[Federal Register Volume 76, Number 162 (Monday, August 22, 2011)]
[Rules and Regulations]
[Pages 52253-52259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21353]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 260

[Docket No. RM07-9-004; Order No. 710-C]


Revisions to Forms, Statements, and Reporting Requirements for 
Natural Gas Pipelines

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Order on Rehearing.

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SUMMARY: In this Order, the Federal Energy Regulatory Commission 
(Commission) generally denies rehearing and reaffirms the findings made 
in Order No. 710-B. The Commission does, however, revise the burden 
estimate to more accurately account for initial start-up costs, grant 
rehearing on the issue of whether to include page 521d, and grant 
additional time to comply with Order No. 710-B.

FOR FURTHER INFORMATION CONTACT:

Brian Holmes (Technical Information), Office of Enforcement, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426. Telephone: (202) 502-6008, e-mail: <a href="/cdn-cgi/l/email-protection#2745554e4649094f484b4a4254674142554409404851"><span class="__cf_email__" data-cfemail="85e7f7ece4ebabedeae9e8e0f6c5e3e0f7e6abe2eaf3">[email protected]</span></a>.
Robert Sheldon (Technical Information), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426. Telephone: (202) 502-8672, e-mail: 
<a href="/cdn-cgi/l/email-protection#1b6974797e696f3568737e777f74755b7d7e6978357c746d"><span class="__cf_email__" data-cfemail="e89a878a8d9a9cc69b808d848c8786a88e8d9a8bc68f879e">[email protected]</span></a>.
Gary D. Cohen (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426. Telephone: (202) 502-8321, e-mail: 
<a href="/cdn-cgi/l/email-protection#771016050e5914181f1219371112051459101801"><span class="__cf_email__" data-cfemail="721513000b5c111d1a171c32141700115c151d04">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer, Philip 
D. Moeller, John R. Norris, and Cheryl A. LaFleur.

Order on Rehearing

Issued August 16, 2011

    1. Earlier in this proceeding, the Commission issued a Final Rule 
(Order No. 710-B) revising its financial forms, statements, and reports 
for natural gas companies, contained in FERC Form Nos. 2, 2-A, and 3-Q, 
to provide greater transparency on fuel data by requiring the reporting 
of functionalized fuel data on pages 521a through 521c of those forms, 
and to include on those forms the amount of fuel waived, discounted or 
reduced as part of a negotiated rate agreement.\1\
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    \1\ Revisions to Forms, Statements, and Reporting Requirements 
for Natural Gas Pipelines, Order No. 710-B, 76 FR 4516 (Jan. 26, 
2011), 134 FERC ] 61,033 (2011) (Order No. 710-B or Final Rule).
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    2. In response to the Final Rule, the Interstate Natural Gas 
Association of America (INGAA) filed a request for rehearing raising 
eleven separate objections to the Final Rule. In this order on 
rehearing, we generally deny rehearing and reaffirm the findings we 
made in Order No. 710-B. We do, however, revise the burden estimate to 
more accurately account for initial start-up costs, grant rehearing on 
the issue of whether to include page 521d and we grant filers 
additional time before they must begin filing Form Nos. 2, 2-A, and 3-Q 
in accordance with the requirements established in Order No. 710-B and 
this rehearing order.

I. Background

    3. This matter began in 2008, when the Commission issued a Final 
Rule (Order No. 710) revising its financial forms, statements, and 
reports for natural gas companies, contained in

[[Page 52254]]

