Order No 582.txt

 UNITED STATES OF AMERICA

 FEDERAL ENERGY REGULATORY COMMISSION

 18 CFR Part 154

 (Docket No. RM95-3-000)

 FILING AND REPORTING REQUIREMENTS FOR INTERSTATE NATURAL 

 GAS COMPANY RATE SCHEDULES AND TARIFFS

 ORDER NO. 582

 FINAL RULE

 (Issued September 28, 1995)

 AGENCY: Federal Energy Regulatory Commission.

 ACTION: Final Rule.

 SUMMARY: The Federal Energy Regulatory Commission is amending

 part 154 of the Commission's regulations under the Natural Gas

 Act. The Commission is reorganizing, rewriting and updating its

 regulations governing the form, composition and filing of rates

 and charges for the transportation of natural gas in interstate

 commerce. This rule is part of the Commission's ongoing program

 to review its filing and reporting requirements and reduce

 unnecessary burdens by eliminating the collection of data that

 are not necessary to the performance of the Commission's

 regulatory responsibilities. The rule also requires that certain

 data, necessary to the analysis of a proposed rate, be filed at

 an earlier stage of the process.

 EFFECTIVE DATE: This final rule is effective [insert date 30

 days after publication in the Federal Register].

 FOR FURTHER INFORMATION CONTACT: Richard A. White, Office of the

 General Counsel, Federal Energy Regulatory Commission, 825 North

 Capitol Street, NE., Washington, DC 20426, (202) 208-0491.



Page 1
Order No 582.txt

 Docket No. RM95-3-000 - 2 -

 SUPPLEMENTARY INFORMATION: In addition to publishing the full

 text of this document in the Federal Register, the Commission

 also provides all interested persons an opportunity to inspect or

 copy the contents of this document during normal business hours

 at 888 First Street, NE., Washington, DC 20426.

 The Commission Issuance Posting System (CIPS), an electronic

 bulletin board service, provides access to the texts of formal

 documents issued by the Commission. CIPS is available at no

 charge to the user and may be accessed using a personal computer

 with a modem by dialing (800) 856-3920. To access CIPS, set your

 communications software to 19200, 14400, 12000, 9600, 7200, 4800,

 2400, 1200, or 300 bps, full duplex, no parity, 8 data bits, and

 1 stop bit. The full text of this document will be available on

 CIPS in ASCII and WordPerfect 5.1 format. The complete text on

 diskette in Wordperfect format may also be purchased from the

 Commission's copy contractor, La Dorn Systems Corporation, also

 located in Room 3104, 941 North Capitol Street, NE., Washington,

 DC 20426.



 TABLE OF CONTENTS

 I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . 1

 II. PUBLIC REPORTING BURDEN . . . . . . . . . . . . . . . . 3

 III. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . 6

 IV. DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . 10

 A. Overview and Objectives of the Final Rule . . . . . 10

 1. Organization and editorial changes. . . . . . 12

 2. Substantive changes. . . . . . . . . . . . . . 14

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Order No 582.txt

 B. The Revised Regulations . . . . . . . . . . . . . . 19

 1. Subpart A - General Provisions and Conditions . 18

 a. Section 154.1 Application; obligation to

 file . . . . . . . . . . . . . . . . . . 19

 b. Section 154.2 Definitions . . . . . . . . 24

 c. Section 154.3 Effective Tariff . . . . . 24

 d. Section 154.4 Electronic and Paper

 Media . . . . . . . . . . . . . . . . . . 25

 e. Section 154.5 Rejection of Filings . . . 28

 f. Section 154.6 Acceptance for filing not

 approval . . . . . . . . . . . . . . . . 32

 g. Section 154.7 General Requirements for

 the Submission of a Tariff Filing or

 Executed Service Agreement . . . . . . . 33

 h. Section 154.8 Informal Submission for

 Staff Suggestions . . . . . . . . . . . . 34

 2. Subpart B - Form and Composition of Tariff . . 35

 a. Section 154.101 Form . . . . . . . . . . 35

 b. Section 154.102 Title Page and

 Arrangement . . . . . . . . . . . . . . . . . . . . . . 35

 c. Section 154.103 Composition of Tariff . . 38

 d. Section 154.104 Table of Contents . . . . 38

 i



 e. Section 154.105 Preliminary Statement . . 39

 f. Section 154.106 Map . . . . . . . . . . . 39

 g. Section 154.107 Currently Effective

 Rates . . . . . . . . . . . . . . . . . . . . . . . . . 40

 h. Section 154.108 Composition of Rate

 Schedules . . . . . . . . . . . . . . . . 46

 i. Section 154.109 General Terms and

 Conditions . . . . . . . . . . . . . . . . . . . . . . . 47

 j. Section 154.110 Form of Service

 Agreement . . . . . . . . . . . . . . . . . . . . . . . 51

 k. Section 154.111 Index of Customers . . . 52

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Order No 582.txt

 l. Section 154.112 Exception to Form and

 Composition of Tariff . . . . . . . . . . 56

 m. Miscellaneous Subpart B Comments . . . . 56

 3. Subpart C - Procedures for Changing Tariffs . 58

 a. Section 154.201 Filing Requirements . . . 58

 b. Section 154.202 Filings to Initiate a

 New Rate Schedule . . . . . . . . . . . . 63

 c. Section 154.203 Compliance Filings . . . 65

 d. Section 154.204 - Changes in Rate

 Schedules, Forms of Service

 Agreements, or the General Terms and

 Conditions . . . . . . . . . . . . . . . 66

 e. Section 154.205 Changes Related to

 Suspended Tariffs, Executed Service

 Agreements or Parts Thereof . . . . . . . 68

 f. Section 154.206 Motion to Place

 Suspended Rates Into Effect . . . . . . . 69

 g. Section 154.207 Notice Requirements . . . 73

 h. Section 154.208 Service on Customers and

 Other Parties . . . . . . . . . . . . . . 74

 i. Section 154.209 Form of Notice for

 Federal Register . . . . . . . . . . . . 78

 ii



 j. Section 154.210 Protests, Interventions, and

 Comments . . . . . . . . . . . . . . . . . . . 79

 4. Subpart D - Material to be Filed With

 Changes . . . . . . . . . . . . . . . . . . . . . . . . 80

 a. Section 154.301 Changes in Rates . . . . 80

 b. Section 154.302 Previously Submitted

 Material . . . . . . . . . . . . . . . . . . . . . . . . 83

 c. Section 154.303 Test Periods . . . . . . 83

 d. Section 154.304 Format of Statements,

 Schedules, Workpapers, and Supporting

 Data . . . . . . . . . . . . . . . . . . 85

 e. Section 154.305 Tax Normalization . . . . 86

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Order No 582.txt

 f. Section 154.306 Cash Working Capital . . 87

 g. Section 154.307 Joint Facilities . . . . 87

 h. Section 154.308 Representation of Chief

 Accounting Officer . . . . . . . . . . . 87

 i. Section 154.309 Incremental Expansions . 87

 j. Section 154.310 Zones . . . . . . . . . 92

 k. Section 154.311 Updating of Statements . 93

 l. Section 154.312 Composition of

 Statements . . . . . . . . . . . . . . . . . . . . . . . 94

 1. Schedule B . . . . . . . . . . . . . . . . . . . . . . . 94

 2. Schedule C . . . . . . . . . . . . . . . . . . . . . . . 94

 3. Schedule C-1, End of Base Period Plant Functionalized . 95

 4. Schedule C-2 (Proposed Schedule C-3) . . . . . . . . . . 96

 5. Schedule C-3 (Proposed Schedule C-4) . . . . . . . . . . 97

 6. Schedule C-4 (Proposed Schedule C-5) . . . . . . . . . . 98

 7. Schedule C-5 (Proposed Schedule C-6) . . . . . . . . . . 99

 8. Schedule D . . . . . . . . . . . . . . . . . . . . . . . 99

 9. Schedules D-1 and D-2 . . . . . . . . . . . . . . . . . 100

 iii



 10. Schedule D-2 (Proposed Schedule D-3) . . . . . . . . . . 100

 11. Statement E . . . . . . . . . . . . . . . . . . . . . . 101

 Schedule E-3 . . . . . . . . . . . . . . . . . . . . . . 102

 14. Schedule E-4 . . . . . . . . . . . . . . . . . . . . . . 103

 15. Proposed Schedule E-5 . . . . . . . . . . . . . . . . . 103

 16. Statement F-2 . . . . . . . . . . . . . . . . . . . . . 104

 17. Statement G, Revenues, Credits, and Billing

 Determinants . . . . . . . . . . . . . . . . . . . . . . 105

 18. Schedule G-1, Base Period Revenues . . . . . . . . . . . 112

 Schedule G-2, Adjustment Period Revenues . . . . . . . . 114

 20. Schedule G-3 . . . . . . . . . . . . . . . . . . . . . . 120

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Order No 582.txt

 21. Schedule G-4, At-risk Revenue . . . . . . . . . . . . . 121

 22. Schedule G-5, Other Revenues . . . . . . . . . . . . . . 122

 23. Statement H-1 . . . . . . . . . . . . . . . . . . . . . 123

 24. Schedule H-1(1) . . . . . . . . . . . . . . . . . . . . 124

 25. Schedules H-1(1)(c), H-1(3)(a), and H-1(3)(b) . . . . . 125

 26. Schedules H-1(2)(a) and H-1(2)(b) . . . . . . . . . . . 127

 27. Schedule H-1(2)[Proposed Schedule H-1(3)] . . . . . . . 127

 28. Schedule H-1(2)(k)[Proposed Schedule H-1(3)(k)] . . . . 128

 29. Schedule H-1(2)(l)[Proposed Schedule H-1(3)(l)] . . . . 131

 30. Schedule H-2(1) . . . . . . . . . . . . . . . . . . . . 132

 31. Statement H-3 . . . . . . . . . . . . . . . . . . . . . 132

 32. Schedules H-3(1)-(3) . . . . . . . . . . . . . . . . . . 133

 33. Schedule H-3(4) . . . . . . . . . . . . . . . . . . . . 134

 34. Schedule H-4 . . . . . . . . . . . . . . . . . . . . . . 135

 35. Schedule I-1, Functionalization of Cost-of-service . . . 135

 36. Schedules I-2(i) and (ii) . . . . . . . . . . . . . . . 136

 iv



 37. Schedule I-3, Allocation of Cost-of-Service . . . . . . 137

 38. Schedule I-4, Transmission and Compression of Gas by

 Others (Account 858) . . . . . . . . . . . . . . . . . . 138

 39. Schedule I-5 . . . . . . . . . . . . . . . . . . . . . . 139

 40. Schedule I-5, Gas Balance . . . . . . . . . . . . . . . 140

 41. Statement J, Comparison and Reconciliation of Estimated

 Revenues With Cost-of-service . . . . . . . . . . . . . 140

 Schedule J-1, Summary of Billing Determinants . . . . . 141

 43. Schedule J-2, Derivation of Rates . . . . . . . . . . . 142

 44. Schedule J-2(iii) . . . . . . . . . . . . . . . . . . . 142

 45. Statement P . . . . . . . . . . . . . . . . . . . . . . 143

 m. Section 154.313 Schedules for Minor Rate

 Changes . . . . . . . . . . . . . . . . . 148

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Order No 582.txt

 n. Section 154.314 Other Support for a

 Filing . . . . . . . . . . . . . . . . . . . . . . . . . 150

 5. Subpart E - Limited Rate Changes . . . . . . . 152

 a. Section 154.401 RD&D Expenditures . . . . 152

 b. Section 154.402 ACA Expenditures . . . . 152

 c. Section 154.403 Periodic Rate

 Adjustments . . . . . . . . . . . . . . . . . . . . . . 152

 6. Subpart F - Refunds and Reports . . . . . . . 160

 a. Section 154.501 Refunds . . . . . . . . . 160

 b. Section 154.502 Reports . . . . . . . . . 166

 7. Subpart G - Other Tariff Changes . . . . . . . 168

 a. Section 154.601 Change in Executed

 Service Agreement . . . . . . . . . . . . 168

 b. Section 154.602 Cancellation or

 Termination of a Tariff, Executed

 Service Agreement or Part Thereof . . . . 168

 c. Section 154.603 Adopting of a Tariff by

 v



 a Successor . . . . . . . . . . . . . . . 169

 C. Comments requesting further changes . . . . . . . . 169

 D. Electronic Filing . . . . . . . . . . . . . . . . . 172

 1. Industry-wide conference . . . . . . . . . . . 172

 2. Delayed implementation of electronic filing

 requirements . . . . . . . . . . . . . . . . . 174

 3. Software . . . . . . . . . . . . . . . . . . . 175

 4. Using Rich Text Format for Text . . . . . . . 176

 5. Appropriate Format for Numeric Data . . . . . 178

 6. Security and Reliability of Data . . . . . . . 182

 7. Submission of Data to the Commission . . . . . 182

 8. Dissemination of Data by the Commission . . . 184

 9. Fees for costs of electronic filing . . . . . 186

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Order No 582.txt

 V. REGULATORY FLEXIBILITY ACT CERTIFICATION . . . . . . . . 187

 VI. ENVIRONMENTAL STATEMENT . . . . . . . . . . . . . . . . 187

 VII. INFORMATION COLLECTION STATEMENT . . . . . . . . . . . . 188

 VIII. EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . 190

 Subpart A - General Provisions and Conditions . . . 194

 154.1 Application; Obligation to file . . . . . . . . . . 194 

 154.2 Definitions . . . . . . . . . . . . . . . . . . . . 194 

 154.3 Effective tariff . . . . . . . . . . . . . . . . . 196 

 154.4 Electronic and paper media . . . . . . . . . . . . 196 

 154.5 Rejection of filings . . . . . . . . . . . . . . . 198 

 154.6 Acceptance for filing not approval . . . . . . . . 199 

 154.7 General requirements for the submission of a 

 tariff filing or executed service agreement . . . . 199

 154.8 Informal submission for staff suggestions . . . . . 201 

 vi



 Subpart B - Form and Composition of Tariff . . . 201

 154.101 Form . . . . . . . . . . . . . . . . . . . . . . . 201 

 154.102 Title page and arrangement . . . . . . . . . . . . 201 

 154.103 Composition of tariff . . . . . . . . . . . . . . . 203 

 154.104 Table of contents . . . . . . . . . . . . . . . . . 204 

 154.105 Preliminary statement . . . . . . . . . . . . . . . 204 

 154.106 Map . . . . . . . . . . . . . . . . . . . . . . . . 204 

 154.107 Currently effective rates. . . . . . . . . . . . . 205 

 154.108 Composition of rate schedules . . . . . . . . . . . 206 

 154.109 General terms and conditions . . . . . . . . . . . 207 

 154.110 Form of service agreement . . . . . . . . . . . . . 207 

 154.111 Index of customers . . . . . . . . . . . . . . . . 208 

 154.112 Exception to form and composition of tariff . . . . 209 

 Subpart C - Procedures for Changing Tariffs . . . 209

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Order No 582.txt

 154.201 Filing requirements . . . . . . . . . . . . . . . . 209 

 154.202 Filings to initiate a new rate schedule . . . . . . 211 

 154.203 Compliance filings . . . . . . . . . . . . . . . . 213 

 154.204 Changes in rate schedules, forms of service 

 agreements, or the general terms and conditions . . 214

 154.205 Changes related to suspended tariffs, executed 

 service agreements, or parts thereof . . . . . . . 215

 154.206 Motion to place suspended rates into effect . . . . 216 

 154.207 Notice requirements . . . . . . . . . . . . . . . . 218 

 154.208 Service on customers and other parties . . . . . . 218 

 154.209 Form of notice for Federal Register . . . . . . . . 219 

 154.210 Protests, interventions, and comments . . . . . . . 220 

 vii



 Subpart D - Material to be Filed With Changes . . . 221

 154.301 Changes in rates . . . . . . . . . . . . . . . . . 221 

 154.302 Previously submitted material . . . . . . . . . . . 222 

 154.303 Test periods . . . . . . . . . . . . . . . . . . . 222 

 154.304 Format of statements, schedules, workpapers and 

 supporting data . . . . . . . . . . . . . . . . . . 224

 154.305 Tax normalization . . . . . . . . . . . . . . . . . 225 

 154.306 Cash working capital . . . . . . . . . . . . . . . 228 

 154.307 Joint facilities . . . . . . . . . . . . . . . . . 229 

 154.308 Representation of chief accounting officer . . . . 229 

 154.309 Incremental expansions . . . . . . . . . . . . . . 229 

 154.310 Zones . . . . . . . . . . . . . . . . . . . . . . . 230 

 154.311 Updating of statements . . . . . . . . . . . . . . 230 

 154.312 Composition of Statements . . . . . . . . . . . . . 231 

 154.313 Schedules for minor rate changes . . . . . . . . . 257 

Page 9
Order No 582.txt

 154.314 Other support for a filing . . . . . . . . . . . . 263 

 Subpart E - Limited Rate Changes . . . . . . 263

 154.400 Additional requirements . . . . . . . . . . . . . . 263 

 154.401 RD&D expenditures . . . . . . . . . . . . . . . . . 263 

 154.402 ACA expenditures . . . . . . . . . . . . . . . . . 266 

 154.403 Periodic rate adjustments . . . . . . . . . . . . . 267 

 Subpart F - Refunds and Reports . . . . . . 273

 154.501 Refunds . . . . . . . . . . . . . . . . . . . . . . 273 

 154.502 Reports . . . . . . . . . . . . . . . . . . . . . . 277 

 Subpart G - Other Tariff Changes . . . . . . 279

 154.600 Compliance with other subparts . . . . . . . . . . 279 

 154.601 Change in executed service agreement . . . . . . . 279 

 viii



 154.602 Cancellation or termination of a tariff, executed 

 service agreement or part thereof . . . . . . . . . 279

 154.603 Adoption of the tariff by a successor . . . . . . . 280 

 APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . 281

 APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . 285

 APPENDIX C . . . . . . . . . . . . . . . . . . . . . . . . . 289

 

 

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Order No 582.txt

 ix



 UNITED STATES OF AMERICA

 FEDERAL ENERGY REGULATORY COMMISSION

 Before Commissioners: Elizabeth Anne Moler, Chair;

 Vicky A. Bailey, James J. Hoecker,

 William L. Massey, and Donald F. Santa, Jr.

 Filing Requirements for Interstate )

 Natural Gas Company ) Docket No. RM95-3-000 

 Rate Schedules and Tariffs )

 ORDER NO. 582

 FINAL RULE

 (Issued September 28, 1995)

 I. INTRODUCTION

 The Federal Energy Regulatory Commission (Commission) hereby

 adopts procedural rules governing the form and composition of

 interstate natural gas pipeline tariffs and the filing of rates

 and charges for the transportation of natural gas in interstate

 commerce under sections 4 and 5 of the Natural Gas Act (NGA) and

 section 311 of the Natural Gas Policy Act. This rule is a

Page 11
Order No 582.txt

 companion to the final rule, issued concurrently, titled

 "Revisions to the Uniform System of Accounts and to Forms and

 Statements and Reporting Requirements for Natural Gas Companies"

 which amends, among other things, the Uniform System of Accounts

 and FERC Form No. 2. 

 The Commission intends to make the filing and reporting

 requirements reflect recent regulatory changes, in particular the

 implementation of Order No. 636, and the realities of the process



 Docket No. RM95-3-000 - 2 -

 of a modern rate case. 1/ The restructuring of the pipeline

 industry has rendered many of the current rate and tariff

 regulations superfluous or outdated. The Commission is adopting

 filing requirements that reflect the current part 284 service

 regulations that mandate unbundled pipeline sales and open-access

 transportation of natural gas. The current part 154 rate

 regulations are not designed for the type of rate changes that

 will occur in the restructured service environment. These filing

 requirements were originally designed to focus on pipeline sales

 activities. The revised regulations focus on transportation

 services. 

 Before the recent industry restructuring, natural gas

 pipelines primarily provided a merchant service. A typical

 pipeline company would purchase gas from producers or other

 suppliers, transport the gas from the supply area to storage

 fields or sales delivery points, and sell the gas on a bundled

 basis. Now, pipeline companies are primarily transporters of

 natural gas. This change in the primary role of the pipeline

 from merchant to transporter requires that the filing

 

Page 12
Order No 582.txt

 1/ Pipeline Service Obligations and Revisions to Regulations

 Governing Self-Implementing Transportation; and Regulation

 of Natural Gas Pipelines After Partial Wellhead Decontrol,

 Order No. 636, 57 FR 13267 (April 16, 1992), FERC Statutes

 and Regulations 30,939 (April 8, 1992); order on reh'g, 

 Order No. 636-A, 57 FR 36128 (August 12, 1992), FERC

 Statutes and Regulations 30,950 (August 3, 1992); order on 

 reh'g, Order No. 636-B, 57 FR 57911 (December 8, 1992), 61

 FERC 61,272 (1992), reh'g denied, 62 FERC 61,007 (1993),  

 appeal pending sub nom. United Distribution Co., et al. v.

