[Federal Register Volume 78, Number 3 (Friday, January 4, 2013)]
[Proposed Rules]
[Pages 679-687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31085]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 2 and 380

[Docket No. RM12-11-000]


Revisions to the Auxiliary Installations, Replacement Facilities, 
and Siting and Maintenance Regulations

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Natural Gas Act (NGA) requires that prior to the 
construction or extension of any natural gas facilities, the Federal 
Energy Regulatory Commission (Commission) must issue a certificate that 
authorizes a natural gas company to undertake the proposed activity. 
However, under the Commission's regulations, the construction of 
auxiliary installations or replacement facilities, while subject to the 
Commission's NGA jurisdiction, are not treated as the construction or 
extension of facilities, and thus do not require certificate 
authorization. The Commission proposes to revise its regulations to 
clarify that all activities

[[Page 680]]

related to the construction of auxiliary installations and replacement 
facilities must take place within a company's certificated right-of-way 
using previously approved work spaces. In addition, the Commission 
proposes to add landowner notification requirements for auxiliary 
installations, replacement facilities, and other jurisdictional 
activities performed within the right-of-way.

DATES: Comments are due March 5, 2013.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through: http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT:
Katherine Liberty, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street NE., Washington, DC 20426, 
(202) 502-6491, [email protected];
Gordon Wagner, Office of the General Counsel, Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426, (202) 502-8947, 
[email protected];
Douglas Sipe, Office of Energy Projects, Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426, (202) 502-8837, 
[email protected];
Howard Wheeler, Office of Energy Projects, Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426, (202) 502-8688, 
[email protected].

SUPPLEMENTARY INFORMATION:

141 FERC ] 61,228

December 20, 2012.
    1. On April 2, 2012, the Interstate Natural Gas Association of 
America (INGAA) requested clarification of section 2.55 of the 
Commission's regulations,\1\ which defines facilities that may be 
added, altered, or replaced under a company's existing Natural Gas Act 
(NGA) section 7(c) certificate authorization, without the need for any 
additional authorization.\2\ INGAA states that in discussions with 
pipelines and in industry meetings, Commission staff has expressed the 
position that under section 2.55(a), in undertaking auxiliary 
installations, companies must stay within their existing rights-of-way, 
with construction activities limited to the work space that was 
previously used. INGAA disagrees with this restriction, arguing that in 
the past, auxiliary installation activities have not been constrained 
in this way; therefore, to now impose right-of-way and work space 
constraints would amount to rulemaking without the opportunity for 
notice and comment, contrary to the requirements of the Administrative 
Procedure Act (APA).\3\ Pursuant to section 385.207(a)(4) of the 
Commission's Rules of Practice and Procedure, INGAA requests the 
Commission affirm that no right-of-way or work space limitations apply 
to auxiliary installations under section 2.55(a).
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    \1\ 18 CFR 2.55 (2012).
    \2\ On May 2, 2012, MidAmerican Energy Pipeline Group (which 
includes Kern River Gas Transmission Company and Northern Natural 
Gas Company) filed a motion to intervene and comments in support of 
INGAA's petition.
    \3\ 5 U.S.C. 553 (2006).
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I. Background

    2. Section 7(c)(1)(A) of the NGA requires a natural gas company to 
have certificate authorization for the ``construction or extension of 
any facilities.'' \4\ In order to ``avoid the filing and consideration 
of unnecessary applications for certificates,'' \5\ section 2.55 of the 
Commission's regulations establishes that for the purposes of NGA 
section 7(c), ``the word facilities as used therein shall be 
interpreted to exclude'' auxiliary installations and replacement 
facilities.\6\ Thus, although auxiliary installations and replacement 
facilities remain subject to the Commission's NGA jurisdiction, they do 
not require section 7(c) certificate authorization. Section 2.55 was 
implemented to reduce the burden that would otherwise be imposed on 
companies and the Commission by requiring a full, formal case-specific 
section 7 proceeding for minor, routine modifications to an existing or 
proposed interstate transportation system.\7\
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    \4\ 15 U.S.C. 717f(c)(1)(A) (2006).
    \5\ Filing of Applications for Certificates of Public 
Convenience and Necessity, Notice of Proposed Rulemaking, 13 FR 
6253, at 6254 (October 23, 1948).
    \6\ 18 CFR 2.55 (2012).
    \7\ Section 2.55 went into effect in 1948, prior to (and 
presaging) the Commission's blanket certificate program, which went 
into effect in 1982.
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    3. Section 2.55(a) excludes facilities which are ``merely auxiliary 
or appurtenant to an authorized or proposed pipeline transmission 
system'' and are installed ``only for the purpose of obtaining more 
efficient or more economical operation of the authorized or proposed 
transmission facilities,'' such as ``[v]alves; drips; pig launchers/
receivers; yard and station piping; cathodic protection equipment; gas 
cleaning, cooling and dehydration equipment; residual refining 
equipment; water pumping, treatment and cooling equipment; electrical 
and communication equipment; and buildings.''
    4. Originally, natural gas companies were not required to notify 
the Commission in advance of constructing auxiliary installations. 
However, in 1999 the Commission expressed the concern that adding 
auxiliary facilities to an authorized, but not yet completed project, 
without notifying the Commission of the auxiliary facilities, would not 
afford the Commission the opportunity to assess the auxiliary 
facilities' environmental impacts, impacts which, when combined with 
the impacts of the authorized facilities, could potentially alter the 
Commission's conclusions regarding the overall environmental impact of 
the pending project. As a result, Order No. 603 \8\ revised section 
2.55(a)(2) to require that any natural gas company constructing 
auxiliary installations on or at the same time as the construction of a 
certificated project must provide a description of the auxiliary 
facility and its location to the Commission 30 days in advance of its 
installation.\9\ Likewise, if any natural gas company plans to 
construct an auxiliary facility in conjunction with a proposed project, 
the auxiliary facility must be described in the application's 
environmental report, as required by section 380.12 of the Commission's 
regulations, or in a supplemental filing while the application is 
pending.\10\ The Commission explained these advance notification 
requirements are necessary because certain aboveground auxiliary 
installations involve substantially different environmental impacts 
than a

