Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations 80685 

1Contract Reporting Requirements of Intrastate 

Natural Gas Companies, Order No. 735, 75 FR 

29404, FERC Stats. & Regs. ¶ 31,310 (2010) (Order 

No. 735 or Final Rule). 2Under section 2(16) of the NGPA, 15 U.S.C. 

3301(16), the term ‘‘intrastate pipeline’’ may refer to 

all entities engaged in natural gas transportation 

under section 311 of the NGPA or section 1(c) of 

the NGA. For consistency, this Final Rule will also 

use the terms ‘‘transportation,’’ ‘‘pipeline,’’ and 

‘‘shippers’’ to refer inclusively to storage activity 

(except where noted). 

3 15 U.S.C. 3372. 

4Section 1(c) of the NGA exempts from the 

Commission’s NGA jurisdiction those pipelines 

which transport gas in interstate commerce if (1) 

they receive natural gas at or within the boundary 

of a state, (2) all the gas is consumed within that 

state, and (3) the pipeline is regulated by a state 

Commission. This exemption is referred to as the 

Hinshaw exemption after the Congressman who 

introduced the bill amending the NGA to include 

section 1(c). See ANR Pipeline Co. v. Federal Energy 

Regulatory Comm’n, 71 F.3d 897, 898 (1995) 

(briefly summarizing the history of the Hinshaw 

exemption). 

5This Final Rule does not eliminate or revise 18 

CFR 284.126(c) and the corresponding Form No. 

537, which require a semi-annual storage report. 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 284 

[Docket No. RM09–2–001; Order No. 

735–A] 

Contract Reporting Requirements of 

Intrastate Natural Gas Companies 

Issued December 16, 2010. 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

ACTION: Order on rehearing. 

SUMMARY: In this Order on Rehearing, 

the Commission addresses pending 

requests to reconsider or clarify Order 

No. 735, in which it reformed its 

reporting requirements and instituted 

Form No. 549D—Quarterly 

Transportation and Storage Report for 

Intrastate Natural Gas and Hinshaw 

Pipelines. Order No. 735–A generally 

reaffirms the Final Rule. It also retracts 

the increased requirements for contract 

end dates and per-customer revenue, 

extends the filing deadlines from 30 

days to 60 days after each reporting 

quarter, and offers clarification on 

several matters. Simultaneously with 

this order, the Commission is issuing a 

Notice of Inquiry under a separate 

docket to explore reforms to the semiannual storage reporting requirements 

for interstate and intrastate storage 

companies. 

DATES: Effective Date: The revisions 

made in this Order on Rehearing are 

effective April 1, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Vince Mareino (Legal Information), 

Office of the General Counsel, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 20426, 

(202) 502–6167, 

Vince.Mareino@ferc.gov. 

James Sarikas (Technical 

Information), Office of Energy Markets 

Regulation, Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426, (202) 502–6831, 

James.Sarikas@ferc.gov. 

Thomas Russo (Technical 

Information), Office of Enforcement, 

Federal Energy Regulatory Commission, 

888 First Street, NE., Washington, DC 

20426, (202) 502–8792, 

Thomas.Russo@ferc.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

Paragraph 

No. 

I. Background ............................................................................................................................................................................................ 3. 

II. Discussion ............................................................................................................................................................................................ 15. 

A. Changes to the Quarterly Reporting Requirement ...................................................................................................................... 17. 

1. Interruptible Contract End-Dates .......................................................................................................................................... 17. 

2. Customer Revenues ................................................................................................................................................................ 20. 

3. Quarterly Reporting Deadlines .............................................................................................................................................. 24. 

B. Justification for Increased Transparency Required by the Rule ................................................................................................ 26. 

1. Statutory Authority To Require Public Disclosure .............................................................................................................. 31. 

2. Harm to Storage Providers With Market-Based Rates ......................................................................................................... 39. 

3. Evidence ................................................................................................................................................................................. 48. 

4. Insufficiency of Periodic Rate Review .................................................................................................................................. 58. 

5. Burden .................................................................................................................................................................................... 61. 

C. Identification of Receipt Points ................................................................................................................................................... 64. 

D. Identification of Shippers ............................................................................................................................................................ 67. 

E. Prior Period Adjustment and Inactive Contracts ........................................................................................................................ 70. 

F. Semi-Annual Storage Report ........................................................................................................................................................ 74. 

G. Effective Date and Technical Workshop ..................................................................................................................................... 77. 

III. Information Collection Statement ...................................................................................................................................................... 79. 

IV. Environmental Analysis ..................................................................................................................................................................... 82. 

V. Regulatory Flexibility Act ................................................................................................................................................................... 83. 

VI. Document Availability ....................................................................................................................................................................... 84. 

VII. Effective Date ..................................................................................................................................................................................... 87. 

Before Commissioners: Jon Wellinghoff, 

Chairman; Marc Spitzer, Philip D. 

Moeller, John R. Norris, and Cheryl A. 

LaFleur. 

Order on Rehearing 

1. On May 20, 2010, the Commission 

issued Order No. 735,1 revising the 

contract reporting requirements for (1) 

intrastate natural gas pipelines 2

providing interstate transportation 

service pursuant to pursuant to section 

311 of the Natural Gas Policy Act of 

1978 (NGPA) 3 and (2) Hinshaw 

pipelines providing interstate service 

subject to the Commission’s Natural Gas 

Act (NGA) section 1(c) jurisdiction 

pursuant to blanket certificates issued 

under § 284.224 of the Commission’s 

regulations.4 Order No. 735 sought to 

bring the less stringent transactional 

reporting requirements for section 311 

and Hinshaw pipelines closer in line 

with the reporting requirements for 

interstate pipelines, without imposing 

unduly burdensome requirements on 

the pipelines. Specifically, Order No. 

735 revised § 284.126(b) of the 

Commission’s regulations and replaced 

Form No. 549—Intrastate Pipeline 

Annual Transportation Report with the 

new Form No. 549D, so as to (1) 

increase the reporting frequency from 

annual to quarterly, (2) include certain 

additional types of information and 

cover storage transactions as well as 

transportation transactions,5 (3) 

establish a procedure for Form No. 549D 

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80686 Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations 

6The Appendix to this order includes a static 

PDF version of the draft revised Form No. 549D. 

The Appendix will not be included in the Federal 

Register, but is available on the Commission’s 

eLibrary site. The draft revised form is being 

submitted to the Office of Management and Budget 

(OMB) for review and approval. 

7 15 U.S.C. 3371(c). 

8Certain Transportation, Sales, and Assignments 

by Pipeline Companies not Subject to Commission 

Jurisdiction Under Section 1(c) of the Natural Gas 

Act, Order No. 63, FERC Stats. & Regs. ¶ 30,118, at 

30,824–25 (1980). 

9See 18 CFR 284.7(b), 284.9(b), and 284.122. 

10See Associated Gas Distributors v. FERC, 824 

F.2d 981, 1002–1003 (D.C. Cir. 1987) (Associated 

Gas Distributors); Mustang Energy Corp. v. Federal 

Energy Regulatory Comm’n, 859 F.2d 1447, 1457 

(10th Cir. 1988), cert. denied, 490 U.S. 1019 (1988); 

see also EPGT Texas Pipeline, 99 FERC ¶ 61,295 

(2002). 

11Pipeline Service Obligations, and Revisions to 

Regulations Governing Self-Implementing 

Transportation Under Part 284 of the Commission’s 

Regulations; Regulation of Natural Gas Pipelines 

After Partial Wellhead Decontrol, Order No. 636–B, 

61 FERC ¶ 61,272, at 61,992 n.26 (1992), order on 

reh’g, 62 FERC ¶ 61,007 (1993), aff’d in part and 

remanded in part sub nom. United Distribution Cos. 

v. FERC, 88 F.3d 1105 (D.C. Cir. 1996), order on 

remand, Order No. 636–C, 78 FERC ¶ 61,186 (1997). 

12Regulation of Short-Term Natural Gas 

Transportation Services and Regulation of 

Interstate Natural Gas Transportation Services, 

Order No. 637, FERC Stats. & Regs. ¶ 31,091, 

clarified, Order No. 637–A, FERC Stats. & Regs. 

¶ 31,099, reh’g denied, Order No. 637–B, 92 FERC 

¶ 61,062 (2000), aff’d in part and remanded in part 

sub nom. Interstate Natural Gas Ass’n of America 

v. FERC, 285 F.3d 18 (D.C. Cir. 2002), order on 

remand, 101 FERC ¶ 61,127 (2002), order on reh’g, 

106 FERC ¶ 61,088 (2004), aff’d sub nom. American 

Gas Ass’n v. FERC, 428 F.3d 255 (D.C. Cir. 2005). 

to be filed in a uniform electronic 

format and posted on the Commission’s 

web site, and (4) hold that those reports 

must be public and may not be filed 

with information redacted as privileged. 

Order No. 735 also modified 

Commission policy concerning periodic 

reviews of the rates charged by section 

311 and Hinshaw pipelines to extend 

the cycle for such reviews from 3 years 

to 5 years. 

2. In this order, the Commission 

addresses requests for rehearing or 

clarification of Order No. 735. Five 

requests for rehearing or clarification of 

Order No. 735 were timely filed, by 

Arkansas Oklahoma Gas Corporation 

(AOG), Enstor Operating Company, LLC 

(Enstor), Enogex LLC (Enogex), Jefferson 

Island Storage & Hub, L.L.C. (Jefferson), 

and the Texas Pipeline Association 

(TPA). As discussed below, we largely 

affirm Order No. 735, granting a limited 

number of rehearing requests and 

clarifying the order.6

I. Background 

3. NGPA section 311 authorizes the 

Commission to allow intrastate 

pipelines to transport natural gas ‘‘on 

behalf of’’ interstate pipelines or local 

distribution companies served by 

interstate pipelines ‘‘under such terms 

and conditions as the Commission may 

prescribe.’’ 7 NGPA section 601(a)(2) 

exempts transportation service 

authorized under NGPA section 311 

from the Commission’s NGA 

jurisdiction. Congress adopted these 

provisions in order to eliminate the 

regulatory barriers between the 

intrastate and interstate markets and to 

promote the entry of intrastate pipelines 

into the interstate market. After the 

adoption of the NGPA, the Commission 

authorized Hinshaw pipelines to apply 

for NGA section 7 certificates, 

authorizing them to transport natural 

gas in interstate commerce in the same 

manner as intrastate pipelines may do 

under NGPA section 311.8

4. Subpart C of the Commission’s Part 

284 open access regulations (18 CFR 

284.121–126) implements the 

provisions of NGPA section 311 

concerning transportation by intrastate 

pipelines. Those regulations require that 

intrastate pipelines performing 

interstate service under NGPA section 

311 must do so on an open access 

basis.9 However, as described in Order 

No. 735, the Commission has not 

imposed on intrastate pipelines all of 

the Part 284 open access transportation 

requirements imposed on interstate 

pipelines, consistent with the NGPA’s 

goal of encouraging intrastate pipelines 

to provide interstate service.10 Thus, the 

Commission does not require intrastate 

pipelines to offer firm open access 

service, or comply with the 

requirements of Order No. 636, such as 

capacity release and flexible receipt and 

delivery points.11 Section 284.224 of the 

Commission’s regulations provides for 

the issuance of blanket certificates to 

Hinshaw pipelines to provide open 

access transportation service ‘‘to the 

same extent that, and in the same 

manner’’ as intrastate pipelines are 

authorized to perform such service by 

Subpart C. 

