[Federal Register Volume 61, Number 144 (Thursday, July 25, 1996)]
[Rules and Regulations]
[Pages 38567-38569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18900]


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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission

18 CFR Part 346

[Docket No. RM96-10-000; Order No. 588]


Oil Pipeline Cost-of-Service Filing Requirements

Issued July 19, 1996.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
amending Part 346 of its regulations to make the cost-of-service filing 
requirements of that Part applicable to the Trans-Alaska Pipeline 
System (TAPS) carriers and carriers delivering oil directly or 
indirectly to TAPS. These carriers were inadvertently excluded from the 
streamlined procedural rules in Part 346 required by the Energy Policy 
Act of 1992.

EFFECTIVE DATE: August 26, 1996.

FOR FURTHER INFORMATION CONTACT: Jacob Silverman, Office of the General 
Counsel Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, Telephone: (202) 208-2078.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document of the Federal Register, the Commission also provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in Room 2-A, 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 1-800 856-3920 if dialing 
long distance. To access CIPS, set your communication software to 
19200, 14400, 12000, 9600, 7200, 4800, 2400 or 1200bps, 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 for one year. The complete text on diskette in WordPerfect 
format may also be purchased from the Commission's copy contractor, La 
Dorn Systems Corporation, also located in Room 2-A, 888 First Street, 
NE., Washington, DC 20426.
    The Commission's bulletin board system can also be accessed through 
the FedWorld system directly by modem or through the Internet. To 
access the FedWorld system by modem:

Dial (703) 321-3339 and logon to the FedWorld system.
1/2 After Logging on, type: /go FERC
To access the FedWorld system, through the Internet:
1/2 Telnet to : Fedworld. gov
1/2 Select the option: [1] FedWorld

    The Federal Energy Regulatory Commission (Commission) is revising 
Part 346 of its regulations to make the cost-of-service filing 
requirements of that Part applicable to the Trans-Alaska Pipeline 
System (TAPS) and carriers delivering oil directly or indirectly to 
TAPS. The revision is necessary to correct the inadvertent exclusion of 
these carriers from the procedural requirements of Part 346.

I. Background

    The Commission issued Order No. 561 1 to comply with the 
Energy Policy Act of 1992 (Act of 1992),2 which required the 
Commission to establish a simplified and generally applicable 
methodology for oil pipelines and to streamline its procedures relating 
to oil pipeline rates. The Act of 1992 excluded TAPS from its 
provisions for ratemaking purposes. Thus, Order No. 561 stated that 
TAPS and the other excluded pipelines would continue to be governed by 
their existing rate methodologies, but also would be subject to the 
Commission's new procedural rules. Thereafter, as a companion to Order 
No. 561, the Commission issued Order No. 571, establishing in Part 346 
of its regulations cost-of-service filing requirements for oil 
pipelines.3 These procedural requirements include all the 
information that is necessary to support a rate filing under the 
Opinion No. 154-

[[Page 38568]]

B methodology.4 The existing provisions of Part 346, however, do 
not apply to TAPS or its feeder lines.5
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    \1\ Revisions to Oil Pipeline Regulations Pursuant to the Energy 
Policy Act of 1992, Order No. 561, FERC Statutes & Regulations para. 
30,985 (1993); Order on Rehearing, Order No. 561-A, FERC Statutes & 
Regulations para. 31,000 (1994).
    \2\ 42 U.S.C. 7172 note (West Supp. 1993).
    \3\ Cost-of-Service Reporting and Filing Requirements for Oil 
Pipelines, FERC Statutes & Regulations para. 31,006 (1994).
    \4\ Williams Pipeline Company, 31 FERC para. 61,377 (1985).
    \5\ See, Milne Point Pipeline Company, 75 FERC para. 61,050 
(1996).
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    It has always been the Commission's intent to exclude TAPS and its 
feeder lines only from the simplified ratemaking methodology adopted in 
Order No. 561, not from the streamlined procedural rules required by 
the Act of 1992. Accordingly, on April 29, 1996, the Commission issued 
a Notice of Proposed Rulemaking (NOPR) in this docket 6 to amend 
Part 346 to make it applicable to TAPS and its feeder lines.
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    \6\ Oil Pipeline Cost-of-Service Filing Requirements, FERC 
Statutes & Regulations para. 32,518, 61 FR 19878 (May 3, 1996).
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    The TAPS Carriers 7 were the only parties filing comments in 
response to the NOPR.
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    \7\ The TAPS Carriers, each of which owns an undivided joint 
interest in the Trans Alaska Pipeline System (TAPS), are: Amerada 
Hess Pipeline Corporation, ARCO Transportation Alaska, Inc., BP 
Pipelines (Alaska) Inc., Exxon Pipeline Company, Mobil Alaska 
Pipeline Company, Phillips Alaska Pipeline Corporation and Unocal 
Pipeline Company.
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II. Public Reporting Burden

