[Federal Register Volume 66, Number 33 (Friday, February 16, 2001)]
[Rules and Regulations]
[Pages 10573-10574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3965]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 352, 357, and 385

[Docket No. RM99-10-001; Order No.620-A]


Revisions to and Electronic Filing of the FERC Form No. 6 and 
Related Uniform Systems of Accounts

Issued February 12, 2001.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule; order on rehearing.

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SUMMARY: The Society for the Preservation of Oil Pipeline Shippers 
(SPOPS) filed a request for clarification and rehearing of the 
Commission's Final Rule in Order No. 620, Revisions to and Electronic 
Filing of the FERC Form No. 6 and Related Uniform Systems of Accounts. 
The Commission provides clarification and denies rehearing.

ADDRESSES: Office of the Secretary, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT:
Mary C. Lauermann (Technical Information), Office of the Executive 
Director, 888 First Street, NE., Washington, DC 20426, (202) 208-0087
Julia A. Lake (Legal Information), Office of the General Counsel, 888 
First Street, NE., Washington, DC 20426, (202) 208-2019
David H. Ulevich (Page 700 Information), Office of Markets, Tariffs and 
Rates, 888 First Street, NE., Washington, DC 20426, (202) 208-0678.

SUPPLEMENTARY INFORMATION:

I. Introduction

    In this order, the Commission addresses a request for rehearing and 
clarification of Order No. 620, the Final Rule on the revisions to and 
electronic filing of the FERC Form No. 6 and related uniform systems of 
accounts, issued on December 13, 2000.\1\ In Order No. 620, the 
Commission amended Parts 352, 357, and 385 \2\ of its regulations in 
order to better meet current and future regulatory requirements and 
industry needs; be more consistent with current Generally Accepted 
Accounting Principles; and to provide for the electronic filing of FERC 
Form No. 6. Order No. 620 is part of the Commission's ongoing program 
to update and eliminate burdensome and unnecessary accounting and 
reporting requirements. These changes will reduce, by about 25 percent, 
the burden on regulated companies for maintaining and reporting 
information under the Commission's regulations.
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    \1\ 65 FR 81335 (Dec. 26, 2000); III FERC Stats. & Regs. para. 
31,115 (Dec. 13, 2000).
    \2\ 18 CFR Parts 352, 357, and 385.
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    For the reasons stated below, the Commission provides clarification 
and denies rehearing.

II. Background

    FERC Form No. 6, ``Annual Report of Oil Pipeline Companies,'' 
collects information on an annual basis to enable the Commission to 
carry out its responsibilities associated with the regulation of oil 
pipeline companies under the Interstate Commerce Act.
    Order No. 620, among other things, revised FERC Form No. 6 page 
700, ``Annual Cost of Service Based Analysis Schedule.'' Page 700 
provides basic cost-of-service and throughput information that allows a 
shipper to compare proposed changes in a pipeline's rates against the 
change in level of the pipeline's cost of service and the change in the 
pipeline's average company-wide barrel-mile cost.
    On January 12, 2001, the Society for the Preservation of Oil 
Pipeline Shippers (SPOPS) filed a timely request for rehearing and 
clarification of Order No. 620. SPOPS seeks rehearing of the Final 
Rule's requirement that pipelines report total jurisdictional revenues 
on Line 10 of page 700 rather than total company revenues. Also, SPOPS 
asks the Commission to clarify the Final Rule regarding what cost-of-
service information must be reported on page 700.
    Specifically, SPOPS argues that the Final Rule's requirement that 
oil pipelines report total jurisdictional revenues on Line No. 10 of 
page 700 results in a mismatch between the costs and revenues reported 
on this page. According to SPOPS, the Final Rule permits oil pipeline 
companies to exclude revenues earned from either non-carrier services 
or non-jurisdictional carrier services which could result in an 
understatement of company revenues. SPOPS also argues that pipelines 
will have an enhanced opportunity to engage in an allocation shell game 
if only jurisdictional costs and revenues are reported on page 700.
    SPOPS requests that the Commission clarify what cost-of-service 
information is to be reported on page 700: cost-of-service data related 
to jurisdictional operations or total company operations including non-
jurisdictional activities. SPOPS cites the instructions listed on page 
700 that were effective prior to the issuance of Order No. 620 which 
required the total cost-of-service to be computed on a total company 
basis consistent with the Commission's Opinion No. 154-B, et al., 
methodology. SPOPS argues total company cost-of-service should be 
reported on page 700 although it acknowledges that pipelines have been 
reporting cost-of-service data on a jurisdictional basis.
    The Association of Oil Pipelines (AOPL) filed an answer on January 
29, 2001. AOPL essentially responds that Order No. 620, and page 700, 
properly focus on jurisdictional revenues.
    Rule 213(a)(2) of the Commission's Rules of Practice and Procedure, 
18 CFR 385.213(a)(2) (2000), prohibits answers unless otherwise ordered 
by the decisional authority. We find that good cause exists to allow 
AOPL's answer.