FERC Form Nos. 2, 2-A, and 3-Q, to make the information reported in 
these forms more useful by updating them to reflect current market and 
cost information relevant to interstate natural gas pipelines and their 
customers.\2\ The information provided in these forms included data on 
fuel use, but did not require these data to be functionally 
disaggregated.
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    \2\ Revisions to Forms, Statements, and Reporting Requirements 
for Natural Gas Pipelines, final rule, Order No. 710, FERC Stats. & 
Regs. ] 31,267 (2008) (Order No. 710).
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    4. On rehearing, the American Gas Association (AGA) argued that the 
fuel data would be more useful if such data were broken out by 
different pipeline functions, including transportation, storage, 
gathering, and exploration/production, and should include, by function, 
the amount of fuel waived, discounted or reduced as part of a 
negotiated rate agreement. This argument was rejected in Order No. 710-
A,\3\ but was reconsidered in a Notice of Proposed Rulemaking issued on 
June 17, 2010.\4\ AGA supported the Commission's proposal while INGAA 
opposed it. After considering all the comments and reply comments, the 
Commission issued a Final Rule adding additional transparency to the 
reporting of fuel data. Specifically, the Final Rule revised FERC Form 
Nos. 2, 2-A, and 3-Q, revising pages 521a, 521b, and page 520, and 
adding page 521c to FERC Form Nos. 2, 2-A, and 3-Q to include 
functionalized fuel data, including the amount of fuel waived, 
discounted or reduced as part of a negotiated rate agreement.\5\
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    \3\ Revisions to Forms, Statements, and Reporting Requirements 
for Natural Gas Pipelines, order on reh'g and clarification, Order 
No. 710-A, 123 FERC ] 61,278 (2008).
    \4\ Revisions to Forms, Statements, and Reporting Requirements 
for Natural Gas Pipelines, Notice of Proposed Rulemaking, 75 FR 
35700 (June 23, 2010), FERC Stats. & Regs. ] 32,659 (June 17, 2010) 
(June 2010 NOPR).
    \5\ Order No. 710-B, 134 FERC ] 61,033, at P 1, 7, 37. The Final 
Rule has a more complete discussion of the procedural history of 
this case. We will not reiterate that complete history here.
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    5. In response to the Final Rule, INGAA filed a request for 
rehearing reiterating many of the concerns that it raised earlier in 
the proceeding (in its comments and reply comments on the June 2010 
NOPR).

II. Discussion

A. Overview

    6. INGAA raises eleven separate objections to the Final Rule. 
First, INGAA argues that Order No. 710-B erred by finding that 
reporting of functionalized fuel data by contract rate category does 
not require tracking of fuel by individual contracts. Second, INGAA 
argues that adding this level of detail increases the reporting burden. 
Third, INGAA argues that the Commission erred by not adopting its 
alternative proposal which it maintains would have met the Commission's 
needs with a lesser burden to filers. Fourth, INGAA claims that the 
requirement to allocate lost and unaccounted for gas (LAUF) among 
negotiated, discounted and recourse transportation customers ignores 
fundamental nature of LAUF, forcing an allocation that is meaningless. 
Fifth, INGAA argues that the requirement to disclose the disposition of 
excess gas or gas acquired to meet deficiencies by contract rate 
category also is meaningless. Sixth, INGAA reiterates its objection to 
reporting discounted rates as a separate category, claiming that 
disclosing this information does not serve any regulatory purpose 
because pipelines are prohibited from discounting. Seventh, INGAA 
argues that the Commission erred by not granting the clarification 
requested by MidAmerican \6\ (that the rule should only cover (1) 
contracts with discounted and negotiated fuel rates and (2) headings 
should be changed to be ``discounted fuel rate'' and ``negotiated fuel 
rate''). INGAA argues this would be less burdensome but would 
accomplish the Commission's stated goals. Eighth, INGAA argues that the 
Commission erred by assuming that MidAmerican's proposal would have 
excluded many contracts that otherwise would be reported. Ninth, INGAA 
argues that the Final Rule orders the collection of data too soon and 
that data under the new categories should not be required to be 
collected until calendar year 2012. Tenth, INGAA requests clarification 
that ``backhaul service offered under tariff'' means that, if tariff 
does not include a ``backhaul'' rate schedule, then nothing need be 
reported for this. Finally, INGAA argues that the Commission should 
keep blank page 521d, which was included in the June 2010 NOPR and 
omitted in the Final Rule. We will now examine each of these arguments.
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    \6\ In this proceeding, we are referring to Northern Natural Gas 
Company and Kern River Gas Transmission Company, collectively, as 
MidAmerican.
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B. Does the Final Rule Require the Tracking of Individual Contracts?

    7. INGAA argues that Order No. 710-B erred by finding that 
reporting of functionalized fuel data by contract rate category does 
not require the tracking of fuel by individual contracts.
    8. INGAA states that, in Order No. 710-B, the Commission found that 
the reporting of functionalized fuel data by contract rate category 
does not require the tracking of fuel by individual contracts. INGAA 
disputes this finding and argues that such tracking would be 
necessitated, despite the Commission's finding to the contrary. We 
reject this interpretation. As we stated in Order No. 710-B, at 
paragraph 74:

    In this Final Rule, the Commission is not imposing any 
additional reporting requirements that change how those pipelines 
track fuel. Pipeline billings are provided on an integrated basis, 
accounting for sales based on whether the volumes are negotiated, 
recourse, or discounted. Moreover, contrary to INGAA's assertions, 
the Commission is not requiring pipelines to track fuel by 
individual contracts, but merely continuing the current practice of 
requiring the assignment of fuel based on an allocation of 
throughput or stated fuel rate. The revisions to page 521a through 
521c require the same accounting mechanism for fuel, enabling 
parties to better understand how fuel use costs are assigned.

