[Federal Register Volume 69, Number 112 (Thursday, June 10, 2004)]
[Notices]
[Pages 32526-32530]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12920]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP00-463-006]


Williston Basin Interstate Pipeline Co.

Issued June 1, 2004.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of request for comments; order on remand.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
requesting comments on its policy concerning a shipper's retention of 
its discounted rates when a secondary point is used, as that policy has 
been modified by the decisions in Colorado Interstate Gas Co., 95 FERC 
] 61,321 (2001) and Granite State Transmission Co., 96 FERC ] 61,273 
(2001).

DATES: Initial comments are due August 9, 2004.
    Reply comments are due August 30, 2004.

ADDRESSES: Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov. Commenters unable to 
file comments electronically must send an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street, NE., Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Wayne Guest, Office of Markets, Tariffs and Rates, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 502-6475.
Michael Goldenberg, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 502-8685.
Michael Miller (concerning information collection), Office of the 
Executive Director, Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426, (202) 502-8415.

SUPPLEMENTARY INFORMATION:

Before Commissioners: Pat Wood, III, Chairman; Nora Mead Brownell, 
Joseph T. Kelliher, and Suedeen G. Kelly.
    1. On February 20, 2004, in Williston Basin Interstate Pipeline Co. 
v. FERC,\1\ the United States Court of Appeals for the District of 
Columbia Circuit (Court) vacated the Commission's decisions in 
Williston Basin Interstate Pipeline Co.\2\ The Commission's decisions 
addressed Williston Basin Interstate Pipeline Company's (Williston) 
filing to comply with Order Nos. 637, 587-G and 587-L. The Court found 
that the Commission had failed to present an adequate explanation for 
its ruling directing Williston to adopt the policy set forth by the 
Commission in Colorado Interstate Gas Co. (CIG) \3\ concerning 
shippers' ability to retain their primary point discounts when they or 
a replacement shipper use secondary points.
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    \1\ 358 F.3d 45 (D.C. Cir. 2004).
    \2\ 98 FERC ] 61,212 (2002), reh'g, 99 FERC ] 61,327 (2002).
    \3\ 95 FERC ] 61,321 (2001).
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    2. The Court's decision raises questions concerning the 
Commission's discount policy on a generic basis, as well as the effect 
of the policy on individual pipelines. In order to better resolve the 
issues raised in this proceeding, the Commission is requesting 
additional comments on its policy concerning a shipper's retention of 
its discounted rates when a secondary point is used, as that policy has 
been modified by the decisions in Colorado Interstate Gas Co. (CIG) \4\ 
and Granite State Transmission Co.\5\ (Granite State). The Commission 
recognizes that the resolution of the issues in this proceeding will 
have implications for other pipelines. Therefore, the Commission will 
permit late intervention in this proceeding to permit comments from all 
interested parties.
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    \4\ 95 FERC ] 61,321 (2001).
    \5\ 96 FERC ] 61,273 (2001).
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I. Background

A. The Commission's Discount Policy

1. The Discount Policy Prior to Order No. 636
    3. As part of Order No. 436, which commenced the transition to 
open-access transportation, the Commission adopted regulations 
permitting pipelines to engage in selective discounting based on the 
varying demand elasticities of the pipeline's customers.\6\ The 
Commission explained that these selective discounts would benefit all 
customers, including customers that did not receive the discounts, 
because the discounts allow the pipeline to maximize throughput and 
thus spread its fixed costs across more units of service.\7\ The 
Commission's adoption of these regulations was upheld in Associated Gas 
Distributors v. FERC (AGD I).\8\
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    \6\ Regulation of Natural Gas Pipelines After Partial Wellhead 
Decontrol, FERC Stats. & Regs. Regulations Preambles 1982-1985 ] 
30,665 at 31,543-45 (1985); Order No. 436-A, FERC Stats. & Regs. 
Regulations Preambles 1982-1985 ] 30,675 at 31,677-80 (1985). 18 CFR 
284.10(c)(5).
    \7\ Order No. 436 at 31,544.
    \8\ 824 F.2d 981, 1010-1012 (D. C. Cir. 1987).
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    4. In the Rate Design Policy Statement \9\ and a number of section 
4 rate cases,\10\ the Commission held that if a pipeline grants a 
discount in order to meet competition, the pipeline is not required in 
its next rate case to design its rates based on the assumption that the 
discounted volumes would flow at the maximum rate. As the Commission 
explained, if the pipeline must assume in the next rate case that 
volumes it has transported at discounted rates would still be 
transported if the maximum rate were charged, the pipeline might be 
unable to recover its cost of