 FERC, No. 92-1485, et al. (D.C. Cir. Feb. 8, 1995). 

 .



 Docket No. RM95-3-000 - 3 -

 requirements be adapted to the change. Accordingly, the

 Commission is deleting all of the current regulations in part 154

 and replacing them with new regulations that reflect the

 restructured industry.

 Kern River requests clarification that the companion rules

 are pursuant to section 5 of the NGA. The clarification is

 denied. Section 5 specifically gives the Commission the power to

 change any rule, regulation, practice or contract that the

 Commission finds to be unjust, unreasonable, unduly

 discriminatory or preferential. The Commission's power to

 prescribe rules, regulations and statements of policy of general

 applicability with respect to any function under its jurisdiction

 is derived from section 402 of the Department of Energy

 Organization Act and section 16 of the NGA. The instant rule is

 more appropriately considered to be promulgated pursuant to the

 latter authorities. 

 The changes to the Commission's regulations are effective

 [insert date 30 days after publication in the Federal Register]. 

 II. PUBLIC REPORTING BURDEN

 The subject final rule will effect seven of the Commission's

 existing data collections. However, only one of these data

Page 13
Order No 582.txt

 collections will have a net change (reduction) in reporting

 burden. The final rule reflects many of the changes suggested in

 industry comments filed in response to Commission's Notice of

 Proposed Rulemaking. In particular, the joint comments of The

 Interstate Natural Gas Association of America (INGAA) and the



 Docket No. RM95-3-000 - 4 -

 American Gas Distributors (AGD) were helpful. 

 The final rule is expected to reduce the existing reporting

 burden associated with FERC-545, Gas Pipeline Rates: Rate Change

 (Non-Formal) (OMB Control No. 1902-0154) (FERC-545) by an

 estimated 136,785 hours annually -- an average of 172.9 hours per

 response. As a result of the final rule, the annual reporting

 requirement under FERC-545 is estimated to total 36,068 hours

 based on an expected 650 filings per year. A copy of this rule

 is being provided to Office of Management and Budget (OMB). 

 The Commission estimates the public reporting burden for

 data collected under FERC-545 will average approximately 55.5

 hours per response, including the time for reviewing

 instructions, searching existing data sources, gathering and

 maintaining the data needed, and completing and reviewing the

 collection of information. 

 Six other existing data collections are effected by the 

 changes in regulations. 2/ However, no net change in the

 

 2/ Five existing data collections affected by the subject final

 rule but with no net change in industry reporting burden,

 are:

 FERC-542, Rate Change and Tracking (1902-0070); 

 FERC-543, Rate Tracking (Formal) (1902-0152); 

 FERC-544, Gas Pipeline Rates: Rate Change (Formal) 

 (1902-0153); 

 FERC-546, Certificated Rate Filings: Gas Pipeline Rates 

Page 14
Order No 582.txt

 (1902-0155); and 

 FERC-547, Refund Report Requirements (1902-0084). 

 Under the above data collections plus FERC-545, net

 reductions in reporting burden have totaled more than

 355,000 hours to date as a result of Order No. 636. Such

 reductions have been reflected in separate clearance

 (continued...)



 Docket No. RM95-3-000 - 5 -

 reporting burden of those effected data collections is expected

 because of off-setting increases and decreases within each

 respective data collection. FERC-545 is the only data collection

 under which a net change (reduction) in reporting burden is

 expected as a result of the changes in filing requirements

 adopted by the Commission in the subject final rule.

 Interested persons may send comments regarding these burden 

 estimates or any other aspect of these collections of

 information, including suggestions for further reductions of

 burden, to the Federal Energy Regulatory Commission, 888 First 

 Street, N.E., Washington, D.C. 20426 [Attention: Michael Miller,

 Information Services Division, (202) 208-1415, FAX: (202) 208-

 2425]. Comments on the requirements of this final rule may also

 be sent to the Office of Information and Regulatory Affairs of

 OMB, Washington, D.C. 20503 [Attention: Desk Officer for Federal

 Energy Regulatory Commission, (202) 395-6880, FAX: (202) 395-

 5167].

 III. BACKGROUND

 On December 16, 1994, the Commission issued a Notice of

 Proposed Rulemaking proposing a major overhaul of its regulations

 governing natural gas company filing and reporting 

 

 2/(...continued)

 packages previously reported to the Office of Management and

 Budget (OMB). 

Page 15
Order No 582.txt

 A sixth existing data collection, FERC-542(A), Tracking

 and Recovery of Alaska Natural Gas Transportation System

 (ANGTS) Charge (1902-0129), which has conditional OMB

 approval on a "standby" basis, is terminated under the final

 rule.



 Docket No. RM95-3-000 - 6 -

 requirements. 3/ The Commission is determined to issue

 sensible regulations that impose the least burden without

 sacrificing rational and necessary protections. 4/ The

 Commission is not changing its substantive rate policies in this

 rulemaking, but rather bringing its filing requirements and

 procedures up to date to match its current substantive policies. 

 In the interest of an expeditious process, the regulations have

 been revised with a view toward removing any industry-wide filing

 burdens that are not generally needed to analyze a proposal. The

 revised regulations are designed to provide the Commission and

 interested parties with the information generally required to

 access and process a rate filing. Where more information is

 needed, it may be collected on an individual case basis. This

 achieves a realistic balance between the public interest and the

 needs of the industry.

 The Commission received many comments on the NOPR. 5/ 

 Additionally, on August 17, 1995, AGD and INGAA filed joint

 

 3/ Filing and Reporting Requirements for Interstate Natural Gas

 Company Rate Schedules and Tariffs, 60 FR 3111 (January 13,

 1995), IV FERC Stats. & Regs. 32,511 (1995). 

 4/ This effort is consistent with the President's directives in

 his memo dated 3/4/95 concerning the National Performance

 Review to, among other things, eliminate or revise outdated

 regulations, and to move from a process that creates volumes

 of regulations to issuing "sensible regulations that impose

Page 16
Order No 582.txt

 the least burden without sacrificing rational and necessary

 protections." 

 5/ See Appendix B for a list of commenters. 



 Docket No. RM95-3-000 - 7 -

 comments to both this and the companion rule (Agreement). 6/ 

 The Commission found the Agreement both informative and helpful

 as it clearly sets out the positions and interests of a fairly

 large representative group of pipelines and customers.

 The Final Rule reflects many of the proposals in the

 Agreement. The suggestions concerning the restructuring of

 Statement G, the concurrent filing of Statement P, and the

 reduction in material required to support a filing, are reflected

 in the Final Rule, as more fully explained in the discussion of

 Statement G, supra. However, the Final Rule does not,

 automatically, accord confidential treatment to Statement G, as

 proposed in the Agreement, which is also discussed supra. 

 The NOPR proposed to delete many filing requirements. After

 analyzing the comments in light of its current goals, the

 Commission has determined to delete even more of the current

 filing requirements, not include many proposed filing

 requirements, and further modify many other current and proposed

 regulations. Specific reductions in reporting requirements

 follow:

 All the filing requirements of current 154.201-213 have 

 been deleted. Those regulations apply to shippers seeking to

 recover charges incurred for the conditioning and transportation

 

 6/ Agreement Between Associated Gas Distributors (AGD) and The

 Interstate Natural Gas Association of America (INGAA) on

 Issues Related to Filing Requirements, filed August 17,

 1995. The agreement was in addition to the individual

 comments provided by AGD, INGAA, and their members. It was

Page 17
Order No 582.txt

 an attempt to resolve various differences and reflected

 compromises in the positions of AGD and INGAA. 



 Docket No. RM95-3-000 - 8 -

 of Alaska natural gas through the Alaska Natural Gas

 Transportation System (ANGTS) for sale in the contiguous 48

 states of the United States.

 Current 154.38(e), requiring that the minimum bill heading 

 appear on every schedule is deleted.

 Current 154.67(b), requiring annual reports, is deleted. 

 Current Schedule E-5, showing the computations, cross-

 references and sources from which the data used in computing

 claimed working capital are derived,is deleted.

 Current Schedule H(1)-2, cost of purchased gas, is deleted.

 Current Schedule H(3)-1, reporting the reconciliation of

 book and taxable net income for a pipeline, is deleted.

 Current Schedule H(3)-2, reporting the differences between

 book and tax depreciation on a straight-line basis and the excess

 of liberalized depreciation for tax purposes, is deleted.

 Current Schedule I-5, requiring information on metering

 points and units, is deleted.

 Current Schedule I-6, Three-day peak deliveries, is deleted.

 Current 154.42, dealing with the price of gas, is deleted. 

 Proposed 154.309 has been modified by removing the 

 requirement to report "every major expansion since the pipeline's

 last rate case."

 Proposed Schedule C-2, Plant in Service as Adjusted, showing

 the proposed test period Adjusted Plant by function, has not been

 included in the final rule.



Page 18
Order No 582.txt

 Docket No. RM95-3-000 - 9 -

 Proposed Schedule D-2, Projected End of Test Period

 Depreciation Reserves Functionalized, showing the ending test

 period balance of accumulated depreciation reserve, has not been

 included in the final rule.

 Proposed Schedule E-3, which was to be filed by companies

 with PGA clauses, has not been included in the final rule.

 Proposed Schedule H-1(1) has been modified by removing the

 requirement to report the rate assigned for reflecting an expense

 for gas used on the system. Only the volumes will be required.

 Proposed Schedule H-1(2)(a), which was to be filed by

 companies with PGA clauses, has not been included in the final

 rule.

 Proposed Schedule H-1(2)(b), which was to be filed by

 companies with PGA clauses, has not been included in the final

 rule.

 Proposed Schedule H-1(3)(b), Account 813, Other Gas Supply

 Expenses, has not been included in the final rule.

 Proposed Schedule H(2)-1 requiring the reporting of the

 reconciliation of depreciable plant to gas plant was incorporated

 into Schedule H(2).

 Proposed 154.314 provided that in addition to the 

 workpapers accompanying the filing, certain material, related to

 the test period, must be provided to the Commission on request. 

 This requirement has been removed from the final rule. Parties

 to a hearing may seek this information through the discovery

 process. 



Page 19
Order No 582.txt

 Docket No. RM95-3-000 - 10 -

 IV. DISCUSSION

 A. Overview and Objectives of the Final Rule

 Section 4(a) of the Natural Gas Act (NGA) requires that any

 rate charged by a natural gas company must be "just and

 reasonable." 7/ In order to aid the Commission in establishing

 whether a change in a rate meets the statutory standard,

 section 4 of the NGA grants authority to the Commission to

 establish procedures for the review of proposed changes. Section

 4(c) of the NGA requires that a natural gas company file proposed

 changes in rates with the Commission thirty days prior to the

 proposed effective date. 8/ The Commission may suspend the

 effectiveness of the proposed changes to that rate for up to five

 months, permit the changed rates to take effect subject to

 refund, and may order a hearing to determine the lawfulness of

 the proposed rates. 9/ At such hearing, the company bears the

 burden of proof that the proposed changed rates are just and

 reasonable. Part 154 imposes specific filing and reporting

 requirements on jurisdictional natural gas companies in order for

 the Commission to fulfill its statutory review functions. 

 This proceeding represents a major overhaul of the

 regulations governing natural gas company filing and reporting

 requirements. The new part 154 incorporates both basic

 "housekeeping" changes to eliminate obsolete language and

 

 7/ 15 U.S.C. 717c(a). 

 8/ 15 U.S.C. 717c(d). 

 9/ 15 U.S.C. 717c(e). 



 Docket No. RM95-3-000 - 11 -

Page 20
Order No 582.txt

 sections, and substantive changes to update the regulations to

 reflect the many developments that have taken place in the

 natural gas industry since the regulations were first

 promulgated. 

 The revised part 154 represents the reorganization,

 rewriting, updating, modification, consolidation, and pruning of

 the current regulations. The changes provide for more useful and

 less burdensome data filed in electronic format; a schedule by

 schedule revision of the current 154.63 filing requirements for 

 an NGA section 4(e) general rate case; and, new filing

 requirements for initial rates and various limited section 4

 filings, miscellaneous tariff change filings, and cost tracking

 filings. 

 1. Organization and editorial changes.

 PART 154 - RATE SCHEDULES AND TARIFFS has been reorganized

 into subparts: Subpart A - General Provisions and Conditions;

 Subpart B - Form and Composition of Tariff; Subpart C -

 Procedures for Changing Tariffs; Subpart D - Material to be Filed

 With Changes; Subpart E - Limited Rate Changes; Subpart F -

 Refunds and Reports; Subpart G - Other Tariff Changes. 

 The revised part 154 is organized in such a way that the

 filing requirements are cumulative. That is, all filings must

 meet the requirements of subpart A even if no other subpart

 applies. All tariff sheets or executed service agreements must

 conform to the requirements of subpart B. Changes to tariff

 sheets or executed service agreements, whether additions or



 Docket No. RM95-3-000 - 12 -

 modifications, must conform to the requirements of subpart B and

Page 21
Order No 582.txt

 comply with the filing requirements of subpart C. Additional

 filing or reporting requirements applicable to specific types of

 filings fall under subparts D through G.

 The entire part 154 has been edited for clarity and to

 remove outdated references. For example, all references to

 filing fees have been removed because fees are no longer required

 for interstate pipelines. Also, the current regulations contain

 some sections which have never been updated and refer to the

 Commission as the "FPC" or direct the applicant to comply with

 sections that have been removed. The Commission has made

 appropriate editorial revisions to these sections.

 Some current sections contain provisions on several

 different matters and, for the sake of clarity, have been broken

 out into several smaller sections. For example, the provisions

 of current 154.63 are redistributed throughout the revised 

 part 154. Current 154.38(d)(5) and (6) deal with the 

 substantive rules for obtaining rate treatment for research,

 development, and demonstration costs (RD&D) and annual charge

 adjustment (ACA) expenditures, respectively. These sections are

 moved to a separate subpart and revised. 

 Many provisions are redrafted to reflect the prevalent

 practice in the industry. For example, revised 154.208 

 formally adds to the regulations the requirement that the company

 must serve notice upon its customers. Revised 154.209 sets out 

 a new form of notice to reflect current practice. Revised 



 Docket No. RM95-3-000 - 13 -

 154.107 formalizes the general practice of providing a detailed 

 statement of rates and charges in a particular location in the

 tariff. Revised 154.2(d) allows mailing to customers and state 

Page 22
Order No 582.txt

 commissions to be accomplished either through electronic media or

 traditional methods.

 2. Substantive changes.

 The changes create filing requirements that reflect the

 current policies and regulations that mandate unbundled pipeline

 sales and open-access transportation of natural gas. The primary

 objectives of the substantive changes are to update the filing

 and reporting requirements to reflect restructured services and

 operations, streamline rate case processing by receiving

 important information earlier in the process, and remove outdated

 requirements. 

 The revised filing requirements permit parties to address

 the important issues more quickly. For example, pipelines

 currently file their Statement P testimony 15 days after filing

 the rate proposal. The Commission's experience is that Statement

 P provides the most comprehensive description of the proposed

 change. The rule requires Statement P to be filed concurrently

 with the rate case so as to make a more complete explanation of

 the rate proposal available at the outset. To achieve its

 intended purpose of expediting the hearing, Statement P must

 serve as the applicant's complete case-in-chief, not a mere

 description of proposed rates. 



 Docket No. RM95-3-000 - 14 -

 INGAA, Panhandle, ANR/CIG, KNI, MRT, and Great Lakes state

 that the proposed regulations would increase the burden to the

 pipeline industry. Panhandle attached a study showing that the

 number of hours needed to prepare a Section 4 filing would

 increase by 77% and the paperwork would triple. Panhandle states

Page 23
Order No 582.txt

 that the study reflects estimates of time required to prepare a

 rate filing, responses to staff data requests and, the proposed

 quarterly updates. Panhandle states that the quarterly updates

 account for a substantial portion of the increased burden and

 that 88 percent of the increased burden could be eliminated if

 pipelines were permitted to submit supplemental testimony as the

 need arises (i.e., Statement P does not represent the "sole"

 case-in-chief).

 As discussed supra, the proposed quarterly update provision

 has not been included in the final rule. Proposed 154.311 has 

 been modified to only require one update; and so, that portion of

 the increased burden has been substantially reduced. Statement G

 and associated schedule requirements have not been expanded as

 proposed. Revised Statement G does not require the customer

 specific information as proposed in the NOPR; and so, that

 portion of the increased burden has also been eliminated. 

 It was unclear from the material provided by Panhandle

 whether the study considered that filing Statement P with the

 initial filing is an increase to the filing burden. The

 Commission remains firm in the belief that the requirement for a

 fuller, complete Statement P presented at the beginning of a rate



 Docket No. RM95-3-000 - 15 -

 case reduces the overall burden to the parties to the hearing. 

 The Commission does not expect that this requirement will

 entirely remove the need for data requests and discovery in all

 instances. However, it is the pipelines' statutory burden to

 demonstrate that proposed rates are just and reasonable. When

 the rates cannot be determined to be just and reasonable by the

 filed material alone, a hearing must be established. This rule

Page 24
Order No 582.txt

 represents a concerted effort to avoid lengthy hearings. One way

 to expedite the process is to get the information needed to make

 the determination (Statement P) to the Commission and other

 parties sooner than under the current regulations. This does not

 increase the burden to the pipeline but changes only the timing

 of the submission. 

 Certain regulations are, as a practical matter, no longer of

 general interest. The Commission has removed them from the

 general regulations. The regulations concerning Research,

 Development, and Demonstration expenses (RD&D) for example, are

 currently a lengthy and cumbersome part of 154.38. These 

 regulations were originally developed to apply to all pipelines

 and to any number of RD&D organizations. However, in practice,

 there is one predominant and principal research organization, Gas

 Research Institute (GRI). Thus, the Commission has streamlined

 the regulations, recognizing that GRI is the principal research

 organization funded by the natural gas industry. 

 The Commission has removed the regulations governing

 Purchase Gas Adjustments (PGAs) from the general regulations. As



 Docket No. RM95-3-000 - 16 -

 a result of the restructuring of the industry under Order No.

 636, most pipelines have shed their traditional merchant

 function. At the time this rule is being written, only two

 natural-gas companies, Eastern Shore Natural Gas Company and West

 Texas Gas, Inc., continue to pass through gas purchase costs

 under the PGA regulations. 10/ The Commission will now

 require these natural-gas companies to incorporate all of the

 existing PGA regulatory requirements applicable to it into their

Page 25
Order No 582.txt

 tariffs if they are not open-access by the effective date of this

 rule. 11/ The PGA regulations are removed from part 154. 

 The Commission also requires the provisions governing PGAs in

 current 154.111 to be incorporated into these companies' 

 tariffs and that section is also removed. 

 The Commission has deleted current 154.201-213. Those 

 regulations apply primarily to shippers seeking to recover

 charges incurred for the conditioning and transportation of

 Alaska natural gas through the Alaska Natural Gas System (ANGTS)

 for sale in the contiguous 48 states of the United States. Those

 provisions establish the terms and conditions for a permanent

 tariff provision that a shipper may propose to adjust its rates

 semiannually to flow through to its jurisdictional customers the

 jurisdictional portion of changes its ANGTS charges. 

 

 10/ These pipelines do not provide open access transportation

 under part 284 of this chapter; and so, were not subject to

 restructuring under Order No. 636. 

 11/ Eastern Shore is required by a settlement to apply to become

 an open-access pipeline no later than January 1, 1996. 72

 FERC 61,176 (1995). 



 Docket No. RM95-3-000 - 17 -

 Alternatively, a shipper may recover the jurisdictional portion

 of these charges through a cost-of-service tariff approved by the

 Commission.

 The Commission has deleted these regulations because the

 ANGTS project has not been built as originally contemplated, and

 the regulations are obsolete in light of the post-Order No. 636

 unbundled environment. Nonetheless, the Commission remains ready

 to facilitate the construction of ANGTS, which Congress has found

 to be in the public interest. 12/ Hence, if action is

Page 26
Order No 582.txt

 warranted in the future to facilitate financing and progress on

 the ANGTS and the recovery of ANGTS costs, the Commission will

 act expeditiously. What was stated in Order No. 636-A applies

 here as well: "nothing in the rule [Order No. 636] is intended to

 disturb the United States government's commitment to the ANGTS

 prebuild." 13/ Further, the Commission continues to view the

 Northern Border Pipeline Company prebuild segment as remaining

 subject to the various agreements between the United States and

 Canadian governments and subsequent findings in Commission orders

 certificating Northern Border's system. 14/ Removing these

 regulations is not intended to have any effect on the ANGTS

 prebuild revenue stream.

 

 12/ Alaska Natural Gas Transportation System Act, 15 U.S.C. 

 719-719. 

 13/ Order No. 636-A, III FERC Stats. & Regs. Preambles

 30,950 at p. 30,674 (1992). 

 14/ Northern Border Pipeline Co., 63 FERC 61,289 (1993). 