5. The Commission currently has less 

stringent transactional reporting 

requirements for NGPA section 311 

intrastate pipelines and Hinshaw 

pipelines, than for interstate pipelines. 

In Order No. 637,12 the Commission 

revised the reporting requirements for 

interstate pipelines in order to provide 

more transparent pricing information 

and to permit more effective monitoring 

for the exercise of market power and 

undue discrimination. As adopted by 

Order No. 637, § 284.13(b) of the 

Commission’s regulations requires 

interstate pipelines to post on their 

internet websites basic information on 

each transportation and storage 

transaction with individual shippers, no 

later than the first nomination under a 

transaction. This information includes: 

• The name of the shipper 

• The contract number (for firm 

service) 

• The rate charged 

• The maximum rate 

• The duration (for firm service) 

• The receipt and delivery points and 

zones covered 

• The quantity of natural gas covered 

• Any special terms or details, such 

as any deviations from the tariff 

• Whether any affiliate relationship 

exists. 

6. In addition, § 284.13(e) of the 

Commission’s regulations requires 

interstate pipelines to file semi-annual 

reports of their storage injection and 

withdrawal activities, including the 

identities of the customers, the volumes 

injected into and withdrawn from 

storage for each customer and the unit 

charge and total revenues received. 

7. The Commission has not imposed 

any daily transactional posting 

requirement on section 311 and 

Hinshaw pipelines comparable to the 

daily posting requirement in Order No. 

637. Until Order No. 735, § 284.126(b) of 

the Commission’s regulations only 

required intrastate pipelines to file 

annual reports of their transportation 

transactions with the Commission, 

excluding storage transactions. Those 

reports included the following 

information: 

• The name of the shipper receiving 

transportation service 

• The type of service performed (i.e. 

firm or interruptible) 

• The total volumes transported for 

the shipper, including for firm service a 

separate statement of reservation and 

usage quantities 

• Total revenues received for the 

shipper, including for firm service a 

separate statement of reservation and 

usage revenues. 

8. Unlike the interstate pipelines’ 

transactional posting requirements 

adopted by Order No. 637, § 284.126(b) 

of the Commission’s regulations did not 

require intrastate pipelines to report the 

rate charged under each contract, the 

duration of the contract, the receipt and 

delivery points, and the zones or 

segments covered by each contract, 

whether the contract includes any 

special terms and conditions, or 

whether there is an affiliate relationship 

between the pipeline and the shipper. 

9. Section 284.126(c) of the 

Commission’s regulations requires 

section 311 intrastate pipelines and 

Hinshaw pipelines to file a semi-annual 

report of their storage activity, within 30 

days of the end of each complete storage 

and injection season. This requirement 

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Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations 80687 

13SG Resources Mississippi, L.L.C., 125 FERC 

¶ 61,191 (2008) (SGRM). 

14 15 U.S.C. 717c(c). 

15Contract Reporting Requirement of Intrastate 

Natural Gas Companies, FERC Stats. & Regs. 

¶ 35,559 (2008) (NOI). 

16Contract Reporting Requirements of Intrastate 

Natural Gas Companies, FERC Stats. & Regs. 

¶ 32,644 (2009) (NOPR). 

is substantially the same as the 18 CFR 

284.13(e) requirement that interstate 

pipelines file such semi-annual reports 

of their storage activity. 

10. In November 2008, the 

Commission denied a request by SG 

Resources Mississippi, L.L.C. (SGRM), 

an interstate storage provider with 

market-based rates, for waiver of the 

Order No. 637 requirements that 

interstate pipelines post the rates 

charged in each transaction no later 

than first nomination for service. SGRM 

contended that the Order No. 637 daily 

posting requirements placed marketbased rate interstate storage providers at 

a competitive disadvantage with marketbased rate NGPA section 311 intrastate 

storage providers, who were subject 

only to semi-annual storage and annual 

transportation reporting requirements. 

The Commission held that the interstate 

pipeline posting requirements are 

necessary to provide shippers with the 

price transparency they need to make 

informed decisions, and the ability to 

monitor transactions for undue 

discrimination and preference.13 The 

Commission also found that the 

requested exemption would be contrary 

to NGA section 4(c)’s requirement that 

‘‘every natural gas company * * * keep 

open * * * for public inspection * * * 

all rates.’’ 14

11. However, simultaneously with the 

denial of SGRM’s waiver request, the 

Commission commenced this 

proceeding with a Notice of Inquiry 

(NOI) in order to explore (1) whether the 

disparate reporting requirements for 

interstate and intrastate pipelines have 

an adverse competitive effect on the 

interstate pipelines and (2) if so, 

whether the Commission should modify 

the reporting requirements for section 

311 intrastate pipelines and Hinshaw 

pipelines in order to make them more 

comparable to the 18 CFR 284.13(b) 

posting requirements for interstate 

pipelines.15 Based upon the comments 

received in response to the NOI, the 

Commission issued a Notice of 

Proposed Rulemaking (NOPR),16

proposing to revise its transactional 

reporting requirements for intrastate 

pipelines. The Commission determined 

not to impose the full interstate pipeline 

daily transactional positing 

requirements on section 311 and 

Hinshaw pipelines. The Commission 

was concerned that the burden of a 

daily internet posting requirement could 

discourage section 311 and Hinshaw 

pipelines from performing interstate 

service, contrary to the purpose of the 

NGPA. In addition, it did not appear 

from the comments that there was 

widespread concern among interstate 

pipelines that foregoing a daily posting 

requirement would cause significant 

adverse competitive effects. However, 

the Commission proposed increased 

transactional reporting requirements for 

section 311 and Hinshaw pipelines in 

order to provide shippers and the 

Commission with more timely and 

useful information concerning the 

transactions entered into by section 311 

and Hinshaw pipelines. 

12. As adopted by Order No. 735, the 

increased transactional reporting 

requirements for section 311 and 

Hinshaw pipelines are as follows. First, 

the Commission modified the existing 

18 CFR 284.126(b) annual transportation 

reporting requirement to require section 

311 and Hinshaw pipelines to make the 

report on a quarterly basis. Second, the 

Commission required that the reports 

cover storage transactions as well as 

transportation transactions. Third, 

Order No. 735 required that the reports 

must contain the following information 

on each transaction, aggregated by 

contract: 

i. The full legal name, and 

identification number, of the shipper 

receiving the service, including whether 

there is an affiliate relationship between 

the pipeline and the shipper; 

ii. The type of service performed (i.e., 

firm or interruptible transportation, 

storage, or other service); 

iii. The rate charged under each 

contract, specifying the rate schedule/ 

name of service and docket where the 

rates were approved. The report should 

separately state each rate component set 

forth in the contract (i.e., reservation, 

usage, and any other charges); 

iv. The primary receipt and delivery 

points covered by the contract, 

identified by the list of points that the 

pipeline has published with the 

Commission, which shall include the 

industry common code for each point 

where one has already been established; 

v. The quantity of natural gas the 

shipper is entitled to transport, store, or 

deliver under each contract; 

vi. The duration of the contract, 

specifying the beginning and ending 

month and year of the current 

agreement; 

vii. Total volumes transported, stored, 

injected, or withdrawn for the shipper; 

and 

viii. Total revenues received for the 

shipper. The report should separately 

state revenues received under each rate 

component. 

13. Finally, Order No. 735 established 

a procedure for the Form No. 549D 

reports to be filed in a uniform 

electronic format and posted on the 

Commission’s web site, and held that 

those reports must be public and may 

not be filed with information redacted 

as privileged. The Commission found 

that these transactional reporting 

requirements appropriately balanced the 

need for increased transparency of 

section 311 and Hinshaw pipeline 

transactions, while avoiding unduly 

burdensome requirements that might 

discourage such pipelines from 

participating in the interstate market. 

14. While Order No. 735 revised the 

18 CFR 284.126(b) report to include 

storage transactions, the Commission 

continued to require section 311 and 

Hinshaw pipelines to make the semiannual storage activity reports currently 

required by § 284.126(c) of the 

Commission’s regulations. The 

Commission explained in the NOPR that 

those reports included information that 

is not contained in the proposed 

quarterly transactional reports. 

Specifically, § 284.126(c) of the 

Commission’s regulations requires 

section 311 and Hinshaw pipelines to 

report total volumes injected into 

storage during each complete storage 

injection season and total volumes 

withdrawn from storage during each 

complete storage withdrawal season. 

Such seasonal information is not 

captured by the new 18 CFR 284.126(b) 

quarterly transactional reports, because 

those reports do not correlate with the 

typical five-month withdrawal and 

seven-month injection seasons. The 

Commission also stated that retaining 

the 18 CFR 284.126(c) semi-annual 

storage activity report for section 311 

and Hinshaw pipelines is consistent 

with the Commission’s existing 

requirement, in § 284.13(e) of the 

Commission’s regulations, that 

interstate pipelines also make such 

semi-annual storage activity reports in 

addition to posting transactional 

information pursuant to § 284.13(c) of 

the Commission’s regulations. 

II. Discussion 

15. For the reasons discussed below, 

the Commission generally denies 

rehearing of Order No. 735. However, 

the Commission does grant rehearing in 

several respects. First, the Commission 

removes the requirement that the new 

quarterly reports include the contract 

end-date for interruptible transactions. 

Second, the Commission eliminates the 

increased per-customer revenue 

reporting requirements by requiring 

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80688 Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations 

17 18 CFR 284.13 (c)(2)(iv) (2010, prior to effective 

date of Order No. 735). 

18None of the commenters on the NOPR objected 

specifically to the proposal to require the ending 

dates of interruptible contracts to be reported, 

although they did raise concerns generally about 

commercially sensitive data. 

19Enogex at 16. 

20 18 CFR 284.126(b)(4) (2010, prior to effective 

date of Order No. 735). 

21 18 CFR 284.13(e)(5), 284.126(c)(5). 

such revenues to be reported only on an 

annual basis and excluding storage 

revenues from the report. Third, the 

Commission extends the deadline for 

submitting the quarterly reports from 

approximately 30 days after the end of 

the quarter to 60 days. With these 

modifications, the Commission 

reaffirms all other aspects of Order No. 

735, including the requirements that the 

quarterly reports be filed in a uniform 

electronic format with no information 

redacted as privileged and be posted on 

the Commission’s Web site. 

Contemporaneously with this order, the 

Commission is also issuing an NOI in 

Docket No. RM11–4–000 to consider 

issues related the existing semi-annual 

storage reporting requirement for both 

interstate pipelines and section 311 and 

Hinshaw pipelines. 

16. Below, we first discuss the 

modifications to Order No. 735 we are 

making on rehearing. We then turn to 

the other objections to Order No. 735. 

