[Federal Register Volume 80, Number 140 (Wednesday, July 22, 2015)]
[Notices]
[Pages 43414-43419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17949]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PL15-1-001]


Cost Recovery Mechanisms for Modernization of Natural Gas 
Facilities; Order Denying Request For Clarification

Before Commissioners: Norman C. Bay, Chairman; Philip D. Moeller, 
Cheryl A. LaFleur, Tony Clark, and Colette D. Honorable.


[[Page 43415]]


    1. On April 16, 2015, the Commission issued a policy statement in 
the referenced proceeding to provide greater certainty regarding the 
ability of interstate natural gas pipelines to recover the costs of 
modernizing their facilities and infrastructure to enhance the 
efficient and safe operation of their systems.\1\ The Policy Statement 
explains the standards the Commission will require interstate natural 
gas pipelines to satisfy in order to establish simplified mechanisms, 
such as trackers or surcharges, to recover certain costs associated 
with replacing old and inefficient compressors and leak-prone pipes and 
performing other infrastructure improvements and upgrades to enhance 
the efficient and safe operation of their pipelines. On May 15, 2015, 
Process Gas Consumers Group (PGC) and the American Forest and Paper 
Association (AF&PA)(jointly Requesters) filed, pursuant to 18 CFR 
385.212 (2014), a joint ``Request for Clarification'' of the Policy 
Statement.\2\ As discussed more fully below, the Commission denies the 
requested clarifications of the Policy Statement.
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    \1\ Cost Recovery Mechanisms for Modernization of Natural Gas 
Facilities, 151 FERC ] 61,047 (2015) (Policy Statement).
    \2\ On June 1, 2015, the Interstate Natural Gas Association of 
America (INGAA) and Tenaska Marketing Ventures (Tenaska) filed 
answers to the request for clarification, and on June 2, 2015, the 
Kansas Corporation Commission filed in support of the clarification 
request. On June 9, AF&PA and PGC separately filed replies to INGAA 
and Tenaska. On June 11, 2015, the Natural Gas Supply Association 
(NGSA) filed an answer to the request for clarification and comments 
on INGAA's answer. On June 24, 2015, Tenaska filed an answer to 
AF&PA and PGC.
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I. Background

A. Policy Statement

    2. The Policy Statement established a process to allow interstate 
natural gas pipelines to seek to recover certain capital expenditures 
made to modernize system infrastructure through a surcharge mechanism, 
subject to conditions intended to ensure that the resulting rates are 
just and reasonable and protect natural gas consumers from excessive 
costs. Recognizing that historically the Commission has required 
interstate natural gas pipelines to design their transportation rates 
based on projected units of service, the Commission found in the Policy 
Statement that recent governmental safety and environmental initiatives 
have raised the probability that interstate natural gas pipelines will 
soon face increased costs to enhance the safety and reliability of 
their systems. The Commission issued the Policy Statement in an effort 
to address these potential costs and to ensure that existing Commission 
ratemaking policies do not unnecessarily inhibit interstate natural gas 
pipelines' ability to expedite needed or required upgrades and 
improvements, such as replacing old and inefficient compressors and 
leak-prone pipelines. The Policy Statement adopted five guiding 
standards a pipeline would have to satisfy for the Commission to 
approve a proposed modernization cost tracker or surcharge. Those 
criteria are (1) Review of Existing Base Rates; (2) Defined Eligible 
Costs; (3) Avoidance of Cost Shifting; (4) Periodic Review of the 
Surcharge and Base Rates; and (5) Shipper Support.
    3. The Policy Statement addressed how the Commission would apply 
those standards, and noted that ``the Policy Statement will be most 
effective and efficient if designed according to flexible parameters 
that will allow for accommodation of the particular circumstances of 
each pipeline's circumstances. Maintaining a transparent policy with 
flexible standards will best allow pipelines and their customers to 
negotiate just and reasonable, and potentially mutually agreeable, cost 
recovery mechanisms to address the individual safety, reliability, 
regulatory compliance and other infrastructure issues facing that 
pipeline.'' \3\ The Commission also stated that ``while we are imposing 
specific conditions on the approval of any proposed modernization cost 
tracker, leaving the parameters of those conditions reasonably flexible 
will be more productive in addressing needed and required system 
upgrades in a timely manner. Further, consistent with this approach, 
the Commission will be able to evaluate any proposals in the context of 
the specific facts relevant to the particular pipeline system at 
issue.'' \4\
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    \3\ Policy Statement, 151 FERC ] 61,047 at P 40.
    \4\ Id.
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B. Request for Clarification

