates a one-sided 
exception to test period ratemaking. ANR and CIG state that requiring a 
pipeline to pay to customers refunds received after the end of the test 
period underlying the pipeline's rates violates Secs. 154.303 and 
154.63(e)(2) of the Commission's regulations. ANR and CIG state, unless 
the Commission implements an exception to this regulation in an even 
handed manner, equity dictates that pipelines should not be required to 
pass through a refund from an upstream pipeline unless the Commission 
determines that the pipeline is overrecovering its costs after 
reviewing all of the pipeline's other costs and revenues.
    In any event, ANR and CIG request that the 30-day provision be 
clarified with respect to minor refunds and surcharges. Specifically, 
they request that minor refunds be treated as billing adjustments which 
will be reflected in the next billing 30 days subsequent to receipt, 
and surcharges be reflected in the next billing 30 days subsequent to 
billing.
4. Commission Response
    In response to ANR/CIG's comments to the NOPR, the Commission 
stated in the Rule that cost increases must be filed for by the 
pipeline. Pipelines would not receive automatic passthrough authority 
within 30 days of the pipeline paying such charges. A pipeline paying 
increased charges to an upstream pipeline must file to recover these 
costs through a section 4 filing. The Commission will not prejudge the 
proper approach for passing through costs paid to one pipeline by 
another. Regulations governing such cost passthrough are contained 
elsewhere in Part 154. ANR/CIG's request for clarification is denied.
5. One-Way Tracker
    ANR/CIG reiterates, on rehearing, its comment to the NOPR that the 
language proposed in the NOPR mandated the institution of a one-way 
tracker. In response to that comment, the Commission clarified the 
language of Sec. 154.501(a)(2) to ensure that the refund either is a 
product of a prior Commission order or occurs in conjunction with a 
tracker filing instituted under Sec. 154.403. The provision is not a 
universal requirement for flow through of upstream pipeline refunds as 
ANR/CIG implies and does not violate the test period concept. This is 
so because the refund passthrough either is required by a specific 
Commission order or is made in conjunction with a cost tracking 
provision approved by the Commission. A cost tracker permits the 
pipeline to recover costs paid subsequent to the end of the test period 
without having to file a general rate case and submit to a review of 
all costs and revenues. Therefore, to ensure those costs are not over-
recovered, refunds of costs collected from customers by means of a rate 
established under a tracking mechanism must be flowed through to 
customers.
6. Minor Refunds
    ANR/CIG request clarification that the 30-day provision relates to 
minor refunds and surcharges. Sections 154.501 and 154.502 relate 
solely to refunds, not to surcharges.
    The Commission adopted a single generic standard of 30 days to pass 
through refunds. The difficulty with making an exception for minor 
refunds is defining what constitutes a minor refunds. A minor amount on 
one pipeline may represent a significant amount on another pipeline. It 
is preferable to have a single generic standard. The Commission will 
review requests for exceptions for disbursing minor refunds through 
billing adjustments on a case-by-case basis, thereby allowing such a 
provision to be tailored to the specific circumstances of each 
pipeline.

u. Topsheets

    APGA requests rehearing of the Commission's determination that it 
should not establish a time frame for the submission of Staff 
topsheets.
    This matter has been fully considered and discussed in the Rule. 
APGA's arguments do not warrant further consideration or a different 
conclusion. This request is denied for the reasons discussed in the 
Rule.51

    \51\ III FERC Stats. & Regs. para. 31,025 at 31,431.
---------------------------------------------------------------------------

v. Bifurcation

    AGD suggests, as a strategy to expedite pipeline rate case 
decisions, an early bifurcation of a given proceeding into two separate 
categories for decisionmaking. The Commission's suspension order in a 
pipeline rate case would divide the issues to be addressed by the ALJ 
and the parties in two categories, one of which would be subject to a 
final Commission decision deadline of 12 months from the filing date, 
while the other category could have a different Commission decision 
deadline. In the first, 12 months-to-decision category, the issues 
would include those concerning the pipeline's filed-for cost of service 
and its throughput and/or other issues which lend themselves to prompt 
decisions. The Commission's rules would provide that, in the absence of 
compelling reasons, all rate case issues concerning the pipeline's cost 
of service and its throughput volume, including rate of return, 
depreciation rate and other similar issues would be addressed by the 
ALJ and by the Commission within 12 months of the filing date.
    The second category of issues would be those concerning the 
pipeline's rate design and/or its allocation of costs among functions 
and among customers according to their rate schedule. This latter 
category of issues may involve more complex questions and may require 
the use of expert testimony, exhibits and other evidence to frame the 
issues for Commission decision.
    The Commission recognizes that the proposed procedure might have 
the effect of expediting pipeline rate case decisions. However, before 
implementation, the Commission would require more study as to the 
potential effects of such a procedure on the rate case as well as what 
further changes would have to be made to the filing requirements. The 
suggested change is simply beyond the scope of the purposes of this 
Rule and will not be adopted.