A. Changes to the Quarterly Reporting 

Requirement 

1. Interruptible Contract End-Dates 

17. Section 284.126(b)(1)(vi) of the 

Commission’s regulations, as adopted 

by Order No. 735, requires that section 

311 and Hinshaw pipelines include in 

their quarterly transactional reports the 

duration of each active contract for both 

firm and interruptible service, including 

the beginning and ending date. Before 

Order No. 735, 18 CFR 284.126(b) did 

not require this information from 

intrastate pipelines. Currently 18 CFR 

284.13(b)(1)(v) requires interstate 

pipelines to post the duration of firm 

contracts but 18 CFR 284.13(b)(2) has no 

similar requirement to post the duration 

of interruptible contracts. In addition, 

18 CFR 284.13(c)(2)(iv) requires 

interstate pipelines to report the 

effective and expiration dates for firm 

transportation and storage contracts 

quarterly as part of their Index of 

Customers, but not for interruptible 

contracts.17 Neither the interstate nor 

intrastate semi-annual storage reports 

require this information. 

18. On rehearing, Enstor objects to the 

requirement that section 311 and 

Hinshaw pipelines reveal the ending 

dates of their interruptible storage 

contracts, including contracts for park 

and loan service. Enstor states that it 

enters into separate contracts for each 

interruptible transaction and that the 

end date of those transactions is 

commercially sensitive. Despite the time 

lag between the execution of a contract 

and its ultimate disclosure in a quarterly 

report, the ending date of an 

interruptible transaction may still be in 

the future when the quarterly report is 

filed. Enstor states that knowledge of the 

forward month when a parking or 

lending transaction will end will enable 

other market participants to recreate the 

storage position of individual Enstor 

customers. Enstor states that, as a result, 

a potential storage customer interested 

in a short-term parking arrangement 

customer will be able to ‘‘lowball’’ 

Enstor based on its knowledge of 

Enstor’s inventory and pricing 

information. Enstor argues that 

requiring market-based intrastate 

pipelines to reveal this information, 

while not imposing a similar 

requirement on interstate pipelines, 

results in unduly disparate treatment of 

the two types of pipelines.18 Enstor 

urges the Commission to remove the 

requirement to report the end-date of 

interruptible transactions in order to 

maintain its policy in Order No. 735 of 

equalizing NGA and section 311/ 

Hinshaw reporting requirements. 

Enogex makes a similar argument from 

a theoretical perspective, arguing that 

the expansion of the reporting 

requirements would indirectly impose a 

greater burden on section 311 

companies than on interstate pipelines 

which, it argues, is contrary to the intent 

of the NGPA.19

19. The Commission will revise 18 

CFR 284.126 (b)(1)(vi) so that section 

311 and Hinshaw pipelines are only 

required to report contract end-dates for 

firm transportation and firm storage 

contracts, not for interruptible contracts. 

Because interstate pipelines are not 

required to report the end-dates of their 

interruptible transactions, imposing 

such a requirement on section 311 and 

Hinshaw pipelines is contrary to Order 

No. 735’s purpose of making the 

reporting requirements for the two sets 

of pipelines more similar. The absence 

of such a reporting requirement for 

interstate pipelines does not appear to 

have hampered the ability of the 

Commission and other interested parties 

to monitor the market for undue 

discrimination. Moreover, some 

pipelines, unlike Enstor, do not enter 

into separate contracts for each 

interruptible transaction, but rather 

enter into a single master interruptible 

contract under which multiple 

individual transactions may occur. In 

such circumstances, the end-date of the 

interruptible contract is of limited 

significance. 

2. Customer Revenues 

20. Before Order No. 735, § 284.126(b) 

of the Commission’s regulations 

required section 311 and Hinshaw 

pipelines to report, on an annual basis, 

the actual revenues collected from each 

transportation customer, not including 

storage.20 The Commission does not 

currently require interstate pipelines to 

report revenues received from each 

customer for non-storage services. Both 

the interstate and intrastate semi-annual 

storage reports, however, do require 

reporting of the revenues received from 

each storage customer during storage 

injection and withdrawal seasons.21

Section 284.126(b)(1)(viii) of the 

Commission’s regulations, as adopted 

by Order No. 735, requires section 311 

and Hinshaw pipelines to report the 

total revenues received from each 

shipper on a quarterly basis for both 

transportation and storage. 

21. In its rehearing request, Enstor 

urges the Commission to exempt storage 

providers with market-based rates from 

the requirement to report per-customer 

revenues publicly. Among other 

arguments, Enstor points out that 

interstate storage providers are not 

required to report this information in 

their daily Web site postings. Enstor 

therefore asserts that, in this respect, the 

new quarterly reports required by Order 

No. 735 actually require more 

information from intrastate than 

interstate storage providers, contrary to 

the Commission’s stated intent of 

bringing the intrastate and interstate 

reporting requirements more in line 

with each other. Enstor asserts that the 

requirement would put intrastate 

storage providers at a competitive 

disadvantage to interstate storage 

providers. Enstor also states that while 

such customer-by-customer revenue 

information is included in the semiannual storage reports of both interstate 

and intrastate pipelines, Enstor and 

other pipelines file such reports subject 

to a request for privileged treatment. 

22. We grant rehearing in part on this 

issue, and will revise 18 CFR 

284.126(b)(1)(viii) and the analogous 

lines of Form No. 549D so as to (1) 

collect per-customer revenue 

information only on an annual basis and 

(2) exclude storage revenues from the 

report. This will return the per-customer 

revenue reporting requirement to the 

status quo before Order No. 735. As a 

result, section 311 and Hinshaw storage 

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Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations 80689 

22 Intrastate pipelines must file semi-annual 

storage reports within 30 days of the end of each 

complete storage injection and withdrawal season. 

18 CFR 284.126(c). 

23Natural gas companies that file a FERC Form 

2 must file the FERC Form 3–Q within 60 days after 

the reporting quarter, and companies that file a 

FERC Form 2–A must file the FERC Form 3–Q 

within 70 days. 18 CFR 260.300(b)(vii), (c)(vii). 

24Order No. 735, FERC Stats. & Regs. ¶ 31,310 at 

P 73–79. 

providers will not be subject to any 

greater per-customer revenue reporting 

requirement than interstate pipelines. 

Both sets of pipelines will continue to 

be required to report per-customer 

revenues for storage services in the 

semi-annual storage reports, required by 

18 CFR 284.126(c)(5) for section 311 and 

Hinshaw pipelines and by 18 CFR 

284.13(e)(5) for interstate pipelines. In a 

contemporaneous NOI, the Commission 

is requesting comments on whether the 

existing semi-annual storage reporting 

requirements for both interstate 

pipelines and section 311 and Hinshaw 

pipelines should be modified. The issue 

of whether any change is warranted in 

the current per-customer storage 

revenue reporting requirement, 

including the confidentiality of that 

information, will be considered in that 

proceeding. 

23. The Commission recognizes that 

the requirement that section 311 and 

Hinshaw pipelines report annual nonstorage revenues imposes a greater 

reporting requirement on those 

pipelines, than on interstate pipelines. 

Interstate pipelines are not required to 

make any report of per-customer nonstorage revenues. However, that is a 

reporting disparity that exists in the 

Commission’s current regulations. The 

Commission relies on the existing 

annual reports of per-customer nonstorage revenues to verify information 

submitted by section 311 and Hinshaw 

pipelines in their rate cases, and 

therefore finds that such information 

should continue to be collected. In 

addition, the rehearing applicants do 

not appear to have significant concerns 

about the commercial sensitivity of nonstorage revenue information. Rather, 

they are primarily concerned that 

making storage revenue public on a 

quarterly basis could place storage 

providers with market-based rates at a 

competitive disadvantage against their 

shippers who could use the relatively 

fresh revenue information to seek lower 

prices than they might otherwise obtain. 

3. Quarterly Reporting Deadlines 

24. Order No. 735 required that each 

quarterly report be filed on the first day 

of the month one month after the end 

of the relevant quarter, or roughly 30 

days from the end of each quarter. 

Jefferson and TPA both urge the 

Commission to extend the due dates for 

filing quarterly reports. Both parties 

argue that Form No. 549D is much more 

detailed than previous reports, and thus 

will require more time to compile. TPA 

notes that some pipelines’ measurement 

and accounting systems are designed to 

only send invoices 30 days after the end 

of the service month, and so they could 

not file reports so soon. Jefferson seeks 

a 90-day window between the close of 

the reporting period and the date when 

the report is due; TPA seeks a 60-day 

window. 

25. The Commission will revise 18 

CFR 284.126(b)(2) so as to provide a 

roughly 60-day window. While the 

Commission has used 30-day windows 

for other natural gas pipeline reports,22

Form No. 549D is fairly detailed and 

may require more time to complete. It 

may be more comparable in this sense 

to the Form No. 3–Q quarterly financial 

report, which uses a 60-day window.23

Accordingly, 18 CFR 284.126(b)(2) is 

amended to state that the quarterly 

Form No. 549D report for the period 

January 1 through March 31 must be 

filed on or before June 1; the quarterly 

report for the period April 1 through 

June 30 must be filed on or before 

September 1; the quarterly report for the 

period July 1 through September 30 

must be filed on or before December 1; 

and the quarterly report for the period 

October 1 through December 31 must be 

filed on or before March 1. 

B. Justification for Increased 

Transparency Required by the Rule 

26. Order No. 735 adopted increased 

transactional reporting requirements for 

section 311 and Hinshaw pipelines in 

order to provide greater transparency to 

the market.24 The Commission found 

such transparency to be necessary so 

shippers can make informed purchasing 

decisions, and also to permit both 

shippers and the Commission to 

monitor actual transactions for evidence 

of possible abuse of market power or 

undue discrimination. The Commission 

found that the existing reporting 

requirements in 18 CFR 284.126 were 

inadequate for this purpose. For 

example, the annual reports of 

transportation transactions required by 

existing 18 CFR 284.126(b) did not 

include (1) the rates charged by the 

pipeline under each contract, (2) the 

receipt and delivery points and zones or 

segments covered by each contract, (3) 

the quantity of natural gas the shipper 

is entitled to transport, store, or deliver, 

(4) the duration of the contract, or (5) 

whether there is an affiliate relationship 

between the pipeline and the shipper. 

Similarly, the semi-annual storage 

reports required by existing 18 CFR 

284.126(c) do not include the rates 

charged by the storage provider in each 

contract, the duration of each contract, 

or whether there is an affiliate 

relationship between the storage 

provider and its customer. 

27. Order No. 735 found that all this 

information is necessary to allow the 

Commission, shippers, and others to 

determine the extent to which particular 

transactions are comparable to one 

another for purposes of monitoring for 

undue discrimination. For example, 

contracts for service on different parts of 

a pipeline system or with different 

durations may not be comparable to one 

another. The additional information 

required to be reported by the Final 

Rule is also necessary to allow shippers 

to make informed decisions about their 

capacity purchases. Shippers need to 

know the price paid for capacity over a 

particular path to enable them to decide, 

for instance, how much to offer for the 

specific capacity they seek. 

28. Order No. 735 also held that, as 

a matter of policy, section 311 and 

Hinshaw pipelines must file the new 

quarterly transactional reports as public 

in order to achieve the Final Rule’s 

purpose of improving transparency, 

monitoring discrimination, and 

fostering efficient markets. The 

Commission recognized the concern of 

some pipelines that disclosure of 

commercially sensitive information 

would enable a shipper to know what 

the pipeline is charging other shippers 

and thus prevent the pipeline from 

being able to negotiate the best price for 

the services it offers. However, the 

Commission found that its requirement 

that the reports be filed quarterly would 

permit a significant delay between 

contract execution and disclosure, and 

that delay should temper any potential 

adverse effects from disclosure. 