    4. In the Request for Clarification, the Requesters seek what they 
assert is ``clarification'' of six points related to the Policy 
Statement. Specifically they request the Commission clarify (1) that 
pipelines must provide actual cost and revenue information, based on 
twelve months of operation, including the type of data required in 
section 154.312 of the Commission's regulations, to justify its 
existing rates under standard 1; (2) the party responsible for paying 
modernization surcharges in existing capacity release arrangements; (3) 
the formal procedures for conducting the collaborative process to 
ensure all stakeholders are invited and included in meetings; (4) that 
the Commission intends the pipeline to work with each shipper sector in 
the collaborative process; (5) that if a pipeline has over-collected 
through a surcharge or tracker such that its rates are later found 
unjust and unreasonable the pipeline must pay refunds calculated from 
the date a protest or complaint was filed; and (6) that pipelines may 
not seek to implement a modernization tracker or surcharge until the 
October 1, 2015 effective date of the Policy Statement.
    5. On June 1, INGAA and Tenaska filed answers to the request for 
clarification. INGAA asserts the clarification request raises issues 
that were addressed by the Policy Statement and attempts to impose 
added burdens and restrictions not required by the Policy Statement, 
and as such should be rejected as an impermissible request for 
rehearing.\5\ INGAA further states that even if the requests can be 
considered requests for clarification, they are unnecessary because 
contrary to the assertion of Requesters, the Policy Statement's 
resolution of the issues raised is clear. Tenaska urges the Commission 
to reject the request for clarification of the cost responsibility for 
modernization charges in the capacity release context, stating that to 
do so would preemptively resolve a bilateral contract issue against 
replacement shippers. NGSA makes similar comments, stating that the 
issue of cost responsibility for modernization surcharges is one for 
the parties to the contracts, and that a generic determination by the 
Commission will inhibit contract negotiations.
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    \5\ INGAA Answer at 2 (citing Natural Gas Supply Ass'n, et al., 
137 FERC ] 61,051, at P 30 (2011)).
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    6. As discussed more fully below, the Commission denies the 
requests for clarification and declines to adopt the suggested formal 
procedures.

II. Discussion

    7. The Commission issued the Policy Statement in order to provide 
guidance to the industry as to how the Commission will evaluate 
proposals by interstate natural gas pipelines for the recovery of 
infrastructure modernization costs. As we stated in the Policy 
Statement, the Commission intends the standards a pipeline must satisfy 
to implement a modernization cost tracker ``to be sufficiently flexible 
so as not to require any specific form of compliance but to allow 
pipelines and their customers to reach reasonable accommodations based 
on the specific

[[Page 43416]]

