[Federal Register Volume 62, Number 107 (Wednesday, June 4, 1997)]
[Rules and Regulations]
[Pages 30435-30448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14418]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 153
[Docket No. RM97-1-000; Order No. 595]
Applications for Authorization To Construct, Operate, or Modify
Facilities Used for the Export or Import of Natural Gas
Issued May 28, 1997.
AGENCY: Federal Energy Regulatory Commission. DOE.
ACTION: Final rule.
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SUMMARY: The Commission is reorganizing, rewriting, and updating its
regulations governing the filing of applications under section 3 of the
Natural Gas Act governing the filing of applications for the siting,
construction, and operation of facilities for the import or export of
natural gas and the issuance and amendment of Presidential Permits for
the construction and operation of border facilities. The rule is part
of the Commission's ongoing program to review its filing and reporting
requirements and reduce unnecessary burdens by eliminating the
collection of data that is not necessary to the performance of the
Commission's regulatory responsibilities. The rule is necessary to
conform the Commission's regulations to the Commission's current
responsibilities, as delegated by the Secretary of Energy.
EFFECTIVE DATE: This Final Rule is effective August 4, 1997.
FOR FURTHER INFORMATION CONTACT:
Albert J. Francese, Office of the General Counsel, Federal Energy
Regulatory Commission, 888 First Street, NE, Washington, DC 20426,
(202) 208-0736.
Richard W. Foley, Office of Pipeline Regulation, Federal Energy
Regulatory Commission, 888 First Street, NE, Washington, DC 20426,
(202) 208-2245.
SUPPLEMENTARY INFORMATION: In addition to publishing the full text of
this document in the Federal Register, the Commission also provides all
interested persons an opportunity to inspect or copy the contents of
this document during normal business hours in the Public Reference
Room, Room 2A, 888 First Street, NE, Washington, DC 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, also 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 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 in ASCII and Word Perfect 6.1 format. CIPS
user assistance is available at 202-208-2474.
CIPS also is available on the Internet through the Fed World
system. Telnet software is required. To access CIPS via the Internet,
point your browser to the URL address: http://www.fedworld.gov and
select the ``Go to the FedWorld Telnet Site'' button. When your Telnet
software connects you, log-on to the FedWorld system, scroll down and
select FedWorld by typing: 1 and at the command line type:/go FERC.
FedWorld also may be accessed by Telnet at the address fedworld.gov.
Finally, the complete text on diskette in Word Perfect format may
be purchased from the Commission's copy contractor, La Dorn Systems
Corporation. La Dorn Systems Corporation is also located in the Public
Reference Room at 888 First Street, NE, Washington, DC 20426.
TABLE OF CONTENTS
I. Introduction
II. Background
III. Discussion
A. Background and Statutory Authority
B. Objectives of the Final Rule
C. Electronic Filing
D. The Revised Regulations
1. Subpart A--General Provisions
a. Section 153.1 Purpose
b. Section 153.2 Definitions
2. Subpart B--Application under Section 3
a. Section 153.5 Who Shall Apply
b. Section 153.6 Time of Filing
c. Section 153.7 Contents of Application
i. Information Regarding Applicant
ii. Summary
iii. Statements
d. Section 153.8 Required Exhibits
e. Section 153.9 Transferability
f. Section 153.10 Authorization Not Exclusive
g. Section 153.11 Supplemental Orders
3. Subpart C--Application for a Presidential Permit
a. Section 153.15 Who Shall Apply
b. Section 153.16 Contents of Application
c. Section 153.17 Effectiveness of Presidential Permit
4. Subpart D--Paper Media and Other Requirements
a. Section 153.20 General Rule
b. Section 153.21 Conformity with Requirements
c. Section 153.22 Amendments and Withdrawals
d. Section 153.23 Reporting Requirement
IV. Regulatory Flexibility Act Certification
V. Information Collection Statement
VI. Environmental Statement
VII. Effective Date and Congressional Notification
VIII. Regulatory Text
I. Introduction
The Federal Energy Regulatory Commission (Commission) is amending
part 153 of its regulations governing the siting, construction, and
operation of facilities for the import and export of natural gas
between the United States and a foreign country. Part 153 has not been
significantly revised since the Commission's predecessor, the Federal
Power Commission (FPC), recodified its regulations in 1947.1
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\1\ Order No. 141, 12 FR 8596 (December 19, 1947). The part 153
regulations originally became effective on July 11, 1938, in FPC
Order Nos. 52 (section 3 authorizations) and 66 (Presidential
Permits).
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The rule conforms the Commission's filing requirements in part 153
to the Commission's current responsibilities as changed by intervening
legislation and Department of Energy (DOE) delegation orders. The DOE
delegation orders divide jurisdiction and authority over natural gas
import and export issues arising under section 3 of the Natural Gas Act
(NGA) 2 between the Commission and DOE.3 The
revisions to part 153 implement the Commission's currently delegated
responsibilities under NGA section 3 and Executive Order 10485, as
amended, regarding the construction and operation of facilities
[[Page 30436]]
for the import and export of natural gas.4
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\2\ 15 U.S.C. 717b.
\3\ DOE previously issued regulations implementing its delegated
authorities under NGA section 3 for the import/export of natural
gas. See 10 CFR 590.100, et seq.
\4\ Executive Order 10485, 3 CFR, 2949-1953 Comp., p. 970, as
amended by Executive Order 12038, 3 CFR 1978 Comp., p. 136.
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The Final Rule redefines and clarifies the Commission's role with
respect to granting the authorizations necessary to construct and
operate facilities for the import and export of natural gas between a
foreign country and the United States. The regulations codify existing
practice which requires the applicant proposing to construct or modify
LNG facilities to file exhibits concerning the environmental and safety
features of those facilities.
Over the last 11 years (1986-1996), there has been a dramatic
increase in the volume of natural gas import and export activity
involving the United States.5 In 1996 alone, United States
firms imported 2,883.3 Bcf of natural gas from Canada, while exporting
61.4 Bcf to Canada. In the same year, United States firms imported 13.9
Bcf from Mexico and exported 33.8 Bcf of natural gas to Mexico. The
issuance of the Final Rule coincides with proposals recently filed by
pipelines for substantial new construction to bring even more Canadian
natural gas into the United States.6 The Final Rule will
improve Commission monitoring of all facilities authorized under part
153.
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\5\ DOE/FE, Natural Gas Imports and Exports, Fourth Quarter
Report (1996) at p. ii.
\6\ The Final Rule will apply to all part 153 applications filed
after the effective date of the Final Rule.
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The changes to the Commission's regulations are effective August 4,
1997.
II. Background
On February 3, 1997, the Commission issued a Notice of Proposed
Rulemaking (NOPR) proposing a major overhaul of its regulations
governing applications for the construction of facilities for the
import/export of natural gas.7 The Commission is determined
to issue sensible regulations that impose the least burden without
sacrificing rational and necessary protections.8 The
Commission is bringing its filing requirements and procedures up to
date to match its current substantive policies and authority and is not
significantly changing its procedures for processing applications filed
under part 153. The revised regulations are designed to provide the
Commission and interested parties with the information generally
required to process an application under part 153. Where more
information is needed, it may be collected on a case-by-case basis.
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\7\ Applications for Authorization to Construct, Operate, or
Modify Facilities Used for the Export or Import of Natural Gas, 62
FR 5940 (February 10, 1997), IV FERC Stats. & Regs. para. 32,523
(1997).
\8\ The President's memorandum, dated March 4, 1995, concerning
the National Performance Review, requires agencies, among other
things, to eliminate or revise outdated regulations and to move from
a process that creates large numbers of regulations to issuing
``sensible regulations that impose the least burden without
sacrificing rational and necessary protections.''
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The Commission received six comments on the NOPR.9 The
commenters suggested various clarifications and modifications some of
which are incorporated into the Final Rule with appropriate revisions.
The Final Rule:
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\9\ The commenters were the Canadian Association of Petroleum
Producers, Coastal Companies, Great Lakes Gas Transmission Limited
Partnership, PanEnergy Pipelines, Phillips Petroleum Company, and
Yukon Pacific Company L.P. While PanEnergy Pipelines' comments were
filed three days late, the Commission will consider them in order to
address all issues raised in this proceeding.
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Clarifies that Sec. 153.5 does not require the holder of a
Commission section 3 authorization to file an amendment with the
Commission upon DOE/FE's extension of import/export authority;
Clarifies that Sec. 153.5 requires the holder of an
existing section 3 authorization for LNG facilities to file for
additional section 3 authorization to modify existing LNG facilities
with facilities to be used for the import/export of natural gas, but no
amendment would be required if the holder seeks to modify facilities at
the LNG plant site that are not used to import/export LNG;
Requires in Sec. 153.6 an applicant to state for the first
time whether an application for DOE/FE authorization is required or has
been obtained at the time of filing a section 3 application with the
Commission;
Clarifies that the list in Sec. 153.7(c)(1) of public
interest criteria is illustrative and adds as a factor for
consideration the enhancement of competition within the United States
for natural gas transportation or supply;
Clarifies that Sec. 153.9 permits the transfer or
assignment of section 3 authorizations and related facilities upon
prior Commission approval, and;
Exempts applicants that do not possess pipeline
transportation capacity (such as LNG terminals) from the new
requirement in Sec. 153.23 to report annually estimated peak day
capacity and actual peak day usage of the import/export facility.
III. Discussion
A. Background and Statutory Authority
Section 3 of the NGA requires prior authorization before exporting
or importing natural gas from or to the United States.10
Section 3 authorizes the Commission to grant an application, in whole
or in part, with modifications and upon terms and conditions as the
Commission may find necessary or appropriate. Section 3 also authorizes
the Commission to make ``such supplemental order in the premises as it
may find necessary or appropriate.''
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\10\ 15 U.S.C. 717b.
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Currently, responsibilities under section 3 are divided between
DOE/FE and the Commission. The Commission's responsibilities under
section 3, as under the other provisions of the Natural Gas Act, are to
be administered ``to protect consumers against exploitation at the
hands of natural gas companies.'' 11
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\11\ FPC v. Hope Natural Gas Co., 320 U.S. 591, 610 (1944).
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Initially, the FPC was vested with exclusive jurisdiction under
section 3 to decide all natural gas import and export issues, including
the authorization to import and export natural gas and to construct and
operate necessary facilities. The FPC also had the authority, pursuant
to Executive Order 10485, as amended, to issue or modify a Presidential
Permit for the construction and operation of border facilities at the
international boundary between the United States and Canada or Mexico.