29. Order No. 735 concluded that 

public disclosure of all information in 

the quarterly reports is necessary to 

permit all market participants to 

monitor the market and detect undue 

discrimination. The Commission also 

stated that it expects and hopes that 

market participants will use the 

information from these reports in order 

to educate themselves about market 

conditions. Regardless of any adverse 

effect on individual entities, public 

disclosure will improve the market as a 

whole by improving efficiency and 

competition. 

30. On rehearing, Enogex and Enstor 

contend that the Commission has failed 

to support the increased transactional 

reporting and public disclosure 

requirements which Order No. 735 

imposes on section 311 pipelines. In 

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80690 Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations 

25Consumers Energy Co. v. FERC, 226 F.3d 777 

(6th Cir. 2000) (holding that the Commission must 

comply with the requirements of NGA section 5 in 

order to require a Hinshaw pipeline to modify its 

rates for interstate service). 

26SGRM, 125 FERC ¶ 61,191 at P 23 (quoting 

Order No. 637–A, FERC Stats. & Regs. ¶ 31,099 at 

31,614). 

27 15 U.S.C. 717t–2(a)(1). See Energy Policy Act 

of 2005, Pub. L. 109–58, section 316 (Natural Gas 

Market Transparency Rules), 119 Stat. 594 (2005). 

28See, e.g., Associated Gas Distributors, 824 F.2d 

at 1015–18 (affirming the Commission’s use of 

Section 311(c) to require intrastate pipelines to 

permit their interstate sales customers to convert to 

transportation-only service). 

29 824 F.2d 981 at 1017–18. 

30Enogex and Enstor do not object to the 

requirement to state whether the shipper is an 

affiliate of the pipeline. While the amended 

requirement to report annual non-storage revenues 

collected from each customer goes beyond reporting 

contract terms, both Enogex and Enstor are 

primarily concerned with Order No. 735’s effect on 

storage providers with market-based rates. 

Therefore, the removal of the requirement that 

storage revenues be reported addresses their 

concern with respect to the per-customer revenue 

reporting requirement in the Order No. 735 reports. 

31NGA section 4(c); FPA section 205(c). 

32NGPA section 311(a)(2)(A). 

33 Mustang Energy Corp. v. Federal Energy 

Regulatory Comm’n, 859 F.2d 1447, 1457 (10th Cir. 

1988), cert. denied, 490 U.S. 1019 (1988); see also 

EPGT Texas Pipeline, 99 FERC ¶ 61,295 (2002). 

general, they contend that (1) the 

Commission lacks statutory authority 

under the NGPA to impose these 

requirements on section 311 pipelines, 

(2) these requirements will harm section 

311 storage providers with market based 

rates, (3) the Commission has failed to 

show that there is an industry problem 

which these requirements will 

ameliorate, and (4) these requirements 

impose unnecessary burdens on section 

311 pipelines. For the reasons set forth 

below, we find these contentions 

unpersuasive and reaffirm the Final 

Rule. 

1. Statutory Authority To Require Public 

Disclosure 

31. In discussing its statutory 

authority for the increased reporting and 

public disclosure requirements of Order 

No. 735, the Commission first addressed 

its statutory authority with respect to 

Hinshaw pipelines. The Commission 

pointed out that it regulates the 

interstate services of Hinshaw pipelines 

under the NGA.25 NGA section 4(c) 

requires that ‘‘under such rules and 

regulations as the Commission may 

prescribe, every natural gas company 

shall * * * keep open for public 

inspection * * * all rates * * * 

together with all contracts which in any 

manner affect or relate to such rates.’’ 

While the NGA gives the Commission 

some discretion with respect to how to 

provide for the disclosure of rate 

schedules and contracts, clearly the 

public disclosure of rate schedules and 

related contracts, in some manner, is 

required.26 Therefore, Order No. 735 

concluded that its requirement that the 

quarterly reports of Hinshaw pipelines 

be posted without any information 

redacted was simply carrying out NGA 

section 4(c)’s requirement for public 

disclosure of rate and contract 

information ‘‘under such rules and 

regulations as the Commission may 

prescribe.’’ The Commission also 

pointed out that NGA section 23(a)(1) 

directs the Commission ‘‘to facilitate 

price transparency in markets for the 

sale or transportation of physical natural 

gas in interstate commerce.’’ 27

32. Order No. 735 then turned to the 

Commission’s statutory authority with 

respect to section 311 pipelines. The 

Commission recognized that the NGPA 

does not contain an express public 

disclosure provision similar to NGA 

section 4(c). However, the Commission 

stated that NGPA section 311(c) 

authorizes the Commission to prescribe 

the ‘‘terms and conditions’’ under which 

intrastate pipelines perform interstate 

service. Order No. 735 concluded that 

requiring NGPA section 311 pipelines to 

publicly disclose transactional 

information for the purpose of allowing 

shippers and others to monitor NGPA 

section 311 transactions for undue 

discrimination is well within the 

Commission’s broad conditioning 

authority under section 311(c).28

33. Enogex and Enstor do not contest 

the Commission’s authority under NGA 

section 4(c) to require Hinshaw 

pipelines to report and publicly disclose 

all the information in the quarterly 

reports adopted by Order No. 735. 

However, they contend that imposing 

these requirements on section 311 

pipelines goes beyond the Commission’s 

conditioning authority under NGPA 

section 311(c). Enogex points out that 

the purpose of the NGPA is to allow 

intrastate pipelines to compete in the 

interstate transportation market without 

bearing the burden of full NGA 

regulation. It asserts that, when coupled 

with the existing triennial rate review 

requirement for section 311 pipelines 

and other reporting requirements, the 

new quarterly reporting and disclosure 

requirements of Order No. 735 would 

regulate section 311 pipelines on a level 

nearly equivalent to the regulatory 

oversight to which interstate pipelines 

are subject under the NGA. Enstor 

contends that, in Associated Gas 

Distributors,29 the court held that the 

Commission’s exercise of its NGPA 

section 311(c) conditioning authority 

should conform to the overall purposes 

of the NGPA, namely ‘‘to assure 

adequate supplies of natural gas at fair 

prices.’’ Enstor contends that Order No. 

735 failed to explain how the new 

quarterly reports will accomplish that 

goal. 

34. The Commission finds that 

requiring section 311 pipelines to report 

and disclose the information contained 

in the quarterly reports required by 

Order No. 735, as amended in the 

preceding sections of this order, is well 

within the Commission’s conditioning 

authority under NGPA section 311(c). 

The information contained in these 

quarterly reports is basic information 

concerning the terms of the section 311 

pipelines’ contracts with their 

shippers.30 In the NGA and the Federal 

Power Act (FPA), Congress required the 

Commission to provide for the public 

disclosure of the rates and contracts of 

interstate gas and oil pipelines and 

public utilities.31 Public disclosure of 

jurisdictional contracts is thus at the 

heart of each statute adopted by 

Congress prior to the NGPA for 

regulating the rates, terms, and 

conditions of entities subject to our 

jurisdiction. 

35. The NGPA does not set forth a 

comprehensive scheme for Commission 

regulation of interstate service provided 

by intrastate pipelines in the manner of 

the NGA or FPA. Rather, it delegates to 

the Commission broad authority ‘‘by 

rule or order [to] authorize any 

intrastate pipeline to transport natural 

gas on behalf of[] any interstate pipeline 

[or] local distribution company served 

by any interstate pipeline.’’ 32 Consistent 

with that broad authorization, section 

311(c) provides that ‘‘Any authorization 

granted under this section shall be 

under such terms and conditions as the 

Commission may prescribe.’’ Given that 

public disclosure of contracts has been 

a fundamental aspect of the 

Commission’s regulation of all the 

entities subject its jurisdiction, the 

Commission finds that requiring section 

311 pipelines to report and disclose the 

terms of their contracts is well within 

the broad authority Congress delegated 

to us to determine under what terms 

intrastate pipelines may perform 

interstate transportation service. 

36. The Commission has recognized 

throughout this proceeding that 

Congress intended in the NGPA to 

encourage intrastate pipelines to 

participate in the interstate 

transportation market by enabling them 

to do so without bearing the burden of 

full Commission regulation under the 

NGA.33 Contrary to Enogex, the 

reporting requirements adopted in 

Order No. 735 are substantially less 

burdensome than the reporting 

requirements we have imposed on 

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34 824 F.2d 981 at 1002–1003. 

35 Id. at 1016 (citation omitted). 

36 Id. at 1017, quoting Transcontinental Gas Pipe 

Line Corp. v. State Oil & Gas Board, 474 U.S. 409, 

421 (1986). 

37Order No. 637–A, FERC Stats. & Regs. ¶ 31,099 

at 31,614–615. 

38Revised Public Utility Filing Requirements, 

Order No. 2001, FERC Stats. & Regs. ¶ 31,127, P 44– 

46, 74–85, 104–117, reh’g denied, Order No. 2001– 

A, 100 FERC ¶ 61,074, P 13–17, 30–35, reh’g 

denied, Order No. 2001–B, 100 FERC ¶ 61,342, 

order directing filing, Order No. 2001–C, 101 FERC 

¶ 61,314 (2002), order directing filing, Order No. 

2001–D, 102 FERC ¶ 61,334 (2003). 

39Enogex at 13. 

40Enstor Request for Rehearing at 15. 

41 Id. 

interstate pipelines regulated under the 

NGA. The Commission requires 

interstate pipelines to maintain internet 

Web sites and post the terms of each 

contract before the first nomination for 

service under that contract. By contrast, 

this rule does not require section 311 

pipelines to maintain an internet Web 

site. Order No. 735 only requires section 

311 pipelines to make quarterly reports 

of the terms of their contracts. 

Moreover, in this order we have 

extended the deadline for each report 

from 30 days after the end of the quarter 

to 60 days after the end of the quarter. 

In addition, while the reports must be 

filed in a standardized electronic 

format, the Commission has developed 

the electronic form in a PDF format and 

an XML Schema that, upon OMB 

approval, will be available to download 

from the FERC Web site and save to a 

user’s computer desktop. 

37. In Associated Gas Distributors,34

the court affirmed the Commission’s use 

of its NGPA section 311(c) conditioning 

authority to impose conditions 

necessary to assure that section 311 

intrastate pipelines do not engage in 

undue discrimination. The court also 

stated that ‘‘Section 311 itself states no 

explicit standards for the exercise of the 

power, but the overall purposes of the 

NGPA provide a standard—somewhat 

amorphous to be sure—against which 

we can and must measure the 

Commission decision.’’ 35 The court 

further stated that the Supreme Court 

had declared that the NGPA’s ‘‘aim 

* * * was to assure adequate supplies 

of natural gas at fair prices.’’ 36 Order 

No. 735’s requirement that section 311 

pipelines report and disclose 

transactional information is consistent 

with this goal, because it will make the 

market operate more efficiently. The 

Commission has consistently held that 

disclosure of transactional information 

‘‘will benefit the market as a whole, by 

improving efficiency and competition. 

