[Federal Register Volume 72, Number 187 (Thursday, September 27, 2007)]
[Rules and Regulations]
[Pages 54818-54820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-18904]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 157

[Docket No. RM06-7-002; Order No. 686-B]


Revisions to the Blanket Certificate Regulations and 
Clarification Regarding Rates

Issued September 20, 2007.
AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Final rule; order on rehearing.

-----------------------------------------------------------------------

SUMMARY: On June 22, 2007, the Commission issued an Order on Rehearing 
and Clarification in response to motions seeking rehearing and 
clarification of an October 19, 2006 Final Rule. The Final Rule 
expanded the scope and scale of activities that may be undertaken 
pursuant to blanket certificate authority and clarified Commission rate 
policy. The revised regulations allow interstate natural gas pipelines 
to employ the streamlined blanket certificate procedures for larger 
projects and for a wider variety of projects, thereby increasing 
efficiencies, and decreasing the time and cost associated with the 
construction and maintenance of the nation's natural gas 
infrastructure. This order grants a request for rehearing of the June 
22, 2007 Order.

DATES: Effective Date: This final rule will become effective October 
29, 2007.

FOR FURTHER INFORMATION CONTACT:
Gordon Wagner, Office of the General Counsel, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, 
[email protected], (202) 502-8947.
Michael McGehee, Office of Energy Projects, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, 
[email protected], (202) 502-8962.
Lonnie Lister, Office of Energy Projects, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, 
[email protected], 202-502-8587.

SUPPLEMENTARY INFORMATION:
    Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. 
Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff.

Revisions to the Blanket Certificate Regulations and Clarification 
Regarding Rates; Order on Rehearing

I. Introduction

    1. On October 19, 2006, the Federal Energy Regulatory Commission 
(Commission) issued a Final Rule in Order No. 686 \1\ amending Part 
157, Subpart F, of its regulations to expand the scope and scale of 
activities that may be undertaken pursuant to blanket certificate 
authority by (1) Broadening the types of natural gas projects permitted 
under blanket certificate authority to include certain mainline, 
storage, and liquefied natural gas (LNG) and synthetic gas pipeline 
facilities, and (2) increasing the blanket certificate project cost 
limits from $8,200,000 to $9,600,000 for automatic authorization 
projects and from $22,700,000 to $27,400,000 for prior notice 
projects.\2\ In addition, Order No. 686 clarified that a natural gas 
company is not necessarily engaged in an unduly discriminatory practice 
if it charges different customers different rates for the same service 
when those customers commit to service on different dates. The revised 
blanket certificate regulations are intended to allow interstate 
natural gas companies to employ the streamlined blanket certificate 
procedures for larger projects and additional types of projects, 
thereby increasing efficiencies and decreasing the time and cost 
associated with the construction and maintenance of the nation's 
natural gas infrastructure. On June 22, 2007, the Commission issued an 
order in response to motions seeking rehearing and clarification of the 
October 2006 Final Rule.\3\ In this order, for the reasons discussed 
below, the Commission grants a request for rehearing of the June 2007 
Order.
---------------------------------------------------------------------------

    \1\ Order No. 686, Revisions to the Blanket Certificate 
Regulations and Clarification Regarding Rates, 71 FR 63680 (October 
31, 2006), FERC Stats & Regs ] 31,231 (2006). This rulemaking 
proceeding was initiated in response to a petition submitted under 
18 CFR 385.207(a) (2007) of the Commission's regulations by the 
Interstate Natural Gas Association of America jointly with the 
Natural Gas Supply Association.
    \2\ These cost limits now stand at $9,900,000 for an automatic 
authorization project and $28,200,000 for a prior notice project. 
See Natural Gas Pipelines; Project Cost and Annual Limits, 72 FR 
5614 (Feb. 7, 2007).
    \3\ Order No. 686-A, Order on Rehearing and Clarification, 72 FR 
37431 (July 10, 2007), FERC Statutes and Regulations ] 31,249 (2007) 
(June 2007 Order).
---------------------------------------------------------------------------