The Department of Energy Organization Act (DOE Act), enacted in
1977, transferred all the FPC's authority over natural gas imports and
exports to the Secretary of Energy ``unless the Secretary assigns such
a function to the (Federal Energy Regulatory) Commission.''
12 Between October 1, 1977, and February, 1984, DOE and the
Commission shared responsibility over natural gas import and export
issues pursuant to DOE delegation orders (which have since been
rescinded). The Secretary of Energy administered his authority over
natural gas import and export issues pursuant to FPC rules in place on
September 30, 1977, until DOE issued its own final
regulations.13
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\12\ See sections 301(b), 402(a) and 402(f) of the Department of
Energy Organization Act, 42 U.S.C. 7151(b), 7172(a) and 7172(f).
\13\ DOE's final rules establishing procedures for processing
applications for the import and export of natural gas and revised ex
parte rules became effective on September 6, 1984. 49 FR 35302
(September 6, 1984).
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The Secretary issued new delegation orders 0204-111 and 0204-112,
discussed below, in February 1984, to minimize problems of coordination
on certain import/export issues.14 These delegation orders
allocated regulatory functions concerning the import and
[[Page 30437]]
export of natural gas to the Commission and DOE/Economic Regulatory
Administration (ERA).15 DOE and the Commission continue to
share responsibility for determining natural gas import/export issues
under these currently applicable delegation orders.
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\14\ Both delegation orders were published at 49 FR 6684
(February 22, 1984).
\15\ Effective on February 7, 1989, the Assistant Secretary for
Fossil Energy (DOE/FE) assumed the delegated responsibilities of the
Administrator of ERA. See DOE Delegation Order No. 0204-127. 54
11436 (March 20, 1989).
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Under DOE Delegation Order 0204-111, effective February 22, 1984,
the Secretary of Energy delegated to the Administrator of ERA authority
under section 3 of the NGA to regulate the import (including the place
of entry) and the export (including the place of exit) of natural gas.
On the same date, the Secretary of Energy issued Delegation Order 0204-
112 which delegated to the Commission exclusive authority over specific
import/export matters.
The responsibilities delegated to the Commission include the
authority to approve or disapprove proposals for the construction,
operation, and siting of facilities, and when the construction of new
domestic facilities is involved, the place of entry for imports or
place of exit for exports. The Commission's delegated authority is
subject to DOE's right of disapproval if the Administrator finds
disapproval to be appropriate ``in the circumstances of a particular
case.'' Thus, under the most recent and presently applicable delegation
orders, the facility and siting aspects of natural gas import and
export are delegated and assigned to the Commission for determination
of the public interest.
Section 3 of the NGA provides that the Commission ``shall issue an
order upon application, unless * * * it finds that the proposed
exportation or importation will not be consistent with the public
interest.'' The Commission determines the public interest in particular
proceedings upon consideration of all relevant factors. For example,
the Commission has authorized the construction and operation of import/
export facilities under NGA section 3 based upon substantial evidence
that the proposal is necessary to access gas supplies, deliver imported
gas to an industrial user,16 provide a more economic source
of natural gas,17 or enhance competition, system
reliability, flexibility, or the dependability of international energy
trade, and will not adversely affect the service or rates of existing
customers.18 The Commission's current practice in
implementing NGA section 3 does not require that an applicant include
in its application evidence of specific market support for its project
(such as precedent agreements between the applicant and shippers),
although construction authorized under section 3 must be associated
with the import/export of natural gas.19
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\16\ See National Steel Corp., 45 FERC para. 61,100 (1988).
\17\ See Atlantic Richfield Co. and Intalco Aluminum Corp., 49
FERC para. 61,294 (1989), reh'g denied in part, 50 FERC para. 61,210
(1990).
\18\ Great Lakes Transmission Limited Partnership, 76 FERC para.
61,148 (1996).
\19\ Unlike precedent under section 3, Commission precedent
under NGA section 7 requires an applicant to file executed precedent
or service agreements to demonstrate sufficient demand for proposed
capacity. See, e.g., El Paso Natural Gas Co., 65 FERC para. 61,276
(1993).
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A person applying to the Commission for authority under section 3
must also apply to the Commission, pursuant to DOE Delegation Order No.
0204-112, for the issuance of a Presidential Permit or an amendment to
an existing Presidential Permit if the proposed facilities are to be
located at the borders of the United States and either Canada or
Mexico.20 A Presidential Permit authorizes the applicant to
construct, operate, maintain, or connect natural gas pipeline
facilities at the international borders.
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\20\ Pursuant to an opinion rendered by the Office of the Legal
Counsel of the Department of Justice, the FPC determined that
Executive Order No. 10485 does not apply to gas facilities on the
border of the United States and international waters because there
would be no border facilities involving any physical connection
between the facilities involving any physical connection between the
United States and a foreign country. See Phillips Petroleum Co., et
al., 37 FPC 777 (1967).
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The Commission has the jurisdiction, pursuant to Executive Order
10485, as amended, to condition a Presidential Permit ``as the public
interest may in its judgment require.'' 21 In addition,
Executive Order 10485, as amended, requires the Commission to obtain
the concurrence of the Secretary of State and the Secretary of Defense
who will consider foreign policy and national security aspects of the
application.
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\21\ These conditions are stated as ``articles'' in the body of
a Presidential Permit. The articles describe the facilities, design
capacity, nature of the service and include various uniform
provisions concerning transferability of the Presidential Permit or
facilities, inspection and access to the facilities, liability for
damages, filing of information, removal of facilities upon
surrender/revocation of the Presidential Permit, possession by the
United States, and control by a foreign government.
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An applicant proposing to alter a term of an existing Presidential
Permit that does not also necessitate new construction, e.g., a
revision to the authorized operating or design capacity of an existing
import/export facility, must file to amend its Presidential
Permit.22 That applicant, however, does not also require
section 3 authorization when existing facilities are unchanged. On the
other hand, the applicant granted authorization under NGA section 3
does not require a Presidential Permit for the construction of natural
gas import/export facilities located at tidewater or on the border of
the United States and international waters because, as the Commission
interprets and applies Executive Order 10485, as amended, there would
be no physical connection of border facilities at the boundary between
the United States and a foreign country.23
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\22\ See Panhandle Eastern Pipe Line Co., 62 FERC para. 61,190
(1993).
\23\ See EcoElectrica, L.P., 75 FERC para. 61,157 (1996), Yukon
Pacific Corp., 39 FERC para. 61,216 (1987), and Phillips Petroleum
Co., 37 FPC 777 (1967).
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The holder of a Presidential Permit may file to terminate, revoke,
or surrender its Presidential Permit which had been activated by the
construction of authorized facilities. Pursuant to uniform article 9 of
a Presidential Permit, the holder of a surrendered Presidential Permit
must remove the authorized import/export facilities as prescribed by
Commission order. The holder of a surrendered Presidential Permit may
not transfer the related section 3 authorization and facilities to
another owner/operator without prior Commission authorization.
24
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\24\ See Western Gas Interstate Co., 74 FERC para. 61,347 (1996)
and Northern Natural Gas Co., et al., 71 FERC para. 61,292 (1995).
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The holder of a Presidential Permit also may file a request to
surrender its Presidential Permit if the Presidential Permit was never
activated and no facilities were constructed. 25 Upon
receipt of an application to surrender a Presidential Permit, the
Commission's practice is to provide public notice of the application to
determine whether its surrender would be disputed. 26
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\25\ Application pending Commission review in Western Gas
Interstate Co.'s Docket No. CP69-169-000 to discontinue a
Presidential Permit authorized by prior FPC order (41 FPC 385
(1969)) because certain border facilities were never constructed.
\26\ The Commission's review of the annual report for non-
natural gas company applicants required by Sec. 153.23 of the Final
Rule and Form No. 2 and other reports for natural gas companies will
enable the Commission to determine the current status of import/
export facilities authorized under section 3 and a Presidential
Permit.
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B. Objectives of the Final Rule
Part 153 currently imposes specific filing requirements on
applicants for authorization under section 3 and Executive Order 10485,
as amended, to site, construct, and operate facilities for
[[Page 30438]]
the import or export of natural gas. 27 The Final Rule
incorporates basic housekeeping changes to eliminate obsolete and
redundant language and sections concerning filing fees, bundled sales
service, and the filing of import/export contracts and rate schedules.
The Final Rule also makes conforming changes to the current regulations
to reflect the Commission's diminished responsibilities in the
regulation of natural gas imports and exports under DOE's currently
effective delegation orders.
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\27\ Thus, neither the current regulations nor the Final Rule
address filing requirements applicable to the construction of any
connecting facilities transporting natural gas in interstate
commerce. Such facilities would be within the scope of section 7 and
the Commission's part 157 regulations. See Williston Basin
Interstate Pipeline Co., 63 FERC para. 61,179 (1993) and Panhandle
Eastern Pipe Line Co., 5 FPC 476 (1946).
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The Final Rule also updates the type of information and exhibits
that an applicant must include in its application. The Commission is
revising its filing requirements to match its current responsibilities
and does not propose to change its substantive policies.
Other changes to part 153 reflect the separate but related nature
of the Commission's and DOE's responsibilities concerning natural gas
import and export issues. The Commission's revisions will make clear
that the part 153 regulations apply only to the siting, construction,
operation, or modification of facilities for the import or export of
natural gas. On the other hand, DOE's responsibility is the
authorization of requests to import/export natural gas.28
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\28\ Under DOE regulations, applications must be filed at least
90 days prior to the proposed import or export, unless a later date
is permitted for good cause shown. See 10 CFR 590.201. DOE processes
applications for import/export authority where a free trade
agreement applies on an expedited basis. NGA section 3(c), added by
the Energy Policy Act of 1992, provides that ``applications for such
importation or exportation shall be granted without modification or
delay.'' 15 U.S.C. 717b(c).
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Section 153.6 of the Final Rule requires the FERC applicant, for
the first time, to include in its application a statement indicating
whether a related application with DOE/FE (or an amendment to an
existing blanket authorization) is required, and if so, whether that
application or amendment has been granted by DOE/FE.29
Section 153.6 of the Final Rule also requires the FERC applicant to
file a statement before it commences construction that DOE/FE has
granted any required, related import/export authority. Based on
comments received, the Final Rule deletes Sec. 153.6 of the NOPR which
provided for the simultaneous or prior filing of a related application
with DOE/FE.
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\29\ The person filing with DOE/FE for import/export
authorization may be a shipper on the facilities of the FERC
applicant and need not be the FERC applicant.