[[Page 681]]

pipeline or storage facility, and these different impacts could be of 
concern to affected landowners and the Commission.\11\
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    \8\ Revision of Existing Regulations Under Part 157 and Related 
Sections of the Commission's Regulations Under the Natural Gas Act, 
Order No. 603, 64 FR 26572, at 26574 (May 14, 1999), FERC Stats. & 
Regs., Regulations Preambles July 1996-December 2000 ] 31,073 
(1999), order on reh'g, Order No. 603-A, 64 FR 54522 (October 7, 
1999), FERC Stats. & Regs., Regulations Preambles July 1996-December 
2000 ] 31,081 (1999), order on reh'g, Order No. 603-B, 65 FR 11462 
(March 3, 2000), FERC Stats. & Regs., Regulations Preambles July 
1996-December 2000 ] 61,094 (2000).
    \9\ See 18 CFR 2.55(a)(2)(ii) (2012).
    \10\ See 18 CFR 2.55(a)(2)(iii) (2012).
    \11\ Revisions to Regulations Governing NGPA Section 311 
Construction and the Replacement of Facilities, Order No. 544, 57 FR 
46487 (October 9, 1992), FERC Stats. & Regs., Regulations Preambles 
January 1991--June 1996 ] 31,951 (1992), order on reh'g, Order No. 
544-A, 58 FR 57730 (October 27, 1993), FERC Stats. & Regs., 
Regulations Preambles January 1991--June 1996 ] 30,983 (1993).
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    5. Section 2.55(b) permits natural gas companies to replace 
physically deteriorated or obsolete facilities, including replacing 
existing facilities that have or will soon be physically deteriorated 
or obsolete, so long as the replacement will not result in a reduction 
or abandonment of service and will have a substantially equivalent 
designed delivery capacity.\12\ Larger replacements require that a 
description of the project be submitted to the Commission 30 days in 
advance of initiating construction, while smaller replacements may go 
forward without any advance notice.\13\ Such replacements may go 
forward without case-specific or blanket certificate authorization.
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    \12\ 18 CFR 2.55(b) (2012).
    \13\ Of course all jurisdictional activities--whether subject to 
section 2.55 or section 7(c)--are subject to all other applicable 
federal, state, and local requirements.
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    6. In Order No. 603, the Commission specified that all replacement 
facilities must be constructed in the certificated right-of-way using 
the same temporary work space that was used to construct the existing 
facilities.\14\ The Commission reasoned that section 2.55(b) 
replacements ``should only involve basic maintenance or repair to 
relatively minor facilities,'' where it has been determined that no 
significant impact to the environment would occur.\15\ The Commission 
suggested that if a natural gas company wanted to use land outside of 
the original right-of-way, it rely on its blanket certificate authority 
to do so.\16\
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    \14\ Order No. 603, FERC Stats. & Regs. ] 31,073, 64 FR 26572 at 
26574-76 and 18 CFR 2.55(b) (2012).
    \15\ Order No. 603-A, FERC Stats. & Regs. ] 31,081, 64 FR 54522 
at 54524.
    \16\ Order No. 603, FERC Stats. & Regs. ] 31,073, 64 FR 26572 at 
26580.
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II. Proposed Regulatory Revisions

    7. As discussed in more detail below, in response to the concerns 
expressed by INGAA in its petition, the Commission now proposes to 
revise section 2.55(a) covering auxiliary installations to clarify that 
auxiliary facilities must be located within the certificated permanent 
right-of-way or authorized facility site and must use the same 
temporary work space that was used to construct the existing 
facilities. This is consistent with the Commission's 2.55(b) provisions 
(as adopted in Order No. 603), which specify that replacement 
facilities ``will be located in the same right-of-way or on the same 
site as the facilities being replaced, and will be constructed using 
the temporary work space used to construct the original facility.'' 
\17\ In restricting section 2.55 activities to the right-of-way and 
work space authorized in conjunction with the existing facilities, we 
are doing no more than reiterating that the limitations imposed by the 
Commission in approving the facilities continue to apply to auxiliary 
and replacement activities associated with those facilities. This 
ensures that the environmental and landowner impacts attributable to 
auxiliary and replacement activities conducted under this regulation 
without prior Commission authorization remain within the scope of 
impacts studied and addressed in our review and authorization of the 
underlying facilities.
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    \17\ 18 CFR 2.55(b)(1)(ii) (2012). See also Arkla Energy 
Resources Company, 67 FERC ] 61,173, at 61,516 (1994) (Arkla), in 
which the Commission, prior to Order No. 603's revision of the 
2.55(b)(1)(ii) regulations to specify that replacement facilities 
must be in the same right-of-way, explained that although the then-
applicable regulations and case law did not explicitly restrict 
replacement facilities to the existing right-of-way:
    [R]eplacement facilities must be constructed within the existing 
right-of-way. The reason is simple. The authority to replace a 
facility and to establish a right-of-way should be limited by the 
terms and locations delineated in the original construction 
certificate. Thus, a certificate holder that later establishes a new 
right-of-way for purposes of [a section 2.55(b)] replacement engages 
in an unauthorized activity which is outside the parameters of the 
original certificate order.
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    8. With respect to this section 2.55(b)(1)(ii) requirement, we 
propose to substitute ``existing facility'' for ``original facility.'' 
We do so in the recognition that over time, the original facility may 
have undergone modifications, such as auxiliary installations, 
replacements, or emergency repairs. More significant modifications to 
an original facility may have been undertaken pursuant to blanket 
certificate authority, in particular where a company has relied on our 
Part 157, Subpart F, provisions to establish a new permanent right-of-
way and new temporary work spaces. Further, we note that this proposed 
change will render existing section 2.55(b)(1)(ii) consistent with 
existing section 2.55(a)(2)(i) and section 2.55(b)(1) and proposed 
section 2.55(a)(1)(i), all of which refer to ``existing'' rather than 
``original'' facilities.
    9. Commission staff has also received numerous requests from 
landowners, asking that companies be required to notify landowners 
prior to entering and undertaking activities on their property. In 
response, the Commission proposes to add a landowner notification 
requirement for construction activities conducted under section 2.55 
for auxiliary installations and replacement facilities, as well as for 
any jurisdictional activities undertaken to meet the siting and 
maintenance requirements of section 380.15 of the Commission's 
regulations. To guarantee that landowners are notified in advance of 
any construction or maintenance activity planned for their property, 
under proposed sections 2.55(c) and 380.15(c), natural gas companies 
will have to notify affected landowners at least 10 days prior to 
commencing any such activity.