[[Page 32527]]

service.\11\ Therefore, in order to avoid a disincentive to 
discounting, the Commission has stated that, in the next rate case 
after giving discounts, the pipeline is permitted to reduce the 
discounted volumes used to design its rates so that, assuming market 
conditions require it to continue giving the same level discounts that 
it gave during the test period when the new rates are in effect, the 
pipeline will be able to recover 100 percent of its cost of service.
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    \9\ 47 FERC ] 61,295 at 62,056-57 (1989).
    \10\ See, e.g., Southern Natural Gas Co, 65 FERC ] 61,347 at 
62,829-62,833 (1993), reh'g denied, 67 FERC ] 61,155 at 61,456-
61,460 (1994); Williston Basin Interstate Pipeline Co., 67 FERC ] 
61,137 at 61,377-61,282 (1994); Panhandle Eastern Pipe Line Co., 71 
FERC ] 61,228 at 61,866-61,871 (1995) (Opinion No. 395); Northwest 
Pipeline Corp., 71 FERC ] 61,253 at 62,007-61,009 (1995); Panhandle 
Eastern Pipe Line Co., 74 FERC ] 61,109 at 61,399-61,408 (1996) 
(Opinion No. 404); Williams Natural Gas Co., 77 FERC ] 61,277 at 
62,205-61,207 (1996), reh'g denied, 80 FERC ] 61,158 at 61,189-
61,190; Iroquois Gas Transmission System, L.P., 84 FERC ] 61,086 at 
61,478 (1998), reh'g denied, 86 FERC ] 61,261 (1999); Williston 
Basin Interstate Pipeline Co., 84 FERC ] 61,266 at 61,401-61,402 
(1998); Northwest Pipeline Corp., 87 FERC ] 61,266 at 62,077 (1999); 
and Trunkline Gas Co., 90 FERC ] 61,017 at 61,084-61,096 (2000).
    \11\ 47 FERC ] 61,295 at 62,056. The Commission referred to the 
example provided by the Court in AGD I illustrating how the pipeline 
might be unable to recover its cost of service if volumes that were 
obtained because of a discount were projected as volumes that would 
be transported at the maximum rate in the pipeline's next rate case. 
824 F.2d at 1012.
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2. The Discount Policy After Order No. 636
    5. In Order No. 636, requiring the unbundling of the pipeline's 
sales and transportation services, the Commission adopted significant 
changes to the structure of the services provided by natural gas 
pipelines in order to foster greater competition in natural gas 
markets. As part of these changes, the Commission adopted the capacity 
release program that permits holders of firm transportation rights on a 
pipeline to resell those rights to other shippers. As the Commission 
explained in Order No. 636-A, the capacity release mechanism is 
intended to create a robust secondary market for capacity where the 
pipeline's direct sale of its capacity must compete with its firm 
shippers' offers to release their capacity. The Commission stated that 
this competition would help ensure that customers pay only the 
competitive price for the available capacity.\12\ In UDC v. FERC,\13\ 
the Court recognized that capacity release is intended to develop an 
active secondary market with holders of unutilized firm capacity rights 
reselling those rights in competition with capacity offered directly by 
the pipeline. In addition to promoting competition, capacity release 
was a means for firm capacity holders to mitigate the shift to the SFV 
rate design.
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    \12\ See Order No. 636-A, FERC Stats & Regs at 30,553 and 
30,556.
    \13\ 88 F.3d 1105, 1149 (DC Cir. 1996).
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    6. Order No. 636 also adopted a policy giving firm shippers the 
right to use, on a secondary basis, receipt and delivery points other 
than the primary points listed in their contracts. This permits them to 
receive and deliver gas to any point within the firm capacity rights 
for which they pay. As the Court recognized in INGAA v. FERC,\14\ Order 
No. 636's establishment of flexible point rights, as well as 
segmentation, was intended to enhance the value of firm capacity and 
promote competition in the secondary market between firm shippers 