    9. Thus, it can be seen that, if a pipeline has twelve gas service 
contracts, the Final Rule is not requiring the pipeline to report the 
details of each of those contracts. Instead, the Final Rule is 
requiring the pipeline to report the totals for fuel (for all twelve 
contracts) by function which can be determined on an allocation of 
throughput or stated fuel rate. To accomplish this, however, the 
pipelines would need to continue their current practice of assessing 
shippers for services provided to each customer.

C. Reporting Burden

    10. INGAA argues that adding the level of detail required by the 
Final Rule increases the reporting burden. In light of INGAA's 
concerns, we have further reviewed the burden estimate contained in the 
Final Rule and have determined that we can improve the accuracy of our 
burden estimate if we distinguish between the initial start-up costs, 
which include all of the work needed to identify and create a mechanism 
to report the information required to be reported under the Final Rule, 
as compared to the ongoing costs of reporting the information required 
to be reported under the Final Rule once the reporting mechanism is in 
place. This revised burden estimate is shown below in the Information 
Collection Statement that begins at paragraph 28 of this order.

D. INGAA's Alternative Proposal

    11. INGAA argues that the Commission erred by not adopting its 
alternative proposal which it maintains would have met the Commission's

[[Page 52255]]

needs with a lesser burden to filers. The Commission addressed this 
issue in Order No. 710-B, where we stated:

    We find that requiring the reporting of fuel costs and revenues 
by rate structure broken down by function will increase the ability 
of the Commission and interested parties to assess whether a 
pipeline's existing shippers are subsidizing the pipeline's 
negotiated rate program. Thus, we find that INGAA's proposal would 
effectively delete much of the valuable information sought in the 
June 2010 NOPR.\7\
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    \7\ Order No. 710-B, 134 FERC ] 61,033 at P 37.
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    The revised forms also will now allow the user to better 
determine where on the pipeline system fuel costs are being incurred 
and how they are being allocated. This added transparency, which is 
supported by the majority of the commenters, will ensure that the 
Commission and pipeline customers have sufficient information to be 
able to assess the justness and reasonableness of pipeline rates. 
The collection and public availability of this information is 
consistent with our goal of having sufficient information to allow 
the Commission and pipeline customers to assess the impact on 
pipeline rates of changing fuel costs.\8\
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    \8\ Id. P 38.
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    By contrast, if we adopted INGAA's suggestion to limit the 
revisions to FERC Form No. 2 to those originally proposed by AGA, 
then the benefits of increased transparency of rates, particularly 
within the negotiated rate program, which are described in the two 
preceding paragraphs, would not be fully realized.\9\
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    \9\ Id. P 39.

    12. INGAA's rehearing reiterates arguments it advanced earlier in 
this proceeding that, for the reasons quoted above, the Commission 
rejected in Order No. 710-B. We reaffirm those findings and reject 
INGAA's proposal.