circumstances of their systems.'' \6\ The Commission will evaluate any 
proposal for such a surcharge on an individual, case-by-case basis, at 
which time interested parties will have the opportunity to raise any 
issues or concerns. The requested clarifications are antithetical to 
that approach, and accordingly, as discussed below, the Commission 
denies the requested clarifications.
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    \6\ Policy Statement, 151 FERC ] 61,047 at P 3.
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    A. Collaborative Process
    8. The Policy Statement requires pipelines to work collaboratively 
with shippers and other interested parties to seek support for any 
proposed cost modernization surcharge. As part of this collaborative 
process, the Commission stated that, before submitting a modernization 
cost recovery proposal to the Commission, a pipeline should meet with 
its customers and other interested parties to seek resolution of as 
many issues as possible.
    9. The Requesters ask the Commission to ``clarify'' the ``formal 
procedures'' for conducting the collaborative process required by the 
Policy Statement before the pipeline files its proposal with the 
Commission, asserting that because the Policy Statement does not 
require a filing to commence such a process, there is no clear way for 
all shippers to know when a pipeline is initiating the process, or to 
ensure that the process is fair and transparent. Requesters state that 
the Commission should require the involvement of Commission settlement 
judges, mediators or technical staff to ensure shippers' rights are 
protected during the collaborative process.\7\ Requesters also request 
clarification that the Commission intends the pipeline to work with 
``each shipper sector'' during the collaborative process. Requesters 
assert that while the Commission stated it was not requiring a specific 
percentage of shipper support to approve a potential modernization cost 
tracker, it did not address ``whether the pipeline is required to seek 
shipper support from a broad spectrum of shipper sectors . . . or 
whether it can just strike a deal with a subset of its customers.'' \8\
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    \7\ Request for Clarification at 6-8.
    \8\ Request for Clarification at 9 & n.25 (citing Requester's 
February 26, 2015 Joint Reply Comments).
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    10. The Commission denies clarification and declines to adopt 
formal procedures or specified rules for the pre-filing collaborative 
process required for a modernization cost tracker. The Policy Statement 
makes clear the Commission's expectation that a pipeline work with all 
of its customers during the collaborative process \9\ that would 
precede a Natural Gas Act (NGA) section 4 filing. \10\ We decline to 
adopt formal procedures for this collaboration, however, as it is the 
Commission's intention that the process be an informal process for 
parties to share information and negotiate absent Commission 
involvement. The Policy Statement clearly states that during this 
process, a pipeline should share with its customers the results of its 
review of its systems to determine what system upgrades and 
improvements are necessary, be responsive to requests for specific cost 
and revenue data to determine whether existing rates are just and 
reasonable, and provide parties the opportunity to comment on draft 
tariff language for the proposed modernization cost mechanism. \11\
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    \9\ Policy Statement, 151 FERC ] 61,047 at P 93 (``As part of 
this collaborative process, pipelines should meet with their 
customers and other interested parties to seek resolution of as many 
issues as possible before submitting a modernization cost recovery 
proposal to the Commission.'')
    \10\ 15 U.S.C. 717c (2006).
    \11\ Id.
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    11. With respect to concerns that customers may not be aware of, or 
be made aware of, the initiation of the collaborative process to 
implement a modernization cost tracker, a pipeline will have to make an 
NGA section 4 filing to implement any cost modernization surcharge. 
That filing will be noticed the same as any other NGA section 4 filing 
at the Commission, and will provide all interested persons the 
opportunity to intervene in the proceeding and to protest. Consistent 
with NGA section 4, the burden in that instance will be on the pipeline 
to demonstrate that its proposal is just and reasonable, and as we 
stated, the Commission will decide upon appropriate procedures to 
address protests based upon the specific circumstances of each 
proposal. Thus, in order to implement a proposed modernization cost 
tracker in an efficient manner and without unnecessary delay, it is in 
the proposing pipeline's best interest to resolve as many outstanding 
issues as possible through the collaborative process prior to filing a 
modernization cost recovery mechanism proposal.\12\ As noted in the 
Policy Statement, the intent is to ``provide pipelines and their 
customers wide latitude to reach agreements incorporating remedies for 
a variety of system safety, reliability and/or efficiency issues.'' 
\13\ Adoption of formal procedures as suggested by the Requesters would 
thwart rather than facilitate this intent and the collaborative 
process.
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    \12\ In fact, INGAA recognizes in its answer (at 5) that 
``excluding specific shippers or shipper sectors from the 
collaborative process . . . would not be in pipelines' best 
interests because any shippers or shipper groups that were excluded 
from the process would surely contest any agreement reached by the 
other parties.''
    \13\ Policy Statement, 151 FERC ] 61,047 at P 94.
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 B. Existing Rate Justification

    12. The Policy Statement states that ``any pipeline seeking a 
modernization cost recovery tracker must demonstrate that its current 
base rates to which the surcharge would be added are just and 
reasonable. This is necessary to ensure that the overall rate produced 
by the addition of the surcharge to the base rate is just and 
reasonable, and does not reflect any cost over-recoveries that may have 
been occurring under the preexisting base rates.'' \14\
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    \14\ Id. P 51.
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    13. Requesters assert that the Policy Statement does not identify 
the data that pipelines must provide under the Commission's regulations 
to show that the rates are just and reasonable, and whether a cost and 
revenue study would need to include the information in the form 
required by section 154.312 or 154.313 of the Commission's regulations. 
Requesters state the Commission should clarify that the pipeline must 
provide its most recent 12-months of actual costs and revenues, and the 
information required under the more inclusive section 154.312, prior to 
engaging in any collaborative process with its shippers.\15\
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    \15\ Request for Clarification at 1-5.
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    14. The Commission denies clarification. In the Policy Statement, 
we declined to adopt suggestions that we require an NGA general section 
4 rate proceeding as the only means to satisfy the standard that 
existing rates are just and reasonable. As we noted, the ``type of rate 
review necessary to determine whether a pipeline's existing rates are 
just and reasonable is likely to vary from pipeline to pipeline . . . 
therefore, we remain open to considering alternative approaches for a 
pipeline to justify its existing rates.'' \16\ As that statement 
implies, the Commission determined neither to require a specific method 
by which the pipeline must show its existing rates are just and 
reasonable, nor to proscribe the specific data or form that the data 
must take if a pipeline chooses to justify its existing rates by a 
method other than a general NGA section 4 rate case.
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    \16\ Policy Statement, 151 FERC ] 61,047 at P 52.
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    15. As we made clear in the Policy Statement, a pipeline seeking a