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Section 153.7 of the Final Rule codifies Commission practice
concerning evidentiary support for an application for authorization for
the construction of facilities under section 3 or an amendment to an
existing authorization. Section 153.7(c)(1) permits an applicant to
support its statement that its application is not inconsistent with the
public interest by including evidence that its proposal or proposed
construction is beneficial (with examples stated in the Final Rule),
that there will be no impairment of service at reasonable rates, and
that no anti-competitive agreements are involved. In addition, the
applicant must submit, pursuant to Sec. 153.7(c)(2), a statement
describing the nature of the transportation service that the applicant
will provide using the import/export facilities. This statement will
assist the Commission in determining the extent to which a pipeline
applicant will use its import/export capacity for all shippers.
Subpart D of the Final Rule provides for the rejection of
incomplete applications and for amendments and withdrawals of pending
applications consistent with the Commission's practice in part 157.
Certain section 3 applicants are not natural gas companies, and, thus,
are not currently required to notify the Commission of basic
operational data (such as the completion of construction or start-up of
service through authorized facilities). The Final Rule requires those
applicants to report such information to the Commission.
C. Electronic Filing
The Commission is not modifying part 153 at this time to require an
applicant to file its applications on electronic media. The Commission
will review in a future proceeding the electronic filing requirements
for the entire certificate application process, including existing
electronic filing requirements for part 157 applications and
appropriate electronic filing procedures to adopt for part 153
applications. The Commission will determine where changes are necessary
to reflect current policies and will modify existing electronic filing
requirements as necessary to streamline and update the filing process.
As was done in proceedings in Docket Nos. RM95-3-000 30
and RM95-4-000, 31 the Commission will solicit participation
of the industry and other users of filed information in formulating
final electronic filing instructions.
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\30\ Filing and Reporting Requirements for Interstate Natural
Gas Company Rate Schedules and Tariffs, 60 FR 3111 (January 13,
1995).
\31\ Revisions to Uniform System of Accounts, Forms, Statements,
and Reporting Requirements for Natural Gas Companies, 60 FR 3141
(January 13, 1995).
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D. The Revised Regulations
The revised part 153 has a new organization, different from that in
the current regulations, and virtually every section has been changed
in some way. The text has been revised to remove outdated references to
the import/export of natural gas and fees and rewritten to be more
concise with separate subparts A through D. Part 153 starts with a new
heading and updated legal authorities. The final regulations are
discussed below.
1. Subpart A--General Provisions
a. Section 153.1 Purpose
The Commission has included in Sec. 153.1 a statement of the
purpose of its part 153 regulations--to implement the Commission's
authorities delegated under section 3 of the Natural Gas Act and
Executive Order 10485, as amended. Part 153 revamps the Commission's
procedures and evidentiary requirements for applying for section 3
authorization and for a Presidential Permit.
b. Section 153.2 Definitions
The Final Rule includes a section defining key terms used in part
153--``DOE/FE'' (Department of Energy/Office of Fossil Energy),
``NBSIR'' (National Bureau of Standards Information Report), and
``person'' for purposes of part 153 (``person'' is currently undefined
in part 153). The Commission's definition of person is identical with
and cross-references DOE's definition of ``person'' stated at 10 CFR
590.102(m), which DOE uses for purposes of considering applications for
import/export authorization.32 The Commission's definition
will by its own terms automatically incorporate any future changes in
DOE's definition of ``person.'' The Commission's definition would not
change current Commission practice in processing applications under
section 3 or Executive Order 10485, as amended.
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\32\ 10 CFR 590.102(m).
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[[Page 30439]]
2. Subpart B--Application Under Section 3
a. Section 153.5 Who Shall Apply
Section 153.5(a) of the Final Rule retains the requirement in
current Sec. 153.1 that a person file an application to seek
authorization under section 3 and adds a new provision, codifying
current practice, requiring the filing of an application in order to
amend an existing authorization under section 3, including the
modification of existing import/export facilities.
Phillips Petroleum Company (Phillips) asks the Commission to
clarify that the proposed Sec. 153.5(a) does not require it to file an
application with the Commission under section 3 to amend its existing
Commission authorization, if DOE/FE authorizes an extension of its
existing LNG export agreement.33
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\33\ See Phillips Petroleum Co., et al., 37 FPC 777 (1967). The
Commission authorized, pursuant to NGA section 3, the export of LNG
and the construction of facilities currently known as the Kenai LNG
plant in the Cook Inlet area of Alaska for the liquefaction and
storage of natural gas and the loading of LNG onto ships for export
and delivery to Japan. From time to time, Phillips has filed with
DOE/FE requests to extend the term of its export authorization.
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If an entity seeks to modify its facilities authorized under
section 3, that entity must file an application with the Commission
under section 3 in order to amend its existing authorization. A grant
by DOE/FE of an extension of an existing contract to export LNG would
not by itself require a Commission-authorized entity to file an
application to modify its facilities, and no amendment to its section 3
authorization would be required. Accordingly, the requested
clarification is granted. Proposed Sec. 153.5(a) is revised to
eliminate duplicative language concerning the necessity to file an
amendment to an existing Commission authorization in order to modify
facilities authorized under section 3.
Phillips also asks the Commission to clarify that proposed
Sec. 153.5(a) would not require it to file an application with the
Commission under section 3 in order to modify facilities at its LNG
plant site which are not used for the export of natural gas.
The holder of a section 3 authorization is required to obtain prior
Commission authorization under section 3 to amend that current section
3 authorization if the applicant proposes to implement changes in its
import/export facilities or operations.34 Thus, if Phillips
seeks to modify facilities which serve its LNG function at the Cook
Inlet area in order to provide incidental activities, such as
intrastate sales of LNG or regassified natural gas to industrials,
Phillips must file an amendment to its existing section 3 authorization
to undertake that construction.35 This is so because
Phillips would be modifying existing export facilities that would
continue to serve its LNG export function while providing non-export
service. The additional service could not occur without the underlying
LNG facilities for storage, gasification, or transportation.
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\34\ A pipeline may not construct or modify an existing LNG
facility, whether an import facility authorized under section 3 or
not, under its part 157 blanket (subpart F) certificate pursuant to
18 CFR 157.202(b)(2)(ii)(D), which excludes such construction from
the scope of a part 157 blanket (subpart F) certificate. See
Algonquin LNG, Inc., 79 FERC para. 61,139 (1997).
\35\ Ordering Paragraph (d) of the FPC's 1967 order provides
that Phillips and Marathon Oil Co., joint applicants, ``shall not *
* * materially change or alter their export operations without first
obtaining the permission and approval of the Commission.'' 37 FPC at
778.
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If Phillips seeks to modify facilities at its LNG plant site which
are not currently used to export LNG in order to sell natural gas or
natural gas products within the state of Alaska, Phillips would not
need to make a Commission filing to implement that construction which
would facilitate intrastate transactions. If Phillips is unclear about
whether proposed modifications involve dual-purpose facilities
providing LNG-export and non-LNG export service, it may also file a
request for a declaratory order with the Commission to resolve the
uncertainty.
PanEnergy asks the Commission to clarify Sec. 153.5(a) to provide
that a pipeline does not have to file an amendment to its existing
section 3 authorization if it proposes to change the valves, meters,
piping, or other minor construction associated with import/export
facilities. 36 PanEnergy's request for an exemption for
minor facilities, if granted, would be inconsistent with the public
interest. That construction could affect the reliability of service
through the import/export facility, and may require the modification of
facilities in Canada or Mexico. The Commission might not become aware
of self-implemented construction until years after the facilities are
altered as in the case of Panhandle Eastern Pipeline
Co.(Panhandle).37 While Panhandle involved a certificated
export delivery point and not the modification of border-crossing
facilities, the same result should apply in the case of modifications
of border-crossing facilities authorized under section 3 or a
Presidential Permit. The request for rule clarification is rejected.
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\36\ PanEnergy's motion questions the need to file an amendment
to its ``import/export license'' for such minor construction. We
construe PanEnergy's request as referring to the need to file to
amend the Commission's section 3/Presidential Permit authorization.
There would not necessarily be a need to amend a DOE/FE import/
export authorization because of Commission-authorized section 3
construction.
\37\ 65 FERC para. 61,169 (1993). In Panhandle, the Commission
found that the pipeline had abandoned an existing certificated
delivery point and constructed a new delivery point at the United
States-Canada border without prior Commission authorization under
section 7(b) and without following the prior notice procedures of
its part 157 (subpart) F) certificate. The Commission granted
retroactive abandonment authorization as well as the authority to
operate the new delivery point under the pipeline's part 157
(subpart F) certificate.
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Section 153.5(b) of the Final Rule cross-references subpart C
(applications for a Presidential Permit). Section 153.5(b) establishes
a requirement that an applicant must also simultaneously apply under
subpart C for a Presidential Permit for the construction of border
facilities at the international boundary between the United States and
Canada or Mexico.
b. Section 153.6 Time of Filing
Filing requirements prescribing the number of copies and form of
applications for section 3 authorizations (and for Presidential
Permits) are moved from current Sec. 153.2 to Sec. 153.20(a) of subpart
D of the Final Rule. This change avoids duplication of regulatory text.
The current part 153 regulations do not require a pipeline to file
an FERC application under section 3 under any particular timetable in
relation to its shippers' filing of a related, required application for
import/export authorization with DOE/FE. That is so because the current
regulations became effective when the FPC had exclusive jurisdiction
over all natural gas import/export issues. The NOPR recognized that
under current delegation orders separate applications would be filed
with the Commission and DOE/FE. Proposed Sec. 153.6 recognized the
related nature of those applications before the Commission and DOE/FE
on import/export issues by requiring the pipeline's shipper to make
prior or simultaneous filings with DOE/FE for import/export
authority.\38\
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\38\ See Atlantic Richfield Co., et al., 49 FERC para. 61.294
(1989), reh'g denied, 50 FERC para. 61,210 (1990) and National Steel
Corp., 45 FERC para. 61,100 (1988). In both cases, DOE issued import
authorizations before the Commission issued an order approving the
place of import under section 3.
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The Coastal Companies and Great Lakes Gas Transmission Limited
Partnership (Great Lakes) assert that proposed Sec. 153.6 would
establish a new
[[Page 30440]]
requirement which is not workable. Both assert that DOE/FE filings are
likely to be made after the filing of border-crossing applications with
the Commission. According to Great Lakes, a potential FERC applicant
should not be required to coordinate its filing with third parties and
to wait to file with the Commission until its shippers have filed their
applications before DOE/FE. Great Lakes argues that an applicant should
file with the Commission under section 3 before filing an application
with DOE because Commission proceedings, with environmental reviews,
may continue longer than the minimum 90-day period of review under
DOE's regulations for applications to import/export natural
gas.39 Great Lakes asks the Commission to revise its
proposed regulations to require an applicant to state whether an
application for DOE/FE authorization will be required and, if so, to
agree to a condition that ``all necessary DOE authorizations have been
or will be obtained prior to the operation of import/export
facilities.''