E. Allocations of Fuel Used in Compressor Stations, LAUF, and Fuel Used 
in Operations

    13. INGAA argues that Order No. 710-B suggests that fuel consumed 
in compressor stations, LAUF and fuel used in operations, which are all 
drawn from a commingled and fungible gas stream, can be traced back to 
individual shipper contracts. INGAA further argues that the requirement 
to allocate LAUF among negotiated, discounted and recourse 
transportation customers ignores fundamental nature of LAUF, forcing an 
allocation that is meaningless. INGAA also argues that, except in some 
limited and unique circumstances, such tracing is impractical, if not 
impossible.\10\
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    \10\ INGAA states that ``[p]ipelines do track or allocate fuel 
consumed separately for incremental rate services in which the 
Commission in its orders has required the pipeline to keep the 
incremental rate customers' fuel costs and revenues separate. Other 
than for such very limited incremental rate purposes, however, 
pipelines are not required to allocate or track fuel used by 
individual contract even in general section 4 rate proceedings. In 
its orders approving pipelines' negotiated rate contracts, the 
Commission requires pipelines to separately account for the 
negotiated rate transaction's volumes, revenues, billing 
determinants, rate components and surcharges. But, the Commission 
does not require that fuel used, or any other cost for that matter, 
associated with negotiated rate transactions be separately accounted 
for.'' INGAA Rehearing at n.1. As discussed further in paragraph 21 
below, this contention is incorrect because fuel use is a rate 
component.
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    14. The reporting requirements established in the Final Rule do not 
require fuel use to be traced back to individual shipper contracts.\11\ 
The information reported on pages 521a and 521b--even before issuance 
of the Final Rule--already included a requirement for pipelines to 
report monthly fuel use by Dth. The Final Rule added the requirement 
for pipelines (on lines 1-65 on pages 521a and 521b) to allocate these 
totals among discounted rates, negotiated rates, and recourse rates. 
The Final Rule did not impose a requirement that these allocations be 
made based on a review of individual contracts. One reasonable approach 
would be to take the total volume of throughput and allocate it among 
the three contract categories (i.e., contracts with discounted rates, 
contracts with negotiated rates, and contracts with recourse rates) 
based on the percentage of gas transported for each contract type, 
which is already known and available to a pipeline for invoicing 
shippers on a monthly basis. For example, if, hypothetically, a 
pipeline has a monthly transportation volume of 1000 Dth and 5 percent 
of its volume is associated with contracts with discounted rates, 10 
percent is associated with negotiated rates contracts, and 85 percent 
associated with recourse rate contracts, then the pipeline could 
develop an allocation of fuel used at compressor stations, LAUF, and 
gas used in operations based on a ratio of the throughput. Such an 
allocation could be used for all the various allocations needed to 
complete pages 521a and 521b. Thus, it is evident that we are not 
requiring pipelines to assess individual contracts to make this 
allocation.
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    \11\ The Commission does not expect pipelines to develop and 
administer a process by which the fuel in each compressor, as it is 
burned, is assigned in some manner among individual shipper 
contracts.
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    15. In addition, while admittedly imperfect, allocating costs by 
function is a standard practice for pipelines for numerous cost 
categories. The allocation of fuel consumed in compressor stations, 
LAUF and fuel used in operations, and among negotiated, discounted and 
recourse transportation customers are a few, among many, of such cost 
allocations. The allocation of costs is a standard practice for 
pipeline companies to bill their customers for services rendered. The 
fact that such allocations are not 100 percent precise does not negate 
the necessity for such allocations being made. Pipelines collect fuel 
(including LAUF) from customers and the Final Rule requires the 
reporting of how that fuel is assigned.
    16. INGAA's position is that the allocation of fuel costs required 
by this rule is ``meaningless'' given the nature of LAUF as gas that is 
lost and unaccounted for.\12\ We disagree. In our view, allowing 
customers to see exactly how fuel costs are assigned to various 
customers groups is important because it allows customers to assure 
themselves that the fuel costs being assigned to them are reasonable 
and do not cross-subsidize other customer groups. Thus, we find that 
making such allocations transparent is extremely meaningful.
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    \12\ INGAA Rehearing at 3 & 8-9.
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F. Disclosure of Disposition of Excess Gas or Gas Acquired To Meet 
Deficiency by Contract Rate Category

    17. INGAA raises the same objections to the reporting of the 
disposition of excess gas or the reporting of gas acquired to meet 
deficiencies that it raised regarding the reporting of the allocation 
of fuel used in compressor stations, LAUF, and fuel used in operations. 
Specifically, INGAA argues that,

    [t]he reporting of disposition of excess gas or the reporting of 
gas acquired to meet deficiencies on pages 521b and 521c (lines 38-
65) by contract rate category would provide little benefit. A 
pipeline does not track disposition or acquisition of gas by 
categories of transportation contracts. Assignment to contract rate 
categories could be accomplished by utilizing an arbitrary 
allocation methodology. However, the allocation of a pipeline's 
system gas dispositions or acquisitions would not yield any 
meaningful information. Only the reporting of total dispositions or 
total acquisitions of system gas would produce a cogent result. 
Accordingly, INGAA requests rehearing and asks the Commission to 
allow pipelines to report total disposition or total acquisitions of 
system gas on pages 521b and 521c.\13\
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    \13\ INGAA Rehearing at 8.