releasing capacity and pipelines, as well as between releasing shippers 
themselves.
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    \14\ 285 F.3d 18, 36 (DC Cir. 2002).
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    7. In the individual pipeline restructuring proceedings to comply 
with Order No. 636, the question arose whether a releasing shipper 
paying a discounted rate may retain that discount if its replacement 
shipper uses points other than the releasing shipper's primary points. 
In El Paso Natural Gas Co.,\15\ the Commission held that if the 
pipeline's contract with the releasing shipper limited its discount to 
its primary points, the pipeline could require the releasing shipper to 
pay the maximum rate whenever its replacement shipper used a different 
point. The Commission explained that it permits, but does not require, 
pipelines to offer discounts below the maximum rate, and therefore the 
pipeline could limit a discount to a shipper's primary point. The 
releasing shipper, rather than the replacement shipper, would be 
responsible for paying any difference between the maximum rate and the 
replacement shipper's rate, because the replacement shipper's 
reservation charge is established through the bidding or other 
procedures set forth in the pipeline's tariff. The Commission also 
stated that the releasing shipper could protect itself by putting a 
condition in the release preventing the use of alternate points.
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    \15\ 62 FERC ] 61,311 at 62,990-91 (1993).
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    8. In Order No. 637, the Commission took additional actions to 
enhance flexibility and competition in the secondary market. Among 
other things, Order No. 637 revised the Part 284 regulations to require 
pipelines to permit a firm shipper to segment its capacity either for 
its own use or for the purpose of capacity release, where operationally 
possible. While Order No. 637 did not change the Commission's policy on 
selective discounting, the Commission stated that the policy of 
permitting a pipeline to limit a shipper's discount to its primary 
point needed to be reexamined in the compliance filings, as part of the 
examination of restrictions on capacity release and segmentation. The 
Commission explained in Order No. 637-B \16\ that it was concerned that 
requiring a releasing shipper with a discounted rate to pay the maximum 
rate in order to effectuate a segmented or release transaction could 
interfere with the competition created by capacity release.
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    \16\ 92 FERC at 61,167-68.
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    9. CIG was the first Order No. 637 compliance proceeding where the 
Commission addressed how to resolve the tension between the 
Commission's selective discounting policy and the Commission's goal in 
adopting its segmentation and flexible point right policies of 
enhancing competition. The Commission explained that if a shipper 
always loses its primary point discount and is always required to pay 
the maximum rate when it uses a secondary point or segments its 
capacity, the shipper will be less likely to engage in these activities 
and competition will be restricted. On the other hand, the Commission 
recognized that if a shipper always retains its discount when it 
utilizes secondary points, discounts could be allowed at non-
competitive points. Therefore, the Commission refined its discount 
policy to provide that if a pipeline is discounting its primary 
capacity at a point, a shipper that segments to that point or uses that 
point on a secondary basis should also receive that discount if it is 
similarly situated to the shipper receiving the discount. In Granite 
State, the Commission amended its holding in CIG to require pipelines 
to process shipper requests to retain discounts in no longer than two 
hours from the time the request is submitted.