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\39\ Under DOE's regulations, applications to import/export
natural gas must be filed at least 90 days prior to the proposed
import/export date, unless a later date is permitted for good cause
shown. 10 CFR 590.201.
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The Commission's purpose in the NOPR was two-fold. First, the
Commission was proposing to amend its filing requirements to reflect
the division of authority between the Commission and DOE on import/
export issues. Second, the proposed regulation was based on the
assumption that an application for new or changed import/export
authority is a step which would precede an application before the
Commission for necessary, related import/export facilities.
Great Lakes proposes substitute language in proposed Sec. 153.6
that would require a pipeline to state whether an application for DOE/
FE authorization is also required, and, if so, to represent that DOE/FE
will grant that application prior to the operation of the border
facilities.
The Commission recognizes that not all applications filed with the
Commission under NGA section 3 require modification to an existing
import/export authorization. For example, some construction may be
undertaken to enhance system reliability and flexibility, which does
not necessitate a change in an existing import/export authorization.
Other construction may be used to transport volumes previously
authorized under an existing DOE/FE blanket certificate. Moreover, it
may be difficult for a pipeline to control the timing of its shippers'
filing of required, related applications for import/export
authorization.
Accordingly, we will delete proposed Sec. 153.6 and, in its place,
add a new paragraph (a) to Sec. 153.6 requiring an applicant to state
whether DOE/FE authorization is required 40 and, if so,
whether all required DOE/FE authorizations have been granted prior to
filing a section 3 application with the Commission.
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\40\ A shipper's blanket import/export authorization from DOE/FE
satisfies the Final Rule, and no further DOE/FE authorization would
be ``required.''
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Great Lakes also suggests that the Commission could require the
FERC applicant, as a condition of its authorization, to file a
statement that DOE/FE authorizations ``will be obtained prior to the
operation of the border facilities.'' This recommendation is not
workable because if the applicant's representation of DOE/FE approval
does not materialize, the Commission would be in the undesirable
position of having authorized the construction of facilities which may
never become operational. The pipelines' customers would derive no
benefits from unused construction, and the environment would have been
needlessly disturbed.
Accordingly, the Commission will also revise proposed Sec. 153.6 to
condition its grant of section 3 authorization on the applicant's
filing a subsequent statement, before the applicant may commence
construction, that its shippers have applied for and obtained all
required DOE/FE authorizations for the import/export of natural gas. We
will adopt Great Lakes' proposed condition, as revised, in
Sec. 153.6(b) of the Final Rule. The Commission intends to apply the
Final Rule to all future section 3 applications that also require an
application for DOE/FE authorization or an amendment to an existing
authorization for the import/export of natural gas.
c. Section 153.7 Contents of Application
i. Information Regarding Applicant
The requirements in Secs. 153.7 and 153.8 (exhibits) of the Final
Rule apply to applications under subpart B for authorization under NGA
section 3 and under subpart C for Presidential Permits for the
construction of import/export facilities at the border. Informational
requirements in current Secs. 153.3(a) through 153.3(c), identifying
the applicant, its authorized agent, legal status, and address, are
revised and retained in proposed Sec. 153.7(a)(1) through (a)(3) of the
Final Rule with a paragraph heading added. The informational
requirements in current Secs. 153.3(d) through 153.3(f) are deleted
because they require information no longer essential to the
Commission's delegated responsibilities--the name and location of gas
production fields and reserves as well as the name of the seller and
producer of gas to be imported and the proposed rates to the paid by
the applicant. For the same reason, current Sec. 153.8, requiring the
filing of import/export contracts and rate schedules, is deleted.
Section 153.7(a)(3) of the Final Rule reflects a merging of
application requirements for section 3 authorizations and Presidential
Permits which are separately stated in current regulations. The Final
Rule relocates in Sec. 153.7(a)(3) the current requirement in
Sec. 153.11(a)(4) that applications for Presidential Permits identify
foreign ownership or subsidy of the applicant.
The Canadian Producers ask the Commission to clarify why it is
necessary for an applicant to indicate whether the applicant is owned
or subsidized by a foreign government. As noted, the current
regulations applicable to Presidential Permits require a section 3
applicant to supply information about foreign government ownership/
subsidy. This information assists the Commission's implementation of
its delegated authorities under Executive Order No. 10485, as amended,
which derives from the constitutional authority vested in the President
of the United States over foreign relations and as Commander-in-
Chief.\41\ This informational requirement enables the Commission and
the Secretaries of State and Defense, upon their review of a Commission
request for concurrence, to consider all relevant factors in
determining whether an application for a Presidential Permit for the
construction of border facilities is in the public interest. Foreign
ownership or subsidy of an applicant is one such material factor.
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\41\ See Yukon Pacific Corp., 39 FERC para. 61,216 at pp.
61,759-60 (1987).
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ii. Summary
The requirement in current Sec. 153.3(g) to describe proposed
facilities is retained, expanded, and redesignated as Sec. 153.7(b) of
the Final Rule with a ``summary'' paragraph heading added. The Final
Rule requires the applicant to summarize its proposal and to file a
description of the proposed facilities and a description of state,
foreign, or other Federal licenses or permits for the construction or
operation of facilities (revising a similar requirement in
[[Page 30441]]
current Sec. 153.11(d) applicable to Presidential Permits). In
addition, Sec. 153.7(b) of the Final Rule adds a new requirement that
the applicant must also state the status of any non-FERC regulatory
proceedings (United States or foreign) related to the proposal.
iii. Statements
Section 153.7(c) of the Final Rule requires the applicant to file
two statements with its application. The first statement demonstrates
the public interest. It consists of three elements (Sec. 153.7(c)(1)
(i) through (iii))--demonstrating, respectively, benefits from the
proposal, whether existing service at reasonable rates would be
impaired, and whether there are any applicable anti-competitive
agreements. Section 153.7(c)(1)(i) of the Final Rule is new, while the
requirements in Secs. 153.7(c)(1)(ii) and (iii) are in the current
regulations and have been continued with revisions. The second
statement (Sec. 153.7(c)(2)) requires, for the first time, a
description of the nature of the transportation service offered through
the authorized border-crossing facilities.
With respect to the first element of the public interest statement,
Sec. 153.7(c)(1)(i) of the NOPR identified illustrative elements of the
public interest, including a demonstration that the proposal will
access new foreign supplies of natural gas and new markets, or enhance
system reliability and/or flexibility. Section 153.7(c)1)(ii) and (iii)
required representations that the proposal would not impair service to
existing customers at reasonable rates or involve anti-competitive
agreements that may prevent other United States companies from
competing in the same general area.
Great Lakes and PanEnergy Pipelines (PanEnergy) ask the Commission
to clarify that the criteria relating to the public interest in
Sec. 153.7(c)(1)(i) are illustrative only and, because the listing is
not all-inclusive, that an applicant should not be required to make a
showing of ``any of those specific criteria * * * since there are other
criteria that can also demonstrate that the proposed siting and
construction are not inconsistent with the public interest.''\42\ These
parties assert that an applicant should be allowed to raise any factor
showing that its project is not inconsistent with the public interest.
In particular, Great Lakes points out certain situations, not
enumerated in the NOPR, which it believes would not be inconsistent
with the public interest. These situations include border facilities
required by an existing market to provide an alternative less costly
transportation path to import gas from existing foreign supply sources,
or border facilities to reach new markets in the United States or to
allow existing markets to access new foreign supply sources.
---------------------------------------------------------------------------
\42\ Comments at p. 5 (filed April 11, 1997).
---------------------------------------------------------------------------
Great Lakes offers substitute regulatory text which would revise
proposed Sec. 153.7(c)(1), assign separate paragraphs to the items
listed in proposed Sec. 153.7(c)(1)(i) with the addition of an item for
the enhancement of competition, and renumber proposed Secs. 153.7(c)(1)
(ii) and (iii) as Secs. 153.7(c)(1) (vi) and (vii), respectively.
Section 153.7(c)(1)(i) of the Final Rule does not change the
statutory standard under NGA section 3 that the Commission ``shall
issue such order upon application, unless * * * it finds that the
proposed exportation or importation will not be consistent with the
public interest.'' In Commission orders issued under section 3, the
Commission determines the public interest on the basis of all relevant
factors of record.
As Great Lakes and PanEnergy state, the list in Sec. 153.7(c)(1)(i)
illustrates particular factors which may be relevant in a specific
proceeding as evidence that the proposal or proposed construction is
not inconsistent with the public interest. An applicant does not have
to make a showing with respect to each of the factors listed in
paragraph (i) unless each applies to the applicant's project.
Accordingly, Great Lake's and PanEnergy's requested clarification is
granted.
It is unnecessary to revise proposed Sec. 153.7(c)(1) or to
designate separate paragraphs in Sec. 153.7(c)(1)(i), as Great Lakes
proposes. The last item listed in proposed Sec. 153.7(c)(1)(i) (that an
application ``will not impair transportation service to existing
customers'') is deleted as duplicative of the same item separately
stated in proposed Sec. 153.7(c)(1)(ii). Proposed Sec. 153.7(c)(1)(i)
is revised to add as a factor evidencing the public interest the
enhancement of competition within the United States for natural gas
transportation or supply, as Great Lakes proposes.
Proposed Sec. 153.7(c)(1)(i) permitted the applicant to indicate in
its application whether its proposal will access ``new foreign supplies
of natural gas and service new market demand.'' PanEnergy asks the
Commission to clarify that the proposed regulation covers both ``new
and additional'' supplies without reference to foreign or domestic
sources. Great Lakes states that import/export facilities may be
warranted to provide a cheaper transportation path between existing
supplies and existing markets.
Since the Final Rule is intended to apply to export facilities
which transport domestic gas supplies (as well as to import
facilities), the reference to ``foreign'' gas supplies is deleted from
Sec. 153.7(c)(1)(i). Moreover, the reference in Sec. 153.7(c)(1)(i) to
``new'' gas supplies is deleted because it excludes the construction of
facilities used to transport existing supplies to existing or new
markets.
Proposed Sec. 153.7(c)(1)(ii) required the pipeline applicant to
show that the proposal ``will not impair the ability of the applicant
to render transportation service at reasonable rates to customers in
the United States.'' Thus, proposed paragraph (ii) would require the
pipeline applicant to make a showing both that its proposal will not
interfere with its ability to continue to provide transportation
service and that its proposal would not cause the pipeline's systemwide
rates to become unreasonable.