    18. As discussed above in paragraph 14, the allocations required by 
the Final Rule do not require an analysis of individual contracts. 
Moreover, while the allocations required by this rule may not be 
precise, few allocations are, and these allocations are routinely made 
for customer billing purposes.
    19. The information reported in lines 38-65 would be useful in 
determining

[[Page 52256]]

among which classes of shippers over and under recoveries of fuel are 
occurring (i.e., recourse, negotiated, or discounted customers). For 
example, recourse rate shippers could provide more fuel than necessary 
and negotiated rate shippers could have a capped fuel rate such that 
recourse shippers may be subsidizing negotiated rate shippers. The 
recourse rate shippers should be in a position to fully understand 
whether over recovered fuel for recourse rate contracts is being used 
to make up a deficiency of fuel for negotiated rate contracts. 
Similarly, shippers should be aware to the extent a pipeline is 
purchasing gas associated with a fuel deficiency attributable to 
negotiated rate contracts. Additionally, while generally more 
applicable to pipelines with stated fuel rates, shippers should be in a 
position to know whether the disposition of excess fuel is being sold 
or if the gas is used for imbalances such that pipelines are recovering 
the cost through periodic imbalance cashout reports. We find that 
reporting this information provides useful transparency regarding the 
amount of fuel used to operate compressor stations, the disposition of 
excess gas and how the deficiency was acquired, and how fuel costs and 
LAUF are allocated among customers. Consequently, we deny rehearing of 
this issue.

G. Discounted Rates as a Separate Category and Negotiated Rates as a 
Separate Category

    20. INGAA reiterates its objection to reporting fuel assigned to 
discounted rates as a separate category, claiming that disclosing this 
information does not serve any regulatory purpose, because pipelines 
are prohibited from discounting fuel. Fuel expenses constitute a 
significant portion of the total expenses recovered by natural gas 
rates. Obscuring this information makes it harder for entities to track 
the reasonableness of these expenses. Contrary to INGAA's arguments, 
pipelines are not prohibited from discounting fuel under all 
circumstances.\14\ In addition, the additional transparency provided by 
this Final Rule serves the important regulatory objective of assuring 
that rates are just and reasonable. If a pipeline is not discounting 
fuel then it should simply report zero in Column (K), Volume (in Dth) 
Not Collected. This approach provides an affirmative confirmation that 
fuel is not being discounted. Combining the discount rate category with 
negotiated rates would eliminate this confirmation. Consequently, we 
will retain the separate discount rate category.
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    \14\ For example, in Transwestern Pipeline Company, 54 FERC ] 
61,319, at 62,007 (1991), the Commission approved Transwestern's 
proposal to provide fuel discounts, provided that the minimum rate 
would not be lower than actual fuel costs, if any.
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    21. Additionally, based on its contention that there is no cross-
subsidy in instances where a negotiated rate customer pays the same 
fuel rate as a recourse rate customer, INGAA argues that there is no 
need to separate the reporting of recourse and negotiated rate 
contracts. The Commission has long required pipelines to separately 
account for rate components associated with negotiated rates.\15\ We 
are not persuaded to modify that policy in this rule. Moreover, while 
INGAA points to certain circumstances where it argues that no cross-
subsidy would occur, the reporting requirements of this rule apply to 
all negotiated rate contracts and thus INGAA's example does not suffice 
to contradict the need for this provision.
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    \15\ See, e.g., NorAm Gas Transmission Company, 75 FERC ] 
61,322, at 62,029 (1996); Texas Eastern Transmission, LP, 133 FERC ] 
61,220, at P 19 (2010); Gulf Crossing Pipeline Company LLC, 123 FERC 
] 61,100, at P 87 (2008).
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H. MidAmerican's Requested Clarification

    22. INGAA argues that the Commission erred by not granting the 
clarification requested by MidAmerican (that the rule should only cover 
(1) Contracts with discounted and negotiated fuel rates and (2) 
headings should be changed to be ``discounted fuel rate'' and 
``negotiated fuel rate''). INGAA argues this approach would be less 
burdensome but would accomplish the Commission's stated goals.
    23. As we stated in Order No. 710-B,\16\ the proposal to limit the 
scope of the rule to only require the reporting of fuel costs in 
contracts that include a specific provision for discounted or 
negotiated fuel would elevate form over substance and would omit 
contracts with negotiated and discounted rates, unless they include a 
specific provision covering discounted or negotiated fuel. This is 
contrary to the objective of the Final Rule of enhancing the 
transparency of fuel costs and we deny rehearing. Also, given our 
finding on the required reporting of gas contracts with discounted or 
negotiated fuel, we affirm our finding on the appropriate headings to 
be used.\17\
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    \16\ Order No. 710-B, 134 FERC ] 61,033 at P 55.
    \17\ Id. P 56.
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I. Excluded Contracts