A. Clarifying and Updating Regulations To Conform to Commission 
Practice and Policy

1. Comments
    10. INGAA contends that during discussions with natural gas 
companies and in industry meetings, Commission staff has stated that 
under section 2.55(a), auxiliary installations are limited to 
activities that take place within existing rights-of-way where the 
original work space is used. INGAA maintains that Commission staff's 
position substantially changes the meaning of section 2.55(a), as it 
would subject auxiliary installations to the same right-of-way and work 
space requirements that apply to replacement facilities under section 
2.55(b)(ii). INGAA stresses that section 2.55(a) does not have similar 
right-of-way and work space constraints.
    11. INGAA argues that, historically, section 2.55(a) auxiliary 
installations and section 2.55(b) replacement facilities have received 
different treatment.\18\ INGAA states that auxiliary installations 
traditionally have not been limited to existing rights-of-way or 
original work spaces. INGAA notes that

[[Page 682]]

while Order No. 603 \19\ specifically stated that replacement 
facilities must be constructed within the existing right-of-way, the 
Commission was silent on applying that same requirement to auxiliary 
installations.
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    \18\ INGAA sites to two letters from Commission staff, one 
stating that replacement facilities outside of the right-of-way must 
be initiated under a case-specific NGA section 7 certificate 
proceeding, and the other stating that auxiliary installations 
constructed outside of the existing right-of-way do not need 
additional Commission authorization. See INGAA's April 2, 2012 
filing at nn. 18 &19. While Commission staff appropriately stated 
that replacement facility construction cannot occur outside of the 
existing right-of-way or previously used work space, staff was 
incorrect in stating that auxiliary installations outside of the 
right-of-way are permissible.
    \19\ Order No. 603, FERC Stats. & Regs. ] 31,073, 64 FR 26572 at 
26575.
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    12. INGAA states that under Commission staff's current position, an 
auxiliary facility, no matter how small and environmentally 
insignificant, which would extend beyond the existing right-of-way or 
original work space would require NGA section 7(c) certificate 
authorization. INGAA contrasts this with a replacement project that no 
matter how large and environmentally adverse, could proceed under 
blanket certificate authority, provided it meets the Part 157, Subpart 
F, regulatory requirements. INGAA characterizes this treatment as 
nonsensical. By adding a right-of-way or work space limitation to 
section 2.55(a) auxiliary installations, INGAA contends the Commission 
would be imposing a substantial burden on companies seeking to maintain 
their jurisdictional facilities and services.
2. Commission Response
    13. Section 2.55 permits natural gas companies to make certain 
routine modifications and additions to their jurisdictional facilities 
without the need to invoke case-specific or blanket section 7(c) 
certificate authorization. However, as the Commission has previously 
stated, ``[a]cquiring additional land for construction activities is a 
section 7 activity and, therefore, does not qualify for the section 
2.55 exemption.'' \20\ Consequently, the Commission proposes to amend 
section 2.55(a) to clarify that auxiliary installations must be 
constructed within the certificated permanent right-of-way or 
authorized facility site and must use the same temporary work space 
used to construct the existing facility.
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    \20\ See Landowner Notification, Expanded Categorical 
Exclusions, and Other Environmental Filing Requirements, Notice of 
Proposed Rulemaking, Order No. 609, 64 FR 27717, at 27722 (May 21, 
1999) FERC Stats. & Regs. ] 32,540 (1999).
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    14. All section 2.55 facilities are fully jurisdictional. Because 
the originally certificated facilities had undergone an environmental 
review, the Commission determined there was no need to subject the 
comparatively minor modifications to these facilities permitted under 
section 2.55 to the same scrutiny.\21\ Requiring that auxiliary 
installations must conform to the originally specified certificate 
conditions with respect to construction and location is consistent with 
the Commission's treatment of replacement facilities under section 
2.55(b).\22\
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    \21\ As noted above, the ancillary nature of these secondary 
facilities is indicated by section 2.55(a), which describes them as 
``merely auxiliary or appurtenant'' and ``only for the purpose of 
obtaining more efficient or more economical operation of the 
authorized or proposed transmission facilities,'' and section 
2.55(b) which limits replacement facilities to those that ``will 
have a substantially equivalent designed capacity.''
    \22\ See Order No. 603, FERC Stats. & Regs. ] 31,073, 64 FR 