B. The Williston Decisions

    10. In Williston's Order No. 637 compliance filing, the Commission 
required Williston to implement the discount policies set forth in CIG/
Granite State. On rehearing, Williston argued that the CIG/Granite 
State discount policy undercuts its ability to target firm discounts to 
specific points in order to encourage the shipper to flow gas in a 
manner that will permit Williston to maximize the capacity of its 
reticulated system. Williston also argued that the policy would allow a 
firm shipper to obtain a long-term discount for an underutilized 
portion of its system and then engage in short-term discounted 
transactions at different receipt and delivery points. Williston 
asserted that this could reduce interruptible throughput in heavily 
utilized portions of its system while failing to increase flow at the 
point where the discount was originally given and where additional 
throughput was needed. Williston also argued that the policy is harmful 
because it limits its ability to grant discounts to obtain long-term 
firm service commitments and that application of the policy is not 
appropriate on its reticulated system.
    11. The Commission concluded that shippers could not misuse the 
discounts in the manner described by Williston because, under the CIG/
Granite State policy, the firm shipper changing points would pay the 
greater of its own discounted rate or the prevailing

[[Page 32528]]

discount at the alternate point. Thus, the Commission stated, the 
shipper on the less utilized portion of the system could not shift its 
deeper discount to the more heavily utilized portion of the system. The 
Commission acknowledged that this new policy may require changes in 
long-term contracting, but stated that the policy change was 
nevertheless necessary to resolve the conflict between enhancing 
competition by adopting segmentation and flexible point rights and 
continuing to permit pipelines to restrict discounts to specific 
shippers at specific points.
    12. The Court vacated the Commission's decisions in Williston on 
essentially two grounds. First, the Court held that the Commission had 
not adequately addressed whether the application of the CIG/Granite 
State policy in this case was appropriate in light of Williston's 
individual circumstances, particularly the reticulated nature of its 
system. The Court found that the Commission had not addressed 
Williston's contention that the policy could adversely affect its 
ability to use targeted discounts to manage gas flows across its 
system, in order to maximize its capacity and system utilization. 
Second, the Court held that the Commission had not adequately justified 
the general policy established in CIG/Granite State concerning 
retention of discounts when secondary points are used. The Court 
observed that the purpose of selective discounting is to increase 
throughput by allowing price discrimination in favor of demand-elastic 
customers, but a pipeline is unlikely to be able to increase throughput 
by selective discounting if capacity at secondary points can be 
transferred readily among shippers through resale at a discounted rate. 
The Court stated that ``economic theory tells us price discrimination, 
of which selective discounting is a species, is least practical where 
arbitrage is possible `` that is, where a low-price buyer can resell to 
a high price buyer. . . . Yet this is precisely what the Commission's 
policy would appear not only to allow but to encourage.'' 358 F.3d at 
50. Therefore, the Court was concerned that the CIG/Granite State 
policy undermines the benefits of selective discounting.