    24. INGAA argues that the Commission erred by assuming that 
MidAmerican's proposal would have excluded many contracts that 
otherwise would be reported. As we stated in Order No. 710-B, 
MidAmerican commented that, to its knowledge, very few discounted and 
negotiated rate agreements include a provision for discounted and 
negotiated fuel.\18\ We concluded that, if this were true or if future 
contracts are written to make it true, then excluding the reporting of 
contracts not including a specific provision identifying discounted and 
negotiated fuel would be problematic.\19\ INGAA argues that we erred in 
relying on MidAmerican's statement, but in no way rebuts it. Moreover, 
we were concerned that, even if contracts are not currently drafted in 
this fashion, future contracts could be rewritten to achieve this end 
and we do not wish to open this possibility. Accordingly, we deny 
INGAA's request for rehearing on this issue.
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    \18\ Id. P 53.
    \19\ Id. P 55.
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J. Start Date for New Data Collections

    25. INGAA argues that the Final Rule orders the collection of data 
to begin too soon and that data under the new categories should not be 
required to be collected until calendar year 2012. We agree with INGAA 
that pipelines may not have the accounting systems in place to make the 
allocations of functionalized fuel by contract rate type required by 
the Final Rule and they may need to develop systems for making such 
allocations. We recognize some pipelines may not currently have in 
place the required accounting systems necessary to allocate fuel costs 
to negotiated, discounted and recourse transportation customers. In 
light of these considerations, we will grant rehearing and further 
delay the commencement of implementation of the filing requirements of 
the Final Rule until the fourth quarter period (``Q4'') of 2011. Thus, 
the data must be reported in the new format starting with the quarterly 
period October 1 through December 31, 2011 in Annual Report Forms 2 and 
2-A with a due date of April 18, 2012. This should allow sufficient 
time for filers to develop the necessary data and perform the needed 
allocations. Individual pipeline companies may apply to the Commission 
for further extensions, based on their individual circumstances. Even 
if an extension is granted, the information will still be

[[Page 52257]]

required to be reported for the Q4 period of 2011 but, if an extension 
is granted, the due date for the filing of this information may be 
extended past the April 18, 2012 filing deadline. Pipeline companies 
seeking an extension must provide a detailed explanation of why (for 
example, an additional analysis of data is needed, or allocation 
factors are still being developed) they cannot meet the filing 
deadline. The Commission will evaluate these requests on a case-by-case 
basis, based on the facts presented.

K. Requested Clarification of Reported Backhaul Service

    26. INGAA requests clarification that ``backhaul service offered 
under tariff'' means that, if the tariff does not include a 
``backhaul'' rate schedule, then nothing need be reported for this.\20\ 
A review of gas tariffs shows that many tariffs recover a charge for 
backhaul service, but do not necessarily provide for a separate 
backhaul rate schedule for that service. In many instances, the 
forwardhaul tariff permits backhaul service at or below the forwardhaul 
rate, with no separate backhaul rate schedule.\21\ If we exclude these 
backhaul volumes, then total backhaul volumes would be understated for 
these transactions. Thus, we reject the argument that information on 
backhauls should be limited to those instances when the tariff includes 
a separate backhaul rate schedule. INGAA's requested clarification 
would keep needed information hidden and could encourage tariffs to be 
drafted in a manner to avoid the reporting of this information. We note 
that the discussion in Order No. 710-B at paragraph 52 was addressing 
the narrow instances, such as with reticulated gas systems, where it is 
not possible to clearly determine what is a backhaul and what is a 
forwardhaul. We did not intend this to restrict the reporting of 
backhauls in systems where the gas flow path can be determined. Put 
differently, if the pipeline is unable to determine whether the volume 
is forwardhaul or backhaul, then the volume can be reported entirely as 
forwardhaul. Accordingly, we affirm the findings we made on this 
subject at paragraphs 50-52 of Order No. 710-B and deny the requested 
clarification.
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    \20\ In Order No. 710-B, the Commission added lines 66-68 to 
page 521. The lines request a separation of forwardhaul and backhaul 
throughput volumes in Dths for the quarter.
    \21\ See Trailblazer Pipeline Co., 39 FERC ] 61,103, at 61,324 
(1987), where we stated that, as backhaul volumes are included 
within the definition of transportation in section 284.1(a) of the 
Commission's regulations (18 CFR 284.1(a)), Trailblazer may perform 
backhaul service pursuant to its firm and interruptible rate 
schedules and we did not require Trailblazer to adopt a separate 
backhaul rate in that proceeding. We also note that, for example, 
the Iroquois Gas Transmission System, L.P., FERC Gas Tariff, at 
Section 13 of the General Terms and Conditions, Second Revised Sheet 
No. 76, provides for backhaul transportation service to be provided 
pursuant to the firm transportation service rate schedule and not 
under a separate backhaul rate schedule.
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L. Need for Page 521d