[[Page 43417]]

modernization cost surcharge must demonstrate to the Commission that 
its existing base rates are no higher than a just and reasonable level. 
Absent such a showing, the Commission would be unable to find that the 
overall rate produced by the addition of the surcharge to the base rate 
is just and reasonable. In order to facilitate the review of the 
pipeline's existing rates, we encouraged pipelines to engage in a full 
exchange of information with their customers.\17\ If that process fails 
to satisfy interested parties that existing base rates are no higher 
than a just and reasonable level, then the Commission will establish 
procedures to resolve any disputed issues of fact raised in the 
parties' protests to the filing based upon substantial evidence on the 
record. Such procedures may include, if necessary, a hearing before an 
Administrative Law Judge.\18\ Thus, to the extent a pipeline seeks 
expedient approval of a modernization cost tracker, the Commission 
expects that the pipeline will freely share data and the results of its 
system testing to attempt to resolve as many issues as possible prior 
to filing for the tracker.
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    \17\ Policy Statement, 151 FERC ] 61,047 at P 53.
    \18\ If the pipeline files a settlement supported by many of its 
shippers but some contesting parties raise issues that cannot be 
resolved on the existing record, the Commission may approve the 
settlement as uncontested for the consenting parties and sever the 
contesting parties to litigate their issues. This preserves the 
benefit of the settlement for the consenting parties, while allowing 
the contesting parties to obtain a litigated result on the merits. 
Trailblazer Pipeline Co., 85 FERC ] 61,345, at 62,344-5 (1998), 
reh'g, 87 FERC ] 61,110, at 61,446-7 (1999).
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C. Retroactive Refunds

    16. Requesters also state that the Commission should clarify that 
if a pipeline has over-collected through a surcharge or tracker, such 
that its rates are later found to be unjust and unreasonable after a 
protest or complaint proceeding, the pipeline must pay refunds 
calculated from the date a protest or complaint was filed. They request 
a requirement that a pipeline seeking a modernization cost surcharge or 
tracker must agree that, if during the period that the surcharge is in 
effect, a protest or an NGA section 5 complaint is filed against the 
pipeline, the pipeline must make refunds retroactive to the date of the 
protest or complaint.\19\ Requesters assert the condition is justified 
in return for obtaining an exception to the standard NGA section 4 
ratemaking principles.
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    \19\ Request for Clarification at 10-11.
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    17. The Commission denies the requested clarification.\20\ If the 
Commission is unable to determine the justness and reasonableness of a 
proposed modernization cost tracker mechanism within 30 days after its 
filing pursuant to NGA section 4, the Commission will suspend the 
filing and it will remain subject to refund until the Commission 
determines whether it is just and reasonable. Further, once a 
modernization cost tracker mechanism has been approved, the requirement 
that such mechanisms include a provision for trueing up cost over and 
under-recoveries will ensure that the pipeline only recovers eligible 
costs approved for recovery in the tracker mechanism. Each of the 
pipeline's periodic filings pursuant to its modernization cost tracker 
mechanism would include a comparison of the costs approved for recovery 
during the prior period with the amounts the pipeline actually 
collected from its shippers during that period.\21\ To the extent the 
pipeline over-recovered or under-recovered those costs during the 
relevant period, it would adjust the surcharge for the next period up 
or down so as to either return the over-recovery to its shippers or 
collect any under-recovery from them. Accordingly, the Commission finds 
no reason to condition the right to implement a modernization cost 
tracker mechanism on the pipeline's agreement to forego its NGA section 
5 rights against retroactive refunds for amounts recovered pursuant to 
a modernization cost tracker mechanism that the Commission has approved 
as just and reasonable under NGA section 4.
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    \20\ The Commission notes further that this request is 
effectively a request for rehearing of the Commission's decision not 
to adopt a virtually identical condition requested by APGA in its 
comments on the Proposed Policy Statement. See APGA Initial Comments 
at 20, Policy Statement, 151 FERC ] 61,047 at P 86.
    \21\ The pipeline's customers would have a chance to challenge 
any of the projected costs included in the periodic filings.
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D. Cost Responsibility in Capacity Release Agreements