26572 at 26575.
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    15. In Order No. 603, the Commission added Appendix A to Part 2 to 
provide guidance for the construction of replacement facilities. Order 
No. 603 did not discuss auxiliary facilities, as no party raised any 
issue regarding them. Thus, the Commission saw no need to discuss 
whether the construction and location of auxiliary facilities must fall 
within the footprint of the existing facilities. Nothing in Order No. 
603 evinced an intent to permit auxiliary facilities outside of 
previously approved boundaries, i.e., outside of an area that had been 
previously studied when the Commission considered the environmental 
impacts of the originally proposed project in fulfillment of its 
National Environmental Policy Act (NEPA) obligations.\23\ We noted that 
section 2.55(a) auxiliary facilities, like section 2.55(b) replacement 
facilities, should only include basic maintenance activities and the 
addition of minor facilities so as to ensure that all section 2.55 
activities will have no significant adverse environmental or economic 
impacts.\24\
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    \23\ 42 U.S.C. 4321-4347 (2006).
    \24\ See Order No. 603-A, FERC Stats. & Regs. ] 31,081, 64 FR 
54522 at 54524.
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    16. The authority to replace, construct, or maintain natural gas 
facilities is limited by the terms and locations delineated in the 
original certificate. These terms include the project's approved plans 
and procedures, e.g., the Commission staff's Upland Erosion Control 
Revegetation and Maintenance Plan and Wetland and Waterbody 
Construction and Mitigation Procedures, as required by section 380.12 
of the Commission's regulations, as well as any conditions relating to 
construction methods and restoration obligations. So long as an 
auxiliary or replacement facility will be located within an existing 
right-of-way, and make use of the previously used work space, and 
comply with all the conditions of the original certificate, a natural 
gas company can rely on section 2.55 for its construction activities. 
However, any activity that would require a new permanent right-of-way 
or new temporary work space, i.e., any activity that would require any 
new property rights, would be beyond the scope of section 2.55, and a 
company would require an alternative source of authorization.\25\ For 
activities that cannot qualify under section 2.55, a company may seek 
case-specific certificate authorization or rely on its blanket 
authority.\26\
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    \25\ See, e.g., Arkla Energy Resources, 67 FERC ] 61,173, at 
61,516 (1994) (Arkla). Note that it is irrelevant whether a company 
is able to obtain new property rights by negotiation, since absent 
the opportunity for the Commission to evaluate the potential 
environmental impacts of construction outside a certificated 
project's prescribed boundaries, i.e., outside an area the 
Commission has previously reviewed and approved, the Commission 
cannot meet its NEPA obligations or ensure the activity is in the 
public interest.
    \26\ A natural gas company may rely on blanket certificate 
authority for the construction of an auxiliary or replacement 
facility so long as the installation meets the blanket certificate 
requirements under Part 157 of the Commissions regulations (i.e. 
that the facility is an eligible facility and satisfies any cost 
constraints and standard environmental conditions). Note that all 
activities undertaken pursuant to blanket authority, but for certain 
limited exceptions, require a company to provide written notice to 
affected landowners 45 days prior to commencing the activity. See 18 
CFR 157.203(d) (2012).
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B. Environmental Effects of Auxiliary Installations

1. Comments
    17. INGAA states that auxiliary installations are smaller by nature 
and have limited environmental and other impacts when compared to 
replacement facilities, since replacements can involve the removal and 
replacement of extensive mainline facilities and significant adverse 
effects on the environment.
    18. INGAA contends that implementing right-of-way and work space 
limitations for auxiliary installations would eliminate the ability of 
natural gas companies to install many of the facilities expressly 
identified in section 2.55(a). INGAA states that cathodic protection, 
electrical and communication equipment, pig launchers and receivers, 
and buildings typically extend beyond the existing right-of-way and 
require additional work space for their installation. INGAA notes that 
since eminent domain is not available for section 2.55(a) 
installations, any additional work space can be obtained only through 
negotiations with landowners.
2. Commission Response
    19. Implicit in the section 2.55 exemption from case-specific or 
blanket section 7(c) certificate authorization is the presumption that 
all auxiliary installations and replacement facilities will have 
limited adverse environmental

[[Page 683]]