w. Electronic Pleading

    NGC states that the Commission on rehearing should add to its list 
of goals the electronic service of pleadings. NGC states that, with the 
internet and world-wide web gaining such increased prominence in recent 
months, it is time the Commission implemented electronic service 
through the CIPS system.
    Expanding electronic filing requirements to pleadings is outside 
the scope of this rulemaking.

x. Suspension of Electronic Filing

    The Commission is suspending the requirement to submit filings 
under subpart D electronically until the new electronic filing 
requirements are fully developed.52

    \52\ III FERC Stats. & Regs. para. 31.025 at 31,433.
---------------------------------------------------------------------------

    INGAA seeks clarification that after electronic filing requirements 
have been finalized, there would be a period of six months for 
pipelines to develop internal software and procedures that match their 
data to the newly developed electronic filing requirements. During this 
period, pipelines would continue to file rate cases on paper.
    In accordance with the Rule, staff convened an informal conference 
on December 1, 1995, to discuss issues 

[[Page 9628]]
relating to electronic filing which had not been resolved. Issues 
relating to the Index of Customers and discount rate filings have been 
resolved. The final specifications will be issued shortly. Two working 
groups were established--one to complete work on Form Nos. 2, 2A and 11 
and one to complete work on rate case filings. The working groups met 
on December 12, 1995, February 7, 1996 and February 8, 1996.
    The Commission expects to have work completed on Form No. 11 in 
time for the first filings due on May 15, 1996. Given the relative 
simplicity of the Form No. 11, there should be no difficulty meeting 
this timetable. A delay of six months is excessive for this filing.
    The Form Nos. 2, and 2A, and rate case filings, however, are far 
more complex. Form Nos. 2 and 2A must be filed electronically on April 
30, 1997. However, staff and the Working Group--Forms are urged to use 
due diligence to complete the filing specifications by October 31, 
1996, in order to provide the six month preparation time INGAA seeks.
    As regards electronic filing for rate cases, the Commission will 
not adopt INGAA's proposal that its implementation be delayed until six 
months after the Commission issues the electronic filing 
specifications. Several pipelines in the working group are providing 
test files of rate case data in the new file format. It is preferable 
to wait until the working group process is complete and staff has 
better information about the amount of time the test pipelines required 
to create files in the new file format before making a decision on the 
appropriate amount of delay between the issuance of file specifications 
and implementation of the electronic filing requirements for rate 
cases. Therefore, the Commission will defer making a ruling on this 
issue until staff issues the file specifications for the rate case.

y. Effective Date

    The final rule became effective on November 13, 1995, 30 days after 
publication in the Federal Register.
    The NOPR proposed that the revised regulations would be effective 
90 days after publication in the Federal Register.53 However, the 
Rule made the revisions effective 30 days after publication in the 
Federal Register.54

    \53\ IV FERC Stats. & Regs. para. 32,511 at 32,944.
    \54\ III FERC Stats. & Regs. para. 31,025 at 31,375.
---------------------------------------------------------------------------

    INGAA states that it would be impossible for pipelines who might be 
in the process of preparing a rate case to implement the Rule within 30 
days. INGAA seeks clarification that the effective date will be 90 days 
after publication in the Federal Register. The Rule already is in 
effect. Thus, this request is denied as the issue is moot.
    INGAA also seeks clarification that the order does not apply to 
pending rate cases. This request is granted.
    ANR and CIG request clarification of when pipelines are required to 
make changes to their tariff to bring the tariff into compliance with 
the new Rule. In some instances, such as a filing for a rate change, it 
is clear that the next filing would trigger the Rule's requirements. 
However, it is not clear when pipelines will have to make other 
revisions to their present tariffs, such as conforming the title page 
of their tariff to the new Rule's requirements or providing 
explanations of policies on such issues as discounts.
    The Commission clarifies that all filings and tariffs on file must 
be in compliance with the revised regulations no later than December 
31, 1996.