Buyers of services need good 

information in order to make good 

choices among competing capacity 

offerings. Without the provision of such 

information, competition suffers.’’ 37

Similarly, in Order No. 2001, adopting 

the Electric Quarterly Reports (EQRs) 

required of public utilities, the 

Commission held, 

[W]e believe that disclosure will promote 

competition and make the market operate 

more efficiently. * * * [E]asy access to 

contract and transaction data will give 

customers a basis on which to compare a 

variety of suppliers and monitor for market 

power and anti-competitive behavior. This 

information will allow customers to reap 

further benefits from open access 

transmission by giving them improved tools 

to use in making buying decisions. In 

addition, the Commission hopes that making 

this information more understandable and 

accessible will promote competition and 

confidence in the fairness of the market.38

38. Our statutory authority to require 

section 311 pipelines to report and 

disclose transactional information is 

buttressed by section 23(a)(1) of the 

NGA, adopted by EPAct 2005. That 

section directs the Commission to 

‘‘facilitate price transparency in markets 

for the * * * transportation of physical 

natural gas in interstate commerce, 

having due regard for the public 

interest, the integrity of those markets, 

fair competition, and the protection of 

consumers.’’ This provision applies to 

all natural gas transportation in 

interstate commerce, and thus applies to 

section 311 pipelines as well as 

pipelines subject to our NGA 

jurisdiction. Thus, requiring the Order 

No. 735 quarterly reports by section 311 

pipelines to be public is specifically in 

keeping with this directive. 

2. Harm to Storage Providers With 

Market-based Rates 

39. Both Enogex and Enstor argue that 

the Commission should not require 

market-based storage companies such as 

themselves to report information 

publicly. Enogex argues that ‘‘its ability 

to capture rates that are truly marketbased will be severely compromised if 

non-section 311 competitors have access 

to the rates Enogex is charging and will 

charge under specific storage service 

agreements.’’ 39 Enogex asserts that it 

must compete with unregulated 

intrastate pipelines providing purely 

intrastate service that are not subject to 

any disclosure requirements. It asserts 

that Order No. 735 places it at a 

competitive disadvantage to such 

pipelines, because the purely intrastate 

pipelines will have access to a section 

311 pipeline’s rate and customer 

information, while the section 311 

pipeline will not have access to 

comparable information concerning the 

intrastate pipeline. 

40. Enogex contends that this is 

contrary to the directives of NGA 

section 23. Enogex contends that Order 

No. 735’s public disclosure requirement 

violates the requirement of section 

23(a)(1) that the Commission have due 

regard for the integrity of markets and 

fair competition. It also points out that 

section 23(b)(1) requires the 

Commission to exempt from disclosure 

information that would be detrimental 

to the operation of an effective market, 

and section 23(b)(2) requires the 

Commission to ‘‘seek to ensure that 

consumers and competitive markets are 

protected from the adverse effects of 

potential collusion or other anticompetitive behaviors that can be 

facilitated by untimely public disclosure 

of transaction-specific information.’’ 

41. Enstor claims that reporting such 

commercially sensitive information 

would distort the markets and 

discourage infrastructure development. 

Enstor’s primary concern is that Order 

No. 735 requires section 311 and 

Hinshaw storage providers with marketbased rates to disclose information 

which interstate storage providers are 

not required to disclose, specifically the 

end-date of interruptible transactions 

and revenue collected from each 

customer. Enstor asserts that disclosure 

of this information will place section 

311 and Hinshaw storage providers at a 

competitive disadvantage with interstate 

pipelines. Enstor asserts that despite the 

fact there will be a considerable ‘‘time 

lag between the execution of a contract 

and its ultimate disclosure in a quarterly 

report,’’ the obligation to report 

nevertheless ‘‘will undermine the very 

business model that Enstor and other 

like storage providers have used.’’ 40

Shippers would be able to ‘‘recreate the 

storage positions’’ of their competitors 

and ‘‘gain valuable insight into’’ others’ 

market positions, forcing Enstor’s prices 

downward.41

42. The Commission has consistently 

applied its requirements to report and 

disclose transactional information to 

shippers with market-based rates on the 

ground that such disclosure benefits the 

overall market, and those benefits 

outweigh any commercial disadvantages 

to individual entities in the market. As 

the Commission held in Order No. 637– 

A: 

The disclosure of greater information 

regarding capacity transactions is necessary 

to achieve these dual goals of fostering 

competition and market monitoring. To foster 

competition, it is not sufficient merely to 

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42Order No. 637–A, FERC Stats. & Regs. ¶ 31,099 

at 31,611–2. 

43 Id., at 31,614–615. 

44 915 F.2d 17, 21–22 (1st Cir. 1990), cert. denied, 

499 U.S. 931 (1991). 

45Enogex at 5, 7–10 (citing, inter alia, 

Administrative Procedure Act, 5 U.S.C. 706(2)(A), 

(E)). 

46Enogex at 7 (quoting National Fuel Gas Supply 

Corp. v. FERC, 468 F.3d 831, 843 (D.C. Cir 2006) 

(National Fuel Gas)). 

47Enogex at 9. 

48Enstor at 3. 

49Enogex at 9. 

50Enstor at 10. 

ensure there are multiple competitors, there 

also needs to be good information to enable 

buyers to make informed choices among the 

competitors. Difficulty in obtaining 

information can reduce competition because 

buyers may not be aware of potential 

alternatives and cannot compare prices 

between alternatives. The reporting 

requirements will expand shippers’ 

knowledge of alternative offerings by 

providing more information about the 

capacity available from the pipeline * * *.42

43. Thus, Order No. 637–A concluded 

that ‘‘while disclosure of the 

transactional information may cause 

some commercial disadvantage to 

individual entities, it will benefit the 

market as a whole, by improving 

efficiency and competition.’’ 43 The 

Commission reached the same 

conclusion in Order No. 2001, requiring 

public utilities to report and disclose 

similar transactional information. Thus, 

the requirement that section 311 and 

Hinshaw pipelines with market-based 

rates publicly disclose transactional 

information is consistent with 

longstanding Commission policy. 

44. The Commission also rejects 

Enogex’s contention that Order No. 

735’s public disclosure requirement 

violates the requirements of NGA 

sections 23(a)(1) and 23(b) that any 

transparency requirements avoid 

detrimental effects on competitive 

markets. Enogex appears to read these 

provisions as requiring the Commission 

to exempt from public disclosure any 

information that might have some effect 

on the competitive position of a 

particular participant in the natural gas 

market. However, these provisions only 

provide that, in requiring public 

disclosure, the Commission should seek 

to avoid detrimental effects on the 

operation of the market as a whole and 

protect against ‘‘potential collusion or 

other anti-competitive behaviors.’’ As 

the First Circuit stated in Town of 

Concord v. Boston Edison Co., 

a practice is not ‘‘anticompetitive’’ simply 

because it harms competitors. After all, 

almost all business activity, desirable and 

undesirable alike, seeks to advance a firm’s 

fortunes at the expense of its competitors. 

Rather, a practice is ‘‘anticompetitive’’ only if 

it harms the competitive process. It harms 

that process when it obstructs the 

achievement of competition’s basic goals— 

lower prices, better products, and more 

efficient production methods.44

45. Neither Enogex nor Enstor have 

shown that Order No. 735’s public 

disclosure requirements harm the 

competitive process or encourage anticompetitive behaviors. Enogex focuses 

on the fact that intrastate pipelines 

engaging in purely intrastate business 

are not subject to similar disclosure 

requirements. However, this fact does 

not justify exempting intrastate 

pipelines from the Order No. 735 

disclosure requirements when they 

perform interstate service. As Order No. 

735 clarified, the revised reporting 

requirements adopted by this rule apply 

only to a section 311 pipeline’s 

contracts for interstate service, not its 

purely intrastate contracts. Therefore, 

section 311 pipelines need not disclose 

the rates they charge in intrastate 

transactions. While Enogex asserts that 

the same customers likely take both 

intrastate and section 311 services, a 

contract for section 311 service allows 

the shipper access to the interstate 

natural gas markets, while a strictly 

intrastate contract does not. This fact 

would generally suggest a contract for 

section 311 interstate service would 

have a different value than a contract for 

purely intrastate service. Thus, a section 

311 pipeline’s disclosure of pricing 

information concerning its contracts for 

interstate service is not necessarily 

indicative of the pipeline’s pricing 

policies for its purely intrastate services. 

Moreover, in this order, the Commission 

is extending the deadline for the filing 

of quarterly reports to two months after 

the end of the relevant quarter. Thus, for 

example, contracts entered into during 

the period January through March need 

not be disclosed until June 1. This 

allows a delay in disclosure of from two 

to five months after contract execution, 

depending upon when in the quarter a 

contract was entered into, thereby 

minimizing any harm from disclosure of 

the contract’s terms. 

46. In these circumstances, the 

Commission finds that the benefits to 

the interstate market of Order No. 735’s 

public disclosure requirements 

outweigh any harm arising from the fact 

that there is no similar public disclosure 

requirement for purely intrastate 

pipelines. That a state may not have 

imposed disclosure requirements for 

services within its jurisdiction should 

not prevent the Commission from 

adopting public disclosure requirements 

for the services within our jurisdiction 

and thereby providing the interstate 

market with the benefit of greater 

transparency. 

47. Enstor’s primary concern is that 

Order No. 735 requires section 311 

storage providers to disclose certain 

information that interstate storage 

providers are not required to disclose, 

specifically the end-date for 

interruptible contracts and per-customer 

revenues. However, we are eliminating 

that disparity in this order, by removing 

both requirements from the quarterly 

reports that section 311 pipelines are 

required to submit by this Final Rule. 

As revised, we are confident that the 

transactional reporting requirements 

appropriately balance the need for 

increased transparency of section 311 

and Hinshaw pipeline transactions, 

while avoiding unduly burdensome 

market distortions that might discourage 

such pipelines from participating in the 

interstate market. 

3. Evidence 

48. Citing the standards for reasoned 

decision-making and abuse of 

discretion,45 Enogex argues that the 

Commission failed to support the Final 

Rule with any evidence of market abuse 

requiring an expansion of the scope and 

frequency of the existing contract 

reporting requirements. Enogex argues 

that this is contrary to the D.C. Court’s 

decision in National Fuel Gas Supply 

Corp. v. FERC, where the court reversed 

a Commission rule on the ground that 

the Commission was ‘‘professing that an 

order ameliorates a real industry 

problem but then citing no evidence 

that there is in fact an industry 

problem.’’ 46 Enogex claims that the 

Order No. 735 failed to cite any 

examples of market abuse, only 

potential abuse. It also argues that while 

the Commission seeks to increase 

transparency, ‘‘[i]ncreased transparency 

in of itself is not a sufficient basis to 

impose a substantial new reporting 

burden.’’ 47

49. Enstor makes a similar argument, 

also citing the court’s decision in 

National Fuel Gas, although it only 

argues for reconsidering the Final Rule 

‘‘to the extent that it has imposed 

reporting requirements on intrastate 

storage providers that provide service at 

market-based rates under the NPGA.’’ 48

Enstor notes that the record material in 

the Final Rule concerns allegations 

about intrastate pipeline transportation, 

but none ‘‘on the part of storage 

companies,’’ especially those that ‘‘do 

not possess market power.’’ 49 Enstor 

argues that the Commission’s exercise of 

its conditioning authority under section 

311 of the NGPA cannot be justified by 

‘‘the potential for undue 

discrimination.’’ 50

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51Alabama Power Co. v. Federal Power Comm’n, 

511 F.2d 383, 391 n.13 (D.C. Cir. 1974). 

52See National Fuel Gas, 468 F.3d at 839. 