    18. With respect to capacity releases, Requesters state that the 
Policy Statement did not respond to concerns raised by AF&PA that 
parties to existing capacity release agreements did not contemplate 
cost responsibility for modernization costs in existing capacity 
release agreements, and thus the Commission should clarify that such 
costs should be placed on replacement shippers.\22\
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    \22\ Request for Clarification at 5-6.
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    19. In their answers, INGAA and the NGSA oppose Requesters' 
proposal that cost responsibility for any modernization surcharge be 
placed on replacement shippers. INGAA states that under Commission 
policy, the releasing shipper remains ultimately liable for any 
surcharge amount that a replacement shipper does not pay. NGSA asserts 
that given the myriad of current day contracting options, the 
resolution of contractual matters, particularly where the contract is 
silent as to surcharge cost responsibility, is best left to the 
contracting parties. NGSA also argues that the Commission should not 
make a generic determination as to the responsibility for modernization 
cost surcharges within existing capacity release agreements because 
doing so would unnecessarily impede the parties' attempts to negotiate 
and resolve the issue.
    20. The Commission denies clarification. Section 284.8(f) of the 
Commission's regulations \23\ provides that, unless otherwise agreed by 
the pipeline, the contract of the releasing shipper will remain in full 
force and effect during the release, with the net proceeds from any 
release to a replacement shipper credited to the releasing shipper's 
reservation charge. Therefore, to the extent the releasing shipper's 
service agreement permits the pipeline to recover the surcharge from 
the releasing shipper, the releasing shipper would remain liable for 
the surcharge during the term of any temporary release. The replacement 
shipper's liability for the surcharge would turn on the terms of its 
release. If the release requires the replacement shipper to pay any 
portion of the surcharge, those payments would be credited to the 
releasing shipper. In short, the issue of cost responsibility for 
modernization costs during the term of a capacity release is a 
contractual issue between the relevant parties,\24\ and that issue 
cannot be resolved on a generic basis.
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    \23\ 18 CFR 284.8(f) (2014).
    \24\ See Policy Statement, 151 FERC ] 61,047 at P 82, stating 
that the pipeline's ability to impose a modernization cost surcharge 
on discounted or negotiated rate shippers is a contractual issue 
between the pipeline and its discounted or negotiated rate shippers.
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E. Effective Date

    21. Finally, Requesters seek clarification that pipelines may not 
seek to implement a modernization cost tracker through a filing, or 
even commence the collaborative process, until the October 1, 2015 
effective date of the Policy Statement.\25\ Requesters state that this 
effective date enforcement would provide the Commission time to 
proscribe the formal procedures that it requests.
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    \25\ Request for Clarification at 11-12.

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[[Page 43418]]