List of Subjects in 18 CFR Part 154

    Alaska, Natural Gas, Pipelines, Reporting and recordkeeping 
requirements.

The Commission Orders

    (A) The requests for rehearing and clarification of Order No. 582, 
the final rule issued in this docket on September 28, 1995, are granted 
and denied as discussed in the text of this order.
    (B) All filings and tariffs on file must be in compliance with the 
revised regulations promulgated by Orders No. 582 and 582-A, no later 
than December 31, 1996. By the Commission.
Lois D. Cashell,
Secretary.

    In consideration of the foregoing, the Commission is amending part 
154, Chapter I, Title 18, Code of Federal Regulations, as set forth 
below.

PART 154--RATE SCHEDULES AND TARIFFS

    1. The authority citation for part 154 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w; 31 U.S.C. 9701; 42 U.S.C. 7102-
7352.

    2. Section 154.7 is amended by revising paragraph (a)(6) to read as 
follows:


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

* * * * *
    (a) * * *
    (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 
appropriate. The statement must include a quantified summary comparing 
the cost of service, rate base and throughput underlying each change in 
rate made to the tariff or executed service agreement compared to the 
same information underlying the last rate found by the Commission to be 
just and reasonable. 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.
* * * * *


Sec. 154.101  [Amended]

    3. In Sec. 154.101, the words ``\1/4\ inches'' are removed and the 
words ``1\1/4\ inches'' are added in their place.
    4. Section 154.208 is amended by revising paragraph (c) and adding 
paragraph (d) as follows:


Sec. 154.208  Service on customers and other parties.

* * * * *
    (c) Within two business days 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.
    (d) A customer or other party may designate a recipient of service. 
The filing company must serve the designated recipient, in accordance 
with paragraphs (a), (b) and (c) of this section, instead of the 
customer or other party. For the purposes of this section, service upon 
such designated recipient will be deemed service upon the customer or 
other party.
    5. Section 154.301 is amended by revising paragraph (c) as follows:


Sec. 154.301  Changes in rates.

* * * * *
    (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 change in 
rates or charges presented are not in full accord with any prior 
Commission decision directly involving the filing company, the company 
must include in its working 

[[Page 9629]]
papers alternate material reflecting the effect of such prior decision.
    6. Section 154.303 is amended by revising paragraph (c)(2) to read 
as follows:


Sec. 154.303  Test periods.

* * * * *
    (c) * * *
    (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 that will not be in service as of the end of the test 
period, or for which certificate authorization is required but will not 
be granted as of the end of the test period. At the end of the test 
period, the pipeline must remove from its rates costs associated with 
any facility that is not in service or for which certificate authority 
is required but has not been granted.
* * * * *
    7. Section 154.304 is amended by revising paragraphs (b) and (c) to 
read as follows:


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

* * * * *
    (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 placed at the beginning of the specific 
statement or schedule to which they apply, explaining 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 placed at 
the beginning of the specific statement or schedule to which they 
apply.
* * * * *
    8. Section 154.311 is revised to read as follows:


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 monthly totals for 
each month of the adjustment period with a single set of updates 
encompassing a 12-month period. The updated statements or schedules 
must be filed 45 days after the end of the test period. The updated 
filing must be provided to parties specifically requesting them. 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 (2)(a) through 
H-1 (2)(k), H-2 (1), H-3 (3), I-4, and I-6.
    (c) This requirement to file updates may be extended by the 
Secretary pursuant to Sec. 375.302 of this chapter.
    9. Section 154.312 is amended by revising paragraphs (d)(1), 
(k)(1), (k)(15)(iv) and (o)(1)(iv) as follows:


Sec. 154.312  Composition of Statements.

* * * * *
    (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 and test 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.
* * * * *
    (k) * * *
    (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 on the books at 
the end of the base period 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.
* * * * *
    (15) * * *
    (iv) The bases used in determining the amounts of the charges 
(credits). Explain 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.
* * * * *
    (o) * * *
    (1) * * *
    (iv) Schedule I-1(d). Show the method used to allocate common and 
joint costs to various functions including the allocation of A&G. 
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.
* * * * *
    10. Section 154.501 is amended by revising paragraph (a)(1) to read 
as follows:


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 a final order. For purposes of this 
paragraph, a final order is an order no longer subject to rehearing. 
The pipeline is not required to make any refund until it has collected 
the refundable money through its rates.
* * * * *

    Note: This Appendix will not appear in the Code of Federal 
Regulations.