The Canadian Association of Petroleum Producers (Canadian
Producers) contends that temporary operational restrictions could
constitute a service impairment to the applicant's existing United
States customers that could require rejection of a section 3
application. The NOPR, however, continued the same service continuation
obligation in current Sec. 153.3(h)--to avoid the impairment of service
(at reasonable rates) to existing customers. The construction of a new
import point would make more gas available for delivery to the
pipeline's customers and could result in capacity constraints
downstream. Likewise, a new export point could cause constraints on the
capacity of non-export customers. The required statement puts the
burden on the pipeline applicant to review the service consequences of
its application before proposing an import or export project.\43\ The
Canadian Producers' concern appears unwarranted.
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\43\ Pipelines may avoid possible constraints by simultaneously
proposing the construction of necessary facilities under NGA section
7. See, e.g., Williston Basin Interstate Pipeline Co., 63 FERC para.
61,179 (1993).
---------------------------------------------------------------------------
The Canadian Producers ask the Commission to clarify that the
Commission intends to apply the 1995 pricing policy statement to new
import/export facilities (without an additional reasonableness
analysis).\44\ PanEnergy asks the Commission to clarify that the
Commission does not intend in
[[Page 30442]]
proposed Sec. 153.7(c)(1)(ii) to require the pipeline applicant to make
any additional showing about the justness and reasonableness of its
rates beyond that established under NGA sections 4, 5, and 7.
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\44\ Pricing Policy for New and Existing Facilities Constructed
by Interstate Natural Gas Pipelines, 71 FERC para. 61,241 (1995).
---------------------------------------------------------------------------
The Commission's practice is to apply its 1995 facilities pricing
policy statement to determine the reasonableness of a pipeline's rates
resulting from the construction of import/export facilities by
interstate pipelines in the same fashion as the Commission applies that
policy statement to interstate facilities under section 7 in
certificate proceedings.\45\ We do not regard the application of the
policy statement to a section 3 proceeding as requiring an additional
showing by the pipeline. There is no basis for exempting facilities
authorized under section 3 from the pricing policy statement which
applies to all other construction by interstate pipelines.
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\45\ See, e.g., Great Lakes Transmission Limited Partnership, 76
FERC para. 61,148 (1996), in which the Commission applied the
pricing policy statement to the construction of import/export
facilities.
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PanEnergy also asks the Commission to clarify that the reasonable
rate standard of proposed Sec. 153.7(c)(1)(ii) is satisfied if the
pipeline represents that it can continue to ``render transportation
service at the rates approved by the Commission and contained in
applicant's tariff.'' \46\ In light of our application of the pricing
policy statement to an interstate pipeline's facilities authorized
under section 3, PanEnergy's proposed clarification is granted.
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\46\ Comments of PanEnergy at 5 (filed April 14, 1997).
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The Canadian Producers ask the Commission to revise proposed
Sec. 157.7(c)(1)(ii) to state that there should be no impairment of
service at reasonable rates to applicant's existing customers in the
North American market (instead of the NOPR's impairment of service ``to
customers in the United States.'') The Canadian Producers read the NOPR
as applying to service rendered to all United States customers of all
pipelines. We clarify the Final Rule to track the current regulation,
which requires the pipeline's demonstration to relate to the pipeline-
applicant's customers. The Final Rule also relocates the reference ``in
the United States'' in the current regulation and the NOPR to modify
``transportation service'' instead of ``customers.'' This revision
makes it clear that the facilities and transportation service that the
Commission authorizes are located in the United States (or its
possessions) and that a pipeline's Canadian or Mexican customers may
receive transportation service through the pipeline's import/export
facilities.
Section 153.7(c)(1)(iii) of the NOPR revised the requirement in
current Sec. 153.11(c) to file a statement describing certain contracts
applicable to Presidential Permits. Proposed Sec. 153.7(c)(1)(iii)
required the applicant for section 3 authorization to file a statement
describing any existing contracts involving the control of operations
at import/export facilities or transportation rates that could prevent
competing United States companies from extending their activities in
the same general area.
The Canadian Producers ask the Commission to clarify why the
Commission established the new requirement in Sec. 153.7(c)(1)(iii) to
file certain agreements and whether such agreements could impact free
trade. First, Sec. 153.7(c)(1)(iii) does not establish a new
requirement. A similar provision in Sec. 153.11(c) currently applies to
the filing of applications for Presidential Permits. Second, there
could be exclusivity or market allocation agreements between the
applicant-transporter and its shipper or the applicant and a foreign
government that could prevent other transporters from competing for the
same customers in the same general area. If they existed, such
agreements could be anti-competitive and could interfere with free
trade. The parties to a section 3 proceeding should have the
opportunity to comment on the acceptability of those contracts. Thus,
it is appropriate to require their disclosure at the time of filing.
With respect to the second statement an applicant for section 3
authorization must file, the NOPR established a new requirement in
Sec. 153.7(c)(2) requiring the applicant's demonstration that the
proposed import/export facilities will be used: (1) To render
transportation services under part 284, (2) to provide private
transportation, or (3) to provide service that is exempt from the
provisions of the NGA pursuant to sections 1(b) or 1(c) thereof.\47\
This requirement was intended to enable the Commission to determine
whether the applicant's operations are consistent with the Commission's
open access transportation policies.
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\47\ Section 1(b) states that the provisions of the NGA apply,
inter alia, to the transportation of natural gas in interstate
commerce but not to ``any other transporation,'' the local
distribution of natural gas, or the production or gathering of
natural gas. Section 1(c) exempts a Hinshaw pipeline from the
provisions of the NGA. The Commission, however, regulates the
activities of these exempt entities in foreign commerce under
section 3. See, e.g., Interenergy Sheffield Processing, 78 FERC
para. 61,085 (1997) (gathering); Havre Pipeline Co., et al., 71 FERC
para. 61,292 (1995) (intrastate pipeline/gatherer engaging in
foreign commerce); and Vermont Gas System, Inc., 24 FERC para.
61,366 (1983) (local gas distribution company).
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PanEnergy asserts that the NOPR failed to refer to the continued
existence of individually certificated part 157 transportation service,
which section 3 facilities could enhance. Under Commission policy after
Order No. 436, transportation service through available capacity on a
pipeline's facilities, including import/export facilities, must be
offered on an open access and non-discriminatory basis. The Commission
almost always rejects applications for service under new part 157
certificates, extensions to existing part 157 certificates, or
amendments to part 157 certificates that seek to provide some of the
benefits of part 284 status without the affected customer's converting
to service under part 284.\48\
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\48\ See Algonquin LNG, Inc. 79 FERC para. 61,139 (1997) and
Tennessee Gas Pipeline Co., 78 FERC para. 61,340 (1997).
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We will amend proposed Sec. 153.7(c)(2) to recognize that some
pipelines, operating as open access transporters, currently provide
individually certificated transportation services under part 157. The
Commission will revise proposed Sec. 153.7(c)(2) to require the
pipeline-applicant to represent that: (1) The pipeline's proposed
increases in capacity at existing import/export points is not
exclusively reserved for part 157 users and (2) all services made
available as a result of new or modified import/export facilities will
be under part 284.
The Canadian Producers ask the Commission to clarify what ``private
transportation'' means in proposed Sec. 153.7(c)(2). We intend private
transportation to mean transportation service provided through
facilities owned by the same person that uses the natural gas
transported. Private transportation typically arises in the case of
transportation through a pipeline constructed and owned by an
industrial user to transport natural gas only to its industrial
facility.\49\
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\49\ See, e.g., Sumas Energy Inc., 55 FERC para. 61,163 (1991)
and National Steel Corp., 45 FERC para. 61,100 (1988).
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d. Section 153.8 Required Exhibits.
The Commission in the Final Rule is redesignating current
Sec. 153.4 as Sec. 153.8, which retains the requirement to file current
Exhibits A through C in new paragraphs (a)(1), (a)(2), and (a)(3),
respectively, with editorial revisions. Current Exhibit A is revised to
incorporate the requirement of current Sec. 153.11(a)(3) that an
applicant for a Presidential Permit describe the amount and classes of
capital stock issued by a corporate applicant and the nationality
[[Page 30443]]
of officers, directors, and stockholders, and the amount and class of
stock held by each. The Commission is eliminating obsolete exhibits D
and E (contracts for the export or import of natural gas) because DOE/
FE oversees those activities.
Section 153.8(a) of the Final Rule requires an applicant to file
new exhibits D (copy of any construction and operation agreements), E
(LNG-related engineering data), E-1 (LNG-related seismic information
for certain facilities), and F (an environmental report required by
part 380 for LNG and non-LNG related facilities). Applicants may refer
to the ``Guidance Manual for Environmental Report Preparation'' to
assist in the preparation of these exhibits.
In the NOPR, the Commission proposed to require the applicant to
file a new Exhibit D consisting of copies of construction and operation
agreements between the applicant and the operator of border facilities
in the United States and Canada or Mexico. The NOPR stated that Exhibit
D would enable the Commission to verify the business feasibility of the
import/export project and would show how the applicant and its Canadian
or Mexican counterpart intend to jointly construct and operate the
border-crossing facilities.
Coastal asks the Commission to eliminate proposed Exhibit D as a
filing requirement because construction/operation agreements may not be
available at the time application is filed. As a general observation,
the Commission can not process an incomplete application because it
would not contain the material elements of information required by our
regulations. We regard a construction and operation agreement as a
material element of an application because it would show the business
feasibility of the import/export project. If the executed agreement is
not available when the potential applicant wishes to file its
application, the Commission expects the applicant to wait to file its
application until after the agreement is available. At a minimum, the
applicant must seek to obtain waiver of Sec. 153.8 (Exhibit D) of the
Final Rule which may be granted upon the pipeline's filing of an
agreement in principle that shows the roles and responsibilities of the
parties. The Final Rule is clarified accordingly.
Great Lakes would exempt from filing construction and operation
agreements involving facilities constructed or operated by a single
entity on the United States or Canadian border. Great Lakes, however,
takes an unduly narrow view of the variety of possible operational
agreements for border-crossing facilities in the United States or
Canada and Mexico that could affect the public interest. Most of the
United States facilities may be operated only by United States
entities, and operating agreements with respect to these facilities are
no less relevant to the public interest than United States facilities
which may be jointly operated by United States and Canadian entities.
The Commission intends the Final Rule to require the applicant to file
as part of its application copies of all agreements between the
applicant and the facility operator(s) for the construction and
operation of border facilities.