53 See Order No. 735, FERC Stats. & Regs. 

¶ 31,310 at P 35. 

54Order No. 735, FERC Stats. & Regs. ¶ 31,310 at 

P 28. 

55Revisions to Uniform System of Accounts, 

Forms, Statements, and Reporting Requirements for 

Natural Gas Companies, Order No. 581, 60 FR 

53019, 53051, FERC Stats. & Regs. ¶ 31,026 (1995), 

order on reh’g, Order No. 581–A, FERC Stats. & 

Regs. ¶ 31,032 (1996). 

50. We disagree with both Enogex and 

Enstor. In arguing that the Commission 

must present evidence of market abuses 

by section 311 pipelines in order to 

support the new disclosure 

requirements, Enogex and Enstor miss 

the point that the purpose of this rule 

is not solely to minimize market abuses 

and undue discrimination. As explained 

above, a primary purpose of this rule is 

to provide shippers better information 

about relative prices and other terms of 

different capacity offerings so that they 

can make more informed choices among 

competitors. This will make the market 

operate more efficiently. As the D.C. 

Circuit held in Alabama Power Co., 

Perfect information available to all buyers 

and sellers is, indeed, one of the conditions 

of the economic model of ‘‘perfect 

competition,’’ and where the remaining 

conditions are satisfied, dissemination of 

information tends to facilitate prompt 

adjustment to the market clearing price by all 

parties to transactions.51

51. It is not necessary to present 

evidence to support the well-accepted 

principle that better information enables 

purchasers to make better decisions and 

improves the overall efficiency of the 

market. Indeed, in the same National 

Fuel Gas case that Enogex quotes, the 

court explains that if the Commission 

seeks to justify a new regulation based 

solely on theoretical grounds, it may do 

so.52 Therefore, increased transparency 

of transactions subject to the 

Commission’s jurisdiction in order to 

help shippers make informed 

purchasing decisions is a sufficient 

basis to impose a substantial new 

reporting duty, regardless of whether 

some section 311 of Hinshaw pipelines 

have engaged in market abuses. Indeed, 

this was a primary ground on which the 

Commission justified the Final Rule. 

The Commission argued, and we 

continue to hold, that the increased 

transparency that the Final Rule brings 

should improve the natural gas 

transportation market’s efficiency.53

52. The Commission is also requiring 

the new quarterly transactional reports 

in order to permit both shippers and the 

Commission to monitor section 311 and 

Hinshaw pipelines’ jurisdictional 

interstate transactions for evidence of 

possible abuse of market power or 

undue discrimination. As previously 

discussed, public disclosure of the 

terms of jurisdictional contracts in order 

to ensure against undue discrimination 

among shippers is a standard part of the 

regulatory regimes established by the 

NGA and the FPA, in which Congress 

has directed the Commission to require 

such public disclosure. Therefore, the 

Commission does not believe that 

requiring the same method of enabling 

shippers and the Commission to 

monitor the contracts of section 311 

pipelines for abuse of market power and 

undue discrimination requires the 

establishment of a record showing 

extensive abuses by section 311 

pipelines. This is particularly the case 

since section 23 of the NGA now directs 

the Commission to ‘‘facilitate price 

transparency in markets for the * * * 

transportation of physical natural gas in 

interstate commerce,’’ including such 

transportation by section 311 pipelines. 

In any event, the comments in this 

proceeding do indicate that the 

preexisting reporting regime was not 

performing as well as it could be. For 

example, the Final Rule noted that 

‘‘Clayton Williams provides a detailed 

narrative suggesting that it could have 

pursued allegations that a pipeline has 

been engaging in unlawful business 

practices, if only it had more publicly 

available information to support its 

allegation’’ as evidence in favor of 

improved reporting requirements.54

Given this testimony alleging concerns 

with the preexisting reporting regime, 

plus the Commission’s theoretical 

framework suggesting that increased 

transparency would improve conditions 

in the transportation and storage market, 

we find the Final Rule adequately 

justified. 

53. With regard to Enstor’s argument 

that these concerns do not apply to 

market-based storage, we remind Enstor 

that a Commission finding that a service 

provider lacks market power should not 

be read to mean that its shippers are at 

no risk of undue discrimination or other 

unlawful practices. ‘‘It is even more 

critical for the Commission to review 

pricing when the Commission is relying 

on competition to regulate rates, rather 

than scrutinizing the underlying cost of 

service.’’ 55

54. The court’s decision in National 

Fuel Gas addressed a different type of 

rule than is at issue here. In that case, 

the Commission adopted a rule 

modifying its Standards of Conduct 

governing natural gas pipelines’ 

interactions with their marketing 

affiliates so that the Standards of 

Conduct would also apply to nonmarketing affiliates. These included 

producers, processors, and local 

distribution companies who might not 

hold any capacity on their affiliated 

pipeline. The purpose of the rule was to 

guard against pipelines giving nonmarketing affiliates undue preference or 

other market abuses by non-marketing 

affiliates. The Standards of Conduct 

required that the affiliates function 

independently and limit the information 

that may be shared among them. 

55. In reversing the Commission, the 

court first emphasized that vertical 

integration between a pipeline and its 

affiliates produces benefits for 

consumers. The court stated that both 

the sharing of information between 

pipelines and affiliates and integration 

of functions have efficiency benefits. 

Therefore, the court found that the 

Commission cannot impede vertical 

integration between a pipeline and its 

affiliates without adequate justification. 

The court found that the Commission 

had not provided such justification 

either by presenting evidence of market 

abuses by non-marketing affiliates or 

providing a sufficient explanation of a 

theoretical danger that pipelines will 

favor their non-marketing affiliates. 

56. The rule at issue here differs from 

the rule at issue in National Fuel Gas in 

a number of respects. First, as already 

discussed, the purpose of this rule is not 

limited to preventing certain types of 

market abuses, as was the case with the 

rule in National Fuel Gas; rather a 

primary purpose of this rule also is to 

provide all market participants better 

information in order to make informed 

purchasing decisions, and thereby 

improve the efficiency of the market. 

Second, this rule does not impede 

activities by pipelines (or their affiliates) 

which the courts have found to create 

market efficiencies and thus benefit 

consumers, such as the vertical 

integration at issue in National Fuel 

Gas. To the contrary, as discussed 

above, the courts have found that public 

disclosure of contract terms generally 

benefits the overall market and 

consumers. Third, the public disclosure 

requirements adopted in Order No. 735 

apply only to pipelines and transactions 

directly subject to our jurisdiction under 

the NGA and NGPA and do not affect 

the corporate structure of entities, such 

as non-marketing affiliates, not directly 

subject to our jurisdiction. Finally, the 

instant rule is carrying out Congress’s 

directives in NGA section 4 to require 

public disclosure of Hinshaw pipelines’ 

jurisdictional contracts and in NGA 

section 23 to provide for price 

transparency of all interstate 

transportation transactions. For these 

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56Enogex at 6. 

57Enogex at 9–10. 

58Enogex at 19. 59Enogex at 6. 60Enogex at 18. 61Enogex at 19. 62Enogex at 19. 63Order No. 735, FERC Stats. & Regs. ¶ 31,310 at 

P 96. 

64Order No. 581, 60 FR 53019 at 53,050–51; 

FERC Stats. & Regs. at 31,501. 

65NOPR, FERC Stats. & Regs. ¶ 32,644 at 19. 

66See Arkansas Oklahoma Gas Corp., 33 FERC 

¶ 61,197, at 61,401–02 (1985) (An Order No. 63 

reasons, the Commission finds that our 

adoption of Order No. 735 is not 

inconsistent with National Fuel Gas. 

57. Accordingly, we find sufficient 

cause to apply the Final Rule to both 

cost-based and market-based 

transactions. 

4. Insufficiency of Periodic Rate Review 

58. Enogex further argues that ‘‘the 

Commission erred in concluding that 

the new Form No. 549D is necessary to 

meet its statutory obligation to ensure 

that rates for section 311 service are ‘fair 

and equitable’, in view of the fact that 

it already requires a triennial rate 

review requirement.’’ 56 Enogex claims 

the ‘‘the adequacy of the triennial rate 

review requirement is evident,’’ and 

even more stringent than NGA rate 

review ‘‘because interstate pipelines are 

no longer subject to a periodic rate 

review.’’ 57 Therefore, Enogex argues, the 

reporting requirement is unnecessary. 

59. We reject Enogex’s bare assertions 

about periodic rate review. The triennial 

rate review requirement does not render 

Order No. 735’s increased reporting 

requirements unnecessary. The primary 

purposes of the two requirements are 

different. The Commission requires 

section 311 pipelines with cost-based 

rates to make periodic rate filings so that 

the Commission can review whether the 

pipeline’s maximum rates applicable to 

all transactions continue to be fair and 

equitable. In those rate review 

proceedings, the Commission 

determines whether the pipeline’s 

maximum rates allow it to collect 

revenues in excess of its cost-of-service, 

and, if so, the Commission may require 

a reduction in the pipeline’s maximum 

rates. Thus, the focus of a rate review 

filing is on the pipeline’s generally 

applicable maximum rates, not the rates 

charged in individual transactions. 

60. By contrast, the primary purpose 

of the Order No. 735 reporting 

requirements is to enable individual 

shippers to make more informed 

decisions as to the prices they agree to 

pay in their own individual 

transactions, including with marketbased rate pipelines that are not subject 

to the periodic rate review requirement. 

The reporting requirements also allow 

better monitoring by the Commission 

and shippers for instances of undue 

discrimination among shippers, a matter 

not generally addressed in rate review 

proceedings. While periodic rate review 

is necessary in order to ensure that a 

pipeline’s generally applicable 

maximum rates are fair and equitable, it 

does not accomplish the goals of this 

rulemaking. For that purpose, it is 

necessary to require public reports of 

the terms of the individual contracts a 

pipeline enters into with each of its 

shippers, which the Commission and 

market participants may review in order 

to detect and mitigate against possible 

abuse of market power or undue 

discrimination. Such reporting does not 

occur in a periodic rate review filing. 