III. Discussion

    We disagree with SPOPS's assertion that revised page 700, ``Annual 
Cost of Service Based Analysis Schedule,'' of FERC Form No. 6 results 
in a mismatch between the costs and revenues reported on this schedule, 
or that pipelines will engage in an allocation shell game if only 
jurisdictional costs and revenues are reported on page 700.
    In the Notice of Proposed Rulemaking (NOPR) issued in this 
proceeding, the Commission proposed to revise Instruction No. 3 of page 
700 to require oil pipeline companies to report total company revenues 
so that it would be consistent with the total cost of service reported 
on this page.\3\ SPOPS had asserted in its comments to the NOPR that 
the Commission should require pipelines to report total company costs 
and total company revenues on page 700.
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    \3\ 65 FR 50376 (Aug. 17, 2000), IV FERC Stats. & Regs. para. 
32,553 at 33,961 (July 27, 2000).
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    In its comments on the NOPR, AOPL explained that our proposed 
revision to Instruction No. 3 would in fact result in an inconsistency. 
That is, the total cost of service computed using the Opinion No. 154-B 
methodology does not equate to total company costs; rather it 
represents the aggregate cost of the pipeline's jurisdictional 
services. While AOPL did not object to reporting total

[[Page 10574]]

company revenues on page 700, it argued that only jurisdictional 
operating revenues should be reported on this page. In the Final Rule, 
the Commission stated that it agreed with AOPL's comment and revised 
Line No. 10 of page 700 to require pipelines to report ``Total 
Interstate Operating Revenues.''
    On rehearing, SPOPS argues that by requiring pipelines to report 
only jurisdictional cost of service and revenues on page 700, it will 
give pipelines an enhanced opportunity to mis-allocate jurisdictional 
costs and revenues in favor of the pipelines.
    The Commission never intended in the Final Rule to have a pipeline 
report its non-jurisdictional costs on page 700. Rather, page 700 was 
to be a preliminary screening tool that would permit a shipper to 
compare proposed changes in rates against the pipeline's jurisdictional 
cost of service.\4\ Page 700, as revised by Order No. 620, results in 
the proper matching of FERC jurisdictional costs and revenues for 
shippers to use in assessing rate proposals. Accordingly, we take this 
opportunity to clarify Order No. 620 that the cost-of-service and 
revenue data reported on page 700 will be the cost of service and 
revenues related to FERC jurisdictional services.
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    \4\ Order No. 571, 59 FR 59137 (Nov. 16, 1994); FERC Stats. & 
Regs. [Regulation Preambles January 1991-June 1996] para. 31,006 at 
31,168 (Oct. 28, 1994).
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    In response to SPOPS's concern that the Final Rule will enable 
pipelines to improperly allocate costs and revenues in determining data 
to be reported on page 700, we have adopted measures to ensure 
consistency in how a pipeline computes the information it reports on 
page 700. If a pipeline makes major changes in its application of the 
Opinion No. 154-B methodology, it must disclose on page 700 that it has 
done so and recalculate the prior year's cost of service data to 
reflect the change so that valid comparisons of data can be made from 
one year to the next.\5\
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    \5\ See Instruction No. 6 of revised FERC Form No. 6 page 700.
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    Moreover, in Order No. 620, we required pipelines to maintain 
workpapers that fully support the data reported on page 700 including 
but not limited to the total cost-of-service calculations and all of 
its associated components. This includes allocations of costs and 
revenues between carrier and non-carrier, jurisdictional and non-
jurisdictional facilities/services, and between interstate and 
intrastate services, assumptions made for the Opinion No. 154-B 
calculations and cross-references to underlying source documents. In 
addition, Order No. 620 provides that the Commission or its staff may 
request that a pipeline make its workpapers available.\6\ Given these 
safeguards, SPOPS's claim of possible manipulation of data reported on 
page 700 is speculative at best.
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    \6\ 65 FR 81335 (Dec. 26, 2000); III FERC Stats. & Regs. para. 
31,115 at 31,960-31,961 (Dec. 13, 2000). Also, see Instruction No. 7 
of FERC Form No. 6 page 700.
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The Commission Orders

    SPOPS's request for rehearing of Order No. 620 is denied.

    By the Commission.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 01-3965 Filed 2-15-01; 8:45 am]
BILLING CODE 6717-01-P