New Exhibits E, E-1, and F in the NOPR codified existing practice
which requires an applicant for the construction of LNG facilities to
provide sufficient information that will enable the Commission to
determine whether the new facilities will be constructed and operated
safely, reliably, and with minimal adverse environmental impact. These
exhibits are retained in the Final Rule and are justified by the
significant safety and environmental implications of LNG terminal
facilities. The requirement to file a map is revised as Exhibit G to
require a map of suitable scale.
Phillips asks the Commission to clarify that its safety and
environmental review of Exhibits E, E-1, and F relating to any proposed
modification of LNG facilities will be limited to the proposed new
facilities and will exclude existing facilities. The primary focus of
Exhibits E, E-1, and F of the Final Rule is to demonstrate that the
safety and environmental consequences of the proposed facilities (i.e.,
a new LNG facility or modification of an existing LNG facility) are
within acceptable limits and that the plant design provides a reliable
natural gas service. Thus, the Commission will not impose revised
environmental/safety conditions or scrutinize again the operation of a
previously authorized LNG import/export facility unless there has been
a material change in circumstances.
The Commission's staff conducts cryogenic design and facility
reviews of LNG facilities on a two-year basis. While the Commission
will not reopen its previous environmental/safety review of Phillips'
LNG facility, which has been operational since November 1969, a
modification of existing LNG facilities is related to the function,
operation, and environmental/safety integrity of the existing
facilities. Accordingly, the applicant proposing to modify an existing
LNG facility with new LNG facilities must describe the environmental/
safety aspects of the proposed facilities and how the proposed
facilities integrate with the existing facilities. The Commission must
determine that the proposed modification will not materially alter the
safe and environmentally sound operation of the integrated facility.
Section 153.8 (Exhibits E, E-1, and F) of the Final Rule are clarified
accordingly.
e. Section 153.9 Transferability.
The NOPR continued in Sec. 153.9(a) the provision in the current
regulations (Sec. 153.6(a) (transferability)) that authorizations under
subpart B are not transferable or assignable except temporarily in the
case of involuntary transfer of facilities to receivers, trustees, or
purchasers under foreclosure or judicial sale. Section 153.9(b) in the
NOPR continued current Sec. 153.6(b) to permit the Commission to make
supplemental orders as it may find necessary or appropriate.
Yukon Pacific Company L.P. (Yukon Pacific) states that it is
unclear whether the proposed (or current) regulations would allow Yukon
Pacific to transfer or assign its existing section 3 authorization
except in the limited case of involuntary transfer.50 Yukon
Pacific asks the Commission to amend proposed Sec. 153.9 to clarify
that the holder of a section 3 authorization can transfer or assign
that authorization for ``good commercial or other reasons'' subject to
prior Commission approval. In the alternative, Yukon Pacific asks the
Commission to state in the preamble of the Final Rule that proposed
Sec. 153.9(b), permitting supplemental orders, authorizes the
Commission to permit the transfer of section 3 authorizations in the
same fashion that DOE/FE currently permits the transfer of its
authorizations upon prior DOE approval.51
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\50\ On May 22, 1995, the Commission issued an order granting
Yukon Pacific auhtorization under section 3 for the siting,
construction, and operation of an LNG export facility at Port
Valdez, Alaska. 71 FERC para. 61,197 (1995), reh'g denied, 72 FERC
para. 61,226 (1995), affirming 39 FERC para. 61,216 (1987). Yukon
Pacific's proposed LNG export facility is not yet constructed.
\51\ Under DOE regulations, import/export authorizations are not
transferable or assignable ``unless specifically authorized by the
Assistant Secretary.'' 10 CFR 590.405.
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Under the Commission's current practice, the holder of a section 3
authorization (and a Presidential Permit) may not transfer those
authorizations or related facilities without prior Commission
authorization.52 For example, the
[[Page 30444]]
Commission implements a transfer of section 3 authorization and/or
facilities by approving the amendment of an existing authorization
53 or granting a new authorization to the acquiring
entity.54 The Final Rule continues this practice and revises
proposed Sec. 153.9(a) to deny transfer or assignment of a section 3
authorization (absent an involuntary transfer) without prior Commission
authorization.55 Thus, Yukon Pacific's request for
clarification is granted. The Final Rule relocates as substitute text
in Sec. 153.9(b) the NOPR's provision (based on current Sec. 153.6)
permitting the temporary transfer of facilities in the event of an
involuntary transfer.
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\52\ The Commission similarly reviews and approves under section
7 of the NGA the proposed abandonment of interstate facilities and
services and the acquisition of those facilities by natural gas
companies.
\53\ The Commission may approve an amendment to an existing
Presidential Permit in order to change the legal status of the
Permittee from corporation to limited partnership pursuant to a
reorganization or to change its name. See, e.g., PNM Gas Services,
Secretary's notice in Docket No. CP93-98-002 of redesignation of
name, January 17, 1997 (unreported) and Great Lakes Gas Transmission
Limited Partnership, 53 FERC para. 61,264 (1990).
\54\ Western Gas Interstate Co., et al., 74 FERC para.61,347
(1996) (issuance of a new section 3 authorization and Presidential
Permit to entity acquiring facilities incident to reorganization).
\55\ Similarly, uniform article 8 of a Presidential Permit
prohibits the voluntary transfer of a Presidential Permit or related
facilities.
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Section 3(a) of the NGA gives the Commission the authority, after
hearing, for good cause shown, to make ``such supplemental order in the
premises as it may find necessary or appropriate.'' Section 153.9(b) of
the NOPR, following NGA section 3(a) and current regulations, gave the
Commission the discretion to issue supplemental orders in the case of a
transfer of a section 3 authorization or facilities depending on the
public interest considerations in particular proceedings. Since the
Commission's authority under section 3 to issue supplemental orders
applies to all aspects of the Commission's implementation of section 3,
the Commission is relocating Sec. 153.9(b) of the NOPR to Sec. 153.11
(supplemental orders) in subpart B of part 153.
PanEnergy asserts that proposed Sec. 153.9(b)(supplemental orders)
is ambiguous and, in the alternative, asks the Commission to clarify
that proposed Sec. 153.9(b) may not be applied to impose retroactive
requirements that would change the economics of border construction.
PanEnergy's dispute is with NGA section 3 itself, which authorizes
the Commission for good cause after hearing to issue necessary or
appropriate supplemental orders. In Distrigas Corporation v. FPC, the
Court observed that section 3 (now section 3(a)) authorizes the
Commission to reexamine its decisions authorizing imports/exports based
on its view of the public interest.56 The Commission,
however, would be limited by ``principles of fairness implicit in all
standards governing exercise of regulatory power.'' 57 There
is no justification to eliminate the provision permitting supplemental
orders (relocated to Sec. 153.11) from the Final Rule, as PanEnergy
implies, or to clarify the Final Rule as requested.
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\56\ 495 F.2d 1057, 1065-66 (D.C. Cir. 1974).
\57\ 495 F.2d 1065.
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f. Section 153.10 Authorization Not Exclusive
The Commission is redesignating current Sec. 153.7 as Sec. 153.10
and is revising the current regulation to eliminate references to
authorizations for the import/export of natural gas, replacing them
with references to authorizations for construction and operation under
section 3 of the NGA. Under Sec. 153.10, which codifies current
Commission practice, if the Commission authorizes the construction of
facilities pursuant to section 3, the Commission is not prevented from
granting authorization to another applicant under section 3 at the same
general location.58
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\58\ See, e.g., Tenneco Baja California Corp., 75 FERC para.
61,192 (1996) and Pacific Interstate Offshore Co., 74 FERC para.
61,350 (1996).
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g. Supplemental Orders
The Final Rule removes proposed Sec. 153.9(b)(supplemental orders)
and relocates it as new Sec. 153.11. The provision concerning
supplemental orders would apply to each section in subpart B of the
Final Rule instead of only to Sec. 153.9 concerning transferability of
section 3 authorizations.
3. Subpart C--Application for a Presidential Permit
a. Section 153.15 Who Shall Apply
The existing heading prefacing current Secs. 153.10 through 153.12
is deleted and replaced with a more concise heading (Application for a
Presidential Permit) substituted under a new subpart C of part 153. The
Final Rule redesignates current Sec. 153.10 as Sec. 153.15 and divides
proposed Sec. 153.15 into paragraphs (a) and (b) with individual
headings.
The Commission is using the same definition of person in subpart C
of the Final Rule as is used in subpart B. It is appropriate in the
Final Rule to use the same definition because the same entity that
applies under subpart C to construct and operate border facilities
would need to apply for authorization under subpart B. Section
153.15(b) of the Final Rule cross-references the requirement to file
simultaneously an application under subpart B for the siting or
construction of facilities, deleting the current cross-reference to
applications for authorization to import or export natural gas. Since
the NOPR required the filing of an application to amend an existing
Presidential Permit, it is appropriate to delete from proposed
Sec. 153.15(a) the duplicative requirement to file an application ``to
change the operation or maintenance of facilities.''
b. Section 153.16 Contents of Application
The Final Rule redesignates current Sec. 153.11 as Sec. 153.16,
with a revised heading. Filing requirements prescribing the number of
copies for Presidential Permit applications stated in the first
sentence of current Sec. 153.11 are deleted and relocated to new
subpart D of part 153.
The Final Rule merges the informational requirements for filing an
application for a Presidential Permit and for an application under NGA
section 3. Thus, Sec. 153.16(a) states that an applicant for a
Presidential Permit that complies with the informational filing
requirements under subpart B is not required to satisfy separate filing
requirements under subpart C.
Accordingly, current Secs. 153.11 (a)(1) and (a)(2) and the first
part of paragraph (a)(3) are deleted as they duplicate the same
provisions in Sec. 153.7(a) of the Final Rule. The remainder of current
Sec. 153.11(a)(3) is redesignated in Sec. 153.8 (Exhibit A). Current
Sec. 153.11(a)(4) is revised to update references to applicants
``subventioned'' (subsidized) by a foreign government and is relocated
to Sec. 153.7(a)(3). Current Sec. 153.11(b), requiring an applicant to
file a map, is deleted because it duplicates the same requirement in
Sec. 153.8(a)(8) (Exhibit G) of the Final Rule.
Current Sec. 153.11(c), concerning anti-competitive agreements, and
current Sec. 153.11(d), concerning permits granted by a foreign
government, are revised to eliminate out-dated references to bundled
gas service, ``landing licenses,'' and import/export permits. These
sections are redesignated as Secs. 153.7(c)(1)(iii) and 153.7(b),
respectively, of the Final Rule.