and economic impacts, since it would be inconsistent with the public 
interest to permit projects with potentially significant adverse 
impacts to go forward without notice, opportunity for comment, and 
appropriate review.
    20. We acknowledge that certain types of auxiliary installations, 
such as valves, involve minor facilities that do not merit an in-depth 
review, as the environmental and economic impacts are minimal. However, 
this is not the case for auxiliary installations that are more 
extensive or extend beyond the reviewed and approved boundaries of an 
existing facility. For example, INGAA noted in its filing that 
conventional ground bed installations for cathodic protection commonly 
involve construction outside of the right-of-way. We note that as an 
alternative to the ``conventional'' method of installation, deep-well 
anode bed installations, which may not require disturbance outside of 
the right-of-way, are also in use and may offer other benefits such as 
greater reliability of corrosion protection. INGAA also cites 
communication towers for the monitoring of electrical and communication 
equipment as auxiliary installations that involve ground-disturbing 
activity and are commonly located outside of the existing right-of-way.
    21. In Arkla, the Commission held that the environmental impact of 
a section 2.55(b) replacement facility is insignificant when the 
facility is ``located within a compressor station or a natural gas 
pipeline's right-of-way'' \27\--i.e. within the previously studied, 
specific boundaries of a certificated project. In contrast, 
construction activities outside of the right-of-way have the potential 
to impose unknown and unmitigated impacts on the environment, and 
therefore should be subject to an environmental assessment or an 
environmental impact statement.\28\ The same rationale holds true for 
section 2.55(a) auxiliary installations. The exclusion of auxiliary 
installations from NGA section 7(c) certificate requirements was based 
on the fact that the original facilities were constructed within a 
previously studied, precisely defined area. Any deviations from the 
certificate conditions applicable to the original project require 
additional scrutiny and additional authorization.
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    \27\ 67 FERC ] 61,173, at 61,516-17, n.4 (1994) (citing 
Regulations Implementing National Environmental Policy Act of 1969, 
Order No. 486, 52 FR 47897 (December 17, 1987), FERC Stats. & Regs., 
Regulations Preambles 1986-1990 ] 30,783, at 30,942 (1987)).
    \28\ See id. at 61,517.
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    22. A section 2.55 facility located outside of the existing right-
of-way or using land outside the previously used work space raises 
environmental concerns not contemplated in the original section 7(c) 
certificate proceeding, such as land use, erosion, sediment control, 
impacts on streams and soils, visual impacts, and threatened and 
endangered species. Therefore, to ensure the review of, and if need be, 
the mitigation of adverse environmental impacts caused by activities 
outside of an existing right-of-way or prior work space, a company 
cannot rely on section 2.55, but must instead rely on case-specific or 
blanket section 7(c) authorization. Regardless of whether a facility is 
constructed pursuant to section 2.55 or NGA section 7(c), a pipeline is 
required to obtain the necessary environmental approvals and 
construction permits from federal and state agencies.
    23. In addition, a natural gas company cannot assume that merely 
because land was disturbed within the certificated right-of-way and 
work spaces, the construction of an auxiliary installation within the 
authorized boundaries will not disrupt the environment. Thus, as noted 
above, all environmental or construction conditions (i.e. compliance 
with the project's approved plans and procedures, e.g., right-of-way 
revegetation, monitoring, and maintenance) that were included as 
conditions attached to the original certificate remain in effect until 
the certificate is abandoned. These conditions do not expire once the 
facility goes into service and thus are applicable to all section 2.55 
and section 380.15 activities.
    24. When, in conformity with the clarified section 2.55(a) 
requirements, a natural gas company is obliged to file an application 
for authorization of a relatively minor installation outside of an 
existing right-of-way or work space, it is most likely that the blanket 
certificate will apply and the effort necessary to satisfy 
documentation and information requirements will be relatively minor 
(particularly so when an installation can qualify for section 
157.203(b) automatic authorization). Further, to alleviate any concerns 
that the right-of-way or work space restriction will interrupt service 
to customers, a pipeline may use the emergency regulations under Part 
284 Subpart I and/or may file, under emergency conditions, an 
application pursuant to section 157.17 of the regulations for a 
``temporary certificate authorizing the construction and operation of 
extensions of existing facilities * * * that may be required to assure 
maintenance of adequate service or to service particular customers.'' 
\29\
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    \29\ See, e.g., NorAm Energy Corporation, 70 FERC ] 61,030 at 
61,100 (1995) (citing 18 CFR 157.17) (2012).
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C. Compliance With the Administrative Procedure Act

1. Comments
    25. INGAA argues that Commission staff's position that auxiliary 
installations are limited to the originally certificated right-of-way 
and work space amounts to an informal rulemaking, without the 
opportunity for notice and comment, a violation of the requirements of 
the APA.\30\
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    \30\ 5 U.S.C. 553 (2006).
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2. Commission Response
    26. We disagree. Commission staff's actions are in accord with the 
requirements of the APA. Staff's position is merely a clarification of 
a natural gas company's existing requirements, requirements imposed as 
specific conditions to a certificate authorization. This is not a new 
policy. As stated above, section 2.55 auxiliary and replacement 
facilities have always been confined by right-of-way and work space 
limitations, since the certificate authorizing a natural gas project 
only covers project facilities built within the right-of-way and using 
the work space authorized in the certificate. Thus, project activities 
outside the authorized right-of-way or work space would violate 
conditions applicable to the certificate. Because of these inherent 
certificate limitations, the Commission saw no need to amend section 
2.55 until INGAA's requested clarification. As a result, we are 
initiating this Notice of Proposed Rulemaking to clarify that section 
2.55(a) auxiliary installations must be constructed within the existing 
right-of-way or authorized facility site using the same temporary work 
space used to construct the existing facility.\31\
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    \31\ In any event, staff advice is not binding on the 
Commission--see 18 CFR 388.104 (2012)--thus, such advice is not 
subject to APA rulemaking procedures. A company seeking a definitive 
Commission ruling must apply for one, as INGAA has done.
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D. Landowner Notification for Activities Conducted Under Section 2.55 
and Section 380.15

1. Comments
    27. Commission staff has received numerous requests from landowners 
that we require companies to notify landowners in advance of any 
activity that will take place on their land.