 Docket No. RM95-3-000 - 18 -

 B. The Revised Regulations

 The revised part 154 has a completely new organization from

 the current regulations, and virtually every section has been

 changed in some way. The text has been edited to remove outdated

 and incorrect references, and rewritten in a more concise style. 

 Although many filing and reporting requirements have not been

 changed, they have been relocated. The revised regulations may

 be best understood by a comparison to the current regulations

 they replace. 15/ Details of the revised regulations are

 provided below along with a discussion of the comments. 

Page 27
Order No 582.txt

 1. Subpart A - General Provisions and Conditions

 a. Section 154.1 Application; obligation to file

 The Commission has included as 154.1(b) the description of 

 the purpose of part 154, which is currently set forth in

 154.1(a). That purpose reflects the requirement of 

 Section 4(c) of the NGA that every natural gas company must file

 with the Commission, and maintain open for public inspection, its

 schedules and contracts. 16/

 The Commission has deleted outdated language (i.e., "On or

 after December 1, 1948"). The Commission is removing the

 electronic medium requirements from current 154.1(b) and(c) 

 and placing them in new 154.4. 

 

 15/ Appendix A is a finding guide between current and revised

 regulations.

 16/ 15 U.S.C. 717c(c). 



 Docket No. RM95-3-000 - 19 -

 Section 154.1(c) replaces without change current 154.22, 

 which states that no natural gas company may file a new or

 changed rate schedule or contract for service for which a

 certificate of public convenience and necessity or certificate

 amendment must be obtained pursuant to section 7(c) of the

 Natural Gas Act, until such certificate has been issued. 

 Williston states that 154.1(c) only prolongs the approval 

 process and delays implementation of services. Williston

 suggests allowing a new or changed rate to be filed concurrently

 with the certificate filing. 

 This section imposes no additional requirements from current

Page 28
Order No 582.txt

 154.22. However, the Commission clarifies that, although a 

 pipeline may not file to incorporate a rate schedule in its

 tariff for which section 7(c) authorization is required but for

 which section 7(c) authorization has not yet been granted, it

 does not prohibit a pipeline from proposing an initial rate in

 its certificate application under section 7(c). Since the

 Commission has adopted the practice of granting blanket

 certificates for services, this provision will be applied most

 often to new companies which have not previously been subject to

 the Commission's jurisdiction and do not have a tariff on file. 

 New 154.1(d) requires that any executed service agreement 

 which deviates in a material aspect from the form of service

 agreement in a pipeline's tariff must be filed with the 



 Docket No. RM95-3-000 - 20 -

 Commission. This requirement codifies current Commission

 policy. 17/ 

 INGAA, CNG, Midcon, NGSA, and Columbia believe that 

 154.1(d) requires public disclosure of contract provisions and 

 may negatively affect private contracts. 

 INGAA proposes various alternatives that limit the extent to

 which information on contractual terms and conditions will be

 available to the public.

 Midcon urges the Commission to delete the requirements to

 file commercially sensitive information. Midcon also suggests

 that the proposal be deleted or clarified to state that discount

 agreements do not "deviate in any material aspect." Further,

 Midcon suggests, any such contracts must be exempt from the

 FOIA. 18/

 Pacific Northwest Commenters urge the Commission to be more

Page 29
Order No 582.txt

 specific as to what deviations or substantive additional

 provisions will trigger this filing requirement. Columbia

 objects to 154.1(d) as too broad and requests that the 

 Commission clarify that specifically drafted provisions

 addressing flow rates, pressure obligations, maximum delivery

 obligations, term, and other "tariff-contemplated" items are not

 "material" deviations.

 

 17/ See, Tennessee Gas Pipeline Company, et al., 65 FERC

 61,356 (1993); reh'g denied, 67 FERC 61,196 (1994).  

 18/ See the discussion on confidentiality, infra.



 Docket No. RM95-3-000 - 21 -

 IPAA and NI-Gas support the requirement. IPAA states that

 the legal concept of materiality may depend upon "where one

 resides in the food chain" and suggests that all deviating

 agreements be filed. 

 The use of forms of service agreements as the basis of

 contracts between a pipeline and its customers ensures that there

 are no unreasonable differences among the rates, charges,

 services, facilities, or otherwise of the pipeline's customers. 

 Having made the determination that the form of service agreement

 in the tariff is just and reasonable, the Commission does not

 necessarily have to review every contract to determine if it

 complies with the requirements of the NGA. Thus, a contract that

 conforms to a pro forma service agreement need not be filed with

 the Commission because the Commission has already considered and

 determined that the pro forma service agreement is just and

 reasonable. Likewise, any contract that deviates in a material

Page 30
Order No 582.txt

 way from a pro forma service agreement must be evaluated anew to

 determine that it is not unjust, unreasonable, preferential, or

 otherwise unacceptable. The Commission does allow parties to

 negotiate additional mutually agreeable terms and conditions in

 their service agreements, but where the terms differ materially

 from those in the form of service agreement, the pipeline must

 seek authorization for these modifications from the Commission

 under section 4 of the NGA. 19/

 

 19/ Id. See also, Mojave Pipeline Company, 57 FERC 61,300 

 (1991).



 Docket No. RM95-3-000 - 22 -

 The Commission agrees that "materiality" is likely to vary

 with the circumstances of the case. Therefore, it is better to

 allow the term to remain less strictly defined in order that the

 particular facts of a given contract will determine whether the

 deviation is material and needs to be filed. The Commission also

 agrees that provisions such as those addressing flow rates,

 pressure obligations, maximum delivery obligations, receipt and

 delivery points, and term would not normally be expected to be

 "material" deviations. Such provisions could easily be drafted

 into the fixed language of the pro forma service agreements or a

 blank space could be provided for insertion according to the

 agreement of the parties. Likewise, rates that fall between the

 maximum and minimum rates permitted for the rate schedule would

 not be considered to be material. In either case, there would be

 no deviation from the Commission approved pro forma service

 agreements contract. 

 b. Section 154.2 Definitions

Page 31
Order No 582.txt

 The Commission defines terms of general applicability in 

 154.2. The Commission is proposing stylistic changes only to 

 definitions for: "Rate Schedule," currently in 154.11, 

 "Contract," currently in 154.12, "Service Agreement," currently 

 in 154.13, and "Tariff or FERC Gas Tariff," currently in 

 154.14. "Posting," currently in 154.16, has been defined to  

 allow the parties to agree to alternative methods of "mailing"

 such as electronic mail.



 Docket No. RM95-3-000 - 23 -

 Williston states that the definition of "rate schedule" in 

 154.2(e) is unclear as to whether a "sale of natural gas" 

 pertains to the price charged for gas sold by a pipeline's sales

 division. Williston states that such information is proprietary

 and should not be included in the rate schedule.

 The definition of "rate schedule" is substantially the same

 as in the current regulation and tracks the language of the NGA.

 20/ Williston has not persuaded us to change the definition. 

 c. Section 154.3 Effective Tariff

 The Commission describes the term "Effective tariff" in 

 154.3, currently 154.21. The description clarifies that a  

 pipeline may not avoid filing for a rate change by making the

 rate subject to an exception or condition, such as a periodic

 rate change under a price index. At present this concept is

 found in 154.38(d)(3). 

 AGD requests clarification that 154.3(b) is not intended to 

 cause incentive rates to be rejected. SoCal urges the Commission

 not to prohibit index adjustments submitted as part of a

 settlement or where supported by the facts. 

Page 32
Order No 582.txt

 The regulation does not prohibit index adjustments or

 incentive rates when authorized by the Commission. The

 regulation only prevents a change from occurring automatically,

 without Commission authorization. The regulation is consistent

 with the statutory obligation of the Commission to review all 

 

 20/ 18 U.S.C. 717c(c). 



 Docket No. RM95-3-000 - 24 -

 proposed rate changes for adherence to the just and reasonable

 standard.

 d. Section 154.4 Electronic and Paper Media

 Current 154.26 generally calls for 6 paper copies and 

 requires rate filings to be submitted electronically. New 

 154.4 continues to require electronic media filings in addition 

 to paper copies. Generally, it calls for an original and 5 paper

 copies but requires an original and 12 paper copies of filings

 made pursuant to subpart D. 

 The new section consolidates in one place the Commission's

 requirements with respect to electronic submittal of filings

 required by part 154. Currently, these requirements are strewn

 throughout part 154, often redundantly.

 The appendix to the NOPR included updated electronic tariff

 filing formats as well as tariff pagination guidelines. 21/ 

 The revised formats take into consideration improvements in the

 FASTR software which reads the tariff ASCII files submitted by

 the companies to the Commission. 22/ The NOPR proposed that

 all companies that had not restated their tariffs, do so,

 electronically on or before June 1, 1995. That date has passed. 

Page 33
Order No 582.txt

 Therefore, all companies that have not restated their tariffs

 

 21/ The formats for the electronic filing and paper copy can be

 obtained at the Federal Energy Regulatory Commission, Public

 Reference and Files Maintenance Branch, Washington, D.C.

 20426.

 22/ On February 28, 1990, the Commission issued the "Notice of

 Tariff Retrieval System Software Availability," otherwise

 referred to as the FASTR software package.



 Docket No. RM95-3-000 - 25 -

 must do so, electronically on or before January 26, 1996.

 Columbia seeks clarification as to whether the requirement

 under 154.4(a) that 6 (the NOPR had proposed 6 paper copies) 

 paper copies be filed, applies to the quarterly updates under

 proposed 154.311. The quarterly update requirement has not 

 been included in the final rule as originally proposed; however,

 the paper copy requirement applies to any updates which are

 required.

 El Paso does not support the increase in the number of paper

 copies to be filed. As discussed infra, the Commission is

 suspending electronic filing of proposed changes in rates. Until

 electronic filing is reinstated, the Commission will continue to

 require 12 paper copies of rate case data. At the time

 electronic filing is reinstated, the Commission will make any

 appropriate adjustment to the paper copy requirements.

 INGAA states that electronic filing should be the rule; in

 order to receive documents in another medium, the customer should

 have to demonstrate its lack of ability to retrieve information

 electronically. ANR/CIG suggests that the option should be the

 pipeline's where the customer is able to receive information

 electronically. El Paso suggests the filing of documents by

Page 34
Order No 582.txt

 electronic means such as telecommunications or upload to the OPR

 Bulletin Board.

 El Paso and Columbia support electronic service of filings

 upon parties rather than service on paper. According to

 Columbia, parties should be required to demonstrate their



 Docket No. RM95-3-000 - 26 -

 inability to receive electronic service. Service could be

 accomplished through a central electronic library of filings,

 from which copies could be made, or through electronic

 transmission through the EBB or other communication links. El

 Paso suggests the Federal Register notice be the only paper

 document served on customers. The remaining portions of a filing

 should be placed on the pipeline's EBB with the ability to view

 and download. This enhancement to the EBB would promote timely 

 access to relevant information. 

 The Commission will not require customers to accept only

 electronic versions of a pipeline's filings at this time. The

 new electronic filing requirements are not yet finalized. No

 testing has been done. It will take some time before anyone can

 be comfortable with solely electronic filing. Therefore, until

 all of the issues related to electronic only filing can be

 resolved, parties must continue to receive paper copies of the

 filing. As the industry gains more experience with electronic

 filings, parties may elect to receive only an electronic version

 of the filing. The decision to send or receive an electronic

 filing should be arrived at by mutual consent of the pipeline and

 the interested party as noted in 154.2(d). 

 e. Section 154.5 Rejection of Filings

 Section 154.5 states that filings, that would prejudice the

Page 35
Order No 582.txt

 Commission in the discharge of its duty to decide whether or not

 to investigate and suspend the increased rates contained in the

 filing, will be rejected by the Director of the Office of



 Docket No. RM95-3-000 - 27 -

 Pipeline Regulation. This section merely recognizes, in these

 rate and tariff filing requirements, the existing power of the

 Director of the Office of Pipeline Regulation to reject tariff or

 rate schedule filings pursuant to the authority delegated to the

 Director by the Commission in 375.307(b)(2) of the Commission's 

 regulations.

 Proposed 154.5 replaced current 154.15 with a definition  

 of filing date based on 35.2(c) of the Commission's regulations 

 for public utilities under the Federal Power Act. The rule, as

 proposed, would allow the Director of the Office of Pipeline

 Regulation to notify a natural gas company that its filing is

 rejected within 15 days of receipt of the document. Under this

 proposal, the date of receipt stamped by the Secretary would not

 necessarily be the officially recognized filing date.

 This proposed regulation was met with approval by some

 commenters such as APGA, Brooklyn Union, and AGD. However,

 others such as Columbia and El Paso object to the proposal that

 the stamped date is not necessarily the filing date. INGAA seeks

 clarification that the date the pipeline submits its filing to

 the Secretary is the filing date for determining compliance. 

 INGAA and ANR/CIG state that the Commission already has the

 authority to reject rate filings if deemed incomplete; so, the

 proposal should be rejected because it may only create confusion

 as to the official filing date.

Page 36
Order No 582.txt

 Columbia argues that 15 days is more time than necessary and

 creates uncertainty in trying to project and place rates into



 Docket No. RM95-3-000 - 28 -

 effect as of a date certain. Panhandle states that the status of

 interventions and protests would be unclear during the 15 days. 

 Northwest/Williams states that 7 days is sufficient for the

 Director's notice. Northwest/Williams suggests that "procedural"

 revisions should be allowed within 2 days without effecting the

 filing date. 

 Pacific Northwest Commenters recommends that the Commission

 issue a notice that a filing is deemed incomplete, suspend any

 applicable dates triggered by the original filing, and allow an

 additional 8 business days for further protests or comments.

 Columbia proposes that a modification permit pipelines to

 supplement deficient filings rather than being rejected where the

 deficiency is not substantive. 

 Arizona Directs sees conflict between this regulation and 

 154.209. Arizona Directs states that there is no proposed 

 requirement that a filing be deemed complete before the NGA

 Section 4(d) 30-day notice period begins. Arizona Directs states

 that it would be burdensome for customers to review, intervene,

 and comment upon a filing deemed incomplete. Arizona Directs

 suggests that a new comment period be established with respect to

 the entire complete application, not just the corrected portion. 

 Further, public notice should be given whenever a filing is

 deemed incomplete, and a second notice issued designating the

 date the filing is deemed complete and filed and establishing a

 new intervention, protest, and comment deadline. Arizona Directs

 suggest that the rule provide that a section 4 rate filing is not

Page 37
Order No 582.txt



 Docket No. RM95-3-000 - 29 -

 accepted for filing within the meaning of section 4(d) until

 after the end of a 15-day public review period and a staff

 finding that the filing is complete. Then, a notice could issue

 establishing the 10-day comment period.

 NGSA suggests retaining the current provision or modifying

 the proposal to start a 15-day comment clock after the Director's

 review period.

 Panhandle states that the determination by the Director that

 a filing is incomplete is tantamount to a rejection or a summary

 judgment. Panhandle states that filings should not be rejected

 if they are in substantial compliance with the regulations. 

 Panhandle states that the proposal allows the Director to decide

 rate cases on isolated components without further proceedings.

 Consumers Power does not object to the Director making the

 determination of incompleteness but believes the Commission

 should provide specific guidance as to conditions for rejection. 

 INGAA states that the Director's discretion should be

 limited so that rejection does not take place where: in a section

 4 case, a good faith effort was made to include all of the

 required statements and schedules; information has not been

 provided for which a legitimate or routine waiver has been

 sought; information is provided under seal with a request for

 confidential treatment.

 Panhandle suggests modifying the regulation to read that the

 "Secretary" shall reject any material "which patently fails to

 substantially comply with the applicable requirements."



Page 38
Order No 582.txt

 Docket No. RM95-3-000 - 30 -

 INGAA states that the proposed regulation would create

 practical problems. If the Commission rejects a filing and

 establishes another filing date, the pipeline could be in

 violation of the requirement that the data be based upon a period

 ending not more than 4 months prior to the filing date. A delay

 in the start of the 30-day notice period could leave the pipeline

 without authorization to provide services set to coincide with

 the expiration of old contracts.

 Although several commenters supported proposed 154.5, most 

 commenters either opposed the regulation or requested substantial

 modifications to the proposed section. Because of the confusion

 and uncertainty that may be created by the proposed regulation

 and the numerous procedural problems raised by the commenters,

 the Commission is not adopting 154.5 as proposed. New 154.5  

 is an indication of the Commission's intent to have the Director

 reject filings that do not comply with the filing requirements

 promulgated by this order. 

 Finally, because the Commission is not adopting proposed 

 154.5, the definition of filing date contained in current 

 154.15 is retained in new 154.2(f).  

 f. Section 154.6 Acceptance for filing not

 approval

 New 154.6 replaces current 154.23 and 24. The  

 rejection language of 154.24 is amended and the reference to 

 fees is deleted.



 Docket No. RM95-3-000 - 31 -

Page 39
Order No 582.txt

 g. Section 154.7 General Requirements for the

 Submission of a Tariff Filing or Executed

 Service Agreement

 Section 154.7 is a new section setting forth the content of

 a tariff filing or executed service agreement. In part, new 

 154.7 reflects the requirements of current 154.63(b)(1). New  

 154.7 concerns all filings of tariff sheets and executed 

 service agreements. In light of the short time period in which

 the Commission and interested parties have to review the filing,

 several items have been added to speed processing of the filing

 and minimize additional requests for information. These include

 an expanded definition of the reference to the authority under

 which the filing is made, addition of the name and telephone

 number of an official able to respond to questions regarding the

 filing, and clarification of the contents of the statement of the

 nature, reasons, and basis for the filing.

 Section 154.7(a)(9) requires that the transmittal letter

 contain either a motion, in case of minimal suspension, to place

 the proposed rates into effect at the end of the suspension

 period; or, a specific statement that the pipeline reserves its

 right to file a later motion to place the proposed rates into

 effect at the end of the suspension period.

 APGA supports the requirement to provide a detailed

 statement of the nature, reasons, and basis for any rate filing.

 Columbia suggested that the proposed 154.7(b) be modified 

 to refer to the posting requirements of 154.2(d) as sufficient 

 service. Columbia also states that filings should be provided



 Docket No. RM95-3-000 - 32 -

 only to firm customers, not "affected" customers. Although these

 suggestions have not been adopted, the service requirements have

Page 40
Order No 582.txt

 been further refined and reduced as discussed supra.

 NI-Gas suggests that 154.7(a)(2) be modified to require 

 that the transmittal letter include an address suitable for

 overnight delivery as opposed to a PO Box and a facsimile (FAX)

 number. The Commission has required a telephone number in the

 transmittal letter to provide for those situations where an

 intervenor needs clarification or detects a problem with a filing

 that could best be resolved by a phone call. The address is

 required by 154.102 to be on the title page of the tariff. 

 There is no need for it to also be in the transmittal letter. 

 Northwest/Williams requests clarification whether the letter

 of transmittal and certificate of service are to be submitted on

 electronic media. These items are not required to be submitted

 on electronic media. Section 154.4(a) lists those filings that

 must be filed electronically. As discussed in the section on

 electronic filing, the Commission does not intend to require that

 all filings be made electronically. 

 h. Section 154.8 Informal Submission for Staff

 Suggestions

 Section 154.8 replaces current 154.25. 

 2. Subpart B - Form and Composition of Tariff

 a. Section 154.101 Form

 Section 154.101 replaces current 154.32. The Commission 

 is proposing to eliminate the requirement that electronic media

 record format duplicate the page size, borders, and margins of



 Docket No. RM95-3-000 - 33 -

 the paper copy. The electronic filing requirements are in new 

 154.4. In addition, the Commission has eliminated the 

 requirement of a binder.

Page 41
Order No 582.txt

 b. Section 154.102 Title Page and Arrangement

 Section 154.102 replaces current 154.33. The Commission 

 has eliminated the reference to 154.52, as special exceptions 

 are covered by new 154.112. The Commission has also eliminated 

 the requirement of a binder. The Commission now requires that

 the numbering of sheets be as provided in the Tariff Sheet

 Pagination Guidelines. 23/ 

 Currently, compliance with these guidelines is optional

 although the Commission has required use of the pagination

 guidelines in individual cases. Many companies have already

 voluntarily adopted the Commission's guidelines. The Commission

 now makes these guidelines mandatory. The guidelines provide the

 only means to ensure that tariff sheets are in the proper order

 in the Commission's electronic database. The guidelines also

 provide the basic knowledge necessary to create a sorting

 methodology for any party that wishes to create a database. Most

 importantly, the guidelines help to create a clear guide to the

 succession of tariff sheets.

 MoPSC suggests the title page of each volume of a pipeline's

 tariff contain a phone number which customers and interested

 

 23/ The guidelines and electronic and filing instructions for

 tariff sheets may be obtained at the Federal Energy

 Regulatory Commission, Public Reference and Files

 Maintenance Branch, Washington, DC 20426.