For amendments to an existing Presidential Permit that do not
involve related section 3 applications or amendments, Sec. 153.16(b) of
the Final Rule requires that applicant to provide information
identifying itself pursuant to Sec. 153.7(a) and to fully explain and
[[Page 30445]]
justify its proposed amendment. This applicant would not be required to
provide the remainder of information required by Secs. 153.7 and 153.8
of the Final Rule, applicable to the construction of facilities.
Current Sec. 153.12, authorizing the Commission to request such
other information in connection with an application as it may deem
pertinent, is deleted. In its place, Sec. 153.21(b), in subpart D of
the Final Rule, authorizes the Commission to direct the applicant to
file such information as may be necessary to cure a deficient
application.
c. Section 153.17 Effectiveness of Presidential Permit
Section 153.17 of the Final Rule codifies the Commission's existing
practice of requiring a Permittee to accept an issued Presidential
Permit by executing, with proof of proper authorization, the Testimony
of Acceptance of the Presidential Permit. The Permittee is required to
file a copy of the executed Testimony of Acceptance with the Secretary
prior to the start of construction.59
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\59\ See MidCon Texas Pipeline Corp., 77 FERC para. 61,205
(1996).
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4. Subpart D--Paper Media and Other Requirements
a. Section 153.20 General Rule
The Commission is relocating its current filing requirements for
paper media in subpart D.
b. Section 153.21 Conformity with Requirements
Section 153.21 of the Final Rule states the requirement that an
application must conform to the requirements of part 153 or be
rejected. The Commission will reject and wishes to discourage
undocumented applications for section 3 authorization.60
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\60\ In the past, the Commission has rejected applications for
import/export facilities that were not properly supported by
required documentation. See SouthCoast Transmission Corp., 49 FERC
para. 61,161 (1989) and Flormax Energy Corp., 21 FERC para. 61,319
(1982).
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c. Section 153.22 Amendments and Withdrawals
Section 153.22 of the Final Rule applies the Commission's Rules of
Practice and Procedure applicable to amending or withdrawing pleadings
to amending or withdrawing an application under subpart B or subpart C
of part 153.
d. Section 153.23 Reporting Requirement
Interstate pipelines are currently required to file operational
information about facilities authorized under section 3 in their FERC
Form No. 2 (annual report), FERC Format No. 567 (annual system flow
diagram), and annual report of estimated peak capacity pursuant to 18
CFR 284.12. Commission regulations do not require applicants which are
not natural gas companies to file operational information with the
Commission concerning facilities authorized under section 3.
61 Uniform article 7 of a Presidential Permit requires the
Permittee to file with the Commission requested statements or reports
concerning the natural gas exported/imported and the facilities
described in the Presidential Permit.
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\61\ The Commission has imposed such reporting as a condition in
individual section 3 proceedings. See, e.g., Yukon Pacific Co.,
L.P., 71 FERC para. 61,197 (1995) and EcoElectrica, L.P., 75 FERC
para. 61,157 (1996).
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Proposed Sec. 153.23 required applicants which are not otherwise
required to file operating information concerning facilities authorized
under section 3 with the Commission to report the completion of
construction or modification, and the date service commenced through
the authorized facilities. 62 The NOPR also required each
applicant to report annually by March 1 the estimated peak day capacity
and actual peak day usage of its import/export facilities.
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\62\ Effective November 13, 1995, the Commission eliminated its
annual report of import/export volumes in FPC Form 14. See Final
rule, Revisions to Uniform System of Accounts, Forms, Statements and
Reporting Requirements for Natural Gas Companies, 60 FE 53019
(October 11, 1995). The Commission eliminated FPC Form 14 because
importers/exporters currently file quarterly reports with DOE/FE
including the same volume and price information.
---------------------------------------------------------------------------
Phillips asks the Commission to exempt the owners/operators of LNG
facilities that are not used as peak shaving facilities or pipelines
from the requirement to file peak day capacity and actual peak day
usage information. The Commission is aware that the capacity and usage
of non-pipeline facilities are subject to many variables not applicable
to pipeline operations. Thus, we agree with Phillips that peak day
capacity and actual peak day usage information is irrelevant in the
case of entities that do not own or operate pipeline capacity. The
proposed regulation is revised to exempt applicants that do not own or
operate pipeline capacity, including the owners/operators of LNG
facilities, from the requirement to file annually peak day capacity/
usage information. The Commission, however, retains the right to seek
capacity/usage information from non-pipeline operators should such
information be needed for the performance of its duties on a case-by-
case basis. Phillips' requested clarification is granted.
IV. Regulatory Flexibility Act Certification
The Regulatory Flexibility Act (RFA) requires agencies to prepare
certain statements, descriptions, and analyses of proposed rules that
will have a significant economic impact on a substantial number of
small entities.63 The Commission is not required to make
such analyses if a rule would not have such an effect.
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\63\ 5 U.S.C. 601-612.
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The Commission does not believe that this rule would have such an
impact on small entities. Most filing companies regulated by the
Commission do not fall within the RFA's definition of small
entity.64 Further, the filing requirements of small entities
are reduced by the rule. Therefore, the Commission certifies that this
rule will not have a significant economic impact on a substantial
number of small entities. Therefore, no regulatory flexibility analysis
is required.
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\64\ 5 U.S.C. 601(3), citing to section 3 of the Small Business
Act, 15 U.S.C. 632. Section 3 of the Small Business Act defines a
``small-business concern'' as a business which is independently
owned and operated and which is not dominant in its field of
operation.
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V. Information Collection Statement
The OMB regulations require OMB to approve certain reporting and
recordkeeping (collections of information) imposed by agency
rule.65 OMB has approved the NOPR without comment. The Final
Rule will affect one existing data collection, FERC-539. Respondents
subject to the filing requirements of this Final Rule will not be
penalized for failing to respond to these collections of information
unless the collections of information display a valid OMB control
number.
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\65\ 5 CFR 1320.11.
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Title: FERC-539, Gas Pipeline Certificate: Import/Export.
Action: Proposed Data Collection.
OMB Control No.: 1902-0062.
Respondents: Interstate natural gas pipelines (Business or other
for-profit, including small businesses).
Frequency of Responses: On occasion.
Necessity of the Information: The Final Rule revises the filing
requirements contained in 18 CFR part 153 for the siting, construction,
and operation of facilities for the import or export of natural gas
under NGA section
[[Page 30446]]
3 and for Presidential Permits that have been issued and modified for
the construction and operation of border facilities. These filing
requirements are being updated to conform to the Commission's current
responsibilities as changed by intervening legislation and DOE
delegation orders.
The Commission received six comments on its NOPR but none on its
reporting burden or cost estimates. The Commission's responses to the
comments are addressed in the Discussion portion (Part III) of this
Final Rule. The Commission is submitting a copy of this Final Rule to
OMB for information purposes because the Final Rule is not
significantly different from the NOPR and OMB has not provided any
comments on the NOPR.
Interested persons may obtain information on the reporting
requirements by contacting the Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC 20426 (Attention: Michael Miller,
Information Services Division, (202) 208-1415) or send comments to the
Office of Management and Budget (Attention: Desk Officer for the
Federal Energy Regulatory Commission (202) 395-3087, fax: 395-728). 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.
VI. Environmental Statement
The Commission excludes certain actions not having a significant
effect on the human environment from the requirement to prepare an
environmental assessment or an environmental impact
statement.66 No environmental consideration is raised by the
promulgation of a rule that is procedural or that does not
substantially change the effect of legislation or regulations being
amended.67 The instant rule updates the part 153 regulations
and does not substantially change the effect of the underlying
legislation or the regulations being revised or eliminated.
Accordingly, no environmental consideration is necessary.
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\66\ 18 CFR 380.4.
\67\ 18 CFR 380.4(a)(2)(ii).
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VII. Effective Date and Congressional Notification
The regulations are effective August 4, 1997. The Small Business
Regulatory Enforcement Fairness Act of 1996 requires agencies to report
to Congress on the promulgation of certain final rules prior to their
effective dates.68 That reporting requirement applies to
this Final Rule. 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.
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\68\ Pub. L. No. 104-121, 110 Stat. 847 (1996).
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List of Subjects in 18 CFR Part 153
Exports, Imports, Natural gas, Reporting and recordkeeping
requirements.
By the Commission.
Lois D. Cashell,
Secretary.
For the reasons set out in the preamble, the Commission is revising
18 CFR part 153 to read as follows:
PART 153--APPLICATIONS FOR AUTHORIZATION TO CONSTRUCT, OPERATE, OR
MODIFY FACILITIES USED FOR THE EXPORT OR IMPORT OF NATURAL GAS
Subpart A--General Provisions
Sec.
153.1 Purpose and scope.
153.2 Definitions.
Subpart B--Application Under Section 3
Sec.
153.5 Who shall apply.
153.6 Time of filing.
153.7 Contents of application.
153.8 Required exhibits.
153.9 Transferability.
153.10 Authorization not exclusive.
153.11 Supplemental orders.
Subpart C--Application for a Presidential Permit
153.15 Who shall apply.
153.16 Contents of application.
153.17 Effectiveness of Presidential Permit.
Subpart D--Paper Media and Other Requirements
153.20 General rule.
153.21 Conformity with requirements.
153.22 Amendments and withdrawals.
153.23 Reporting Requirements.
Authority: 15 U.S.C. 717b, 717o; E.O. 10485, 3 CFR, 1949-1953
Comp., p. 970, as amended by E.O. 12038, 3 CFR, 1978 Comp., p. 136,
DOE Delegation Order No. 0204-112, 49 FR 6684 (February 22, 1984).
Subpart A--General Provisions
Sec. 153.1 Purpose and scope.
The purpose of this part is to implement the Commission's delegated
authorities under section 3 of the Natural Gas Act and Executive Order
10485, as amended by Executive Order 12038. Subpart B of this part
establishes filing requirements an applicant must follow to obtain
authorization under section 3 of the Natural Gas Act for the siting,
construction, operation, place of entry for imports or place of exit
for exports. Subpart C of this part establishes filing requirements an
applicant must follow to apply for a Presidential Permit, or an
amendment to an existing Presidential Permit, for border facilities at
the international boundary between the United States and Canada or
Mexico.
Sec. 153.2 Definitions.
(a) DOE/FE means the Department of Energy/Office of Fossil Energy
or its successor office.
(b) NBSIR means the National Bureau of Standards Information
Report.
(c) Person means an individual or entity as defined in 10 CFR
590.102(m).
Subpart B--Application Under Section 3
Sec. 153.5 Who shall apply.
(a) Applicant. Any person proposing to site, construct, or operate
facilities which are to be used for the export of natural gas from the
United States to a foreign country or for the import of natural gas
from a foreign country or to amend an existing Commission
authorization, including the modification of existing authorized
facilities, shall file with the Commission an application for
authorization therefor under subpart B of this part and section 3 of
the Natural Gas Act.