5. Burden 

61. Enogex also argues that the 

Commission should not have 

implemented the Final Rule ‘‘after 

acknowledging that the new quarterly 

report would be unduly burdensome 

when coupled with the periodic cost of 

service rate review requirement,’’ 58 and 

that the Commission ‘‘erred in 

concluding that the new * * * 

requirement would not be unduly 

burdensome from a cost and 

administrative standpoint.’’ 59 Enogex 

refers to Form No. 549D’s ‘‘seventy five 

data elements’’ as an ‘‘extraordinary 

level of detail,’’ and claims that ‘‘because 

Enogex may provide for both Section 

311 and intrastate services in a single 

contract, existing contract methods 

* * * may have to be * * * modified 

in order to report the required 

information.’’ 60 Finally, Enogex argues 

that ‘‘the Commission inadvertently 

demonstrated that the triennial rate 

review requirement is more than 

sufficient,’’ and urges that Commission 

to ‘‘reverse course and terminate this 

rulemaking proceeding, even if this 

results in the triennial rate review 

requirement being reinstituted.’’ 61

62. Enogex misstates the record in 

claiming that the Commission found 

‘‘that the new quarterly report would be 

unduly burdensome when coupled with 

the periodic cost of service rate review 

requirement.’’ 62 Rather, the Commission 

stated that it ‘‘is sensitive to concerns 

that the improved reporting 

requirements could prove too 

burdensome, when considered in 

aggregation with other burdens such as 

triennial rate review.’’ 63 In other words, 

the Commission reduced the periodic 

rate review requirement not because it 

was obligated to do so by the undue 

burden standard, but because the 

Commission was exercising its 

discretion to lessen pipelines’ overall 

burden of complying with all the 

Commission’s various regulatory 

requirements. We also reject Enogex’s 

implication of burden by the fact that 

there are seventy-five data elements. 

Burden is more properly weighed by the 

content of the data requested. The first 

eighteen of those data elements, for 

instance, are little more than the 

company filling out its name and 

contact information; using numerous 

but smaller data elements is useful for 

making the completed form more 

amenable to electronic searches. 

63. Furthermore, as the Commission 

has explained, its regulatory oversight is 

not merely limited to reviewing rate 

filings. In order to carry out our 

‘‘responsibility to ensure rates and 

charges are fair and equitable * * * it 

is important for rates charged to be 

reported’’ as well.64 The Commission 

seeks to empower shippers ‘‘to 

determine the extent to which particular 

transactions are comparable to one 

another’’ 65 in order to protect 

themselves from undue discrimination. 

The previous reporting requirements in 

18 CFR 284.126, for both transportation 

and storage, were inadequate for 

providing potential shippers with 

sufficient information to make well 

informed purchasing decisions. We also 

note that while other parties on 

rehearing request changes to specific 

elements or argue for special attention 

to certain market sectors, Enogex is 

alone among all Respondents in arguing 

that filing the new reports would be 

unduly burdensome. The benefits to the 

functioning of the market, by ensuring 

transportation and storage customers are 

aware of the actual prices charged just 

as American customers have long come 

to expect in the retail sector, far 

outweigh Enogex’s inchoate claims of 

undue administrative burden. 

C. Identification of Receipt Points 

64. AOG urges the Commission to 

amend or clarify Order No. 735’s 

requirement, codified at 18 CFR 

284.126(b)(1)(iv), that Respondents must 

state the primary receipt points covered 

by each contract that is reported on 

Form No. 549D. AOG is a small local 

distribution company for a ten-county 

rural area along the Arkansas-Oklahoma 

border. Its system includes roughly 400 

production wells, which ordinarily 

serve AOG’s non-jurisdictional 

distribution customers. When demand 

is not at peak, AOG delivers excess 

production gas to the interstate markets 

under an Order No. 63 blanket 

certificate.66 AOG states that the current 

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blanket certificate ‘‘permits a local distribution 

company that is served by an interstate pipeline 

* * * to sell and transport gas in interstate 

commerce under the same conditions as apply to 

those transactions when engaged in by intrastate 

pipelines under sections 311 and 312 of the 

NGPA.’’). 

67AOG’s request includes an affidavit from its 

president elaborating on its specific factual 

circumstances, along with a system map. 

68AOG at 9. 

69AOG at 7. 

70TPA at 3, 7. 

71Order No. 735, FERC Stats. & Regs. ¶ 31,310 at 

P 61. 

72TPA at 8. 

73See Electric Quarterly Report Submission 

Software Users Guide at 11–12 (January 2008), 

available at http://www.ferc.gov/docs-filing/eqr/

soft-tools/userguide.pdf. See also Dun & Bradstreet 

Web site, http://fedgov.dnb.com/webform. 

74See Instruction Manual for Electronic Filing of 

the Index of Customers, OMB Form No. 1902–0169 

at 5 (June 2000), available at http://www.ferc.gov/ 

docs-filing/forms/form-549b/elec-inst.pdf. 

75TPA at 9. 

76TPA at 10. 

set-up of its system does not allow it to 

identify the receipt point of each 

transaction.67 AOG argues that even if it 

could, ‘‘the information would be 

meaningless’’ because AOG does not 

deliver to the interstate markets directly; 

rather, all five of its delivery points 

interconnect with third-party gathering 

systems that would not be covered by 

the reporting requirements.68

65. Because of the high difficulty and 

limited usefulness of tracking receipt 

points on such a system, AOG 

recommends that the Commission 

clarify the receipt point reporting 

requirement. AOG requests that: 

respondents, such as AOG, who perform 

basically a gathering service, are located in a 

production area, have hundreds of wells 

attached to their system, deliver only 

production gas to other gathering facilities 

* * *, and are physically unable to identify 

a receipt point for each transaction be 

[allowed] to designate ‘production pool’ as 

the receipt point in their quarterly reports.69

66. AOG’s request is narrowly tailored 

to its own circumstances, which appear 

to be quite rare. Accordingly, we find 

that this request does not justify a 

modification of the generally applicable 

reporting requirements adopted in this 

rulemaking proceeding. However, AOG 

may re-file its request in a separate 

docket, and request a case-specific 

waiver of the 18 CFR 284.126(b)(1)(iv) 

requirement to identify individual 

receipt points based on its own 

circumstances. While we do not 

anticipate many other pipelines to 

qualify for waivers, the Commission 

will consider other requests for waiver 

on a case-by-case basis, as the moving 

party’s individual circumstances so 

warrant. 

D. Identification of Shippers 

67. TPA argues that, ‘‘[t]he 

Commission erred by requiring Section 

311 and Hinshaw pipelines to identify 

shippers by D–U–N–S number in Form 

No. 549D.’’ 70 TPA claims that the 

Commission has not explained why an 

identification number is useful, given 

that pipelines must report publicly the 

names of its shippers. 

68. We affirm that ‘‘standardized 

shipper identification is not unduly 

burdensome in comparison to the 

benefit to the Commission and market 

participants of being certain of the true 

identity of a pipeline’s shippers.’’ 71 For 

some persons interested in reading 

Form No. 549D data, TPA may be 

correct that the shipper’s full legal name 

will be sufficient. For entities using the 

data to engage in market research, 

however, a standardized identification 

number is necessary for at least two 

reasons. First, identification numbers 

facilitate the process of creating reliable, 

robust databases, which in turn help 

market participants to gain the most 

value out of the information in these 

public reports. Without standard 

identification numbers, a small 

typographic change, such as referring to 

‘‘Shipper A, LLC’’ as ‘‘Shipper A, L.L.C.,’’ 

could be misinterpreted by a computer 

system as two different entities. Second, 

identification numbers greatly reduce 

the administrative burden (both to 

Respondents and to all readers of the 

reports) in the common situation where 

a shipper changes its legal name but is 

otherwise the same entity. Identification 

numbers allow for data from before and 

after the shipper’s name change to be 

considered properly as part of a 

continuous set, without the need for the 

Respondent to engage in tedious manual 

intervention. Accordingly, all 

Respondents are required to use a 

standard shipper identification number 

for Form No. 549D. 

69. TPA also argues that while 

Respondents ‘‘can ask their shippers to 

obtain D–U–N–S numbers, they have no 

authority to require them to do so and 

should not be held accountable for a 

shipper’s failure to obtain a D–U–N–S 

number.’’ 72 We disagree. As a general 

matter, it would be fair and equitable for 

a pipeline to include in its Statement of 

Operating Conditions a requirement that 

shippers must provide the pipeline with 

information that is necessary in order to 

comply with any state or federal 

reporting requirements. Currently, 

assignment of a D–U–N–S number is 

free for all entities required to register 

with the federal government by a 

regulatory agency.73 The Commission 

and the North American Energy 

Standards Board have been requiring 

shipper D–U–N–S numbers for years in 

the Index of Customers without serious 

complaint.74

E. Prior Period Adjustment and Inactive 

Contracts 

70. TPA asks the Commission to 

clarify how prior period adjustments 

should be reported. Since ‘‘volumetric 

measurement is an inexact science,’’ 75

TPA argues, inevitably pipelines will 

discover measurement errors in prior 

records of volumes shipped, injected, or 

withdrawn. TPA states that it is not 

clear how to report these adjustments on 

Form No. 549D. TPA recommends that 

Respondents should report a prior 

period adjustment as part of the data for 

the quarter when it is discovered rather 

than revising previously reported data, 

which TPA claims is how pipelines 

book such adjustments for accounting 

purposes. 

71. The Commission clarifies that 

Form No. 549D reports should reflect 

the data on the billing statements to 

customers. If a pipeline’s billing policy 

for prior period adjustments is to revise 

the prior bill, then that pipeline should 

resubmit its Form No. 549D for that 

prior quarterly time period. If, however, 

a pipeline’s billing policy for prior 

period adjustments is to bill for the 

quarter when the discrepancy is 

discovered, as TPA suggests, then that 

pipeline should submit the adjusted 

data as part of its upcoming report 

rather than revising prior reports. Either 

way, the Form No. 549D data should 

match the data in the pipeline’s own 

billing systems, so as to reduce the 

pipeline’s recordkeeping burden and 

also to avoid systemic discrepancies in 

the event of an audit. Furthermore, in 

order to aid Respondents who may need 

to correct a previous Form No. 549D 

report for any reason, the Commission 

will insert a Field 3A in the report, in 

which Respondents may provide a short 

explanation of why they are 

resubmitting a prior report. 

72. TPA also requests that the 

Commission clarify how Respondents 

should handle contracts that were not 

active during a given quarter. TPA cites 

the appendix to the Final Rule as 

explaining that ‘‘pipelines that did not 

provide any interstate services to any 

shipper’’ at all need only fill out the 

initial fields in Form No. 549D, and not 

the remainder of the form.76 TPA states 

that it is unclear, however, how to 

respond if ‘‘gas flows under some 

contracts but not others,’’ and 

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77 Id. 

78TPA at 6. 

79Enogex at 20. 

80 Jefferson at 8. 

81The previous Form No. 549D was approved 

under OMB Control No. 1902–0253. 

82The technical workshop shall be to discuss 

implementation of the draft reporting requirements. 

The technical workshop will not address legal or 

policy issues that are more appropriately raised 

through requests for rehearing or clarification, 

including any changes to the form, instructions, and 

definitions that would require OMB approval, nor 

will it address the semi-annual storage reports. 

83 5 CFR 1320. 

84See 44 U.S.C. 3507(h)(3). 

85See Order No. 735, FERC Stats. & Regs. 

¶ 31,310 at P 106–108. 

recommends that pipelines only ‘‘report 

the contracts where [jurisdictional] gas 

flowed.’’ 77

73. The Commission grants the 

requested clarification. Respondents 

need not include in their quarterly 

reports any contracts for which no 

Commission-jurisdictional gas has 

flowed in that quarter. 