Appendix

    Minor modifications are made to the electronic filing 
instructions for tariff sheets. The instructions for completing the 
``TF07'' 

[[Page 9630]]
record have been corrected. In the previous version of these 
instructions, the position for the FERC Cite was erroneously given 
as character position 43-49. The correct character position is 5-11. 
The Commission's software, the FERC Automated System for Tariff 
Retrieval, FASTR, will recognize the FERC cite whether entered in 
positions 43-49 or 5-11. The Commission is allowing pipelines to 
file other electronic filings on CD-ROM. The Commission will extend 
this option to electronic tariff filings as well.

Natural Gas Pipeline Company Tariff Filings

Revised

Docket No. RM95-3-001

------------------------------------------------------------------------
                                                              Expiration
                          OMB Nos.                               date   
------------------------------------------------------------------------
1902-0066..................................................      5/31/97
1902-0070..................................................      5/31/97
1902-0152..................................................      5/31/97
1902-0153..................................................      5/31/97
1902-0154..................................................      6/30/96
1902-0155..................................................      5/31/97
------------------------------------------------------------------------


    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 
file with FERC on or before January 26, 1996 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. Optionally, data may be submitted on CD. 
Filings in this medium must conform to the specifications in Exhibit 
A. The diskette(s) or CD(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, Washington, DC 20426.
    (2) Hand deliveries may be made to the same address.
    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.

General Instructions

    (1) Schedule TF. Records TF01 through TF07 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 TFO1 identifies the company and the filing date. Record TF02 
captures information about the tariff volume; and Records TF03, 
TF04, TF05, TF06, and TF07 contain requisite marginal information 
for an individual tariff sheet. The actual tariff sheet text will 
follow Record TF07.
    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 
Sec. 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 154.101 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        Maximum  
                                       (characters)           lines per 
       Page orientation        ----------------------------     page    
                                                           -------------
                                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. 
    
[[Page 9631]]

    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.
    FERC Cite (TF07): One record per sheet. This header record 
should only accompany tariff sheets filed in compliance with an 
order of the Commission.
    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 ``Second 
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 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. In this field, enter the numbers of the cite to 
the FERC Reports for the order listed in ``Order Reference'' 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. If the order has no FERC Reports citation, 
do not enter a TF07 record.

                                   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.          

[[Page 9632]]
                                                                                                                
                                         ..........  ...........................  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.   
(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..............................        5-11  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--Filing Procedures

    Diskette(s) or CD(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) or CD(s). The information required for a tariff filing 
should be recorded on the diskette(s) or CD(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 must 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 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 have a label affixed to it stating the 
pipeline's name. The CD must be enclosed in an appropriate disc 
protector with a label affixed to the protector stating the 
pipeline's name. The label must also state 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.

CD Specifications

    Filing on CD is an option for those respondents who wish to do 
so. However, all data filed on CD must adhere to the following two 
constraints:
    1. All data submitted must be on CD-Recordable (CD-R) media or 
traditional CD-ROM media.
    2. The file directory structure of the CD must adhere to the ISO 
9660 Level One standard.
    What is CD-R and how does it differ from traditional CD-ROM 
media?
    CD-R is a technology that allows for creating CD-ROMs on the 
desktop more cheaply than traditional CD-ROM media. Traditional CD-
ROMs are made by using a laser to ``burn'' pits in a thin metallic 
layer thus recording the binary data. By comparison CD-R uses 
special discs impregnated with an organic dye which serves the same 
function as the pits, but at a much lower cost. Both kinds of discs 
are readable with a traditional CD-ROM drive. Other kinds of discs, 
magneto optical, or floptical discs are not readable by the common 
CD-ROM drive and require a different system altogether.
    What is Level One ISO 9660? 
    
[[Page 9633]]

    The ISO 9660 standard is for file directory systems on CD-ROMs. 
It is a non-proprietary standard and can be used on different 
platforms. It defines naming conventions, and directory depth. There 
are two main levels of ISO 9660: level one and level two. The major 
difference lies within the naming conventions. Level one ISO 9660 
allows for MS-DOS style filenames (eight character and three 
character extensions). Level two ISO 9660 allows for thirty-two 
character filenames. Because the commission relies upon MS-DOS 
compatible personal computers, data submitted on CD-ROMs must be in 
compliance with Level One ISO 9660.

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.)
    (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.

BILLING CODE 6717-01-P

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[FR Doc. 96-5165 Filed 3-8-96; 8:45 am]
BILLING CODE 6717-01-C