    The Commission estimates the public reporting burden for the 
collection of information under the final rule will remain unchanged 
for rate filings, since what the Commission is codifying as the 
information to be provided is that which the Commission's staff 
routinely has requested of oil pipelines for cost-of-service rate 
filings in the past. The information will be collected on FERC-550, 
``Oil Pipeline Rates: Tariff Filings.'' 8 This estimate includes 
the time for reviewing instructions, researching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. The current annual reporting burden 
associated with this information collection requirement was described 
in Order No. 571 and included the burden attributable to all oil 
pipelines, including TAPS and its feeder lines, as follows: FERC-550: 
5,350 hours, 535 responses, and 140 respondents.
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    \8\ FERC-550 is the designation covering oil pipeline tariff 
filings made to the Commission.
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    Comments regarding this burden estimate or any other aspect of this 
collection of information, including suggestions for reducing this 
burden, can be sent to the Federal Energy Regulatory Commission, 888 
First Street, N.E., Washington, DC 20426 [Attention: Michael Miller, 
Information Services Division, (202) 208-1415]; and to the Office of 
Information and Regulatory Affairs of OMB (Attention: Desk Officer for 
Federal Energy Regulatory Commission), FAX: (202) 395-5167.

III. Discussion

    As the NOPR explained, since TAPS was excluded from the ratemaking 
provisions of the Act of 1992, Order No. 561 specifically stated: 
9

    \9\ FERC Statutes & Regulations para. 30,985 at 30,961.
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for ratemaking purposes, TAPS and those excluded pipelines [the TAPS 
feeder lines] will continue to be regulated under the ratemaking 
standards that are currently in effect. However, it is the 
Commission's judgment that such exclusion [of TAPS and its feeder 
lines from the provisions of the Energy Policy Act of 1992] was 
intended to apply only to the simplified and generally applicable 
rate methodology, not to the procedural rules that the Act of 1992 
required the Commission to consider. Otherwise, the Commission would 
be required to enforce one set of procedural rules for TAPS and 
excluded pipelines, and another for all other pipelines under its 
jurisdiction under the ICA. This would not be consistent with 
Congress' intent for the Commission to streamline its procedures for 
oil pipelines.

    As the NOPR pointed out, the Commission meant the procedural rules 
of Part 346 to apply to TAPS and its feeder lines. This is the 
interpretation that is consistent with the mandate of the Act of 1992 
that the Commission streamline its procedures in order to avoid 
unnecessary regulatory costs and delay, and with the Commission's 
explicit desire to enforce one set of the procedural rules for all 
pipelines.
    The revision adopted here will require the TAPS Carriers and the 
TAPS feeder carriers to comply with the cost-of-service filing 
requirements of Part 346 when they seek to establish rates under the 
Opinion No. 154-B methodology. As the NOPR explained, these 
requirements are no more than a codification of the information that 
these carriers now must provide routinely in response to the Commission 
staff's requests for information to support their cost-of-service rate 
filings. Thus, it should not create any additional burden for carriers 
making cost-of-service filings. Inclusion of cost-of-service supporting 
information with carriers' initial filings, rather than at a later time 
in the regulatory process, also will satisfy the requirement of the Act 
of 1992 to avoid unnecessary regulatory costs and delays.
    In their comments, the TAPS Carriers state that they do not oppose 
the proposed revision to the extent it simply seeks to make the cost-
of-service filing requirements consistent as between excluded and non-
excluded oil pipelines. However, they seek to clarify that nothing in 
the proposed revision is intended to undermine or supplant the 
Commission-approved settlements already in place for TAPS, and certain 
TAPS feeder pipelines, including the TAPS Settlement Agreement. Thus, 
the TAPS Carriers seek assurance that, consistent with the Commission's 
discussion in Order Nos. 561 and 561-A, excluded pipelines, such as 
TAPS, can continue to file tariffs that are within the ceilings imposed 
by existing settlements without requiring a separate Opinion No. 154-B 
submission.
    The TAPS Carriers state that there is a possible ambiguity in the 
proposed language in the NOPR that might require TAPS Carriers that 
make filings under an existing settlement methodology, such as the TAPS 
Settlement methodology, to also include the Opinion No. 154-B schedules 
specified in section 346.2. The TAPS Carriers assert that no meaningful 
purpose would be served by such filings, since the TAPS Settlement 
Agreement already imposes cost-based ceilings on the TAPS rates. The 
TAPS Carriers have proposed language that removes that ambiguity by 
making clear that the filing requirement under a Commission-approved 
settlement remains the same.
    In response to the TAPS Carriers' concern, the Commission will 
include language in the revised regulations to make it clear that the 
TAPS Carriers and the TAPS feeder carriers need file the Opinion No. 
154-B schedules specified in section 346.2 only if they make filings to 
establish or change rates under the Opinion No. 154-B methodology, and 
not when they file pursuant to a Commission-approved settlement.