II. Request for Rehearing

    2. New Sec.  157.210 permits companies to rely on blanket 
certificate authority to ``acquire, construct, modify, replace, and 
operate natural gas mainline facilities, including compression and

[[Page 54819]]

looping.'' Revised Sec.  157.216(b)(2) provides for the abandonment of 
such facilities. The Interstate Natural Gas Association of America 
(INGAA) asked the Commission to clarify whether the Final Rule's 
revised Sec.  157.216(b)(2) abandonment provisions would apply 
exclusively to mainline facilities put in place under the new Sec.  
157.210 or would also apply to mainline facilities already in place.
    3. In its June 2007 Order, the Commission stated that facilities 
which were constructed under case-specific certificate authorization, 
but which would have met the criteria for construction under the 
current blanket certificate program, may be abandoned pursuant to the 
provisions Sec.  157.216(b). The Commission stated that in considering 
whether existing facilities would have met the criteria for blanket 
certificate authorization, ``the facilities must have been installed 
subsequent to the Commission's implementation of the blanket 
certificate program and the facilities' original cost must have met the 
Sec.  157.208 project cost cap in effect at the time of their 
construction.''
    4. INGAA requests rehearing of the June 2007 Order to ask the 
Commission to remove this qualification because it precludes Sec.  
157.216 abandonment of facilities put in place prior to 1982, i.e., the 
year the blanket certificate program was initiated. INGAA notes that 
the Commission did not impose the qualification that the project cost 
not exceed the blanket certificate cost cap in effect at the time of 
construction with respect to its 1999 expansion of the blanket 
certificate abandonment provisions to cover gas supply facilities and 
services.\4\ INGAA contends rather than comparing the per project cost 
cap in effect at the time a facility was constructed with the 
facility's actual original cost, to determine whether the blanket 
certificate abandonment provisions might apply to an existing facility, 
the Commission should compare the per project cost cap currently in 
effect with the estimated cost to duplicate the facility today. INGAA 
states this approach will permit facilities put in place prior to the 
1982 initiation of the blanket certificate program to qualify for 
abandonment under the blanket program.
---------------------------------------------------------------------------

    \4\ See Order No. 603, Revision of Existing Regulations under 
the Natural Gas Act, 64 FR 26572 (May 14, 1999), FERC Stats. & Regs. 
] 31,073 (1999); Order No. 603-A, 64 FR 54522 at 54532-34 (Oct. 7, 
1999), FERC Stats. & Regs. ] 31,081 at 30,936 (1999), adopting a 
similar approach with respect to automatic abandonments under 18 CFR 
157.216(a) (2007).
---------------------------------------------------------------------------

    5. The Commission will grant INGAA's request for rehearing. Instead 
of restricting Sec.  157.216 abandonments to facilities put in place 
after the effective date of the blanket certificate program and 
comparing a facility's original cost to the cost cap in effect at the 
time the facility was placed in service, companies will be required to 
compare the estimated current cost to replicate an existing facility to 
the current Sec.  157.208(d) per project cost cap. This will permit 
companies to employ blanket certificate authority to abandon a facility 
put in place under case-specific authority, provided the existing 
facility could qualify for authorization under the current blanket 
program
    6. To effect this expansion of abandonment authority, the 
Commission will revise Sec.  157.216(c)(1) and (d)(1) to specify that a 
company seeking to rely on its blanket certificate to abandon a 
facility which was not initially constructed or acquired under blanket 
certificate authority must estimate the current cost to replicate the 
facility. Provided the estimated current cost to replicate the facility 
would not exceed the currently-effective Sec.  157.208(d) project cost 
cap, and provided the existing facility would qualify for authorization 
under the currently-effective blanket regulations, the company may rely 
on abandonment authority under Sec.  157.216. Note that in calculating 
an estimated cost, the Commission anticipates a company will account 
for the current values of a facility's various component costs, such as 
land acquisition, public outreach, agency involvement, materials, 
labor, and environmental mitigation and remediation.\5\ In addition, 
the Commission will revise Sec.  157.216(a)(2) and (b)(2) to clarify 
that any existing facility that could be constructed or acquired under 
the currently-effective blanket certificate program criteria can be 
abandoned under blanket certificate authority, provided that, as is 
currently the case, the blanket certificate holder obtains the written 
consent of each customer served using the facility during the past 12 
months.
---------------------------------------------------------------------------