    22. The Commission declines to provide the requested clarification. 
The Commission has no authority to regulate a pipeline's discussions 
with its customers or the content of such discussions. Moreover, even 
if it had the authority, the Commission advocates active discussions 
between pipelines and their customers, and as we stated in the Policy 
Statement, ``[t]he Commission sees no reason for pipelines to wait to 
make needed improvements to their systems until a regulation is adopted 
requiring them to do so.'' \26\
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    \26\ Policy Statement, 151 FERC ] 61,047 at P 68.
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    23. Additionally, the Commission lacks the authority to prevent a 
pipeline from making an NGA section 4 filing to request approval for a 
modernization cost tracker. As INGAA notes, the Policy Statement did 
not permit pipelines to file for tracker mechanisms for the first time; 
it announced the Commission's policy for addressing such filings. There 
is nothing to prevent a pipeline from making a proposal consistent with 
the Commission's existing policy as set forth in Columbia Gas 
Transmission, LLC,\27\ prior to October 1, 2015.\28\
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    \27\ Columbia Gas Transmission, LLC, 142 FERC ] 61,062 (2013).
    \28\ Further, because the Commission declines to adopt the 
requested formal procedures for the collaborative process there is 
no need for the suggested delay to allow time for the Commission to 
develop those procedures.
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    24. Finally, we note that, as with any policy statement, the Policy 
Statement is not a final action of the Commission but an expression of 
our intent as to how we will evaluate proposals by interstate natural 
gas pipelines for the recovery of infrastructure modernization costs. 
As the U.S. Court of Appeals for the District of Columbia Circuit has 
held, a statement of policy ``is not finally determinative of the 
issues or rights to which it is addressed;'' rather, it only 
``announces the agency's tentative intentions for the future.'' \29\ We 
will consider each pipeline proposal to implement a modernization cost 
tracker based on the facts relevant to that particular pipeline and 
will address any further concerns regarding the Policy Statement on a 
case-by-case basis.
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    \29\ Pacific Gas & Electric Co. v. FPC, 506 F.2d 33, 38 (D.C. 
Cir. 1974). See Alternatives to Traditional Cost-of-Service 
Ratemaking for Natural Gas Pipelines, 75 FERC ] 61,024, at 61,076 
(citing, American Gas Ass'n v. FERC, 888 F.2d 136 (1989); Interstate 
Natural Gas Pipeline Rate Design, 47 FERC ] 61,295 (1985), order on 
reh'g, 48 FERC ] 61,122, at 61,442 (1989)).
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F. Information Collection Statement

    25. The collection of information discussed in the Policy Statement 
is being submitted to the Office of Management and Budget (OMB) for 
review under section 3507(d) of the Paperwork Reduction Act of 1995 
\30\ and OMB's implementing regulations.\31\ OMB must approve 
information collection requirements imposed by agency rules.
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    \30\ 44 U.S.C. 3507(d) (2012).
    \31\ 5 CFR 1320.
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    26. In the Policy Statement, the Commission solicited comments from 
the public on the Commission's need for this information, whether the 
information will have practical utility, the accuracy of the burden 
estimates, recommendations to enhance the quality, utility, and clarity 
of the information to be collected, and any suggested methods for 
minimizing respondents' burden, including the use of automated 
information techniques. The Commission received no comments on those 
issues.
    27. The burden estimates are for implementing the information 
collection requirements of the Policy Statement. The collection of 
information related to the Policy Statement falls under FERC-545 (Gas 
Pipeline Rates: Rate Change (Non-Formal).\32\ The following estimate of 
reporting burden is related only to the Policy Statement.
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    \32\ The information collection requirements in the Policy 
Statement were included in FERC-545A (OMB Control No.: TBD). The 
Commission used FERC-545A (a temporary collection number) because 
another item was pending OMB review under FERC-545, and only one 
item per OMB Control Number can be pending review at OMB at a time. 
The submittal to OMB will now be made under FERC-545 (OMB Control 
No. 1902-0154).
    \33\ An estimated 165 natural gas pipelines (Part 284 program) 
may be affected by the Policy Statement. Of the 165 pipelines, 
Commission staff estimates that 3 pipelines may choose to submit an 
application for a modernization cost tracker per year.
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    28. Public Reporting Burden: The estimated annual burden and cost 
follow.
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    \34\ The hourly wage figures are published by the Bureau of 
Labor Statistics, U.S. Department of Labor, National Occupational 
Employment and Wage Estimates, United States, Occupation Profiles, 
May 2014 (available 4/1/2015) at http://www.bls.gov/oes/home.htm, 
and the benefits are calculated using BLS information, at http://www.bls.gov/news.release/ecec.nr0.htm.
    The average hourly cost (salary plus benefits) to prepare the 
modernization cost tracker filing is $65.59. It is the average of 
the following hourly costs (salary plus benefits): manager ($77.93, 
NAICS 11-0000), Computer and mathematical ($58.17, NAICS 15-0000), 
Legal ($129.68, NAICS 23-0000), Office and administrative support 
($39.12, NAICS 43-0000), Accountant and auditor ($51.04, NAICS 13-
2011), Information and record clerk ($37.45, NAICS 43-4199), 
Engineer ($66.74, NAICS 17-2199), Transportation, Storage, and 
Distribution Manager ($64.55, NAICS 11-3071).
    The average hourly cost (salary plus benefits) to perform the 
periodic review is $67.04. It is the average of the following hourly 
costs (salary plus benefits): manager ($77.93, NAICS 11-0000), Legal 
($129.68, NAICS 23-0000), Office and administrative support ($39.12, 
NAICS 43-0000), Accountant and auditor ($51.04, NAICS 13-2011), 
Information and record clerk ($37.45, NAICS 43-4199).
    \35\ The pipeline's modernization cost tracker filing is 
expected to include information to:
    Demonstrate that its current rates are just and reasonable and 
that proposal includes the types of benefits that the Commission 
found maintained the pipeline's incentives for innovation and 
efficiency;
    Identify each capital investment to be recovered by the 
surcharge, the facilities to be upgraded or installed by those 
projects, and an upper limit on the capital costs related to each 
project to be included in the surcharge, and schedule for completing 
the projects;
    Establish accounting controls and procedures that it will 
utilize to ensure that only identified eligible costs are included 
in the tracker;
    Include method for periodic review of whether the surcharge and 
the pipeline's base rates remain just and reasonable; and
    State the extent to which any particular project will disrupt 
primary firm service, explain why it expects it will not be able to 
continue to provide firm service, and describe what arrangements the 
pipeline intends to make to mitigate the disruption or provide 
alternative methods of providing service.
    \36\ Based on the Columbia case, we estimate that a review may 
be required every 5 years, triggering the first pipeline reviews to 
be done in Year 6 (for the pipelines which applied and received 
approval in Year 1).