 Docket No. RM95-3-000 - 34 -

 persons may call to make inquiries about those tariffs. 

 NI-Gas suggested that communications information be expanded

 to include an address suitable for overnight deliveries. Many

 pipelines use post office boxes for their general mail

Page 42
Order No 582.txt

 deliveries, but expedited delivery services cannot make

 deliveries to such locations. NI-Gas also recommends that the

 information should include a fax number, so that requests for

 additional information can be promptly delivered and forwarded.

 NGSA recommends tariff sheets be clearly distinguished from

 each other as being one of the following: 1) proposed, 2)

 accepted but subject to refund, and 3) approved. It often

 becomes very confusing as to whether the tariff being identified

 is currently effective (i.e., the rate currently being charged)

 or is to become effective on the date proposed in the filing.

 The Commission finds that the proposal to add a telephone

 number and a fax number to the title page has merit. The

 regulations currently require, on the title page, the name and

 address of a person to whom communications concerning the tariff

 should be sent. A few pipelines provide a telephone number

 and/or a fax number on the title page now. Inclusion of a

 telephone number and a fax number on the title page will be made

 mandatory. This modest addition should foster communication

 about the tariff.

 Pipelines are fairly evenly divided between those who put a

 post office box number on the title page and those who put a

 street address. The Commission does not believe it is burdensome



 Docket No. RM95-3-000 - 35 -

 to provide a street address instead of, or in addition to, the

 post office box number. 24/ This suggestion will be adopted.

 The Commission will not adopt the suggestion that the tariff

 sheets carry designations as suggested by NGSA. Adoption of this

 suggestion will require the pipelines to make filings of tariff

Page 43
Order No 582.txt

 sheets simply to change the status designation. This would

 consume additional pipeline and Commission staff resources. The

 tariff sheets available to the public at the Commission's

 Washington, DC headquarters are marked in the way suggested by

 NGSA. The electronic tariff sheets, in a format readable by the

 Commission's software, can be downloaded from the Commission's

 bulletin board system. In this format, the tariff sheets each

 carry a status indicator: proposed, effective, superseded,

 withdrawn, rejected, or suspended. The tariff sheets also

 indicate if the order acting on the sheets accepted the sheets

 subject to refund.

 c. Section 154.103 Composition of Tariff

 Section 154.103 is the replacement for current 154.34. In 

 recognition of prevailing practice, the new section specifically

 requires that the tariff set forth all currently effective rates. 

 The Commission has deleted the reference to special exceptions

 and changed the examples of classes of service to reflect the

 current prevalent designations.

 

 24/ Those pipelines who prefer communications to be addressed to

 a post office box number may wish to present the address

 information in the way Northern Border Pipeline Company

 does. The street address is noted specifically as the

 courier address.



 Docket No. RM95-3-000 - 36 -

 d. Section 154.104 Table of Contents

 Section 154.104 replaces current 154.35 with the 

 clarification that the table of contents must contain a list of

 the sections of the general terms and conditions.

 NI-Gas states that the inclusion of a detailed listing of

 the General Terms and Conditions of the tariff in the table of

Page 44
Order No 582.txt

 contents will be a major improvement in the current practice of

 some pipelines.

 Columbia's tariffs have an initial table of contents in the

 front of the tariff which contains a line item reference to

 "General Terms and Conditions" and lists a page number for the

 "General Terms and Conditions Table of Contents" located in

 approximately the middle of the tariff, at the beginning of the

 General Terms and Conditions. Columbia seeks clarification that

 this is permissible within the context of the proposed

 regulation; and, if not, requests that the regulation be modified

 to accept this format. 

 The intent of requiring the sections of the general terms

 and conditions to be listed in the table of contents is to ensure

 such a listing appears in the tariff. Columbia's approach to the

 table of contents is acceptable.

 e. Section 154.105 Preliminary Statement

 Section 154.105 replaces current 154.36 with stylistic 

 changes only.



 Docket No. RM95-3-000 - 37 -

 f. Section 154.106 Map

 Section 154.106 is the replacement for current 154.37. 

 Maps must be submitted on paper and updated to reflect major

 changes. The new section states a preference for zones to be

 displayed on separate sheets.

 Williston states that there should not be a map requirement

 in the tariff because there is a map in the FERC Form No. 2. The

 Commission has found that the presence of a map in the tariff is

 helpful in the process of evaluating other provisions. 

 NGSA states that the map should identify storage, gathering,

Page 45
Order No 582.txt

 and all off-system (non-contiguous) facilities as well as

 "pipeline" facilities.

 Industrials recommend that pipelines be required to serve a

 hard copy of system maps prepared in accordance with new Section

 154.106, even if the parties agree that tariff filings may be

 served via electronic mail, in diskette form, or otherwise.

 The Commission will not adopt NGSA's suggestion to require a

 more detailed map in the tariff. A detailed map with the 

 facilities NGSA wishes identified is filed annually with the Form

 No. 2. Since the Commission is not discontinuing paper filing of

 tariffs, all parties receiving service of the tariff sheets are

 entitled to a paper copy unless they agree otherwise. It is up

 to the parties and the pipeline to determine the terms of

 electronic service, including exceptions to electronic service.

 g. Section 154.107 Currently Effective Rates

 New 154.107 governs the tariff sheets setting forth the 



 Docket No. RM95-3-000 - 38 -

 natural gas company's currently effective rates. In part, this

 new section replaces 154.38(d)(1) and (2). The section 

 requires that rates be stated in thermal units, as is the

 prevalent practice, rather than in units of volume. 

 APGA points out that 154.107 formalizes the current 

 practice of providing a detailed statement of rates and charges

 in a particular location in a pipeline's tariff. APGA supports

 this requirement. They state it will be particularly helpful for

 customers to receive a complete picture of effective and proposed

 rates upon the filing of a new rate case. 

 Williston states that the language in this section appears

Page 46
Order No 582.txt

 to be adding a level of complexity to the rate schedules that is

 unnecessary. Williston requests clarification of a "limited rate

 change."

 The Commission believes that Williston misunderstands the

 purpose of this section. The summary of rates would not appear

 in the rate schedule. This section is intended to codify the

 nearly universal practice of placing a summary of rates on a

 tariff sheet or sheets which generally appears in the tariff

 after the map. It is not part of the rate schedule. We note

 that Williston's summary of rates fully complies with 

 154.107. 25/ Proposed Subpart E details the filing 

 requirements for limited rate changes. To avoid confusion, the

 Commission will modify this section to reference Subpart E.

 

 25/ Ninth Revised Sheet No. 15 to its FERC Tariff Second Revised

 Volume No. 1.



 Docket No. RM95-3-000 - 39 -

 Northwest/Williams asks whether the required "total rate" column

 applies only to the maximum rate and whether surcharges, ACA, and

 GRI charges are to be included in the "total rate."

 Section 284.7(d)(5) requires that rate schedules filed under

 that section must state a maximum and minimum rate. Therefore,

 the summary of rates must show the total maximum and minimum

 rates. It is preferable for all surcharges to be added into the

 maximum rate and, if appropriate, into the minimum rate. 

 However, it has been the Commission's past practice, in

 appropriate cases, to accept summaries of rates in which the GRI

 surcharge is noted in a footnote at the bottom of the summary

 rate sheet but not added into the total rate. This has been

Page 47
Order No 582.txt

 acceptable since the GRI surcharge does not necessarily apply to

 all transactions under a rate schedule. The reverse is accepted

 also -- the GRI surcharge is listed in a column and added into

 the total rate. In this case, a footnote states the GRI

 surcharge is not applicable in certain circumstances. 26/ To

 a lesser degree, the same can be said of the ACA surcharge. The

 Commission will not depart from past practice on this issue. The

 regulations will be modified to allow the ACA and GRI surcharges

 to be noted in a footnote. If the footnote option is elected,

 the charges must be stated in the footnote, it must be clear when

 

 26/ Northwest's summary of rates reports the GRI and ACA

 surcharges in separate columns and adds the charges into the

 total rate, where appropriate. Williams, in contrast,

 states the level and applicability of the GRI and ACA

 surcharges in footnotes on its summary of rates but does not

 include them in the total rate.



 Docket No. RM95-3-000 - 40 -

 the charges apply, 27/ and the footnote must indicate that

 these charges are added to the total stated rate.

 Columbia, AGD, and APGA are in favor of the requirement to

 state rates in thermal units. APGA points out that many of its

 members and most LDCs bill their retail customers on the basis of

 units of volume. The use of units of heat content has been the

 standard measure for pipelines for some time.

 Great Lakes requests that the Commission clarify that, for

 pipelines whose rates are currently stated on a volumetric basis,

 inclusion of a statement of rates in thermal units should take

 place in the pipeline's next Section 4 rate case. Great Lakes

 also asks that the Commission clarify whether "thermal units"

 refers to dekatherms or to some other measurement. NGSA

Page 48
Order No 582.txt

 recommends that the rates be stated on the same basis (Mcf or

 MMBtu) as they are charged, with the units clearly labeled. NGSA

 maintains that the proper unit for stating rates has been and can

 continue to be determined on an individual pipeline basis. 

 NGSA is opposed to a generic rulemaking which mandates the

 use of a standard unit of measure in rate case filings at this

 time. NGSA states that rates and tariffs should be stated in the

 same units as charged. NGSA states that calculating the rates

 based on one unit of measurement and then converting those rates

 to a different unit of measurement for billing purposes creates

 confusion. Further, NGSA states, some pipelines and shippers

 

 27/ A reference to the section in the tariff where the

 applicability of the surcharge is explained is acceptable.



 Docket No. RM95-3-000 - 41 -

 have negotiated private contracts based on an "Mcf" basis of

 measurement. NGSA states that the proposed requirement is a

 substantive change in the Commission's rate policy which was not

 the purpose of this rulemaking. NGSA states that in order to

 protect the due process rights of all parties, any Commission

 imposed change in measurement standards should be implemented on

 an individual pipeline, on a prospective basis, when the pipeline

 files its next major rate case. NGSA states that conversion to

 the thermal units will not be a simple process. Therefore, NGSA

 states, parties should be able to present the issues of material

 fact brought about by such conversion in the context of a full

 evidentiary hearing, wherein disputes as to the methodology of

 conversion may be resolved. 

 Kern River objects to the proposal and states that changing

Page 49
Order No 582.txt

 measurement standards at this time from volumetric to thermal

 would be a substantive change and would needlessly put it to the

 expense of converting its tariff, contracts, and business

 systems. Whittier adds that, at a minimum, individual pipelines,

 like Kern River should be permitted to be exempt, if the thermal

 billing mandate would impair individual shippers. Kern River

 states that if the final rule requires billing unit uniformity,

 then the new section 154.107 should be modified to require only

 volumetric billing units. 

 Whittier states that volumetric billing is good policy

 because volumetric rates; 1) equitably allocate to shippers the

 capital and operating cost of the pipeline on the basis of the



 Docket No. RM95-3-000 - 42 -

 units actually transported; 2) allow shippers efficiently to use

 their contracted space to transport as many Btu's as the quality

 specifications allow, and gas suppliers are able to optimize the

 economic efficiency of their own facilities by making the

 economic decision whether to leave liquefiable hydrocarbon gases

 in the gaseous form and transport them in the gas pipeline or to

 incur the cost of extracting and marketing them as liquids; and

 3) allow the appropriate costs to be divided by the appropriate

 throughput in volume units. Whittier argues that there is no

 reason for a commodity to be transported on the same basis that

 it is purchased. 

 Whittier states that forcing pipelines that are content with

 volumetric-based rates to change to thermal-based rates would be

 making a substantive change in the contracts of shippers on

 pipelines that measure and bill on a volumetric basis. Whittier

 states that this could result in reopening contracts and rates. 

Page 50
Order No 582.txt

 Chevron, Whittier, and Kern River recommend deletion of the

 word "thermal" so that the proper unit for stating rates can

 continue to be determined on an individual pipeline basis.

 A significant majority of pipelines state their rates on the

 basis of either MMBtu or Dth. Only a few pipelines continue to

 state their rates in Mcf. 28/ The Commission earlier adopted

 the MMBtu measurement base for all reports submitted under part

 284, in 284.4. The change to the regulations in this 

 

 28/ Approximately a dozen pipelines continue to state their

 rates in Mcf. Another five state their reservation rates in

 Mcf but state their usage rates in Dth or MMBtu.



 Docket No. RM95-3-000 - 43 -

 rulemaking expands on the Commission's earlier action and

 reflects the prevalent practice in the industry. The

 Commission recognizes that some companies perceive a hardship in

 switching from Mcf to Dth or MMBtu. However, the Commission also

 recognizes the ongoing industry concern with standardizing

 certain practices as expressed at the EBB conference held on

 September 21, 1995. Standardizing industry practices, such as

 stating rates in thermal units, facilitates cross-pipeline

 business. Accordingly, the Commission will maintain this

 standard in the regulations. However, in light of the

 difficulties expressed by some pipelines, the Commission does not

 intend to actively enforce this section until one year after the

 effective date of this rule. 

 NGSA recommends that the rate sheets should state the amount

 of each applicable surcharge and include a citation to the docket

 in which such surcharge level was accepted by the Commission. 

 The Commission will not adopt NGSA's suggestion that the summary

Page 51
Order No 582.txt

 statement of rates include the citation to the docket in which

 each surcharge level was accepted. This would add a great deal

 of complexity to the summary statement of rates. The information

 NGSA is interested in is available publicly. Since comments in

 this docket were filed, the Commission provided access to each

 company's electronic tariff sheets on the Commission's bulletin

 board system. 29/ Each tariff sheet which is not pending

 

 29/ Pipelines began filing electronic versions of their tariff

 sheets with tariff sheets effective November 1, 1989. Some

 (continued...)



 Docket No. RM95-3-000 - 44 -

 contains the citation to the order which acted on the tariff

 sheet. With some careful checking, a researcher can identify

 each tariff sheet containing a surcharge change and readily

 identify the order acting on that sheet.

 h. Section 154.108 Composition of Rate Schedules

 Section 154.108 replaces current 154.38. Current 

 154.38(d)(4), Refunds, is moved to 154.501. Current  

 154.38(d)(5), RD&D, is moved to 154.401. Current  

 154.38(d)(6), ACA expenditures, is moved to 154.402. Current  

 154.38(d)(1) and (2) are revised and moved to 154.107.  

 Current 154.38(d)(3) is moved to 154.3. Current 154.38(e),  

 minimum bill, is deleted.

 Williston objects to the requirement that pipelines provide

 a description of the calculation of the monthly charges for each

 rate component. It argues this would cause a pipeline's tariff

 to become even more voluminous and onerous without serving any

 useful purpose. Williston requests that the Commission eliminate

 this proposed requirement.

Page 52
Order No 582.txt

 Section 154.108 merely formalizes current practice. 

 Virtually all current tariffs include a section in the rate

 schedules explaining how the rate is to be applied to derive

 monthly billings. This section of the tariff is essential to

 determining the accuracy of a shipper's bill. Under current

 practice, this section provides both a textual description of the

 

 29/(...continued)

 of the tariff sheets filed early in the process are

 contained in separate archive databases.



 Docket No. RM95-3-000 - 45 -

 components of the rate and the mathematical method to determine

 charges each month. The Commission notes that almost all

 pipelines appear to comply with this regulation already.

 i. Section 154.109 General Terms and Conditions

 Section 154.109 replaces current 154.39. The company's 

 discounting policies are added to the tariff.

 AGD, NI-Gas, and the LDC Caucus support the proposed

 requirement that the pipeline set forth in its tariff its

 discount policy and the order in which each pipeline charge will

 be discounted. The LDC Caucus states that this would assist

 customers in ensuring that the pipeline's discount policy is

 consistently applied and that adjustment to rates to reflect

 discounted revenues are proper. 

 INGAA supports a requirement of providing broad policy

 statements by pipeline companies concerning nondiscriminatory

 discounts but objects to disclosure of management policies or any

 specific order in which rate components would be discounted. 

 The statement specifying the order in which each rate component

 will be discounted must be in accordance with Commission policy. 

Page 53
Order No 582.txt

 This proposed regulation could be interpreted to require

 pipelines to disclose the order in which each rate component will

 be discounted. This portion of proposed 154.109(c) reduces 

 pipeline rights and flexibility as granted in Order Nos. 436 and

 500. Great Lakes, Columbia, KN, MRT, and Panhandle concur.

 Panhandle and Great Lakes state that a company's discount

 policy is commercially sensitive information. Disclosure of this



 Docket No. RM95-3-000 - 46 -

 information may interfere with a pipeline's ability to compete in

 the marketplace, thwarting the Commission's goals in Order No.

 636 to foster competition and provide natural gas transportation

 service to the customer which values it most. Great Lakes

 submits that a general statement of policy will meet the

 Commission's intent without requiring the disclosure of

 commercially sensitive information.

 Columbia argues the proposed requirement is too broad. 

 Columbia notes that pipelines are already subject to

 nondiscriminatory standards with respect to the granting of

 discounts, and must post/disclose discounts to affiliates. 

 Columbia requests deletion of this requirement to the extent it

 requires setting forth the "manner" in which rates are

 discounted. 

 KN fears that this provision would allow each pipeline to

 review the discounting policies of other pipelines that compete

 with it for business. KN states that the disclosure rule would

 serve to reward those pipelines that are evasive or simplistic in

 their policy statements and would punish those that are more

 descriptive or detailed. KN states that there is no valid

Page 54
Order No 582.txt

 competitive purpose served by compelling pipelines to reveal all

 their discount policies.

 MRT fails to see the relevance of this provision. MRT

 states that pipelines already file discount reports and report

 marketing affiliate discounts on their Electronic Bulletin

 Boards. MRT states that this provides sufficient information for



 Docket No. RM95-3-000 - 47 -

 both the Commission and the pipeline's customers to monitor the

 discounts a pipeline is granting. 

 Great Lakes also states its opposition to the proposed

 section requiring the pipeline to state in its general terms and

 conditions its policy for financing and constructing laterals. 

 Great Lakes states that pipelines must be able to evaluate each

 proposal to finance and construct lateral facilities on a case-

 by-case basis. Great Lakes states that no set policy can

 contemplate all of the factors which contribute to a pipeline's

 decision to finance and construct these facilities. Great Lakes

 states that a pipeline's decisions with regard to laterals are

 public knowledge since the financing, cost, location, and

 customer information related to the construction of any lateral

 facilities are disclosed in a pipeline's certificate application. 

 Great Lakes state that the Commission and others have the ability

 to determine whether or not a pipeline is unduly discriminatory

 in its decision regarding the financing and construction of

 laterals and so, proposed 154.109(b) is not necessary for 

 regulatory purposes.

 Section 154.109(c) merely formalizes the Commission's policy

 on recognition of discounts as enunciated in Natural. 30/ 

 Under the policy, the pipeline must recognize discounts in a

Page 55
Order No 582.txt

 

 30/ Natural Gas Pipeline Company of America (Natural), 69 FERC

 61,029, (1994), reh'g, 70 FERC 61,317 (1995). Policy  

 applied in ANR, 69 FERC 61,322 (1994), and Tennessee, 69 

 FERC 61,094 (1994). Policy applied to interruptible 

 transportation in Southern, 69 FERC 61,093 (1994), and 

 MRT, 69 FERC 61,112 (1994). 



 Docket No. RM95-3-000 - 48 -

 specified order. The first item of the overall reservation

 charge discounted will be the GRI surcharge (for member

 pipelines), followed by the base rate reservation charge, Account

 858 or other Order No. 636 transition cost surcharges, and, last,

 all GSR reservation surcharges. Other non-transition reservation

 surcharges will be attributed as agreed by the pipeline and its

 customers in individual proceedings. 31/ 

 In adopting the policy in Natural, the Commission saw the

 need for a generic methodology to recognize discounts in a

 transition cost recovery filing. The Commission enumerated the

 advantages of its policy as follows:

 ù Maximize the pipeline's recovery of transition costs

 from its discounted customers,

 ù Minimize the need for a subsequent true-up to implement

 the Commission's policy of permitting full recovery of

 transition costs,

 ù Ensure transition costs are spread as evenly and widely

 as possible, and

 ù Minimize discount adjustments in periodic filings.

 The requirement, in 154.109(b), for a general statement of 

 

 31/ In Algonquin Gas Transmission Company, 69 FERC 61,105 

 (1994), the Commission clarified its policy with respect to

 surcharges designed to collect costs in Account No. 858. If

Page 56
Order No 582.txt

 the Account No. 858 costs at issue are not Order No. 636

 transition costs, but relate to upstream capacity retained

 by the pipeline for operational use and are embedded in the

 pipeline's base rates, the policy announced in Natural does

 not apply.



 Docket No. RM95-3-000 - 49 -

 the pipeline's policies on laterals formalizes the Commission's

 policy of assuring that laterals are built on a non-

 discriminatory basis. By placing the general policy in the

 tariff, parties may more effectively monitor its application. 

 j. Section 154.110 Form of Service Agreement

 Section 154.110 replaces current 154.40 with the addition 

 of receipt points as an item for insertion on the form when

 appropriate.

 k. Section 154.111 Index of Customers

 Section 154.111 replaces current 154.41, Index of 

 Purchasers, but with applicability specifically limited to

 natural gas activities not subject to part 284 of this chapter. 