    27. Finally, INGAA argues that the Commission should retain the 
blank page 521d that we proposed in the June 2010 NOPR but omitted in 
Order No. 710-B. This omission was an oversight and we agree with INGAA 
that a filer would need this page to properly complete the Forms. Thus, 
we will correct this oversight and will include page 521d on the 
various forms.\22\ We, likewise, are including pages 521a-d in the FERC 
Form Nos. 2/2-A/3-Q Submission Software System.
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    \22\ This page is shown as an attachment to this order.
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III. Information Collection Statement

    28. The Office of Management and Budget's (OMB) regulations require 
approval of certain information collection requirements imposed by 
agency rules.\23\ Previously, the Commission submitted to OMB the 
information collection requirements arising from Order No. 710-B and 
OMB approved those requirements.\24\ In this order, the Commission is 
making no substantive changes to the content of the forms and the 
information that is required to be submitted. However, by adding in 
blank page 521d and re-estimating the reporting burden arising from 
Order No. 710-B, the Commission finds it necessary to make a formal 
submission to OMB for review and approval under section 3507(d) of the 
Paperwork Reduction Act of 1995.\25\
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    \23\ 5 CFR 1320.11.
    \24\ OMB approved the information collections prescribed in 
Order No. 710-B on May 16, 2011 for FERC Form No. 2 (OMB Control No. 
1902-0028, ICR<greek-i> 201101-1902-001), FERC Form No. 2-A (OMB 
Control No. 1902-0030, ICR<greek-i> 201101-1902-003) and FERC Form 
No. 3-Q (OMB Control No. 1902-0205, ICR<greek-i> 201101-1902-004).
    \25\ 44 U.S.C. 3507(d).
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    29. This order affects the following existing data collections:
    Title: FERC Form No. 2, ``Annual Report for Major Natural Gas 
Companies''; FERC Form No. 2-A, ``Annual Report for Nonmajor Natural 
Gas Companies.
    Action: Proposed information collection.
    OMB Control Nos. 1902-0028 (FERC Form No. 2); 1902-0030 (FERC Form 
No. 2-A).
    Respondents: Businesses or other for profit.
    Frequency of responses: Annually (FERC Form Nos. 2 and 2-A).
    Necessity of the information: The information maintained and 
collected under the requirements of 18 CFR 260.1 and 18 CFR 260.2 is 
essential to the Commission's oversight duties. The data previously 
reported in the forms did not provide sufficient information to the 
Commission and the public to permit an evaluation of the filers' 
jurisdictional rates. Since the triennial restatement of rates 
requirement was abolished and pipelines are no longer required to 
submit this information, the need for current and relevant data is 
greater than in the past.
    30. Without the information required in Order No. 710-B, it is 
difficult for the Commission and the public to perform an assessment of 
pipeline costs, and thereby help to ensure that rates are just and 
reasonable. Order No. 710-B accounts for the possibility that multiple 
pipelines may be required to develop and implement new procedures in 
order to provide the data in the revised forms. In any event, we 
believe the additional information required in Order No. 710-B will 
allow the Commission and form users to better analyze pipeline fuel 
costs, an important component in assessing the justness and 
reasonableness of pipelines' rates.
    Burden Statement: As indicated in the above discussion, INGAA 
contends that the Commission underestimated the burden associated with 
implementing the changes mandated in Order No. 710-B. In light of 
INGAA's arguments, the Commission acknowledges that some filers may 
have to modify existing systems in order to collect the necessary data. 
To account for this, the Commission estimates a one-time burden of 80 
hours per filer. This will increase the burden as follows:

[[Page 52258]]



----------------------------------------------------------------------------------------------------------------
                                                                                                     One-time
                                                     Number of       One-time       Filings per     additional
            Data collection form\26\                respondents     filing per         year          hours for
                                                                    respondent                       this form
----------------------------------------------------------------------------------------------------------------
FERC Form No. 2.................................              84              80               1           6,720
FERC Form No. 2-A...............................              44              80               1           3,520
                                                 ---------------------------------------------------------------
    Totals......................................  ..............  ..............  ..............          10,240
----------------------------------------------------------------------------------------------------------------

    Information Collection Costs: 10,240 hours at $120/hour= 
$1,228,800.
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    \26\ The FERC Form No. 3-Q (OMB Control No. 1902-0205) is not 
directly affected by the one-time burden increase because the filers 
will be making this one-time change in preparation for filing the 
FERC Form Nos. 2 and 2A in April 2012. It is expected that well 
before the date of the next FERC Form No. 3Q filing the one-time 
burden will have already been expended. However, the Commission 
intends to submit the FERC Form No. 3-Q to OMB for informational 
purposes.
---------------------------------------------------------------------------

    31. Internal Review: The Commission has reviewed the proposed 
changes and has determined that the changes are necessary. These 
requirements conform to the Commission's need for efficient information 
collection, communication, and management within the energy industry. 
The Commission has assured itself, by means of internal review, that 
there is specific, objective support associated with the information 
requirements.
    32. Interested persons may obtain information on the reporting 
requirements by contacting: Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426 [Attention: Ellen Brown, Office 
of the Executive Director, e-mail: <a href="/cdn-cgi/l/email-protection#c387a2b7a280afa6a2b1a2ada0a683a5a6b1a0eda4acb5"><span class="__cf_email__" data-cfemail="2165405540624d444053404f424461474453420f464e57">[email protected]</span></a>, phone (202) 
502-8663, fax: (202) 273-0873]. For submitting comments concerning the 
collections of information and the associated burden estimates, please 
submit comments to FERC in this Docket No. and to the 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 the following e-mail address: <a href="/cdn-cgi/l/email-protection#81eee8f3e0def2f4e3ece8f2f2e8eeefc1eeece3afe4eef1afe6eef7"><span class="__cf_email__" data-cfemail="d9b6b0abb886aaacbbb4b0aaaab0b6b799b6b4bbf7bcb6a9f7beb6af">[email protected]</span></a>. Please refer to OMB Control Nos. 1902-0028 
(FERC Form No. 2), and 1902-0030 (FERC Form No. 2-A), and the docket 
number of this Final Rule in your submission.

IV. Regulatory Flexibility Act

    33. The Regulatory Flexibility Act of 1980 (RFA)\27\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small 
entities.\28\ However, the RFA does not define ``significant'' or 
``substantial.'' Instead, the RFA leaves it up to an agency to 
determine the effect of its regulations on small entities.
---------------------------------------------------------------------------

    \27\ 5 U.S.C. 601-612.
    \28\ The RFA definition of ``small entity'' refers to the 
definition provided in the Small Business Act, which defines a 
``small business concern'' as a business that is independently owned 
and operated and that is not dominant in its field of operation. 15 
U.S.C. 632. The Small Business Size Standards component of the North 
American Industry Classification System defines a small natural gas 
pipeline company as one whose total annual revenues, including its 
affiliates, are $6.5 million or less. 13 CFR parts 121, 201.
---------------------------------------------------------------------------

    34. In Order No. 710-B the Commission certified that the additional 
reporting requirements would not have a significant economic impact on 
a substantial number of small entities.\29\ With the understanding that 
a one-time burden has now been added, the Commission affirms that the 
certification provided in Order No. 710-B remains accurate and no 
further justification is needed under the RFA.
---------------------------------------------------------------------------

    \29\ Order No. 710-B, 134 FERC ] 61,033 at P 89-91.
---------------------------------------------------------------------------

    The Commission orders:
    (A) INGAA's request for rehearing is hereby denied in part and 
granted in part, as discussed in the body of this order.
    (B) This order shall be published in the Federal Register.

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

[[Page 52259]]

[GRAPHIC] [TIFF OMITTED] TR22AU11.054

[FR Doc. 2011-21353 Filed 8-19-11; 8:45 am]
BILLING CODE 6717-01-P


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