(b) Cross-reference. Any person applying under paragraph (a) of
this section to construct facilities at the borders of the United
States and Canada or Mexico must also simultaneously apply for a
Presidential Permit under subpart C of this part.
Sec. 153.6 Time of filing.
(a) An application filed pursuant to Sec. 153.5(a) shall state
whether DOE/FE authorization for the import/export of natural gas is
required and whether DOE/FE has granted all required authorizations for
the import/export of natural gas.
(b) If all required DOE/FE authorizations have not been obtained
prior to filing an application with the Commission, the applicant
agrees, as a condition of its authorization, to file a statement that
all required DOE/FE authorizations have been obtained prior to
applicant's construction of border facilities.
Sec. 153.7 Contents of application.
Every application under subpart B of this part shall include, in
the order indicated, the following:
(a) Information regarding applicant. (1) The exact legal name of
applicant;
[[Page 30447]]
(2) The name, title, and post office address, telephone and
facsimile numbers of the person to whom correspondence in regard to the
application shall be addressed;
(3) If a corporation, the state or territory under the laws of
which the applicant was organized, and the town or city where
applicant's principal office is located. If applicant is incorporated
under the laws of, or authorized to operate in, more than one state,
all pertinent facts should be stated. If applicant company is owned
wholly or in part by any foreign government entity, or directly or
indirectly subsidized by any foreign government entity; or, if
applicant company has any agreement for such ownership or subsidization
from any foreign government, provide full details of ownership and/or
subsidies.
(b) Summary. A detailed summary of the proposal, including
descriptions of the facilities utilized in the proposed export or
import of natural gas; state, foreign, or other Federal governmental
licenses or permits for the construction, operation, or modification of
facilities in the United States, Canada, or Mexico; and the status of
any state, foreign, or other Federal regulatory proceedings which are
related to the proposal.
(c) Statements. (1) A statement demonstrating that the proposal or
proposed construction is not inconsistent with the public interest,
including, where applicable to the applicant's operations and proposal,
a demonstration that the proposal:
(i) Will improve access to supplies of natural gas, serve new
market demand, enhance the reliability, security, and/or flexibility of
the applicant's pipeline system, improve the dependability of
international energy trade, or enhance competition within the United
States for natural gas transportation or supply;
(ii) Will not impair the ability of the applicant to render
transportation service in the United States at reasonable rates to its
existing customers; and,
(iii) Will not involve any existing contract(s) between the
applicant and a foreign government or person concerning the control of
operations or rates for the delivery or receipt of natural gas which
may restrict or prevent other United States companies from extending
their activities in the same general area, with copies of such
contracts; and,
(2) A statement representing that the proposal will be used to
render transportation services under Parts 157 or 284 of this chapter,
private transportation, or service that is exempt from the provisions
of the Natural Gas Act pursuant to sections 1(b) or 1(c) thereof. The
applicant providing transportation service under part 157 of this
chapter must represent that the pipeline's proposed increase in
capacity at an existing import/export point is not exclusively reserved
for Part 157 users and that all new service made available as a result
of a new or modified import/export facility will be under part 284 of
this chapter.
Sec. 153.8 Required exhibits.
(a) An application must include the following exhibits:
(1) Exhibit A. A certified copy of articles of incorporation,
partnership or joint venture agreements, and by-laws of applicant; the
amount and classes of capital stock; nationality of officers,
directors, and stockholders, and the amount and class of stock held by
each;
(2) Exhibit B. A detailed statement of the financial and corporate
relationship existing between applicant and any other person or
corporation;
(3) Exhibit C. A statement, including signed opinion of counsel,
showing that the construction, operation, or modification of facilities
for the export or the import of natural gas is within the authorized
powers of applicant, that applicant has complied with laws and
regulations of the state or states in which applicant operates;
(4) Exhibit D. If the proposal is for a pipeline interconnection to
import or export natural gas, a copy of any construction and operation
agreement between the applicant and the operator(s) of border
facilities in the United States and Canada or Mexico;
(5) Exhibit E. If the proposal is to import or export LNG, evidence
that an appropriate and qualified concern will properly and safely
receive or deliver such LNG, including a report containing detailed
engineering and design information. The Commission staff's ``Guidance
Manual for Environmental Report Preparation'' may be obtained from the
Commission's Office of Pipeline Regulation, 888 First Street, NE.,
Washington, DC 20426;
(6) Exhibit E-1. If the LNG import/export facility is to be located
at a site in zones 2, 3, or 4 of the Uniform Building Code's Seismic
Risk Map of the United States, or where there is a risk of surface
faulting or ground liquefaction, a report on earthquake hazards and
engineering. Guidelines are contained in ``Data Requirements for the
Seismic Review of LNG Facilities,'' NBSIR 84-2833. This document may be
obtained from the National Technical Information Service or the
Commission's Office of Pipeline Regulation, 888 First Street, NE.,
Washington, DC 20426;
(7) Exhibit F. An environmental report as specified in Sec. 380.3
of this chapter. Refer to Commission staff's ``Guidance Manual for
Environmental Report Preparation;'' and
(8) Exhibit G. A geographical map of a suitable scale and detail
showing the physical location of the facilities to be utilized for the
applicant's proposed export or import operations The map should
indicate with particularity the ownership of such facilities at or on
each side of the border between the United States and Canada or Mexico,
if applicable.
(b) The applicant may incorporate by reference any Exhibit required
by paragraph (a) of this section already on file with the Commission.
Sec. 153.9 Transferability.
(a) Non-transferable. Authorizations under subpart B of this part
and section 3 of the Natural Gas Act and related facilities shall not
be transferable or assignable without prior Commission authorization.
(b) Involuntary transfer. A Commission order granting such
authorization shall continue in effect temporarily for a reasonable
time in the event of the involuntary transfer of facilities used
thereunder by operation of law (including such transfers to receivers,
trustees, or purchasers under foreclosure or judicial sale) pending the
making of an application for permanent authorization and decision
thereon, provided notice is promptly given in writing to the Commission
accompanied by a statement that the physical facts relating to
operations of the facilities remain substantially the same as before
the transfer and as stated in the initial application for such
authorization.
Sec. 153.10 Authorization not exclusive.
No authorization granted pursuant to subpart B of this part and
section 3 of the Natural Gas Act shall be deemed to prevent the
Commission from granting authorization under subpart B to any other
person at the same general location, or to prevent any other person
from making application for such authorization.
Sec. 153.11 Supplemental Orders.
The Commission also may make, at any time subsequent to the
original order of authorization, after opportunity for hearing, such
supplemental orders implementing its authority under section 3 of the
Natural Gas Act as it may find necessary or appropriate.
[[Page 30448]]
Subpart C--Application for a Presidential Permit
Sec. 153.15 Who shall apply.
(a) Applicant. Any person proposing to construct, operate,
maintain, or connect facilities at the borders of the United States and
Canada or Mexico, for the export or import of natural gas to or from
those countries, or to amend an existing Presidential Permit, shall
file with the Commission an application for a Presidential Permit under
subpart C of this part and Executive Order 10485, as amended by
Executive Order 12038.
(b) Cross-reference. Any person applying under paragraph (a) of
this section for a Presidential Permit for the construction and
operation of border facilities must also simultaneously apply for
authorization under subpart B of this part.
Sec. 153.16 Contents of application.
(a) Cross-reference. The submission of information under
Secs. 153.7 and 153.8 of subpart B of this part shall be deemed
sufficient for purposes of applying for a Presidential Permit or an
amendment to an existing Presidential Permit under subpart C of this
part for the construction and operation of border facilities.
(b) Amendment not proposing construction. An applicant proposing to
amend the article(s) of an existing Presidential Permit (other than
facilities aspects) must file information pursuant to Sec. 153.7(a) and
a summary and justification of its proposal.
Sec. 153.17 Effectiveness of Presidential Permit.
A Presidential Permit, once issued by the Commission, shall not be
effective until it has been accepted by the highest authority of the
Permittee, as indicated by Permittee's execution of a Testimony of
Acceptance, and a certified copy of the accepted Presidential Permit
and the executed Testimony of Acceptance has been filed with the
Commission.
Subpart D--Paper Media and Other Requirements
Sec. 153.20 General rule.
(a) Number of copies. Applications under subpart B of this part
must be submitted to the Commission in an original and 7 conformed
paper copies. Applications under subpart C of this part must be
submitted to the Commission in an original and 9 conformed paper
copies.
(b) Certification. All applications must be signed in compliance
with Sec. 385.2005 of this chapter.
(1) The signature on an application constitutes a certification
that: The signer has read the filing signed and knows the contents of
the paper copies; and, the signer possesses the full power and
authority to sign the filing.
(2) An application must be signed by one of the following:
(i) The person on behalf of whom the application is made;
(ii) An officer, agent, or employee of the governmental authority,
agency, or instrumentality on behalf of which the filing is made; or,
(iii) A representative qualified to practice before the Commission
under Sec. 385.2101 of this chapter who possesses authority to sign.
(c) Where to file. The paper copies and an accompanying transmittal
letter must be submitted in one package to: Office of the Secretary,
Federal Energy Regulatory Commission, Washington, DC 20426.
Sec. 153.21 Conformity with requirements.
(a) General Rule. Applications under subparts B and C of this part
must conform with the requirements of this part.
(b) Rejection of applications. If an application does not conform
to the requirements of this part, the Director of the Office of
Pipeline Regulation will notify the applicant of all deficiencies.
Deficient applications not amended within 20 days of the notice of
deficiency, or such longer period as may be specified in the notice of
deficiency, will be rejected by the Director of the Office of Pipeline
Regulation as provided by Sec. 385.2001(b) of this chapter. Copies of a
rejected application will be returned. An application which relates to
an operation, service, or construction concerning which a prior
application has been filed and rejected, shall be docketed as a new
application. Such new application shall state the docket number of the
prior rejected application.
Sec. 153.22 Amendments and withdrawals.
Amendments to or withdrawals of applications must conform to the
requirements of Secs. 385.215 and 385.216 of this chapter.
Sec. 153.23 Reporting requirements.
Each person authorized under this part 153 that is not otherwise
required to file information concerning the start of construction or
modification of import/export facilities, the completion of
construction or modification, and the commencement of service must file
such information with the Commission within 10 days after such event.
Each person, other than entities without pipeline capacity, must also
report by March 1 of each year the estimated peak day capacity and
actual peak day usage of its import/export facilities.
[FR Doc. 97-14418 Filed 6-3-97; 8:45 am]
BILLING CODE 6717-01-P