 The Commission has expanded the Index of Customers to include all

 firm transportation services and contract demand for each

 customer for each rate schedule. In the order issued in

 Tennessee Gas Pipeline Company's restructuring proceeding, 32/

 the Commission clarified that current 154.41 is not limited to 

 the requirement to file sales-related information. The changes

 here make that interpretation explicit. Some pipelines have

 provided contract demand information on a voluntary basis before

 this. The information has proven valuable to the Commission in

 analyzing pipelines' filings and in eliminating additional

 requests for information.

 Pipelines that offer services under part 284 of this

 chapter, exclusively or in addition to services authorized under

Page 57
Order No 582.txt

 

 32/ Tennessee Gas Pipeline Company, 65 FERC 61,224 (1993). 



 Docket No. RM95-3-000 - 50 -

 part 157 of this chapter, must comply with the requirements in

 the companion rulemaking instead of this provision. In the

 companion rulemaking, pipelines providing service pursuant to

 part 284 of this chapter, provide an Index of Customers on their

 electronic bulletin board (EBB). As an interim measure, we will

 require pipelines providing transportation service under part 284

 to comply with the Index of Customers requirements as set forth

 in 154.111 until the electronic index is implemented. 

 Panhandle recommends that the Index of Customers requirement

 remain the same as that contained in the current regulations. 

 Panhandle objects to the expansion of the index as being anti-

 competitive. Panhandle objects to the inclusion of the term of

 each contract, arguing the duration of the contract is sensitive

 information. Further, Panhandle believes this information serves

 no valid regulatory purpose.

 Columbia objects to the requirement to include contract

 demand for each customer for each rate schedule in the Index of

 Customers. Columbia believes public disclosure of such

 commercially-sensitive information unfairly places pipelines and

 their customers at a competitive disadvantage in the marketplace. 

 AGD supports the provision and suggests that this

 information should be provided in both print and electronic media

 in order to facilitate its full use by interested parties. AGD

 recommends that the regulations be amended to require each

 pipeline to provide a sum of the MDQ contract levels by rate

 schedule, at least in the paper copy of the index of purchasers. 

Page 58
Order No 582.txt



 Docket No. RM95-3-000 - 51 -

 This information is valuable because it facilitates analysis of

 billing determinants in rate cases and between rate cases.

 The Pacific Northwest Commenters urge the Commission to

 continue to require that the tariff include a reasonably current

 index of all firm customers. Pipelines should be required to

 provide a completely current customer index on their EBBs--but on

 a semi-annual basis the pipeline should still file updated

 indices or firm customers in their tariffs. 

 Consistent with the action being taken in the companion

 rule, the Index of Customers will include the full legal name of

 the shipper, the rate schedule number of the service under

 contract, the effective date of the contract, the termination

 date of the contract, and the maximum daily contract quantity

 under the contract.

 We will not adopt Columbia or Panhandle's recommendations. 

 As we note in our companion rulemaking, the index will contain

 fundamental data about the natural gas industry -- how much of

 the pipeline's capacity shippers have under firm contract. This

 information is basic to the Commission's understanding of events

 taking place in the industry. With this information, the

 Commission will remain apprised of trends in the industry, the

 willingness of shippers to hold firm capacity, the average length

 of time capacity remains under contract, the proportion of

 capacity rolling over under evergreen provisions, etc. Pipelines

 are beginning to deal with complex issues related to shippers'

 contracts coming up for renewal in the post restructuring



Page 59
Order No 582.txt

 Docket No. RM95-3-000 - 52 -

 period. 33/ The lack of easily accessible data regarding

 customers' contract levels and contract terms could hamper the

 Commission's ability to assess the impact of this phenomenon on

 the industry. The index will provide key data for this purpose. 

 The Index of Customers which is the subject of this section will

 be included in the tariff. Currently, the tariff is filed both

 electronically and on paper. Therefore, AGD's suggestion is

 moot.

 We will not require the pipelines offering service under

 part 284 to maintain the Index of Customers in both their tariff

 and on their EBBs. It is the Commission's intention to reduce

 the filing burden on the pipelines. Access to the Index of

 Customers through a downloadable file or through the tariff

 should be sufficient. The Commission will hold future

 conferences on the appropriate format for the electronic Index of

 Customers. 

 The language originally proposed in 154.111 required the 

 index to be updated coincident with the filing of the Form No. 2

 and Form No. 11. At the time, Form No. 11 was proposed to be

 filed semi-annually. In our companion rulemaking, we are

 revising the Form No. 11 and requiring it to be filed quarterly. 

 In light of the change to the frequency of the filing of Form No.

 11, we will remove the reference to Form No. 11 and modify the

 language in this section to preserve the semi-annual schedule

 

 33/ For example, Transwestern Pipeline Co. recently filed a

 settlement in Docket No. RP95-271-000 to deal with the turn

 back of significant amounts of capacity by a key customer.



Page 60
Order No 582.txt

 Docket No. RM95-3-000 - 53 -

 originally contemplated.

 l. Section 154.112 Exception to Form and

 Composition of Tariff

 Section 154.112(a) replaces current 154.52, but deletes 

 those paragraphs dealing with the sale of gas or purchased gas

 cost tracking. Because the requirements of 154.101 (Form) and 

 154.102 (Title page and arrangements) are applicable, 

 154.112(a) does not refer to those matters. 

 Section 154.112(a) specifies that special rate schedules for

 service under part 157 of this chapter are to be included in FERC

 Volume No. 2. Section 154.112(b) mirrors the provision in

 154.1(d) which requires that contracts that deviate in any 

 material aspect from the form of service agreement must be filed

 with the Commission. 34/ Section 154.112(b) also requires

 that such contracts be referenced in FERC Volume No. 1.

 m. Miscellaneous Subpart B Comments 

 AGD commented that proposed Subpart B should be supplemented

 to include a provision requiring a pipeline seeking a rate

 increase to identify (a) the new rate being proposed by rate

 schedule and (b) for each proposed new rate the rate which

 represents the refund floor or "last clean rate." AGD states

 that this information should be presented in a simple, easy-to-

 understand format such as a chart or matrix so that interested

 parties can quickly find in one place the rate levels which

 

 34/ The language proposed in the NOPR for 154.112(b), which 

 would require the filing of contracts "that do not conform

 to the form of service agreement" has been changed to be

 consistent with the provision of 154.1(d). 



Page 61
Order No 582.txt

 Docket No. RM95-3-000 - 54 -

 quantify the totality of the applicant's rate increase proposal. 

 Pipeline rate changes are routinely made in response to various

 factors. Some of the resultant adjustments are made effective

 subject to refund. AGD state that these circumstances have the

 effect of obscuring the underlying rate and that AGD's

 recommendation is intended to simplify the task of the staff and

 the pipeline customer in discovering what rate is proposed and

 what portion of that rate is already subject to change as a

 result of some regulatory contingency.

 AGD also suggests that many pipelines follow a practice of

 providing to their customers a quarterly statement summarizing

 the currently effective tariff sheets. This practice should be

 required of all pipelines as it is an efficient mechanism for

 keeping abreast of the developments affecting pipeline services.

 Subpart B sets out the proper contents of a pipeline's

 tariff. AGD's suggested summary appears in 154.7(a)(6) which 

 requires "a summary of the changes or additions made to the

 tariff" to be included in the statement of the nature, the

 reasons, and the basis for the filing. Thus, what AGD seeks is

 already required. No additional language needs to be added to

 the regulations.

 AGD's suggestion that the pipeline identify the last "clean

 rate" when it proposes an increased rate has merit. The

 identification will assist the Commission and other interested

 parties in determining the level of potential refunds if the

 proposed rate is suspended and ultimately found unjust or



 Docket No. RM95-3-000 - 55 -

 unreasonable. It will also alert interested parties to the fact

Page 62
Order No 582.txt

 that the underlying rate may also be in effect subject to refund. 

 Proposed 154.7(a) was modified to require that the letter of 

 transmittal identify the last rate found to be just and

 reasonable that underlies the proposed rate.

 The NGA requires a pipeline to "keep open in convenient form

 and place for public inspection, schedules showing all rates and

 charges for any transportation or sale subject to the

 jurisdiction of the Commission, ..." 35/ Historically, this

 provision has not been interpreted as requiring pipelines to

 provide periodic copies of effective tariffs to each customer. 

 The Commission notes that much more can be done through

 electronic means, today. As a result, the Commission makes

 available through its electronic bulletin board system, each

 pipeline's complete tariff for downloading. As this information

 is available through the Commission's EBB, we will not require

 the pipelines to send their customers a copy of the pipeline's

 current tariff on a quarterly basis. 

 3. Subpart C - Procedures for Changing Tariffs

 a. Section 154.201 Filing Requirements

 New 154.201(a) is a replacement for current 

 154.63(b)(1)(v), Marked Versions of Tariff Changes. The new 

 section clarifies that changes to both text and numbers must be

 marked. New 154.201(b) is a replacement for current 

 154.63(e)(4), Workpapers and Supporting Data. The intent of 

 

 35/ 15 U.S.C. 717c.



 Docket No. RM95-3-000 - 56 -

 this regulation is to ensure that all mathematical calculations

 are complete and logically follow from the first calculation to

Page 63
Order No 582.txt

 the last; so that, anyone attempting to recreate the calculations

 can do so. This requirement will also ensure that any numbers

 that are not directly from the company's source documents are

 explained. 

 Other parts of current 154.63 are revised and distributed 

 elsewhere in revised part 154.

 Northwest/Williams requests clarification as to when the

 filing requirements of Subpart C or D apply. The confusion over

 the applicability of Subparts C and D turns on the inclusion of

 the section titled "Changes in rate schedules, forms of service

 agreements, or the general terms and conditions," as proposed in

 Subpart D, 154.301. Some of Subpart C applies to all changes 

 to a tariff or executed service agreement, such as 154.201 and 

 the notice, service, and protest requirements. There are other

 sections in Subpart C which have a more limited scope, such as

 the provisions for submission of new rate schedules, filing of

 compliance filings, and changes to suspended tariffs. The

 subject section is better positioned in Subpart C since it

 applies when a pipeline submits changes to specific portions of

 the tariff. Subpart D applies to changes in rates other than

 those described in Subparts E, F, G, and H. To avoid any

 confusion, the subject section is now 154.204 in Subpart C. 

 NI-Gas supports 154.201(a) but seeks clarification that 

 all changes be marked, not just substantive changes. The



 Docket No. RM95-3-000 - 57 -

 Commission clarifies that the regulation applies to all changes

 in text and numbers whether substantive or not. 

 Williston states that 154.201(a) should not apply to maps. 

Page 64
Order No 582.txt

 The regulation requires that changes in text and numbers be

 marked. This includes text and numbers on pages containing maps. 

 Whenever possible, text and numbers on maps should be marked in

 the same manner as text and numbers elsewhere in the filing. 

 However, the Commission recognizes that maps are often produced

 in such a fashion that this is not practical. In such cases, the

 text and numbers on maps may be marked in any clear fashion. 

 Further, the Commission is not specifying any particular method

 for marking changes to boundary lines, symbols, and

 representative drawings. Such changes may also be demonstrated

 in any clear fashion. 

 NI-Gas supports 154.201(b). NGSA approves of 201(b)(2) 

 and (4). Columbia states that while it supports adherence to

 principles of disclosure and open communication with Commission

 staff and parties concerning calculations and workpapers,

 Columbia avers that this regulation is too broad and subjective. 

 Columbia states that the determination whether the calculations

 are complete and logically follow so that anyone can recreate

 them, is a subjective standard which is particularly onerous

 given that an incomplete filing may be rejected pursuant to 

 154.5. 

 The Commission disagrees with Columbia. It has been the

 Commission's experience that pipelines have not always included



 Docket No. RM95-3-000 - 58 -

 all of the calculations necessary to support the proposed rate

 modification even though the pipeline must have these

 calculations in order to establish the rates in its filing. The

 lack of these calculations causes unnecessary delay and raises

 questions about the filing. It is impossible for the parties to

Page 65
Order No 582.txt

 determine if the proposed rate is just and reasonable if the

 calculations are incomplete or unexplained. 

 Section 154.201(b) serves two purposes: it gives specific

 guidance to the pipeline as to what is needed to fulfill the

 pipeline's obligation to support proposed rates; and, it gives

 interested parties useful information in a timely manner. This

 regulation should reduce the necessity for data requests. 

 Columbia states that if this regulation is promulgated,

 pipelines should not be subject to additional data requests about

 calculations. Columbia's suggestion is not adopted. The

 Commission cannot anticipate all of the information the parties

 may need in a rate case. It would be improper to generalize

 that, under any circumstances, no pipeline would be subject to

 additional data requests. Eliminating the possibility of any

 data requests concerning the pipeline's rate calculations would

 restrict the parties' options unnecessarily. 

 Pacific Northwest Commenters urge the Commission to require

 that each filing contain a summary customer impact comparison

 setting forth the amounts paid by customers under the current

 rates based on the most recent test period determinants compared

 to what they would pay under the proposed change based on the



 Docket No. RM95-3-000 - 59 -

 same determinants. Statements G-1 and G-2 provide this

 information. The Commission will not require the pipeline to

 provide an additional customer impact comparison. There should

 be sufficient information available through the filing to allow

 each customer to conduct its own comparison.

 Pacific Northwest Commenters request that the current

Page 66
Order No 582.txt

 provision in 154.63(e)(1) that pipelines include material 

 reflecting rate fixing adjustments in accord with Commission

 orders be included here. AGD recommends that the regulation

 require a description of any Dth-mile study relied upon by the

 applicant for the rate change. 

 The regulations already require that the pipeline provide

 documentation to support proposed changes. It is not necessary

 to list each and every document that might be needed for such

 support. It is the pipelines' responsibility to provide the

 documents that prove that its proposed rate change is just and

 reasonable. 

 The Commission modified proposed 154.301(c) to reinstate 

 the original language regarding alternate material reflecting

 rate fixing adjustments. A regulation requiring a description of

 the Dth-mile study will not be adopted.

 b. Section 154.202 Filings to Initiate a New

 Rate Schedule

 New 154.202 replaces current 154.62. The new section  

 does not apply to initial executed service agreements. Very

 little data is currently required to support an initial rate



 Docket No. RM95-3-000 - 60 -

 schedule or executed service agreement. Because many services

 are now provided under blanket authorizations, there is no review

 prior to the tariff filing. Thus, the current filing

 requirements are no longer consistent with the needs of the

 Commission for reviewing new rate schedules. The new section

 relates to the requirements for a new rate schedule under the

 blanket authority granted under part 284 of this chapter as well

 as to other initial filings.

Page 67
Order No 582.txt

 NI-Gas states that 154.202(a)(1)(iv)(B) should be expanded 

 to include information on surcharges and crediting. On the other

 hand, Williston states that 154.202(a) should be deleted because 

 it requires filing data not previously required, is burdensome,

 and prolongs review by staff. 

 Section 154.202(a) requires the pipeline to file basic

 information about the proposed service which the Commission needs

 to know to make an informed and timely decision. The current

 regulations are adapted for individually certificated services

 where the information would be provided in the certificate

 proceeding. Section 154.202(a) recognizes the transition from

 individually certificated services to blanket certificates. It

 requires less information than previously required for an

 individual certificate application. It is designed to provide

 Commission staff and others with enough information to review the

 rates and charges for an initial service or service provided

 under a blanket certificate authority. By requiring pipelines to

 submit this necessary information when they make their initial



 Docket No. RM95-3-000 - 61 -

 filing, the Commission avoids the need to formulate data requests

 which only delay the proceedings. 

 NI-Gas' interest in the applicability of surcharges to the

 new service is understandable. However, no modifications to the

 proposed regulations are necessary to accomplish NI-Gas' goal. 

 Section 154.107 requires all surcharges applicable to a service

 to be displayed on the tariff sheet showing currently effective

 rates. If a new rate is proposed for the new service, a separate

 line or lines will appear on this tariff sheet. All applicable

Page 68
Order No 582.txt

 surcharges would be displayed in separate columns as provided

 under 154.107(d). Therefore, the surcharges applicable to the 

 new service would be discernible. The Commission does not

 believe it is necessary to expand the list under proposed 

 154.202(a)(1)(iv) to list all of the possible affects of a new 

 service upon existing shipper services since the regulations

 state that information is to be provided is "including but not

 limited to" the specific information noted. Any additional

 affects on existing service would be covered by this inclusive

 phrase.

 Panhandle states that the regulation should be clarified to

 establish that only where a pipeline is proposing to change a

 rate previously established in the Section 7 proceeding should

 there be a Section 4 obligation. Section 154.202(b) states that

 where a rate, service, or facility is certificated under section

 7, the tariff sheets filed to implement the terms of the

 certificate must comply with the requirements for compliance



 Docket No. RM95-3-000 - 62 -

 filings. No change needs to be made to the regulations to

 accommodate Panhandle's position. This regulation creates an

 obligation applicable to initial rates and rates and charges for

 services under a blanket authorization. Any proposed rate or

 charge that differs from the rate or charge approved in a 

 Section 7 proceeding is governed by 154.202(b)(2). 

 c. Section 154.203 Compliance Filings

 Section 154.203 is a new section addressing filings that are

 made to comply with a Commission order. Filings made to comply

 with Commission orders must include only those changes required

 to comply with the order. Such compliance filings must not be

Page 69
Order No 582.txt

 combined with other rate or tariff change filings. A compliance

 filing that includes other changes or that does not comply with

 the applicable order in every respect may be rejected.

 APGA and NI-Gas support this regulation.

 Pacific Northwest Commenters states that compliance filings

 should be designated and noticed as such, and recognized as not

 mandating action within 30 days. The form of notice now requires

 the pipeline to designate compliance filings.

 CNG believes that 154.203(b) lacks flexibility. CNG 

 states that an alternate or creative response to a Commission

 requirement may obviate the need for a rehearing request or court

 appeal. CNG argues that including related rate or tariff changes

 in a compliance filing saves parties time and money. On the

 other hand, Brooklyn Union requests confirmation that compliance

 filings that do not conform to the applicable order in all



 Docket No. RM95-3-000 - 63 -

 respects will be rejected. 

 The regulation states that a compliance filing that includes

 other changes or that does not comply with the applicable order

 in every respect "may be rejected." In practice, the Commission

 regularly rejects filings that go beyond the order. The

 Commission chose not to use the phrase "will be rejected" in

 order to allow for some flexibility to accommodate minor

 variations in special and rare circumstances. However, the

 Commission will not accept any compliance filing that contains

 any substantive difference from the underlying order.

 d. Section 154.204 - Changes in Rate Schedules, 

 Forms of Service Agreements, or the General

 Terms and Conditions

Page 70
Order No 582.txt

 Section 154.204 provides distinct requirements for filings

 to change rate schedules, forms of service agreements, or the

 general terms and conditions of a tariff. 36/ Such filings

 must explain the necessity for the change and the impact on

 existing customers.

 NI-Gas states that the inclusion of the information required

 in 154.204(b) and (c) will help in the timely analysis of 

 tariff changes by interested parties.

 NDG supports the proposed requirement that the filing

 company must include with its filing an explanation of why the

 proposed change is necessary and the impact on existing

 customers. NDG also believes that several additional filing

 requirements would further improve the rate review process,

 

 36/ This regulation appeared in the NOPR as 154.301. 



 Docket No. RM95-3-000 - 64 -

 including requiring the distribution of workpapers provided to

 FERC staff in support of a filing to customers. Pipelines should

 be required to (1) allow interested parties to notify the filing

 pipeline that they wish to receive a copy of the workpapers on

 the filing data, and (2) include with the copy of the filing

 served on interested parties a notice describing the content of

 the workpapers. 

 It is unclear to what workpapers NDG refers. All workpapers

 referred to in 154.204 are to be submitted as part of the 

 filing. Thus, the pipeline is already required to submit all

 workpapers.

 Generally, Columbia does not object to the requirements of

 this section. However, Columbia believes that much of the

Page 71
Order No 582.txt

 requested information is irrelevant to many tariff filings e.g.,

 workpapers showing the estimated effect on revenues and costs

 over a 12-month period.

 The requirements of 154.204 are generally applicable. 

 Further, the specific requirement to which Columbia refers has

 been a longstanding requirement for filings for changes other

 than in rate level. 37/ However, if a particular requirement

 does not happen to apply, a statement to that effect is all that

 is necessary. 

 

 37/ See section 154.63(b)(2).



 Docket No. RM95-3-000 - 65 -

 e. Section 154.205 Changes Related to Suspended

 Tariffs, Executed Service Agreements or Parts

 Thereof

 Section 154.205 replaces current 154.66. 38/ The 

 change adds two exceptions to the rule prohibiting tariff filings

 during a suspension period. The exceptions are "changes made

 under previously accepted tariff provisions permitting periodic

 limited rate changes" and "accepted limited rate changes." 