                           FERC-545, Modifications From Policy Statement in PL15-1-000
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                                     Number of       Number of    Average burden                   Total annual
                                    respondents    responses per     hours per     Total annual    cost ($) \34\
                                       \33\         respondent       response      burden hours      [rounded]
----------------------------------------------------------------------------------------------------------------
                                             (1)             (2)             (3)     (1) x (2) x  ..............
                                                                                             (3)
----------------------------------------------------------------------------------------------------------------
Provide information to shippers                3               1             750           2,250        $147,578
 for any surcharge proposal, and
 prepare modernization cost
 tracker filing \35\............
Perform periodic review and                    3       \36\ 0.60             350             630         $42,235
 provide information to show
 that both base rates and the
 surcharge amount remain just
 and reasonable.................
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[[Page 43419]]

    29. Title: FERC-545, Gas Pipeline Rates: Rate Change (Non-formal).
    30. Action: Revisions to an information collection.
    31. OMB Control No.: 1902-0154.
    32. Respondents: Business or other for profit enterprise (Natural 
Gas Pipelines).
    33. Frequency of Responses: Ongoing.
    34. Necessity of Information: The Commission is establishing a 
policy to allow interstate natural gas pipelines to seek to recover 
certain capital expenditures made to modernize system infrastructure 
through a surcharge mechanism, subject to certain conditions. The 
information that the pipeline should share with its shippers and submit 
to the Commission is intended to ensure that the resulting rates are 
just and reasonable and protect natural gas consumers from excessive 
costs
    35. Internal Review: The Commission has reviewed the guidance in 
the Policy Statement and has determined that the information is 
necessary. These requirements conform to the Commission's plan for 
efficient information collection, communication, and management within 
the natural gas pipeline industry. The Commission has assured itself, 
by means of its internal review, that there is specific, objective 
support for the burden estimates associated with the information 
requirements.
    36. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426 [Attention: 
Ellen Brown, Office of the Executive Director, email: 
[email protected], phone: (202) 502-8663, fax: (202) 273-0873].
    37. Comments filed with OMB, identified by the OMB Control No. 
1902-0154 should be sent via email to the Office of Information and 
Regulatory Affairs: [email protected], Attention: Federal Energy 
Regulatory Commission Desk Officer. The Desk Officer may also be 
reached via telephone at 202-395-0710. A copy of the comments should 
also be sent to the Commission, in Docket No. PL15-1-000. Comments 
concerning the collection of information and the associated burden 
estimate should be submitted by August 21, 2015.
    The Commission orders:
    The requests for clarification are denied as discussed above.

    By the Commission.

    Issued: July 16, 2015.
Kimberly D. Bose,
Secretary.
[FR Doc. 2015-17949 Filed 7-21-15; 8:45 am]
BILLING CODE 6717-01-P