[Federal Register Volume 70, Number 135 (Friday, July 15, 2005)]
[Proposed Rules]
[Pages 40943-40944]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13909]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 342

[Docket No. RM05-22-000]


Five-Year Review of Oil Pipeline Pricing Index

July 6, 2005.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of inquiry.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) invites 
comments on its five-year review of the oil pipeline pricing index, 
established in Order No. 561, Revisions to Oil Pipeline Regulations 
Pursuant to the Energy Policy Act of 1992, FERC Stats. & Regs. [Regs. 
Preambles, 1991-1996] ] 30,985 (1993). Specifically, the Commission 
proposes to use the Producer Price Index for Finished Goods (PPI) as 
the index for oil pipeline rate changes in the next five-year period, 
commencing July 1, 2006. Commentors are invited to submit and justify 
alternatives to the continued use of the PPI.

DATES: Written comments on this Notice of Inquiry are due on September 
13, 2005. Reply comments must be received by the Commission 30 days 
after the filing date for initial comments.

ADDRESSES: Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov. Commentors 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 20426. Refer to the 
Comment Procedures section of the NOI for additional information on how 
to file comments.

FOR FURTHER INFORMATION CONTACT: Harris S. Wood, Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426. (202) 208-8224.

SUPPLEMENTARY INFORMATION:

Notice of Inquiry

    1. In this notice of inquiry (NOI), the Commission invites comments 
on its intended utilization of the Producer Price Index for Finished 
Goods (PPI) \1\ for oil pipeline rate changes during the next five 
years.\2\ This index was adopted by the Commission in its order of 
February 23, 2003, ``Five-Year Review of Oil Pricing Index and Order on 
Remand,'' and affirmed by the U.S. Court of Appeals for the District of 
Columbia Circuit.\3\ The Commission proposes to continue to apply PPI 
to oil pipelines' rate ceiling levels to derive the next year's ceiling 
levels effective July 1, 2006.\4\
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    \1\ The PPI represents the Producer Price Index for Finished 
Goods, also written PPI-FG. The PPI-FG is determined and issued by 
the Bureau of Labor Statistics, U.S. Department of Labor. Pursuant 
to 18 CFR 342.3(d)(2), ``The index will be calculated by dividing 
the PPI-FG for the calendar year immediately preceding the index 
year by the previous calendar year's PPI-FG.'' Multiplying the rate 
ceiling on June 30 of the index year by the resulting number gives 
the rate ceiling for the year beginning the next day, July 1.
    \2\ The five-year review process was established in Order No. 
561. See Revisions to Oil Pipeline Regulations Pursuant to the 
Energy Policy Energy Policy Act, FERC Stats. & Regs. [Regs. 
Preambles, 1991-1996] ] 30,985 (1993), 58 FR 58753 (Nov. 4, 1993); 
order on reh'g, Order No. 561-A, FERC Stats. & Regs. [Regs 
Preambles, 1991-1996] ] 31,000 (1994), 59 FR 40243 (Aug. 8, 1994), 
affirmed, Association of Oil Pipelines v. FERC, 83 F.3d 1424 (D.C. 
Cir. 1996).
    \3\ 102 FERC ] 61,195 (2003), affirmed, Flying J Inc., et al., 
v. FERC, 363 F.3d 495 (D.C. Cir. 2004).
    \4\ The Commission publishes the final annual change in the PPI-
FG, expressed as a percent, after the final PPI-FG becomes available 
from the Bureau of Labor Statistics, U.S. Department of Labor in May 
of each calendar year. Pipelines are required to calculate the new 
ceiling level applicable to their indexed rates based on this annual 
change.
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I. Background

    2. In Order No. 561, the Commission established an index 
methodology to regulate changes to oil pipeline rates, and adopted an 
index of PPI minus one percent (PPI-1) as the most appropriate index to 
track oil pipeline industry cost changes from one year to the next. The 
Commission also undertook to review every five years the continued 
effectiveness of its index for tracking changes to oil pipeline 
industry costs.
    3. After its initial five-year review, the Commission adopted PPI, 
without the (-1) percent adjustment, as the appropriate index for 
tracking oil pipeline industry costs for the five-year period beginning 
July 2001. This adoption of PPI was affirmed by the U.S. Court of 
Appeals for the District of Columbia Circuit.

II. Proposal and Comments

    4. The Commission proposes to continue to utilize PPI for the next 
five-year period as the index to track changes to the costs of the oil 
pipeline industry and to apply to rate ceiling levels for oil pipeline 
rate changes. The Commission invites interested persons to submit 
comments on the continued use of PPI and to propose, justify, and fully 
support, as an alternative, adjustments to PPI.

III. Comment Procedures

    5. Comments may be filed on paper or electronically via the eFiling 
link on the Commission's Web site at http://www.ferc.gov. The 
Commission accepts most standard word processing formats and commentors 
may attach additional files with supporting information in certain 
other file formats. Commentors filing electronically do not need to 
make a paper filing. Commentors that are not able 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 20426.
    6. All comments will be placed in the Commission's public files and 
may be

[[Page 40944]]

viewed, printed, or downloaded remotely as described in the Document 
Availability section below. Commentors are not required to serve copies 
of their comments on other commentors.

IV. Document Availability

    7. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's home page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5 p.m. eastern time) at 888 First Street, NE., Room 2A, 
Washington, DC 20426.
    8. From the Commission's home page on the Internet, this 
information is available in the Commission's document management 
system, eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number (excluding the last three digits) in the docket number field.
    9. User assistance is available for eLibrary and the Commission's 
website during normal business hours. For assistance, please contact 
the Commission's Online Support at 1-866-208-3676 (toll free) or 202-
502-6652 (e-mail at [email protected]) or the Public Reference 
Room at 202-502-8371, TTY 202-502-8659 (e-mail at 
[email protected]).

    By direction of the Commission.
Linda Mitry,
Deputy Secretary.
[FR Doc. 05-13909 Filed 7-14-05; 8:45 am]
BILLING CODE 6717-01-P