 Section 154.205 recognizes that the Commission allows periodic

 limited rate changes pursuant to accepted tariff provisions and

 ACA and GRI surcharge changes to take place during the period of

 suspension. This reflects current Commission policy.

 Williston commented that the provision in current 154.66 

 providing that a proposed tariff or executed service agreement

 may be withdrawn during the suspension period with special

Page 72
Order No 582.txt

 permission should be retained. That provision has been

 reintroduced into the final rule.

 f. Section 154.206 Motion to Place Suspended

 Rates Into Effect

 Section 154.206 replaces current 154.67(a). 39/ 

 Current 154.67(b), Reports, is deleted. This section requires 

 that, when rates have been suspended for more than a minimal

 period and the Commission has ordered changes or the rates

 include costs of facilities that are not in service, the motion

 to place suspended tariff sheets into effect must be filed at

 

 38/ This regulation appeared in the NOPR as 154.204. 

 39/ This regulation appeared in the NOPR as 154.205. 



 Docket No. RM95-3-000 - 66 -

 least one day prior to the date the sheets are to take effect. A

 motion is required where: the Commission has ordered changes; the

 rates include facilities that are not in service; or, the

 transmittal letter specifically reserves the pipeline's right to

 file a motion. 

 Section 154.7(a)(9) adds a new provision whereby the

 transmittal letter must include either a motion to place

 suspended rates into effect, or a specific statement that the

 pipeline reserves its right to file a later motion. If the

 pipeline includes a motion in its transmittal letter, then the

 proposed rates will go into effect at the end of the minimal

 suspension period. If the pipeline specifically states that it

 reserves its right to file a later motion, then the proposed

 rates will go into effect only after such later motion is filed. 

 Also, if a pipeline fails to comply with 154.7(a)(9) by not 

Page 73
Order No 582.txt

 including either a motion or a statement, the proposed rates will

 not go into effect until the pipeline files a motion. 

 APGA requests that 154.206(a) be amended to make the form 

 of motion clear. However, the Commission does not believe that

 it is necessary to standardize such a motion.

 The NOPR had proposed that when rates have been suspended

 for more than a minimal period and the Commission has ordered

 changes or the rates include costs of facilities that are not in

 service, the motion to place suspended tariff sheets into effect

 must be filed no less than 30 days nor more than 60 days prior to

 the date the sheets would take effect. Columbia commented that



 Docket No. RM95-3-000 - 67 -

 the proposed requirement would cause pipelines to estimate test

 period data for that portion of the test period occurring after

 the date the pipeline must make the motion rate filing. Columbia

 stated that this would only be acceptable if the Commission

 accepted such estimates as of the end of the test period.

 CNG and Columbia recommended no change to the current

 practice of allowing pipelines to file motion rates one day

 before the effective date. CNG commented that the current rules

 work well but the proposed rule would require pipelines to rely

 on estimated plant balances in determining the level of plant in

 service at the end of the test period. Further, CNG stated, the

 pipeline would be unable to determine the status of negotiations

 30 days in the future, and would be compelled to move to make the

 rate increase effective at the earliest possible date. In the

 alternative, CNG states, the longest notice period should be 6 to

 10 days. 

 In light of these comments, the revised regulation has been

Page 74
Order No 582.txt

 modified to be consistent with the current practice of allowing

 pipelines to file motion rates one day before the effective date. 

 However, individual suspension orders may require pipelines to

 make compliance filings earlier, to reflect changes required by

 the Commission.

 Columbia states that 154.206(c) should not state "for less 

 than one day," but "for one day." JMC suggests a change to "one

 day or less." 



 Docket No. RM95-3-000 - 68 -

 Pacific Northwest Commenters suggest that the Commission

 retain the motion filing requirement for all suspensions of more

 than one day and delete the requirement for suspensions of one

 day or less. To comply with 4 of the NGA, Pacific Northwest 

 Commenters argue that the Commission should issue an express

 blanket grant of a motion for any filing suspended for one day or

 less. Pacific Northwest Commenters state that this approach

 would recognize the past practice of generally suspending rate

 increases for 5 months and other changes for less than one day. 

 Thus, a pipeline could delay implementation where parties are

 resolving issues through negotiation. Pacific Northwest

 Commenters state that automatic implementation of a rate increase

 would restrict this flexibility. 

 JMC supports the proposal to formalize the Commission's

 practice of not requiring a motion when rates are suspended for a

 minimal period.

 Panhandle states that the NGA requires that suspended rates

 only go into effect upon motion by the pipeline. Panhandle

 recommends that when the suspension period is minimal, the

Page 75
Order No 582.txt

 regulations should recognize that the transmittal letter

 constitutes the requisite motion unless the pipeline reserves the

 right to file a separate motion. This recommendation has not

 been adopted. Unless the pipeline reserves the right to file a

 separate motion, it must include a motion in the transmittal

 letter.



 Docket No. RM95-3-000 - 69 -

 JMC requests clarification that rates for separate, distinct

 classes of customers need not be suspended for the same time

 period nor be combined together for purposes of determining

 whether the proposed rate is a decrease or increase. The

 Commission's policy is that customers should only pay for the

 services they receive. Rates need not be aggregated for the

 purpose JMC suggests. 40/

 The revised regulation is consistent with current Commission

 practice and the purposes of the NGA. Section 4(e) of the NGA

 authorizes the Commission to suspend operation of a schedule and

 defer the use of a rate pending a hearing "but not for a longer

 period than five months beyond the time when it would otherwise

 go into effect." 41/ If the proceeding has not been concluded

 and an order made at the expiration of the suspension period, the

 proposed change shall go into effect "on motion of the natural

 gas company making the filing." 42/ The NGA continues that

 refunds may be ordered "where increased rates or charges are thus

 made effective." 43/ Historically, the Commission has

 considered the suspension of a rate as a necessary step to assure

 that refunds may be ordered when appropriate. 

 

Page 76
Order No 582.txt

 40/ See Tennessee Gas Pipeline Company, 62 FERC 61,250 at 

 62,642 (1993).

 41/ 15 U.S.C. 717c(e).

 42/ Id.

 43/ Id.



 Docket No. RM95-3-000 - 70 -

 When the maximum five month suspension is applied, the

 earliest the rates will become effective is on the day after the

 date the motion filing is made. Where the rates have been

 suspended for the maximum period, there is sufficient time for

 the pipeline to modify its proposal, if necessary, and file the

 motion. However, as a practical matter, where rates have been

 suspended for a minimal period as allowed under the statute, a

 hearing could not possibly be concluded by the expiration of the

 period. This regulation allows the pipeline to specify whether

 or not the filing itself acts as a motion.

 g. Section 154.207 Notice Requirements

 Section 154.207 replaces current 154.22 and 154.51.  

 44/ The new section applies only to proposed changes. 

 Reference to former 154.5, which is no longer in part 154, is 

 removed.

 h. Section 154.208 Service on Customers and

 Other Parties

 New 154.208 formally requires the filing company to serve 

 its customers and state regulatory commissions on or before the

 filing date. 45/ The regulation requires that all customers

 and state commissions receive an abbreviated form of the filing. 

 Customers and state commissions with an interest may then request

 a full copy. The pipeline must provide the full copy within 48

Page 77
Order No 582.txt

 hours. However, pipelines must comply with any customer's

 

 44/ This regulation appeared in the NOPR as 154.206. 

 45/ This regulation appeared in the NOPR as 154.207. 



 Docket No. RM95-3-000 - 71 -

 standing request to receive a complete filing as the initial

 served filing. 

 The NOPR invited comments on whether the informational needs

 of customers and state regulatory commissions would be adequately

 fulfilled if the filing company was only required to serve the

 transmittal letter and provide the rest of the filing upon

 request. Some pipelines have used this procedure recently to

 minimize the costs of reproduction and mailing where their lists

 of shippers are quite large.

 MRT, El Paso, NGSA, and NET support serving only a

 transmittal letter to customers and state commissions on or

 before the filing date with complete copies provided on request. 

 They state that serving complete copies wastes pipeline resources

 and annoys customers that are not interested.

 Columbia states that it is unduly burdensome to serve all

 filings on all customers and suggests that the regulation be

 modified to require service upon firm customers on the filing

 date. Columbia states that such service along with the form of

 notice pursuant to 154.209 is sufficient to assure adequate 

 notice. 

 AF&PA, Arizona Directs, AGD, Industrials, and New York

 oppose allowing pipelines to fulfill service by a transmittal

 letter. APGA states that the service of only the transmittal

 letter would be neither desirable nor lawful. APGA states that

Page 78
Order No 582.txt

 without a complete statement of proposed rates, the notice is not

 meaningful.



 Docket No. RM95-3-000 - 72 -

 Michigan and MoPSC state that state commissions should

 receive the full filing. 

 Michigan states that, considering the time restraints in

 which the Commission must act and the delay of requesting full

 service, the burden to request full service should not be on the

 parties. 

 Michigan, MoPSC, and New York suggest that the Commission

 require pipelines to provide state commissions and customers with

 notice of a filing 30 days prior to the filing date. 

 Michigan and New York would like the pipelines to be

 required to serve both the state commission and the designated

 counsel by the next day. 

 Pacific Northwest Commenters points out that "service" under

 385.2010 (Rule 2010) may consist of merely depositing the 

 filing in the mail which may take 3 or 4 days for delivery. To

 assure that customers get more timely notice and may prepare more

 complete comment and analysis, they suggest that pipelines be

 required to certify that arrangements have been made to assure

 receipt by customers no later than the next business day, that

 customers elect whether to receive full service or just

 transmittal letters, and that customers be able to designate two

 representatives to receive service. They also request that the

 Commission require pipelines to provide service of orders in

 specific cases in lieu of Commission service.

 APGA requests a requirement that pipelines must, at the

Page 79
Order No 582.txt

 request of a customer, provide next-day service to attorneys or



 Docket No. RM95-3-000 - 73 -

 consultants designated by customers. 

 AGD states that the regulation should require simultaneous

 service upon the Commission and all customers except those known

 to prefer transmittal letter service.

 Columbia Distribution and NDG do not oppose offering the

 customers the option of receiving a transmittal letter instead of

 the full filing, however customers should be able to place a

 standing request for complete filings by the next day. 

 Panhandle proposes that firm customers and state commissions

 receive full service at the time of filing but that interruptible

 customers receive an abbreviated service consisting of: the

 letter of transmittal, the Statement of Nature, Reason, and

 Basis, the changed tariff sheets, and the Notice. Notice would

 also be on the EBB.

 INGAA and ANR/CIG ask that pipelines be allowed to make an

 abbreviated form of service consisting of: the Letter of

 Transmittal; the Statement of Nature, Reason, and Basis; the

 changed tariff sheets; a summary cost-of-service and rate base;

 and, summary of magnitude of change. Customers with an interest

 may then request a full copy. 

 El Paso suggests that the service obligation be fulfilled by

 posting on the EBB.

 In light of the responses to the NOPR, the revised

 regulation is a combination of the alternatives suggested by

 several commenters and represents a reasonable middle ground

 between requiring service of a complete filing and service of



Page 80
Order No 582.txt

 Docket No. RM95-3-000 - 74 -

 just the transmittal letter. The pipeline must provide the full

 copy within 48 hours if requested. Additionally, the pipeline

 must comply with any customer's standing request to receive a

 complete filing as the initial served filing. Customers are

 defined as customers of the pipeline with a contract for service

 as of the date of the rate case filing. While reducing the

 filing burden to the pipeline, this course assures that all

 interested parties receive complete notice adequate to making

 informed decisions about the proposal. Also, those parties that

 desire service of complete filings can make a standing request

 for such service in lieu of the abbreviated and 48-hour follow-up

 services. 

 i. Section 154.209 Form of Notice for Federal

 Register

 Section 154.209 replaces current 154.28. 46/ The 

 modified form reflects current practice. The form has been

 changed from that in the NOPR to distinguish compliance filings

 that do not require Commission action within 30 days from the

 date of filing, from other rate filings. 

 Michigan and New York request that the notice be modified to

 contain a brief narrative discussing the financial impact of the

 proposed change on each class of service and any conditions of

 service affected by the change. Michigan and New York state that

 filings that fail to include such notice should be rejected. The

 Commission rejects this suggestion. This information can be

 

 46/ This regulation appeared in the NOPR as 154.208. 



Page 81
Order No 582.txt

 Docket No. RM95-3-000 - 75 -

 derived from the filing that is being noticed. The purpose of

 the notice is merely to get the attention of interested parties

 who may then review the full filing.

 NI-Gas states that the form of notice should also include

 the name, address, telephone number, and FAX number of a contact

 person. This information is on the title page of the filing and

 does not need to be in the notice.

 The NOPR invited comments on whether the Federal Register

 notice is useful and should be retained in addition to the

 Commission's electronic notice. Columbia, Consumers Power, UDC,

 and Northwest/Williams state that the Federal Register notice is

 useful and should be retained in addition to the Commission's

 electronic notice. El Paso recommends that, if paper copies of

 filings are required, the Federal Register notice should be the

 only document served on customers. The full filing would be

 available on the EBB. SoCal prefers the Commission CIPS as the

 source for postings rather than the Federal Register.

 Generally, these comments indicate that the Federal Register

 notice is useful and should be retained in addition to the

 Commission's electronic notice. 

 j. Section 154.210 Protests, Interventions, and

 Comments

 Section 154.210 replaces current 154.27. 47/ The 

 intervention, comment, and protest periods are to be standardized

 as has been the practice with oil pipeline tariff filings. 

 

 47/ This regulation appeared in the NOPR as 154.209. 



Page 82
Order No 582.txt

 Docket No. RM95-3-000 - 76 -

 Interventions, comments, and protests must be filed within 12

 calendar days of the filing date and comments must be filed at

 the same time as interventions and protests.

 The NOPR had proposed that the interventions, comments, and

 protests be filed within "10 days" of the filing. Many

 commenters objected to changing from the former 15-day time

 period and argued that more time was needed to adequately review

 the more complete initial filings. Numerous alternatives were

 suggested for comment periods ranging from 10 to 30 days. The

 Commission has balanced the need to allow sufficient time for

 interested parties to review a filing with the need for the

 proceeding to progress swiftly. The use of the 12 calendar day

 standard achieves this balance. 

 4. Subpart D - Material to be Filed With Changes

 a. Section 154.301 Changes in Rates

 Section 154.301 establishes that subpart D pertains to rate

 change filings under the cost-of-service methodology; i.e., all

 rate change filings except those filed under subparts E, F, and

 G. 48/ Subpart D is applicable to both rate increase and

 decrease filings. The current special filing requirements for

 "minor pipelines" are removed. Section 154.301(c) replaces

 current 154.63(e)(1). Minor rate increase filings, as now 

 covered by 154.63(b)(4), and rate decreases have reduced filing 

 requirements under 154.313. In addition, proposed changes 

 

 48/ This regulation appeared in the NOPR as 154.302. 



 Docket No. RM95-3-000 - 77 -

Page 83
Order No 582.txt

 other than to rate level must be made under subpart G, discussed

 infra.

 NI-Gas strongly supports the proposal that a pipeline must

 be prepared to prosecute its case based on the information

 included with its original filing. NI-Gas argues that this

 requirement will help with the initial review by parties;

 eliminate the first stage of many procedural schedules; prevent a

 pipeline from introducing new explanations, proposals, and

 evidence well into the course of a contested proceeding; and

 allow more comprehensive Commission review initially. AGD agrees

 that these regulations embody the proper approach to the rate

 filing process, and argues that there should be no reluctance on

 the Commission's part to reject incomplete rate filings or any

 pipeline's attempts to supplement rate filings.

 Conversely, INGAA believes the regulations severely restrict

 the pipeline's ability to defend its submitted rate case. INGAA

 suggests removing the word "solely" from this section (with

 regard to requiring the pipeline to rely solely on its initial

 filing to sustain its burden of proof on proposed changes) and

 broadening the material that would be admissible in the defense

 of a rate case. Panhandle believes requiring the pipeline to

 rely solely on its initial filing would actually increase the

 time and effort required of other parties and the Commission's

 staff. Panhandle maintains it is impossible to anticipate every

 issue the parties may raise, and that the regulations could be

 read to preclude the pipeline from filing supplemental direct or



 Docket No. RM95-3-000 - 78 -

 rebuttal testimony to address issues raised subsequent to the

Page 84
Order No 582.txt

 rate filing.

 Similarly, Columbia requests clarification that nothing bars

 a pipeline from filing answering and rebuttal testimony in its

 own rate case proceedings. Williston also seeks clarification

 that the filing of supplemental data by the company is not

 precluded. The Commission confirms that this regulation does not

 interfere with a company's rights, during a hearing, to respond

 to opposing testimony and evidence. 

 The Commission agrees with the comments of NI-Gas and AGD,

 above. Further, the substantial body of rate proceeding case law

 as well as the practices that have developed in the prosecution

 of rate cases should provide a pipeline with knowledge of what

 issues must be developed in its case-in-chief.

 Panhandle requests confirmation that 154.301(c) relates 

 only to proposed changes, and that the Commission does not intend

 by promulgating these new regulations to change the prior

 holdings of the courts or the Commission on the burden of going

 forward or the burden of proof. Panhandle also requests

 clarification that matters already sworn to in the filing need

 not be addressed again in Statement P.

 The requirements found in 154.301(c) that a pipeline must 

 be prepared to go forward at hearing and sustain its burden of

 proof based on the materials in its filing are the same as those

 currently in effect in 154.63(e)(1), with some editorial 



 Docket No. RM95-3-000 - 79 -

 changes and will be interpreted by the Commission in the same

 way.

 b. Section 154.302 Previously Submitted Material

 Section 154.302 replaces current 154.63(c)(1) and (2). A 

Page 85
Order No 582.txt

 current FERC Form No. 2 must accompany the filing. 49/

 NGT requests clarification that this regulation represents

 no change in current practice; submission of a copy of the Form

 No. 2 does not constitute part of the rate filing for which

 service may be required pursuant to 154.207. 

 The Commission notes that the language of the revised

 regulation is essentially the same as the current section. The

 Commission clarifies that the FERC Form No. 2 remains an item by

 reference and does not constitute part of the filing for which

 service is required pursuant to 154.207. 

 c. Section 154.303 Test Periods

 Section 154.303 replaces current 154.63(e)(2)(i) and (ii). 

 The section has been completely rewritten. 50/ The Commission

 clarifies that the pipeline must remove from rates moved into

 effect the cost of any facilities not certificated (where a

 certificate is required) and in service as of the end of the test

 period.

 National Fuel requested modification to the NOPR to clarify

 that adjustments to the base period may include costs for

 facilities that do not require a certificate and are in service

 

 49/ This regulation appeared in the NOPR as 154.303. 

 50/ This regulation appeared in the NOPR as 154.304. 



 Docket No. RM95-3-000 - 80 -

 by the end of the test period. Language to that effect has been

 incorporated into the final rule.

 INGAA contends that 154.303(c)(2) requires that a plant 

 not certificated before the end of the test period must be

 excluded when motion rates are filed. INGAA states that it is

Page 86
Order No 582.txt

 impossible for a pipeline to estimate when the Commission will

 issue a certificate in a pending matter; and therefore, pipelines

 are forced to exclude the facilities in the compliance filing yet

 all other aspects of the pipeline's activities are updated to the

 end of the test period.

 NGT and Panhandle seek clarification that the new

 regulations permit the inclusion of costs of facilities that are

 expected to be in service by the end of the test period,

 regardless of the status of a pending certificate application. 

 NGT urge that the last sentence of the revised regulation should

 be deleted.

 INGAA states that the regulation forces pipelines to exclude

 from the end of test period analysis of costs for certificated

 facilities. INGAA states a procedure should be adopted whereby a

 pipeline may reflect the cost of facilities in service prior to

 the end of the test period if the end of the test period is

 beyond the effective date of the proposed rates.

 NET suggests a clarification that permits adjustments for

 facilities for which a certificate application is pending,

 subject to the requirement of 154.303(c)(2) that such costs be 



 Docket No. RM95-3-000 - 81 -

 excluded if the facilities are not in service by the end of the

 test period.

 In light of the above comments, the proposed regulation has

 been modified to allow adjustments for facilities for which a

 certificate application is pending, subject to the requirement of

 154.303(c)(2) that such costs be excluded if the facilities are 

 not in service by the end of the test period.

Page 87
Order No 582.txt

 Columbia urges the Commission to consider a more forward

 looking test period. That is, allow pipelines to project the

 more routine cost items (such as inflation and labor) one year

 beyond the end of the current nine-month test period. This

 comment is, in effect, seeking an extension of the test period. 