[[Page 684]]

2. Commission Response
    28. We propose to add landowner notification requirements for both 
auxiliary installations and replacement facilities under section 2.55 
and for siting and maintenance activities under section 380.15. Under 
proposed sections 2.55(c) and 380.15(b)(1), a natural gas company must 
notify affected landowners at least 10 days prior to commencing 
construction. The notification should include: (1) A brief description 
of the activity to be conducted or facilities to be constructed/
replaced and the effects that the activities are expected to have on 
the landowner's property; (2) the name and phone number of the company 
representative that is knowledgeable about the project; and (3) a 
description of the Commission's Dispute Resolution Service Helpline, as 
explained in section 1b.21(g) of the Commission's regulations, and the 
Dispute Resolution Service Helpline number.
    29. If the landowner has further questions concerning construction 
or maintenance activities, the landowner can contact the company 
representative for more details. If the landowner needs further 
information concerning the Commission's role in these types of 
projects, the landowner can contact the Commission's Dispute Resolution 
Service Helpline.
    30. We also propose to define ``affected landowners'' as owners of 
property interests, as noted in the most recent tax notice, whose 
property (1) is directly affected (i.e., crossed or used) by the 
proposed activity, including all rights-of-way, facility sites, access 
roads, pipe and contractor yards, and temporary workspace, or (2) abuts 
either side of an existing right-of-way or facility site, or abuts the 
edge of a proposed right-of-way or facility site which runs along a 
property line in the area in which the facilities would be constructed, 
or contains a residence within 50 feet of the proposed construction 
work area.

III. Information Collection Statement

    31. The Paperwork Reduction Act (PRA) \32\ requires each federal 
agency to seek and obtain Office of Management and Budget (OMB) 
approval before undertaking a collection of information directed to ten 
or more persons or contained in a rule of general applicability.\33\ 
The OMB's regulations implementing the PRA require approval of certain 
information collection requirements imposed by agency rules.\34\ Upon 
approval of a collection of information, OMB will assign an OMB control 
number and an expiration date. Respondents subject to the filing 
requirements of an agency rule will not be penalized for failing to 
respond to the collection of information unless the collection of 
information displays a valid OMB control number.
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    \32\ 44 U.S.C. 3501-3520 (2006).
    \33\ OMB's regulations at 5 CFR 1320.3(c)(4)(i) (2012) require 
that ``[a]ny recordkeeping, reporting, or disclosure requirement 
contained in a rule of general applicability is deemed to involve 
ten or more persons.''
    \34\ 5 CFR part 1320 (2012).
---------------------------------------------------------------------------

    32. The Commission is submitting the proposed reporting 
requirements to OMB for its review and approval. The Commission 
solicits comments on the proposed modifications, the accuracy of burden 
estimates, ways to enhance the quality, utility, and clarity of the 
information to be collected, and any suggested methods for minimizing 
respondents' burden.
    33. The only entities affected by this rule would be natural gas 
companies under the Commission's jurisdiction. The information 
collection requirements in this Final Rule are identified as follows.
    34. FERC-577, ``Gas Pipeline Certificates: Environmental Impact 
Statements,'' identifies the Commission's information collections 
relating to the requirements set forth in NEPA and Parts 2, 157, 284, 
and 380 of the Commission's regulations. Applicants have to conduct 
appropriate studies which are necessary to determine the impact of the 
construction and operation of proposed jurisdictional facilities on 
human and natural resources, and the measures which may be necessary to 
protect the values of the affected area. These information collection 
requirements are mandatory.
    35. Because this proposed rule adds a landowner notification 
requirement in section 2.55(c) and section 380.15(c) for activities 
undertaken pursuant to these sections, the overall burden on the 
industry will increase. However, because natural gas companies subject 
to our jurisdiction must already notify landowners in conjunction with 
section 3 projects and section 7 applications and when conducting 
activities under part 157 of our regulations, no new technology would 
be needed and no start-up costs would be incurred. Further, even 
without the notification requirement proposed herein, companies 
routinely inform landowners prior to coming onto their property, both 
as a courtesy and to avoid conflicts in landowner and company 
activities. Thus, the proposed notification is expected to be 
consistent with some companies' current practices, and consequently to 
impose little or no additional obligation on such companies.
    36. In 1999, in estimating the landowner notification burden in 
Order No. 609,\35\ we found companies would need four hours to identify 
affected landowners and prepare and distribute information describing 
the proposed project. Given advances in database management since then, 
and given that section 2.55 and section 380.15 activities generally 
involve activities that are smaller than those that go forward under 
blanket certificate authority, we anticipate companies will need two 
hours to meet the proposed landowner notification requirement.
---------------------------------------------------------------------------

    \35\ See note 20.
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    37. While companies are required to file annual reports of 
replacement facilities under 2.55(b), no such reports are required for 
ancillary installations under 2.55(a). Thus, we have no data upon which 
to base an estimate of activities under 2.55(a). In view of this, 
Commission staff asked for information on activities under 2.55(a) from 
a small representative sample (less than ten) of jurisdictional 
companies and we have extrapolated our estimate based on company 
responses. We estimate that on average, approximately 6,500 auxiliary 
installation projects are undertaken annually.
    38. Companies file an annual report itemizing all section 2.55(b) 
replacement activities. Our review of the more recent annual reports 
indicate that companies undertake, in total, approximately 500 section 
2.55(b) projects per year.
    39. Section 380.15 siting and maintenance activities, like 
activities under 2.55(a), do not require companies to submit an annual 
report. These activities are generally minor and planned for well in 
advance and cover a wide variety of efforts, e.g., physical up-keep of 
above-ground facilities and right-of-way vegetation maintenance. 
Further, any particular company's activities on its right-of-way can 
depend upon changing conditions such as maintenance initiatives, 
population density, and even weather. Because of this variety of 
possible activities and their minor nature we have estimated that, for 
all companies nationwide, there will be a total of approximately three 
times as many activities as take place under section 2.55(a) which 
would require a landowner notification, i.e., in the aggregate, 19,500 
siting and

[[Page 685]]

maintenance activities that could require a landowner notification.
    40. We estimate the proposed additional notification burden that 
the proposal would impose in the table below.