II. Discussion

    13. This case raises important issues concerning the relationship 
between the Commission's discounting policy and its policies concerning 
capacity release, segmentation, and flexible point rights. As explained 
above, the Commission's regulations permitting selective discounting 
were first adopted as part of the Commission's regulatory policies as 
set forth in Order No. 436 and the Rate Design Policy Statement. Since 
that time, in Order Nos. 636 and 637, the Commission has moved toward a 
more competitive model, using a blend of approaches to approximate the 
results of a competitive market. The Commission has sought to create 
choice and competition where incentives and lack of market power allow 
for it, and to retain a cost-based approach where market power is too 
strong to allow a more market-oriented approach. Capacity release, 
segmentation, and flexible point rights are features of the 
Commission's more competitive model, while selective discounting is an 
outgrowth of the regulatory model.
    14. Because the policies were developed at different times under 
different regulatory and economic models, selective discounting may not 
always be entirely compatible with the competitive measures adopted in 
Order Nos. 636 and 637. For example, the value of selective discounting 
to the captive customer has been to some extent replaced by the captive 
customer's ability to receive discounted capacity on the secondary 
market. The purpose of capacity release and flexible point rights is to 
encourage competition between the sale of the pipeline's own capacity 
and capacity release. The availability of capacity in the secondary 
market reduces the pipeline's sale of interruptible service, and may 
cause a reallocation of costs to firm customers in the next rate case. 
Thus, capacity release itself has undercut the ability of pipelines to 
use selective discounting both to obtain increased throughput from 
shippers with competitive alternatives and to maximize the revenue it 
obtains from each unit of throughput at the expense of inelastic or 
captive customers. However, capacity release gives firm customers a 
more direct way to reduce their costs. By releasing capacity in the 
secondary market, the firm shipper, including a captive customer, 
receives immediate payment for unused capacity, rather than waiting for 
the pipeline to file a new rate case to reflect throughput it has 
received through discounts.\17\
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    \17\ At the time the discount policy was originally adopted, 
pipeline rates were set every three years under the terms of the 
Purchased Gas Adjustment (PGA) clause in their tariff. Order No. 636 
eliminated the three year rate review and the PGA clause, and 
section 4 rate cases are filed much less frequently by the 
pipelines.
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    15. Thus, as the Commission recognized in CIG, there is a tension 
between the policy of permitting pipelines to restrict discounts to 
specific shippers at specific points and the goal of enhancing 
competition through segmentation and flexible point rights. Placing 
restrictions on discounted transactions could interfere with 
competition created through released capacity. A shipper that uses 
flexible point rights to move to a secondary point or segments its 
capacity will require the use of different points than the primary 
points contained in the contract. Replacement shippers frequently need 
to use points different from those of the releasing shippers, and 
neither the releasing shipper nor the replacement shipper may be 
willing to absorb the differential between the discounted and maximum 
rate. If the releasing and/or replacement shipper is always required to 
pay the maximum rate when a secondary point is needed, competition will 
be restricted, but if the Commission requires the discount to apply to 
all points along the path, discounts may be given for other than 
competitive reasons.
    16. In the CIG decision, the Commission attempted to strike a 
balance between these two extremes, so that a replacement or segmenting 
shipper could retain a discount if it was moving to a point where a 
discount was being given to a similarly situated shipper. Therefore, 
the Commission adopted a rebuttable presumption that a shipper 
segmenting, releasing, or utilizing specific points on a secondary 
basis will receive a discount at those points only if the pipeline is 
already granting discounts to those points under other firm or 
interruptible service agreements. The Commission intended that this 
balancing would address pipeline concerns that a discount necessary to 
meet competition at one point would not be appropriate or necessary at 
another point where conditions were different.
    17. In view of these concerns, and the issues raised by the Court's 
decision in Williston, the Commission has determined in this proceeding 
to reexamine both (1) the general policy established in CIG/Granite 
State concerning retention of discounts when secondary points are used 
and (2) the application of that policy in the specific circumstances of 
Williston's reticulated system. Because the Commission will be using 
this proceeding to consider general policy matters applicable in other 
proceedings, the Commission will permit any interested party to 
intervene in this proceeding. To assist the Commission in this 
reevaluation, the Commission seeks responses from interested parties on 
the following issues.

[[Page 32529]]