 This the Commission is reluctant to do. The regulations are

 constructed so that the rate paid by a customer is based upon the

 costs incurred previously by the pipeline for providing the

 services to that customer. The adjustment period allows for the

 inclusion in rates of costs for items that are not a benefit to

 the rate payers at the time of filing but will be within a

 reasonable time thereafter. The Commission has set the cut off

 point for such costs at 9 months past the end of the chosen base

 period. The commenters have not shown that this period is

 unreasonable. 



 Docket No. RM95-3-000 - 82 -

 d. Section 154.304 Format of Statements,

 Schedules, Workpapers, and Supporting Data

 Section 154.304 replaces current 154.63(c)(3) and 

 154.63(e)(4). 51/ The Commission requires a narrative 

 explanation of each proposed adjustment to base period actual

 volumes and costs.

 INGAA states that the requirement to provide accounting

 workpapers to support data or summaries reflecting the pipeline's

 books of account will place a burden on the companies since the

 accounting workpapers could be voluminous. The information

 should only be provided when specifically requested by the

 Commission auditor. This suggestion has been adopted. 

 With respect to statements, schedules, work papers and

Page 88
Order No 582.txt

 supporting data, NGSA recommends that the filing format be

 standardized by requiring that narrative explanations be placed

 at the beginning of the specific statement or schedule to which

 they apply. To reduce discovery burden rate case statement

 updates should be provided to parties specifically requesting

 them, as well as to the Commission. This suggestion has been

 adopted.

 e. Section 154.305 Tax Normalization

 Section 154.305 replaces current 154.63a with revisions to 

 clarify the section's applicability. 52/ Pipelines will

 continue to be required to use tax normalization to compute the

 

 51/ This regulation appeared in the NOPR as 154.305. 

 52/ This regulation appeared in the NOPR as 154.306. 



 Docket No. RM95-3-000 - 83 -

 income tax component of the cost-of-service and to adjust rate

 base by accumulated deferred income taxes related to components

 of the cost-of-service.

 f. Section 154.306 Cash Working Capital

 Section 154.306 replaces current 154.63b. 53/ 

 g. Section 154.307 Joint Facilities

 Section 154.307 replaces current 154.63(e)(3) with 

 stylistic changes. 54/

 h. Section 154.308 Representation of Chief

 Accounting Officer

 Section 154.308 replaces current 154.63(e)(5) with only 

 stylistic changes. 55/

 i. Section 154.309 Incremental Expansions

 Section 154.309 requires separate statements and schedules

Page 89
Order No 582.txt

 for incremental facilities, including those with Commission

 imposed at-risk provisions. 56/ In some cases, pipelines

 maintain independent rate schedules (incremental rates) that are

 based on the costs of specific facilities. Separate statements

 and schedules for such facilities need to be provided to permit a

 proper evaluation of the rates based on the costs of those

 facilities. When pipelines have been unable to fully subscribe

 certain construction projects, the Commission has permitted

 

 53/ This regulation appeared in the NOPR as 154.307. 

 54/ This regulation appeared in the NOPR as 154.308. 

 55/ This regulation appeared in the NOPR as 154.309. 

 56/ This regulation appeared in the NOPR as 154.310. 



 Docket No. RM95-3-000 - 84 -

 construction to go forward with the pipeline placed at-risk for

 recovery of the costs associated with the unsubscribed capacity. 

 Separate statements and schedules for at-risk facilities need to

 be provided so that the Commission can compare the revenue

 generated from the use of the facilities with the cost of the

 facilities, and determine whether to remove the at-risk

 condition.

 The Pacific Northwest Commenters object to the requirement

 that separate data be provided for major expansions since the

 pipeline's last rate case. They are concerned that this

 provision may impinge upon the development of policy in Docket

 No. PL94-4 on the pricing of pipeline facilities. Pacific

 Northwest Commenters suggest that until the Commission announces

 its policy, it would be better served to limit the scope of 

 154.309 to existing incrementally priced services. NGSA makes 

Page 90
Order No 582.txt

 a similar argument.

 Since the NOPR was issued, the Commission has issued its

 policy statement regarding the pricing of pipeline facilities;

 and so, Pacific Northwest Commenters concerns are moot. 57/ 

 Northern Border argues that this section appears to require

 the filing of a rate case within a rate case for facilities

 certificated with at-risk provisions. Northern Border states

 that this section appears to require a complete set of filing

 exhibits to be created for each separate at-risk facility even if

 

 57/ Pricing Policy For New And Existing Facilities Constructed

 By Interstate Natural Gas Pipelines, Docket No. PL94-4-000;

 Statement of Policy, 71 FERC 61,241 (1995). 



 Docket No. RM95-3-000 - 85 -

 the at-risk condition is not likely to be triggered and/or the

 company is not requesting within a rate case filing to remove the

 at-risk provision. Northern Border proposes that, if an at-risk

 provision has been triggered or it is certain to be triggered

 during a reasonable forthcoming period, then the company should

 be required to include in its filing any necessary information to

 support it position in that regard.

 INGAA seeks clarification that the Commission did not intend

 for the pipeline to file separate schedules under 154.312 and 

 154.313 for each major expansion. INGAA proposes that 

 154.309 be eliminated and that the Commission continue the 

 current practice of including the information in Schedule C. 

 Alternatively, the data required could be provided in summary

 form. Columbia does not object to providing certain summary

 schedules with respect to incremental and expansion facilities,

 but objects to the apparent requirement to provide a full filing

Page 91
Order No 582.txt

 pursuant to 154.312 and 154.313. Columbia supports INGAA's  

 comments and further requests the Commission clarify what is

 meant by the term "major expansion."

 El Paso also argues that the regulations should provide for

 flexible exhibits that produce information sufficient to

 demonstrate the pipeline's position with respect to incremental,

 at-risk, and major expansions since the pipeline's last rate

 case. 

 Great Lakes argues that this section: 1) is premature until

 the Commission determines its course of action in Docket No.



 Docket No. RM95-3-000 - 86 -

 PL94-4; 2) fails to recognize that each cost may not be

 separately identifiable; and 3) magnifies the size of an

 applicant's filing (in Great Lakes's case, at least 7 separate

 sets of schedules and statements would be required). Great Lakes

 urges the Commission to delete proposed 154.309. TransCanada 

 filed similar comments. 

 NI-Gas supports the separate reporting of the costs

 associated with facilities subject to an at-risk condition. NI-

 Gas also states that a pipeline should be required to report the

 revenues associated with at-risk or incremental facilities and

 the reasons why it allocated the revenues to those facilities,

 rather than unsubscribed "general" system capacity.

 The Commission did not eliminate proposed 154.309 as 

 requested, but did modify this section in several respects. 

 First, the Commission deleted the requirement that this section

 applies to "every major expansion since the pipeline's rate

 case." This information may be too broad and need not be filed

Page 92
Order No 582.txt

 with the rate case filing. In this respect, the Commission notes

 that 154.312, Statement O, as modified by this rule, requires 

 pipelines to list each major expansion and abandonment since the

 pipeline's last rate proceeding and provide the costs by

 function. This summary data should provide adequate information

 for parties in the proceeding to evaluate significant changes

 since the last rate case proceeding. 

 The Commission will require that the pipeline provide a

 summary statement that lists the cost-of-service components and



 Docket No. RM95-3-000 - 87 -

 revenues associated with each incremental and at-risk facility in

 lieu of separately identifying each cost on the statements and

 schedules contained in 154.312 and 154.313. However, where  

 applicable, appropriate cross references to 154.312 and 

 154.313 should be made. This change eliminates the bulk of the 

 burden imposed by the section as proposed. The summary statement

 should provide pipelines with the flexibility sought by El Paso. 

 Permitting the summary statement, in lieu of a separate

 identification of each cost and revenue contained on the

 statements and schedules in 154.312 and 154.313, balances the  

 parties' needs for informative data, but will not be so

 burdensome as to require a "rate case within a rate case" as

 suggested by some parties. 

 Lastly, with respect to NI-Gas' request to include revenues

 associated with the incremental and at-risk facilities, the

 pipeline will need to cross reference the statements and

 schedules contained in 154.312 and 154.313. These sections 

 include the recording of revenues (For example, Schedule G-4). 

 Therefore, the information sought by NI-Gas will be provided in

Page 93
Order No 582.txt

 the pipeline's filing. 

 j. Section 154.310 Zones

 Section 154.310 requires a cost breakdown by zone if the

 pipeline maintains records of costs by zone. 58/

 Panhandle commented that proposed 154.310 and 154.312  

 were inconsistent. Proposed 154.310 required cost-of-service 

 

 58/ This regulation appeared in the NOPR as 154.311. 



 Docket No. RM95-3-000 - 88 -

 by zone only if a pipeline proposes a zone rate method, while

 proposed 154.312 appeared to require a cost-of-service for each 

 zone regardless of the underlying rate method. Panhandle

 suggested clarifying language. The Commission agrees with

 Panhandle. Section 154.310 requires a cost-of-service by zone

 only if a pipeline maintains records of costs by zones and

 proposes a zone rate methodology based on these costs. Section

 154.312, Schedule I-1 (c), has been modified as proposed by

 Panhandle.

 SoCal states that if the company files for zone rates,

 whether to continue existing zone rates or to establish zone

 rates, a cost breakdown should be mandatory. However, the

 Commission does not order companies to maintain plant accounts

 and cost-of-service by zone. This is an election made by the

 individual company. Section 154.312, Schedule I-3 (a) requires a

 company to show how the cost-of-service is allocated among rate

 zones by function. This schedule should give SoCal the

 information it seeks by zone.

 k. Section 154.311 Updating of Statements

 The Commission requires certain Statements and Schedules to

Page 94
Order No 582.txt

 be updated, once, 45 days after the end of the test 

 period. 59/ This provision has been changed from the NOPR

 which required the statements and schedules to be updated,

 quarterly, for each month of the test period.

 

 59/ This regulation appeared in the NOPR as 154.312. 



 Docket No. RM95-3-000 - 89 -

 In response to comments, the Commission agrees that

 quarterly updates are burdensome and will require only one update

 at the end of the test period.

 Northern Border states that this provision should not apply

 to pipelines with cost-of-service tariffs. Because such

 pipelines do not rely on test-year adjustments, updates would be

 burdensome and unnecessary. This section was created to govern

 the vast majority of the regulated entities that do not have

 cost-of-service tariffs. We agree that the update is not

 necessary for a pipeline with a cost-of-service tariff. 

 Therefore, Northern Border's request for a waiver of this section

 is granted.

 MoPSC requests clarification that the filing of updated

 material for the test period does not amend the company's direct

 case. MoPSC contends it is essential that the Commission clarify

 that the required filing of updated actuals will not amend/change

 a company's direct case and that updates are intended to provide

 the Commission and interested parties with additional information

 to help evaluate the projections and estimates used by a company

 in its direct case. The Commission grants both these

 clarifications.

Page 95
Order No 582.txt

 l. Section 154.312 Composition of Statements

 Section 154.312 replaces current 154.63(f) with revisions 

 to the statements and schedules as discussed below. 60/ Many

 changes are self explanatory or merely editorial and are not

 

 60/ This regulation appeared in the NOPR as 154.313. 



 Docket No. RM95-3-000 - 90 -

 discussed here.

 1. Schedule B

 INGAA requests that regulatory assets and liabilities not be

 listed on Statement B unless entries specifically are reflected

 in the computation of rate base.

 The Commission agrees with INGAA's comments and clarifies

 that regulatory assets and liabilities should only be listed if

 the pipeline seeks recovery of these items in the computation of

 rate base.

 2. Schedule C

 Columbia states that only the end of base period balances

 and test period adjustments and end of the test period balances

 should be reflected on this statement. The Commission disagrees. 

 These beginning balances are currently required and have proved

 to be necessary for a complete analysis of the pipeline's plant

 and examination of specific plant changes. 

 NGSA recommends that Account 117 include volumes, as well as

 costs, by subaccount and show activity by month for the base

 period, including Account 117.4 (gas owed to system gas). NGSA

 believes this modification is necessary to track the use of

 system gas. 61/ The Commission agrees with NGSA's

 recommendation that Account 117 should include volume data and

Page 96
Order No 582.txt

 show monthly activity to track the use of system gas. In this

 restructured era, an accurate accounting of system gas is

 

 61/ NGSA in its comments to the companion rule suggested

 modifications to the Commission's proposal by retaining

 Account 117 as "Base Gas" and Account 164 as "Working Gas".



 Docket No. RM95-3-000 - 91 -

 important for the determination of the appropriate level for

 storage gas and of capacity retention. Proposed Statement C was

 modified accordingly. 

 3. Schedule C-1, End of Base Period Plant Functionalized

 Schedule C-1 does not refer to storage facilities as 

 "underground" or "local" and requires the showing of plant in

 service by functional classifications.

 INGAA states that the same information is proposed to be

 required by both Schedule C-1 and Statement I. INGAA's

 observation is correct, proposed Schedule C-1 and proposed

 Statement I were duplicative with regards to the requirements to

 reflect plant by zones and expansions. Therefore, these

 requirements have been removed from revised Schedule C-1.

 INGAA and Columbia commented that proposed Schedules C-1 and

 C-2 appear to break information currently contained only in

 Schedule C-1 into two schedules. INGAA recommended that proposed

 Schedule C-2 be deleted and the information be included in

 Schedule C-1 in order to avoid an unnecessary administrative

 burden.

 Proposed Schedule C-1 provided data on the functional gas

 plant for the base period. Proposed Schedule C-2 provided data

 on the functional gas plant for the test period. The Commission

 agrees with INGAA and Columbia that these schedules should be

Page 97
Order No 582.txt

 combined in order to avoid unnecessary administrative burden. 

 Accordingly, Proposed Schedule C-1 has been modified to include

 the data provided in Proposed Schedule C-2. Proposed Schedule C-



 Docket No. RM95-3-000 - 92 -

 2 was deleted and all subsequent schedules renumbered.

 Columbia states that the only significant data necessary is

 total plant in service (as reflected in Account 101, et. seq.)

 and not data by Account 300, et seq. Columbia states that the

 language specifying that plant in service be detailed by account

 numbers should be deleted. The Commission did not adopt

 Columbia's suggestion. The current regulations require gas plant

 in service by plant account. The Commission has found that

 account balances for plant in service are critical to the

 analysis of changes in gas plant and determination of depreciable

 plant. 

 4. Schedule C-2 (Proposed Schedule C-3) 

 INGAA states that listing every work order separately will

 result in unneeded and unhelpful detail. INGAA suggested

 grouping by category of items whose cost is less than a threshold

 level of $500,000. To reduce administrative burdens, the

 Commission adopted INGAA's proposed modification to permit

 grouping by category of items where the cost is less than

 $500,000. Proposed Schedule C-2 was modified accordingly.

 Columbia states that this information is provided in

 Schedule C-1 as plant adjustments and Schedule C-2 should be

 eliminated.

 The Commission agrees that the plant totals are included in

 Schedule C-1 as plant adjustment. However, the details of the

Page 98
Order No 582.txt

 plant adjustments (i.e., work orders) are not reflected. The

 components of these plant adjustments provide the data necessary



 Docket No. RM95-3-000 - 93 -

 to determine the accuracy of the proposed plant adjustments and

 to determine which additions are pending certificate

 authorizations. 

 5. Schedule C-3 (Proposed Schedule C-4)

 Columbia and INGAA state that Schedule C-3 requires

 duplicate information and should be eliminated because the

 pipeline customers own the majority of the gas.

 This is true for those pipelines whose storage gas is owned

 by the customers. However, many pipelines still own a portion of

 the storage gas as base and system gas. Those pipelines must

 report this data. 

 AGD and Brooklyn Union recommend that this schedule specify:

 (1) monthly storage gas quantities; (2) the term "storage

 projects owned" be defined to include storage projects under

 contract to a pipeline; (3) data on customer-owned gas,

 separately states the amounts held in Account Nos. 117 and 164;

 and (4) pipeline owned and contracted storage volumes be shown

 separately for Account 117 gas and Account 164 gas. AGD

 concludes that these modifications will assist pipeline customers

 and Commission staff in analyzing a pipeline's usage of storage

 resources.

 Modifying the regulations as recommended by AGD and Brooklyn

 Union will aid in our investigation of the storage projects. The

 Commission clarifies that the term "storage projects owned"

 includes storage projects under contract to a pipeline. We note

 that customer-owned gas is not reflected on the pipeline's books

Page 99
Order No 582.txt



 Docket No. RM95-3-000 - 94 -

 and therefore, is not included in Account 117. Further, Schedule

 C-3 must reflect the monthly volume activity in Account 117 and

 separately state the amounts and volumes held in Account 117 for

 pipeline owned and contracted storage.

 Columbia requested that the Commission reestablish the

 ability to cross reference Schedule C-3 to FERC Form No. 2. The

 Commission agrees that FERC Form No. 2 is an integral part of the

 Commission's analysis of the pipeline's filing. Accordingly, the

 revised regulation reestablishes a pipeline's ability to cross

 reference Schedule C-3 with FERC Form No. 2.

 6. Schedule C-4 (Proposed Schedule C-5)

 Williston states that this schedule should be eliminated

 because the requested data is also provided in FERC Form No. 2. 

 The Commission did not adopt Williston's suggestion. The

 Commission agrees with Williston that the information required on

 this schedule would be duplicative if the pipeline has not

 changed its procedures since it last filed FERC Form Nos. 2 and

 2-A. Therefore, the Commission's clarifies that Schedule C-4

 must be reported only if the pipeline has changed any of its

 procedures since the last filed FERC Form Nos. 2 or 2-A. 

 7. Schedule C-5 (Proposed Schedule C-6)

 Columbia recommends that since Accounts 101 and 106 can only

 be included in a pipeline's gas operations, this schedule should

 be eliminated.

 Schedule C-5 is reported only if significant changes over

 $500,000 have occurred since the end of the year reported in the



Page 100
Order No 582.txt

 Docket No. RM95-3-000 - 95 -

 company's last FERC Form No. 2. 

 8. Schedule D

 Columbia and INGAA recommend that only the base period

 adjustments and test period balances be reflected on this

 schedule. Furnishing these beginning balances is required by the

 current regulations. The Commission has found that the beginning

 balance is necessary for the analysis of the pipeline's plant

 reserve and examination of specific plant reserve changes. 

 Columbia states that any authorized negative salvage value

 reflected as a separate part of Account 108, should be required

 only if the negative salvage value is defined and looking

 forward. Adopting Columbia's suggestion would also require

 creating a separate subaccount to specifically identify these

 amounts in the reserve account and enhance our analysis of the

 negative salvage account balance and associated rates. 

 Accordingly, proposed Statement D was revised to require that any

 included negative salvage value must be separately maintained in

 a subaccount of Account 108.

 9. Schedules D-1 and D-2

 Proposed Schedule D-1 required actual end of base period

 depreciation, depletion, and amortization balances by functional 

 classifications. Proposed Schedule D-2 required projected end of

 test year balances for depreciation, depletion, and amortization

 by functional classifications. Columbia and INGAA state that

 Proposed Schedule D-2 should be deleted because the information

 is currently reported on Statement D.



Page 101
Order No 582.txt

 Docket No. RM95-3-000 - 96 -

 Proposed Schedule D-1 provides the functional gas plant for

 the base period and Proposed Schedule D-2 provides the functional

 gas plant for the test period. The Commission agrees with

 Columbia and INGAA that these schedules could be combined in

 order to avoid unnecessary administrative burden. Therefore,

 proposed Schedule D-2 was deleted and combined with Schedule D-1

 and Schedule D-3 was renumbered as Schedule D-2.

 10. Schedule D-2 (Proposed Schedule D-3)

 Williston states that this schedule should be eliminated

 because the data is also provided in FERC Form No. 2. However,

 Schedule D-2 (proposed Schedule D-3) is filed only if a policy

 change has been made effective since the last annual report on

 FERC Form No. 2 or 2-A was filed with the Commission. Thus,

 there is no need to make the change suggested by Williston.

 11. Statement E

 Panhandle proposes to revise the instructions for

 Statement E to reinstate the deletion of the gas stored

 underground. In response to numerous commenters in the companion

 rule, the Commission decided to permit a pipeline, in its next

 rate filing, to choose either the fixed asset or the inventory

 model for storage accounting. Therefore, all current gas stored

 underground previously recorded in Account 164 will be recorded

 in Accounts 117.2, System Balancing Gas, and 117.3, Gas Stored

 in Reservoirs and pipelines-noncurrent. Account 117.2 will be

 reflected in a pipeline's gas plant on Schedule C. Only gas for

 resale from underground stored recorded in Account 117.3 will be



 Docket No. RM95-3-000 - 97 -

Page 102
Order No 582.txt

 reported in Statement E. No additional recognition will be

 accorded system gas in working capital, since no working capital

 requirement should result from system balancing. Therefore,

 Statement E reinstates the gas for resale underground storage. 

 If a pipeline believes it can show a working capital requirement

 for system gas, then the pipeline can file for cash working

 capital in accordance with Schedule E-1.

 Panhandle states that companies should continue to have the

 right to request working capital treatment for other items. 