IV. Environmental Analysis

    The Commission is required to prepare an Environmental Assessment 
or an Environmental Impact Statement for any action that may have a 
significant adverse effect on the human environment.10 The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.11 The action proposed here is procedural in nature 
and therefore falls within the categorical exclusions provided in the 
Commission's regulations.12 Therefore, neither an environmental 
impact statement nor an environmental

[[Page 38569]]

assessment is necessary, and neither will be prepared in this 
rulemaking.
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    \10\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes 
& Regulations (Regulations Preambles 1986-1990) para. 30,783 (1987).
    \11\ 18 CFR 380.4.
    \12\ See, 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act 13 generally requires the 
Commission to describe the impact that a proposed rule would have on 
small entities or to certify that the rule will not have a significant 
economic impact on a substantial number of small entities. An analysis 
is not required if a proposed rule will not have such an impact.14
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    \13\ 5 U.S.C.601-612.
    \14\ 5 U.S.C. 605(b).
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    Pursuant to section 605(b), the Commission certifies that the 
proposed rules and amendments, if promulgated, will not have a 
significant adverse economic impact on a substantial number of small 
entities.

VI. Information Collection Requirements

    Office of Management and Budget (OMB) regulations require OMB to 
approve certain information collection requirements imposed by an 
agency.15 The information collection requirements in the final 
rule are contained in FERC-550 ``Oil Pipeline Rates: Tariff filing'' 
(1902-0089).
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    \15\ 5 CFR 1320.11.
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    The Commission's Office of Pipeline Regulation uses the data 
collected in these information requirements filings to investigate the 
rates charged by oil pipeline companies subject to its jurisdiction, to 
determine the reasonableness of rates, and when appropriate, prescribe 
just and reasonable rates.
    The final rule will not change the reporting requirements of FERC-
550. This rule therefore is not subject to OMB review. The Commission 
is submitting a copy of the proposed rule to OMB for information 
purposes. Interested persons may obtain information on these reporting 
requirements by contacting the Federal Energy Regulatory Commission, 
888 First Street, N.E., Washington, DC 20426 [Attention: Michael 
Miller, Information Services Division, (202) 208-1415]. Comments on the 
requirements of this rule can be sent to the Office of Information and 
Regulatory Affairs of OMB [Attention: Desk Officer for the Federal 
Energy Regulatory Commission].

VII. Effective Date

    This final rule will be effective August 26, 1996. The Commission 
has determined, with the concurrence of the Administrator of the Office 
of Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

List of Subjects in 18 CFR Part 346

    Pipelines, Reporting and recordkeeping requirements.

    By the Commission.
Lois D. Cashell,
Secretary.

    In consideration of the foregoing, Part 346, Chapter I, Title 18, 
Code of Federal Regulations, is amended, as set forth below.

PART 346--OIL PIPELINE COST-OF-SERVICE FILING REQUIREMENTS

    1. The authority citation for Part 346 continues to read as 
follows:

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

    2. Section 346.1 introductory text is revised to read as follows:


Sec. 346.1  Content of filing for cost-of-service rates.

    A carrier that seeks to establish rates pursuant to Sec. 342.2(a) 
of this chapter, or a carrier that seeks to change rates pursuant to 
Sec. 342.4(a) of this chapter, or a carrier described in Sec. 342.0(b) 
that seeks to establish or change rates by filing cost, revenue, and 
throughput data supporting such rates, other than pursuant to a 
Commission-approved settlement, must file:
* * * * *
    3. Section 346.2 introductory text is revised to read as follows:


Sec. 346.2  Material in support of initial rates or change in rates.

    A carrier that files for rates pursuant to Sec. 342.2(a) or 
Sec. 342.4(a) of this chapter, or a carrier described in Sec. 342.0(b) 
that files to establish or change rates by filing cost, revenue, and 
throughput data supporting such rates, other than pursuant to a 
Commission-approved settlement, must file the following statements, 
schedules, and supporting workpapers. The statement, schedules, and 
workpapers must be based upon an appropriate test period.
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[FR Doc. 96-18900 Filed 7-24-96; 8:45 am]
BILLING CODE 6717-01-P