F. Semi-Annual Storage Report 

74. Enogex, Jefferson, and TPA all 

argue that the semi-annual storage 

report (Form No. 537, required by 18 

CFR 284.126(c)) will be duplicative and 

burdensome as soon as section 311 and 

Hinshaw pipelines begin reporting on 

Form No. 549D. They argue that since 

the Commission ‘‘will be able to distill 

all of the relevant information presently 

reported on the existing Form No. 537 

from the new Form No. 549D,’’ 78 there 

is ‘‘no justification for’’ 79 collecting ‘‘this 

duplicative storage activity information 

in dissimilar formats.’’ 80 Accordingly, 

they urge the Commission to eliminate 

the semi-annual storage report. 

75. While there is substantial overlap 

between Form No. 537 and Form No. 

549D, it remains unclear whether the 

new quarterly report renders the semiannual storage report obsolete. The 

semi-annual storage report collects 

certain information that the quarterly 

reports do not. This includes the 

volumes actually injected and 

withdrawn during the injection and 

withdrawal seasons. In addition, as 

discussed above, the quarterly reports 

required by this rule will not require 

per-customer revenue data to be 

reported. Moreover, since the semiannual reporting periods are tied to the 

injection and withdrawal season, the 

time periods covered also do not 

correspond precisely to two Form No. 

549D quarterly reports. Thus, we will 

not eliminate Form No. 537 at this time. 

76. However, we find that the 

Commission should reconsider the 

utility of the semi-annual storage reports 

for interstate and intrastate storage 

companies. As Enogex, Jefferson, and 

TPA argue, the Commission should seek 

to eliminate truly duplicative reporting 

requirements. Throughout this 

rulemaking proceeding, the Commission 

has also sought to standardize and 

equalize reporting requirements for 

interstate and intrastate providers 

wherever it is warranted. Thus, any 

consideration of abolishing or reforming 

the intrastate semi-annual storage report 

should be accompanied by a similar 

review of the interstate semi-annual 

storage report. Finally, the semi-annual 

storage reports are now anomalous 

among Commission reports in their 

respondents’ liberal use of requests for 

privileged treatment, which has recently 

led to calls that these reports be made 

public. Accordingly, simultaneously 

with this order, the Commission is 

issuing a Notice of Inquiry under a 

separate docket, Docket No. RM11–4– 

000, to explore reforms to the semiannual storage reporting requirements 

for interstate and intrastate storage 

companies. 

G. Effective Date and Technical 

Workshop 

77. Jefferson argues on rehearing that 

the Commission should delay the 

effective date of Order No. 735 from 

April 1, 2011 until October 1, 2011. 

Jefferson also requests that the 

Commission hold a technical workshop 

at least 6 months before the effective 

date, and post the XML Schema as soon 

as possible. Jefferson argues that since 

the Commission has not yet posted a 

version of the XML Schema that is 

compatible for electronic submission, it 

cannot yet determine the procedures 

that it will use to collect data and 

compile its first report. 

78. The draft revisions to Form No. 

549D 81 are being submitted to OMB for 

review and approval. Above in this 

order, we have pushed back the due 

date of the first quarterly report under 

the new regulations from May 1, 2011 

to June 1, 2011. A print only version of 

the PDF form is provided in the 

Appendix to this order, and 

Commission Staff will post the XML 

Schema and fillable PDF to the FERC 

website as soon as available and 

permitted by OMB. We consider this to 

be sufficient advance notice, 

considering that Jefferson is the only 

pipeline to have expressed concern on 

rehearing that the effective date is too 

soon. We also direct Commission Staff 

to hold a technical workshop on issues 

of implementation, the time and date of 

which will be announced in a separate 

notice in this docket after we receive 

OMB approval of the revised Form No. 

549D.82

III. Information Collection Statement 

79. OMB regulations require that 

OMB approve certain reporting, 

recordkeeping, and public disclosure 

(collections of information) imposed by 

an agency.83 The information collection 

requirements included in Commission 

Order No. 735 for Form No. 549D were 

approved under OMB Control No. 1902– 

0253. This order further revises the 

requirements in order to retract the 

increased requirements for contract end 

dates and per-customer revenue, to 

more clearly state the obligations 

imposed in Order No. 735, and to 

extend the reporting deadlines. Because 

the Commission has made ‘‘substantive 

or material modifications’’ to the 

information collection requirement, we 

will submit Form No. 549D to OMB for 

review and approval under the 

Paperwork Reduction Act.84

80. The Commission identifies the 

information provided under Part 284 as 

contained in FERC Form No. 549D. The 

Commission solicited comments on the 

need for this information, whether the 

information would provide useful 

transparency, ways to enhance the 

quality, utility, and clarity of the 

information to be collected, and any 

suggested methods for minimizing 

Respondents’ burden. Where 

commenters raised concerns that 

information collection requirements 

would be burdensome to implement, the 

Commission has addressed those 

concerns above in this order. The 

Commission does not change its burden 

estimate from that provided in Order 

No. 735.85

81. 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], 

e-mail: DataClearance@ferc.gov, Phone: 

(202) 502–8663, Fax: (202) 273–0873. 

For submitting comments concerning 

the collection of information, please 

send your comments to the Commission 

and to: Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, 725 17th 

Street, NW., Washington, DC 20503, 

[Attention: Desk Officer for the Federal 

Energy Regulatory Commission] Phone: 

(202) 395–4638, Fax: (202) 395–7285. 

Due to security concerns, comments 

should be sent electronically to OMB at 

the following e-mail address: 

oira_submission@omb.eop.gov. Please 

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86Order No. 486, Regulations Implementing the 

National Environmental Policy Act, 52 FR 47897 

(Dec. 17, 1987), FERC Stats. & Regs. ¶ 30,783 (1987). 

87 18 CFR 380.4. 

88See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), and 

380.4(a)(27). 

89 5 U.S.C. 601–612. 

90See Order No. 735, FERC Stats. & Regs. 

¶ 31,310 at P 111. 

reference OMB Control No. 1902–0253 

and the docket number of this order in 

your submission. 

IV. Environmental Analysis 

82. 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.86 The Commission has 

categorically excluded certain actions 

from these requirements as not having a 

significant effect on the human 

environment.87 The actions taken here 

fall within categorical exclusions in the 

Commission’s regulations for rules that 

are corrective; clarifying or procedural; 

for information gathering, analysis, and 

dissemination; and for sales, exchange, 

and transportation of natural gas that 

requires no construction of facilities.88

Therefore an environmental review is 

unnecessary and has not been prepared 

in this rulemaking. 

V. Regulatory Flexibility Act 

83. The Regulatory Flexibility Act of 

1980 (RFA) 89 generally requires a 

description and analysis of final rules 

that will have significant economic 

impact on a substantial number of small 

entities. The Commission is not 

required to make such analysis if 

proposed regulations would not have 

such an effect. For the reasons stated in 

Order No. 735,90 the Commission 

certifies that this Final Rule’s 

amendments to the regulations will not 

have a significant impact on a 

substantial number of small entities. 

VI. Document Availability 

84. In addition to publishing the full 

text of this document in the Federal 

Register, except for the Appendix, the 

Commission provides all interested 

persons an opportunity to view and/or 

print the contents of this document, 

including the Appendix, via the Internet 

through FERC’s Home Page (http://www.

ferc.gov) and in FERC’s Public Reference 

Room during normal business hours 

(8:30 a.m. to 5 p.m. Eastern time) at 888 

First Street, NE., Room 2A, Washington 

DC 20426. 

85. From FERC’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. The report and 

instructions also will be made available 

through the Commission’s Forms page, 

http://www.ferc.gov/docs-filing/forms.

asp, upon approval by OMB. 

86. User assistance is available for 

eLibrary and the FERC’s Web site during 

normal business hours from FERC 

Online Support at 202–502–6652 (toll 

free at 1–866–208–3676) or e-mail at 

ferconlinesupport@ferc.gov, or the 

Public Reference Room at (202) 502– 

8371, TTY (202) 502–8659. E-mail the 

Public Reference Room at public.

referenceroom@ferc.gov. 

VII. Effective Date 

87. These further revisions to the 

reporting regulations will be effective 

April 1, 2011, the same date as in the 

Final Rule. The quarterly report for 

transactions occurring during the period 

January 1, 2011 through March 31, 2011, 

must be filed on or before June 1, 2011. 

The Commission has determined that 

this rule is not a ‘‘major rule’’ as defined 

in section 351 of the Small Business 

Regulatory Enforcement Fairness Act of 

1996. 

List of Subjects in 18 CFR Part 284 

Continental shelf, Natural gas, 

Reporting and recordkeeping 

requirements. 

By the Commission. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

■ In consideration of the foregoing, the 

Commission amends part 284, Chapter I, 

Title 18, Code of Federal Regulations, as 

amended at 75 FR 29404 on May 26, 

2010, as follows. 

PART 284—CERTAIN SALES AND 

TRANSPORTATION OF NATURAL GAS 

UNDER THE NATURAL GAS POLICY 

ACT OF 1978 AND RELATED 

AUTHORITIES 

■ 1. The authority citation for part 284 

continues to read as follows: 

Authority: 15 U.S.C. 717–717w, 3301– 

3432; 42 U.S.C. 7101–7352; 43 U.S.C. 1331– 

1356. 

■ 2. In § 284.126, as amended at 75 FR 

29419 on May 26, 2010, paragraphs 

(b)(1)(vi), (b)(1)(viii), and (b)(2) are 

revised to read as follows: 

§ 284.126 Reporting requirements. 

* * * * * 

(b) * * * 

(1) * * * 

(vi) The duration of the contract, 

specifying the beginning and (for firm 

contracts only) ending month and year 

of the current agreement; 

* * * * * 

(viii) Annual revenues received for 

each shipper, excluding revenues from 

storage services. The report should 

separately state revenues received under 

each component, and need only be 

reported every fourth quarter. 

(2) The quarterly Form No. 549D 

report for the period January 1 through 

March 31 must be filed on or before 

June 1. The quarterly report for the 

period April 1 through June 30 must be 

filed on or before September 1. The 

quarterly report for the period July 1 

through September 30 must be filed on 

or before December 1. The quarterly 

report for the period October 1 through 

December 31 must be filed on or before 

March 1. 

* * * * * 

[FR Doc. 2010–32112 Filed 12–22–10; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1 and 602 

[TD 9512] 

RIN 1545–BF08 

Nuclear Decommissioning Funds 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations and removal of 

temporary regulations. 

SUMMARY: This document contains final 

regulations under section 468A of the 

Internal Revenue Code relating to 

deductions for contributions to trusts 

maintained for decommissioning 

nuclear power plants. These final 

regulations affect taxpayers that own an 

interest in a nuclear power plant and 

reflect recent statutory changes. The 

corresponding temporary regulations are 

removed. 

DATES: Effective Date: These regulations 

are effective on December 23, 2010. 

Applicability Dates: For dates of 

applicability, see §§ 1.468A–9, 1.468A– 

3, and 1.468A–8. 

FOR FURTHER INFORMATION CONTACT: 

Patrick S. Kirwan, (202) 622–3110 (not 

a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

The collection of information 

contained in these final regulations has 

mstockstill on DSKH9S0YB1PROD with RULES