----------------------------------------------------------------------------------------------------------------
                                                 Annual  number   Annual number      Number of
            Proposed data collection                   of         of filings per     hours per     Total annual
                                                   respondents   respondent \36\      filing           hours
----------------------------------------------------------------------------------------------------------------
FERC-577 (new requirement, proposed in 18 CFR               165             39.5               2          13,000
 2.55(a))......................................
FERC-577 (new requirement, proposed in 18 CFR               165              3                 2           1,000
 2.55(b))......................................
FERC-577 (new requirement, proposed in 18 CFR               165            118                 2          39,000
 380.15).......................................
                                                ----------------------------------------------------------------
    Total Annual Burden Hours..................  ..............  ...............  ..............          53,000
----------------------------------------------------------------------------------------------------------------

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

    \36\ This column reflects a rounded estimate for each 
jurisdictional natural gas company, averaged over all 165 such 
companies.
---------------------------------------------------------------------------

    41. As discussed above, natural gas companies already conduct 
landowner notifications for larger projects, and some companies also 
routinely inform affected landowners in advance of undertaking 
activities on their property as it is considered a ``best practice'' 
for facility and right-of-way management. Given that some companies 
currently comply with the notification requirements proposed herein, we 
believe that the actual industry-wide increase in burden will be 
substantially less than what we have estimated here.
    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these revised requirements. It has projected the 
average cost for all respondents to be as follows: \37\
---------------------------------------------------------------------------

    \37\ The cost figures are derived by multiplying the total hours 
to prepare a response by an hourly wage estimate of $60 (based on 
average civil engineer wages and benefit information obtained from 
the Bureau of Labor Statistics' data at http://bls.gov/oes/current/naics4_221200.htm#17-0000 and http://www.bls.gov/news.release/ecec.nr0.htm rates).
---------------------------------------------------------------------------

     $3,180,000.00 per year for all regulated entities;
     $19,272.00 per year for each regulated entity.
    Title: FERC-577.
    Action: Proposed Revision.
    OMB Control Nos.: 1902-0128.
    Respondents: Natural gas pipeline companies.
    Frequency of Responses: On occasion.
    Necessity of Information: The requirement to notify landowners is 
necessary for the Commission to carry out its NEPA responsibilities and 
meet the Commission's objectives of addressing landowner and 
environmental concerns fairly. The information provided to landowners 
is intended to accommodate, to the extent possible, any concerns they 
may have regarding a natural gas company's planning, locating, 
clearing, right-of-way maintenance, and facility construction or 
replacement activities on their property.
    Internal Review: The Commission has reviewed the proposed revisions 
and has determined that they are necessary. These proposed requirements 
conform to the Commission's need for efficient information collection, 
communication, and management within the energy 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 collection requirements.
    42. Interested persons may obtain information on the proposed 
reporting requirements or submit comments by contacting the Federal 
Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426 (Attention: Information Clearance Officer, Office of the 
Executive Director), by phone 202-502-8663, or by email to 
[email protected]). Comments on the proposed requirements may also 
be sent to the Office of Information and Regulatory Affairs, Office of 
Management and Budget, Washington, DC 20503 [Attention: Desk Officer 
for the Federal Energy Regulatory Commission]. For security reasons, 
comments should be sent by email to OMB at [email protected]. Please reference OMB Control No. 1902-0128, 
FERC-577, and Docket No. RM12-11 in your submission.

IV. Environmental Analysis

    43. The Commission is required to prepare an environmental 
assessment or an environmental impact statement for any action that may 
have a significant adverse effect on the human environment. The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.\38\ Generally, the actions proposed to be taken here fall 
within the categorical exclusions in the Commission's regulations that 
are clarifying, corrective, or procedural and for information 
gathering, analysis, and dissemination.\39\ Accordingly, an 
environmental review is not necessary and has not been prepared in 
connection with this proposed rulemaking.
---------------------------------------------------------------------------

    \38\ 18 CFR 380.4 (2012).
    \39\ 18 CFR 380.4(a)(1) and (5) (2012).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    44. The Regulatory Flexibility Act of 1980 (RFA) \40\ generally 
requires a description and analysis of agency rules that will have a 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a proposed rule and that minimize 
any significant economic impact on a substantial number of small 
entities. The Small Business Administration's (SBA) Office of Size 
Standards develops the numerical definition of a small business.\41\ 
The SBA has established a size standard for natural gas pipeline 
companies transporting natural gas, stating that a firm is small if its 
annual receipts are less than $25.5 million.\42\
---------------------------------------------------------------------------

    \40\ 5 U.S.C. 601-612 (2006).
    \41\ 13 CFR 121.101 (2012).
    \42\ 13 CFR 121.201 (2012), Subsector 486; see SBA's Table of 
Small Business Size Standards, effective March 26, 2012, available 
at: http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf.
---------------------------------------------------------------------------

    45. The proposed regulations impose requirements only on natural 
gas companies subject to the Commission's jurisdiction, the majority of 
which are not small businesses. Most companies regulated by the 
Commission do not fall within the RFA's definition of a small entity. 
Approximately 165 companies--nearly all of them large entities--would 
be potential respondents subject to data collection FERC-577 reporting 
requirements. For the year 2011 (the most recent year for which 
information is available), only 15 companies not affiliated with larger 
companies had annual revenues of less than $25.5 million. Moreover, the 
proposed reporting requirements should have no meaningful economic 
impact on companies--be they large or small--subject to the 
Commission's regulatory jurisdiction. The Commission estimates that the 
cost per small entity is $19,272 per year. The Commission does not 
consider the estimated $19,272 impact

[[Page 686]]

per entity to be significant. Accordingly, pursuant to section 605(b) 
of the RFA, the Commission certifies that this proposed rule should not 
have a significant economic impact on a substantial number of small 
entities.