A. The General Policy Issue

    18. Parties should state their views on whether the Commission 
should reaffirm the general policy established in CIG/Granite State 
concerning retention of discounts when secondary points are used, 
return to its previous policy as set forth in El Paso Natural Gas 
Co.,\18\ or adopt some other alternative policy. One alternative 
policy, for example, could permit a releasing shipper to retain its 
discount if the release is for one month or less. This alternative 
would permit the releasing shipper to release capacity in competition 
with the pipeline's sale of interruptible and short-term firm capacity, 
without allowing the shifting of a long-term firm discount to another 
point on a long-term basis. The Commission seeks comments on this 
alternative.
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    \18\ 62 FERC ] 61,311 at 62,990-91 (1993).
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    19. Further, the Commission is interested in comments on the extent 
to which the CIG/Granite State policy does, in fact, undercut the 
benefits of selective discounting for captive customers, and seeks 
comments on the following issues within 60 days of the date of 
publication of this order in the Federal Register. Parties may also 
file reply comments within 80 days of the date of publication of this 
order in the Federal Register.
    (A) The Court was concerned that ``a pipeline is unlikely to be 
able to increase throughput by selective discounting * * * if capacity 
at secondary points can be transferred readily among shippers through 
resale at the discounted rate.'' 358 F.3d at 50. Under the CIG/Granite 
State policy, the pipeline need only permit a releasing shipper with a 
discount at its primary point to retain that discount in connection 
with its replacement shipper's transaction at a secondary point, if (1) 
the pipeline has given another shipper at the secondary point a 
discount due to its competitive alternatives, and (2) the replacement 
shipper is similarly situated, i.e., also has competitive alternatives. 
Given these limitations on the right of the releasing shipper to retain 
its discount, does the CIG/Granite State policy significantly increase 
the opportunities for arbitrage?
    (B) Is there less of an incentive under the CIG/Granite State 
policy for pipelines to offer discounts to attract additional 
throughput? Pipeline commenters should explain how the policy has 
affected their discounting practices, and provide detailed information 
concerning how many discounts were given prior to adoption of the 
policy and after its adoption, and how many discount firm contracts are 
in effect on their systems. Specifically, pipeline commenters should 
provide information concerning the term of the agreement, the total CD 
involved, and the receipt and delivery points for each discount given 
in the year prior to the adoption of the CIG/Granite State policy, and 
that same information for the year after adoption of the policy. In 
addition, pipeline commenters should state how many requests they have 
received from shippers, pursuant their tariff provisions implementing 
the CIG/Granite State discount policy, seeking to retain discounts when 
a different point is used, and how many such requests have been 
granted. For those requests for discounts that were denied, pipeline 
commenters should supply the reasoning used and whether the transaction 
was consummated without a discount. Pipeline commenters should also 
provide information on how selective discounts were used for system 
management prior to the adoption of the policy and whether their 
ability to use selective discounts for this purpose has been harmed by 
the policy. Provide examples.
    (C) Shipper commenters should explain how the CIG/Granite State 
policy has affected their release of capacity, and provide information 
concerning release of discounted capacity prior to adoption of the 
policy and after its adoption. Shipper commenters should explain 
whether and why they were discouraged from engaging in capacity release 
as a result of the previous policy and the extent to which the CIG/
Granite State policy has reduced such disincentives.
    (D) Explain whether the impact of the CIG/Granite State policy is 
different on reticulated systems than on long line systems.

B. Application of the Policy to Williston

    20. Williston has asserted that the application of the CIG/Granite 
State policy to its system is not appropriate because of the 
reticulated nature of its system. Therefore, if the Commission upholds 
the policy on a generic basis, it will also consider whether the nature 
of Williston's system supports applying the policy to Williston on a 
modified basis.
    (A) In order to aid the Commission in that determination, the 
Commission directs Williston to provide the following information 
within 60 days of the date of publication of this order in the Federal 
Register:
    1. For the year before implementation of the CIG/Granite State 
policy on your system, list each discount that you granted to firm 
shippers. Provide information concerning the term of the agreement, the 
total CD involved, and the receipt and delivery points. Explain the 
benefits to system management that resulted from each discount. To the 
extent that any of these discounts were intended to increase flows on 
particular parts of the system, identify each discount and explain on 
what parts of the system the discount was intended to increase flow.
    2. Provide this same information for the year following 
implementation of the CIG/Granite State policy on the system. Explain 
how any transfer of discounts to secondary points that occurred 
pursuant to the CIG/Granite State policy harmed system management. 
Explain how shippers were able to use the discounts granted on less 
heavily utilized portions of the system to displace volumes of gas 
moving on other more heavily utilized portions of the system. Explain 
how this could occur in view of the fact that the Commission's policy 
requires that a discount be granted at another point only if a discount 
has already been granted to a similarly situated shipper at that point, 
i.e., the point has already been designated by the pipeline as a point 
where competition requires a discount.
    3. For the year before and the year after Williston implemented the 
CIG/Granite State policy, list each discount you gave to interruptible 
shippers, including the term of each agreement and the receipt and 
delivery points.
    4. In the Williston decision, the Court referred to Williston's 
concern that under the CIG/Granite State policy, a shipper with a long-
term discount to an underutilized portion of the system could use the 
discount instead either to reduce its own shipments or displace those 
of other shippers on more heavily utilized portions of the system. 
Provide specific examples of how this would occur and indicate whether 
this has in fact ever occurred. If it has in fact occurred, be specific 
as to the customer(s), the term of the agreement, the discount rate, 
and the CD involved.
    5. Provide information on all instances, after implementation of 
the CIG/Granite State policy, where Williston refused to grant a firm 
shipper a discount based on the concern that the shipper would be able 
to shift the discount to another point, thereby causing Williston to 
lose business.
    (B) Within 80 days of the date of publication of this order in the 
Federal Register, other interested parties may reply to the information 
submitted by Williston regarding how the CIG/

[[Page 32530]]

Granite State policy should be applied to Williston.