    \5\ See, e.g., the reporting requirements for describing a 
project's costs in 18 CFR 157.208(e)(3) (2007). The Commission 
suggests a blanket certificate holder contemplating action under 18 
CFR 157.216 review the record in this proceeding, which includes 
comments on past and present project cost comparisons.
---------------------------------------------------------------------------

    7. In view of the above described revisions to the June 2007 order 
and blanket certificate abandonment regulations, INGAA's request for 
rehearing is granted.

III. Information Collection Statement

    8. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain information collection requirements imposed by 
an agency.\6\ The Final Rule's revisions to the information collection 
requirements for blanket certificate projects were approved under OMB 
Control Nos. 1902-0128 and 1902-0060. While this order on rehearing 
clarifies aspects of the existing information collection requirements 
for the blanket certificate program, it does not add to these 
requirements. Accordingly, a copy of this order will be sent to OMB for 
informational purposes only.
---------------------------------------------------------------------------

    \6\ 5 CFR 1320.11 (2007).
---------------------------------------------------------------------------

IV. Document Availability

    9. 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 print the contents of this document via the 
Internet through FERC's Web site (http://www.ferc.gov) and in FERC'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. 
User assistance is available for FERC's Web site during normal business 
hours (8:30 a.m. to 5 p.m. Eastern time, Monday to Friday) from FERC's 
Online Support at 202-502-6652, toll free at 1-866-208-3676, or by e-
mail at [email protected], and from the Public Reference Room 
at 202-502-8371, TTY at 202-502-8659, or by e-mail at 
[email protected].

V. Effective Date and Congressional Notification

    10. The modifications made in this request for rehearing will 
become effective October 29, 2007. The provisions of 5 U.S.C. 801 
regarding Congressional review of rulemaking do not apply to this order 
on rehearing, since it clarifies agency procedure and practice.

List of Subjects in 18 CFR Part 157

    Administrative practice and procedure, Natural gas, Reporting and 
recordkeeping requirements.

    By the Commission.
Kimberly D. Bose,
Secretary.

0
In consideration of the foregoing, the Commission amends part 157, 
Chapter I, Title 18, Code of Federal Regulations, as follows:

[[Page 54820]]

PART 157--APPLICATIONS FOR CERTIFICATES OF PUBLIC CONVENIENCE AND 
NECESSITY AND FOR ORDERS PERMITTING AND APPROVING ABANDONMENT UNDER 
SECTION 7 OF THE NATURAL GAS ACT

0
1. The authority citation for part 157 continues to read as follows:

    Authority: 15 U.S.C. 717-717w.


0
2. In Sec.  157.216, paragraphs (a)(2), (b)(2), (c)(1), and (d)(1) are 
revised to read as follows:


Sec.  157.216  Abandonment.

    (a) * * *
    (2) A facility that did or could now qualify for automatic 
authorization as described in Sec.  157.203(b), provided the 
certificate holder obtains the written consent of each customer served 
using the facility during the past 12 months.
    (b) * * *
    (2) Any other facility that did or could now qualify for prior 
notice authorization as described in Sec.  157.203(c), provided the 
certificate holder obtains the written consent of each customer served 
using the facility during the past 12 months.
    (c) * * *
    (1) The location, type, size, and length of the subject facilities. 
For facilities not constructed or acquired under blanket certificate 
authority, an estimate of the current cost to replicate such 
facilities;
* * * * *
    (d) * * *
    (1) A description of the facilities abandoned under this section. 
For facilities not constructed or acquired under blanket certificate 
authority, an estimate of the current cost to replicate such 
facilities;
* * * * *
[FR Doc. E7-18904 Filed 9-26-07; 8:45 am]
BILLING CODE 6717-01-P