VI. Comment Procedures

    46. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice, including any related 
matters or alternative proposals that commenters may wish to discuss. 
Comments are due March 5, 2013. Comments must refer to Docket No. RM12-
11-000, and must include the commenter's name, the organization 
represented, if applicable, and the commenter's address in the 
comments.
    47. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    48. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    49. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VII. Document Availability

    50. 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 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    51. From the Commission's Home Page on the Internet, this 
information is available on 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 of this document in 
the docket number field.
    52. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].

List of Subjects

18 CFR Part 2

    Administrative practice and procedure, and Reporting and 
recordkeeping requirements.

18 CFR Part 380

    Environmental impact statements, and Reporting and recordkeeping 
requirements.

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Parts 2 and 380, Chapter I, Title 18, Code of Federal Regulations, as 
follows:

PART 2--GENERAL POLICY AND INTERPRETATIONS

0
1. The authority citation for Part 2 continues to read as follows:

    Authority: 5 U.S.C. 601; 15 U.S.C. 717-717z, 3301-3432; 16 
U.S.C. 792-828c, 2601-2645, 42 U.S.C. 4321-4370h, 7101-7352.

0
2. Amend Sec.  2.55 by adding a sentence after the last sentence in 
paragraph (a)(1), revising paragraph (b)(1)(ii), and adding paragraph 
(c) to read as follows:


Sec.  2.55  Definition of terms used in section 7(c).

* * * * *
    (a) * * *
    (1) * * * The auxiliary installations must be located within the 
existing, certificated permanent right-of-way or authorized facility 
site and must be constructed using the temporary work space used to 
construct the existing facility (See appendix A to this part 2 for 
guidelines on what is considered to be the appropriate work area in 
this context).
* * * * *
    (b) * * *
    (1) * * *
    (ii) The replacement facilities will have a substantially 
equivalent designed delivery capacity, will be located in the same 
right-of-way or on the same site as the facilities being replaced, and 
will be constructed using the temporary work space used to construct 
the existing facility (See appendix A to this part 2 for guidelines on 
what is considered to be the appropriate work area in this context);
* * * * *
    (c) Landowner notification. (1) No activity described in paragraphs 
(a) and (b) of this section is authorized unless the company makes a 
good faith effort to notify in writing all affected landowners, as 
defined in paragraph (c)(2) of this section, at least 10 days prior to 
commencing any activity under this section. A landowner may waive the 
10-day prior notice requirement in writing as long as the notice has 
been provided. The notification shall include at least:
    (i) A brief description of the facilities to be constructed or 
replaced and the effect the activity will have on the landowner's 
property;
    (ii) The name and phone number of a company representative who is 
knowledgeable about the project; and
    (iii) A description of the Commission's Dispute Resolution Service 
Helpline as explained in Sec.  1b.21(g) of this chapter and the Dispute 
Resolution Service Helpline number.
    (2) All affected landowners includes owners of property interests, 
as noted in the most recent county/city tax records as receiving the 
tax notice, whose property:
    (i) Is directly affected (i.e., crossed or used) by the proposed 
activity, including all rights-of-way, facility sites (including 
compressor stations, well sites, and all above-ground facilities), 
access roads, pipe and contractor yards, and temporary workspace; or
    (ii) Abuts either side of an existing right-of-way or facility 
site, or abuts the edge of a proposed right-of-way or facility site 
which runs along a property line in the area that would be affected, or 
contains a residence within 50 feet of the proposed construction work 
area.
* * * * *

PART 380--REGULATIONS IMPLEMENTING THE NATIONAL ENVIRONMENTAL 
POLICY ACT

0
3. The authority citation for Part 380 continues to read as follows:

    Authority: 42 U.S.C. 4321-4370h, 7101-7352; E.O. 12009, 3 CFR 
1978 Comp., p. 142.

0
4. In Sec.  380.15, redesignate paragraphs (c), (d), (e), and (f) as 
paragraphs (d), (e), (f), and (g) and add new paragraph (c) to read as 
follows:


Sec.  380.15  Siting and maintenance requirements.

* * * * *

[[Page 687]]

    (c) Landowner notification. (1) No siting, construction, or 
maintenance activity within the right-of-way is authorized unless the 
company makes a good faith effort to notify in writing all affected 
landowners, as defined in paragraph (c)(2) of this section, at least 10 
days prior to commencing any such activity. A landowner may waive the 
10-day prior notice requirement in writing as long as the notice has 
been provided. The notification shall include at least:
    (i) A brief description of the activity and the effect the activity 
will have on the landowner's property;
    (ii) The name and phone number of a company representative who is 
knowledgeable about the project; and
    (iii) A description of the Commission's Dispute Resolution Service 
Helpline as explained in Sec.  1b.21(g) of this chapter and the Dispute 
Resolution Service Helpline number.
    (2) All affected landowners includes owners of property interests, 
as noted in the most recent county/city tax records as receiving the 
tax notice, whose property:
    (i) Is directly affected (i.e., crossed or used) by the proposed 
activity, including all facility sites (including compressor stations, 
well sites, and all above-ground facilities), rights-of-way, access 
roads, pipe and contractor yards, and temporary workspace; or
    (ii) Abuts either side of an existing right-of-way or facility 
site, or abuts the edge of a proposed right-of-way or facility site 
which runs along a property line in the area that would be affected, or 
contains a residence within 50 feet of the proposed work area.
* * * * *
[FR Doc. 2012-31085 Filed 1-3-13; 8:45 am]
BILLING CODE 6717-01-P