C. Administrative Findings

Information Collection Statement
    21. As discussed above, the Commission seeks comment on whether it 
should reaffirm the general policy established in CIG/Granite State 
concerning retention of discounts when secondary points are used, 
return to its previous policy as set forth in El Paso Natural Gas Co., 
or adopt some other policy. In order to make a determination the 
Commission seeks specific information from pipelines on their 
discounting practices. Because the Commission is asking identical 
questions to obtain information from ten or more respondents, it is 
seeking approval of this data request from the Office of Management and 
Budget.
    22. The collection of information set forth below has been 
submitted to the Office of Management and Budget (OMB) for review under 
section 3507(d) of the Paperwork Reduction Act of 1995.\19\ OMB's 
regulations require OMB to approve certain information collection 
requirements imposed by agency rule.\20\ The Commission identifies the 
information provided for under this order as FERC-605, Discount 
Practice Reports.
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    \19\ 44 U.S.C. 3507(d)(2000)).
    \20\ 5 CFR 1320.12 (2003).

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                                                 Number of        Number of        Hours per       Total annual
               Data collection                  respondents       responses         response          hours
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FERC-605....................................             100                1                3              300
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    Information Collection Costs: The Commission seeks comments on the 
cost to comply with this data request. It has projected the average 
annualized cost of all respondents to be: $15,459. (300 hrs. / 2,080 
hours x $107,185) or 300 @ $52.00 an hour.
    23. OMB's regulations require it to approve certain information 
collection requirements imposed by agency rule. The Commission is 
submitting a copy of this order to OMB.
    Title: Discount Practice Reports.
    Action: Proposed collection.
    OMB Control No: To be determined.
    Respondents: Businesses or other for profit.
    Frequency of Responses: On occasion.
    Necessity of Information: The information is needed so that the 
Commission can prepare an order in response to the Court's 
determination in Williston Basin Interstate Pipeline Co. v. FERC and 
assess its current policies. The Commission must ascertain the effects 
of its generic discount policy on pipeline operations and the 
relationship with other Commission policies, specifically, capacity 
release, segmentation and flexible point rights. The Commission will 
use responses to this inquiry to formulate its response in other 
proceedings on whether to maintain the current policy or adopt an 
alternative policy.
    Internal Review: The Commission has reviewed the data request and 
has determined that the information is necessary in order to reevaluate 
both the general policy established in CIG/Granite State concerning the 
retention of discounts when secondary points are used and the 
application of that policy in the specific circumstances of Williston's 
reticulated system. This information conforms to the Commission's plan 
for efficient information collection, communication and management 
within the natural gas industry. The Commission has assured itself, by 
means of internal review, that there is specific, objective support for 
the burden estimates associated with the information/data request.
    24. Interested persons may obtain information on the information 
request by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426 [Attention: 
Michael Miller, Office of the Executive Director, Phone (202) 502-8415, 
fax: (202) 273-0873, e-mail: [email protected].]
    25. For submitting comments concerning the collection of 
information and the associated burden estimates, please send your 
comments to the contact listed above and to the Office of Management 
and Budget, Office of Information and Regulatory Affairs, Washington, 
DC 20503, [Attention: Desk Officer for the Federal Energy Regulatory 
Commission, phone: (202) 395-7856, fax: (202) 395-7285.
    The Commission orders:
    Parties may submit comments on the issues set forth above within 60 
days of the date of the publication of this order in the Federal 
Register, and may file reply comments within 80 days of the date of the 
publication of this order in the Federal Register.

    By the Commission.
Linda Mitry,
Acting Secretary.
[FR Doc. 04-12920 Filed 6-9-04; 8:45 am]
BILLING CODE 6717-01-U