 The Commission clarifies that a company has the right to request

 any working capital treatment of any justifiable item and the

 Commission can rule on the appropriateness of that item based on

 the evidence presented.

 12. Schedule E-3

 Northwest/Williams recommend that this schedule should only

 be submitted by a pipeline utilizing an authorized PGA mechanism. 

 The Pacific Northwest Commenters recommend that Schedule E-3 be

 submitted by any company which utilizes an authorized PGA

 mechanism or which utilizes storage for system balancing. In

 addition, Panhandle states that the instructions for Schedule E-3

 should be revised by deleting the first sentence restricting this

 schedule of gas stored current to applicants utilizing a PGA

 mechanism.

 Currently, there are only two pipelines with authorized PGA

 mechanism and these pipelines have no storage. Thus, there is no

 reason to maintain this schedule as originally proposed. 



 Docket No. RM95-3-000 - 98 -

 Panhandle does not support the change in accounting for

 storage and therefore believes current Schedule E-2 should be

Page 103
Order No 582.txt

 retained. Since pipelines may have gas for resale in underground

 storage, the current Schedule E-3 will need to be reinstated to

 allow the reporting of this gas. Thus current Schedule E-2,

 Storage Gas Inventory, is reinstated as revised Schedule E-3. 

 14. Schedule E-4

 NGSA recommends that Schedule E-4 (Storage Inventory) show

 and explain the source, pricing, each use of working gas (i.e.,

 system balancing, working gas for sale, etc.) and be reconciled

 to Account 117.3 (injected base gas, recoverable) and Account

 117.4 (gas owed to system gas). NGSA deems this modification

 necessary to track the use of system gas. [NGSA in its comments

 to the companion rule suggested retaining Account 117 as "Base

 Gas" and Account 164 as "Working Gas".] The Pacific Northwest

 Commenters believe that this information on storage inventory

 will be valuable for any pipeline utilizing storage to provide

 system balancing. 

 The Commission agrees with NGSA's and Pacific Northwest's

 62/ comments that the tracking of system gas is important. The

 companion rule allows pipelines to use either the fixed asset

 model or the inventory method for storage accounting for system

 gas included in Account 117. Thus, system gas will be reported

 in Account 117.2 will be accounted for or tracked on Schedule C. 

 Account 117.3 will be reported on Schedule E-3 and will reflect

 

 62/ See comments on Schedule E-3.



 Docket No. RM95-3-000 - 99 -

 only gas for resale from underground storage. No working capital

 requirement results from Account 117.4. Therefore, proposed

 Schedule E-4 is not necessary and will be deleted.

Page 104
Order No 582.txt

 15. Proposed Schedule E-5

 INGAA states that proposed Schedule E-5 shows cross-

 references to other schedules containing the computations and

 explanations, and so, this filing requirement should be made

 optional to serve pipelines filing a lead-lag study.

 Columbia states that the proposed schedule should be

 consolidated with Statement E or eliminated because it requires

 the components of working capital to be set forth in sufficient

 detail and contain cross references to other schedules containing

 the computations and components of working capital.

 The Commission agrees with INGAA's and Columbia's comments

 and incorporated the language of proposed Schedule E-5 into

 Statement E and did not promulgate proposed Schedule E-5.

 16. Statement F-2

 NDG recommended requiring the filing pipeline to submit a

 table showing the pipeline's earned rate of return on rate base

 and earned return on equity for the base period. Thus, the

 Commission and interested parties would be able to (1) evaluate

 whether the Commission orders on previous rate filings have

 enabled the filing company to earn the Commission authorized

 return and (2) evaluate the pipeline's proposed revenue

 requirements.



 Docket No. RM95-3-000 - 100 -

 The Commission disagrees with NDG's recommendations to

 modify proposed Statement F-2. The information can be calculated

 from data available in FERC Forms No. 2 and 2-A.

 17. Statement G, Revenues, Credits, and Billing Determinants 

 Statement G replaces current Statement G (Gas operating

Page 105
Order No 582.txt

 revenues and sales volumes). The revised Statement G is a

 summary of information on all jurisdictional services. Statement

 G must be filed with the rate case. More specific information,

 in Schedules G-1 through 6, must be filed 15 days later. 

 Schedules G-1 through 6 must also be served on parties that

 request such service within 15 days of the filing. The sixth

 paragraph of current Statement G(e), concerning credits, is now

 found in Statement G subparagraph (2). The Commission requires

 the allocated GSR component of IT rates to be unbundled and

 treated as a separate component for rate case filing purposes in

 order to better compare and reconcile the cost-of-service to

 revenues. AGD supports the portion of Statement G which provides

 that the filing must identify the GSR component of interruptible

 transportation revenue as a "transition cost." 

 The Industrials suggest standardized customer names or some

 way to correlate data between Statement G and the proposed Index

 of Customers ( 154.111). The Commission does not believe it is 

 necessary to standardize names. Based on our experience, it is

 not difficult to correlate the names used in Schedules G-1 and G-

 2 with those in the Index of Customers.



 Docket No. RM95-3-000 - 101 -

 AGD recommends that Statement G be modified so that

 Statement G is required to be submitted to "all Customers" not

 just to "all affected customers." Under the revised regulation,

 all customers who are customers of the pipeline on the date of

 the filing of the rate case will receive an abbreviated form of

 the filing. Any customer who has a standing request for service

 of the full filing will receive the full filing, including the

 summary Statement G on the date of the filing. Any other

Page 106
Order No 582.txt

 customer may request service of the complete filing and receive

 the complete filing (with the summary Statement G) within 48

 hours of the request.

 INGAA proposes that Statement G only include totals by rate

 schedules and zones. Some pipelines proposed that detailed

 information only be provided for customers that pay the maximum

 rate and that aggregate information would be provided for

 customers that receive discounts.

 Panhandle, Great Lakes, and ANR/CIG state that the proposed

 regulations governing Statement G significantly expand the

 previous requirements and increase the burden on pipelines,

 without demonstrable benefit.

 CPCo and MGSCo believe that the Commission's proposed

 Statement G would require pipelines to reveal commercially

 sensitive information. Panhandle, INGAA, ANR/CIG, Great Lakes,

 and El Paso state that pipelines should not be required to

 disclose commercially sensitive information in Statement G. CPCo

 and MGSCo believe that the Commission proposal should be modified



 Docket No. RM95-3-000 - 102 -

 such that information that is truly commercially sensitive need

 not be provided until a protective agreement covering such has

 been signed by the parties. 

 The Agreement filed by INGAA and AGD contained a detailed

 alternative structure for Statement G. ANR/CIG also suggested

 revisions to the Commission's proposed Statement G reporting

 requirements.

 In light of the above comments, proposed Statement G has

 been modified substantially. The Commission has required a

Page 107
Order No 582.txt

 summary Statement G to provide enough information to begin the

 analysis of the rate case. However, the customer specific

 information is not required immediately; and, is only served on

 customers requesting service. The Commission has not adopted

 commenters' position that such detailed information is

 generically confidential, privileged, or proprietary. Rather,

 the Commission concludes that, in the ordinary course, such

 information should be publically available. 

 In support of the proposal in the AGD and INGAA Agreement

 that contracts, discount information, and specific customer

 information relating to revenue impact and billing determinants

 would be submitted under seal, the Agreement stated "AGD and

 INGAA agree that the information discussed below is commercially-

 sensitive and that its publication in mandatory filings may be

 detrimental to competition. AGD and INGAA believe that the goals

 of the regulatory process can be achieved without divulging



 Docket No. RM95-3-000 - 103 -

 information which is commercially-sensitive." 63/

 The request that portions of the filing be treated as

 confidential on a generic basis finds little support in either

 the statutory framework or precedent. The NGA, on its face in

 section 4, requires pipelines to file contracts when seeking a

 rate change. Section 4(c) of the NGA provides that the pipeline

 shall file, under the Commission's regulations, and shall:

 keep open in convenient form and place for public

 inspection, schedules showing all rates and

 charges for any transportation or sale subject to

 the jurisdiction of the Commission, and the

 classifications, practices, and regulations

 affecting such rates and charges, together with

 all contracts which in any manner affect or relate

 to such rates, charges, classifications, and

 services.

Page 108
Order No 582.txt

 If confidentiality is required as to any specific contract,

 Section 388.112 of the Commission's regulations sets forth the

 procedure to be followed. 64/.

 With the introduction of competition in the interstate

 sale of gas, the Commission has sustained the claim of

 confidentiality with respect to price information where the party

 lacks market power, because the information could be used by

 competitors to undercut that party's bids. There is a different

 answer for transportation-related information. Unless proven

 

 63/ Agreement at 2. In the initial comments, INGAA had expressed

 similar objection to public disclosure, stating that the

 "proposed disclosures would undermine the pipelines'

 competitive position and would eventually stymie the same

 market competition that the Commission strives to foster". 

 See pp. 3, 6, and 9. 

 64/ 18 CFR 388.112. 



 Docket No. RM95-3-000 - 104 -

 otherwise, there is a presumption that a pipeline still retains a

 substantial degree of market power in the transportation of

 natural gas. Therefore, the Commission cannot presume the

 existence of competition for transportation. When the claim of

 confidentiality has been asserted in Commission proceedings, the

 Commission has required the claim to be supported with

 specificity, rather than with vague and speculative allegations

 of competitive harm, 65/ since the Commission must "balance

 the need for public disclosure against the harm caused by release

 of the information." 66/ The Commission intends to apply this

 standard to the customer-specific information in Schedule G.

 18. Schedule G-1, Base Period Revenues 

 Schedule G-1 requires data on actual revenues for all

Page 109
Order No 582.txt

 services and customers, rather than solely on sales revenues, as

 currently required by Schedule G(a), or solely aggregate

 transportation revenues, as currently required by Schedule G(c). 

 Schedule G-1 also requires: (1) identification of revenues by

 customer, by rate schedule, by month, and by billing determinant

 (not adjusted for discounting) which is similar to the data

 currently required by Schedule G(e) fifth paragraph; (2) separate

 identification of revenues for short-term firm transportation

 services; (3) capacity release information; (4) an identification

 of affiliated customers; and (5) identification of rate

 schedules, where revenues are credited as currently required by

 

 65/ Trunkline Gas Company, 49 FERC 61,227 (1989). 

 66/ ANR Pipeline Co., 65 FERC 61,280 at 62,305 (1993) (ANR). 



 Docket No. RM95-3-000 - 105 -

 Schedule G(c).

 NI-Gas supports Schedule G-1, specifically the reporting of

 the actual revenues, including actual billing determinants.

 Panhandle states that base period data on revenues (Schedule G-1)

 serve no purpose in the design of rates and should not be

 required because rates are designed using base period volumes as

 the starting point for determining an appropriate level of test

 period volumes, but base period revenues are not used.

 The Commission disagrees. This information is needed to

 compare the level of revenue change. The Commission notes that

 Schedule G(1) reduces the burden by nearly half, compared to the

 current regulations, because a pipeline is no longer required to

 show existing rates with test period volumes and proposed rates

 with base period volumes. 67/ 

Page 110
Order No 582.txt

 The Commission clarifies, as requested by AGD, that the

 reference to "associated revenues" in Schedule G-1 in connection

 with released capacity relates only to the pipeline's collection

 of commodity charges received from replacement shippers. 

 Pacific Northwest suggested that the Commission clarify that

 the "separate identification" of capacity release transactions

 means that pipelines are to group together base period services

 which were rendered for replacement customers, and indicate which

 customers released the capacity to the replacement customer. The

 Commission is not requiring the separate identification of

 transactions for replacement customers. Since "replacement"

 

 67/ See current 154.63, Statement G(a) and (b). 



 Docket No. RM95-3-000 - 106 -

 customers have become "primary" customers of the pipeline, they

 will be identified in the same manner as all other "primary"

 customers. The Commission is, however, requesting summary

 information in Statement G on capacity release revenues and

 throughput in order to evaluate the effect of the secondary

 market on the level of other services, such as interruptible

 transportation.

 Pacific Northwest suggested changing the fifth sentence to:

 For transportation services provided through released capacity

 during the base period, identify the released usage quantities

 and associated revenues by rate schedule, by contract, by month,

 and totals for the base period, and identify the customer that

 released capacity. The proposed regulation was modified

 similarly to Pacific Northwest's suggestion.

 19. Schedule G-2, Adjustment Period Revenues 

Page 111
Order No 582.txt

 Schedule G-2 requires information similar to that required

 in Schedule G-1.

 Panhandle and Great Lakes state that the requirements of

 Schedule G-2 should be modified as there is no need to provide

 the requested information by customer since rates are designed by

 rate schedule, not by customer. This suggestion was not adopted. 

 The Commission believes that the customers should know the

 specific impact of the changes. Further, the Commission

 observes, this requirement is contained in the current

 regulations and we have not been persuaded that a change is

 necessary. 



 Docket No. RM95-3-000 - 107 -

 Williston states that Schedule G-2 requires that billing

 determinants not be adjusted for discounting. Williston believes

 that this could cause a distortion in the calculation of proper

 rate levels. However, such an adjustment is contemplated in

 Statement J-1. The purpose of Statement G is to show actual and

 estimated throughput levels, unadjusted for discounting.

 ANR/CIG state that Schedule G-2 does not necessarily allow

 for the validation of either cost-of-service data or proposed

 rate design, as there is no linkage between designed and

 discounted rates. 

 The Commission finds that this data is necessary because

 revenue should match the cost-of-service plus any surcharges.

 ANR/CIG also state that Schedule G-2 requires a level of

 detail which is simply not available with regard to discounted

 services. The Commission believes that if a pipeline's rates

 reflect discounted services, detailed information to support such

Page 112
Order No 582.txt

 discounts must be provided. The Commission believes that

 discounting information is available if the pipeline's proposed

 rates simply reflect a continuation of the discounts experienced

 in the base period. If, however, the pipeline is projecting

 different types of discounting, the pipeline must provide data to

 support such discounting in Schedule G-2. Indeed, the

 Commission believes that this information is necessary for the

 pipeline to meet its burden of proof that proposed rates are just

 and reasonable. 

 Third, ANR/CIG state that the requirements of Schedule G-2



 Docket No. RM95-3-000 - 108 -

 exacerbate the confidentiality concerns raised by the industry

 both at the pipeline and shipper levels. Instead, ANR/CIG

 suggest that the Commission should require a revenue study using

 maximum rates and design determinants. The Commission's position

 on confidentiality is discussed supra.

 Columbia states that including the effect of rates that may

 have been in effect for a limited period of time during the base

 period will only serve to distort the revenue comparison. The

 Commission disagrees. The base period is a snapshot of a period

 of time and provides a necessary reference point for determining

 the rates for a subsequent period.

 Great Lakes states that monthly adjustment period

 information would not be useful and should not be reported in

 Schedule G-2. The Commission disagrees. This monthly

 information is currently required by 154.63(f), Statement G(b), 

 and is used in determining trends in throughput and whether

 seasonal rates are appropriate. There has been no persuasive

 argument to change this requirement.

Page 113
Order No 582.txt

 Pacific Northwest contends that pipelines should not be

 required to attempt to identify expected future capacity releases

 by each customer that is expected to release capacity; rather,

 the pipeline should be required only to identify a total expected

 level of capacity release activity based on experience in the

 base period as adjusted. The Commission disagrees. The base

 period identifies capacity release data by customer and the

 pipeline must justify any changes to base period services in



 Docket No. RM95-3-000 - 109 -

 order to adequately explain any proposed changes in rates. If

 the test period data is not provided with the level of detail

 required, customers would not be able to challenge the pipeline's

 projections with respect to their deliveries.

 NI-Gas and Pacific Northwest ask the Commission to clarify

 that pipelines are expected to include in the adjustment period a

 representative level of services for which there may not be firm

 contracts with primary terms extending to the test period,

 including interruptible and short-term firm services. The

 Commission believes this is already required by the regulations.

 Pipelines have always had the burden to propose throughput based

 on actual experience adjusted for known and measurable changes. 

 If the pipeline provided interruptible and short-term firm

 services during the base period, but did not include

 representative levels for such services in the test period

 projections, it must justify the difference in Schedule G-3. 

 Pacific Northwest suggests the Commission change the fifth

 sentence to read as follows: Show separately any projected or

 representative level of released capacity usage quantities

Page 114
Order No 582.txt

 (Unadjusted for discounting) and associated revenues by rate

 schedule, by contract, by month, and totals for the projected

 period. The Commission believes that the proposed language

 change improves the text of the regulation. Accordingly, this

 suggestion has been adopted. 

 NGSA states that to reconcile cost allocation and revenue

 recovery, surcharge revenues should be separately shown for each



 Docket No. RM95-3-000 - 110 -

 applicable surcharge; to reduce the filing burden, Schedules G-1

 (Base Period Revenues) and G-2 (Adjustment Period Revenues)

 should show total volumes and revenues by month, rate schedule

 (separately showing overrun and capacity release), rate charged

 and zone of receipt/zone of delivery (or other category by which

 rates are charged). NGSA asserts that information by customer

 should be available only upon specific request. These comments

 are supported by Chevron and generally supported by IPAA. The

 Commission notes that Statement G(A)(1) requires the separate

 identification of revenues from surcharges. Further, as noted

 earlier, the revised regulations only require the service of

 customer-specific information contained in Schedules G-1 and G-2

 upon request. 

 Arizona Directs pointed out that proposed 

 154.313(j)(6)(ii) appears to apply to all of Statement G and, 

 if so, it should be separately stated. Referring to Schedules G-

 1 and G-2, Arizona Directs states that this data is extremely

 useful and should continue to be provided by pipelines in their

 rate filings. Customers should not need to make a specific

 request to obtain this information. Arizona Directs states the

 specificity of (Statement G) and other filing requirements will

Page 115
Order No 582.txt

 serve to eliminate much current confusion. Arizona Directs'

 comments have caused us to reconsider the need for this

 requirement. We have deleted the proposed 154.313(j)(6)(ii) 

 from the final rule, and have moved the subject language to the

 front of Statement G. As explained earlier, parties may request



 Docket No. RM95-3-000 - 111 -

 Schedules G-1 and G-2 from the pipeline to obtain this

 information.

 The Industrials state that revenue from transportation

 services should be shown by delivery point and/or zone to enable

 interested parties to determine if portions of a pipeline's

 system have become no longer used and useful and to conduct the

 appropriate geographic market analyses if a pipeline argues that

 it should be subject to non-cost-based ratemaking. The

 Commission believes that these suggestions are too burdensome. 

 These regulations are only intended to cover filing requirements

 for cost-based rates.

 20. Schedule G-3 

 Schedule G-3 is a description of adjustments to the base

 period. Schedule G-3 replaces current Schedule G(e) third

 paragraph. Schedule G-3 requires quantification of the impact of

 each proposed change rather than providing only throughput and

 contract level differences. The Commission believes this

 requirement is necessary in order for a pipeline to meet its

 burden of proof with respect to changes to billing determinants. 

 This schedule should reduce follow-up data requests and shorten

 the time required to analyze and evaluate the pipeline's proposed

 changes.

Page 116
Order No 582.txt

 ANR/CIG and Great Lakes state that the proposed Schedule J-1

 seeks the same information as G-3, but on a summary level. 

 ANR/CIG suggests moving the requirements of Schedule G-3 to

 Schedule J-1 in order to place the supporting calculations with



 Docket No. RM95-3-000 - 112 -

 the required summary and enhance the use of this data. 

 Statement G shows throughput data while schedule J-1 shows

 the billing determinants used to develop rates. As explained at

 Schedule J-1, the two sets of data do not always coincide. Thus,

 a reconciliation is needed. Because the two statements serve

 different purposes, the Commission will not require that they be

 consolidated. However, Proposed Schedule G-3 has been modified

 and no longer refers to "discounting."

 Columbia states that this regulation could be interpreted to

 require that a determination be made as to the impact of each

 change in the cost-of-service on each customer. The Commission

 clarifies that the intent is not to require a determination to be

 made as to the impact of each change in the cost-of-service on

 each customer but rather to explain and justify each adjustment. 

 AGD recommends that Schedule G-3 information be reported

 only by pipeline rate zone and by rate schedule. This proposal

 was not adopted as the NGA requires that the pipeline provide

 information necessary to meet the burden that proposed rates are

 just and reasonable. The required information is a necessary

 part of this proof.

 NI-Gas supports Schedule G-3, specifically the requirement

 that test period adjustments to base period billing determinants

 be explained.

 21. Schedule G-4, At-risk Revenue 

Page 117
Order No 582.txt

 Schedule G-4 compares revenues generated by "at-risk"

 facilities to the cost of those facilities, as specified in 



 Docket No. RM95-3-000 - 113 -

 154.310.

 Columbia contends that the at-risk revenue requirements of

 proposed Schedule G-4 are redundant and unnecessary given the

 present requirements for certification of new facilities and

 expansions. The Commission disagrees. The Commission believes

 that this requirement is an important one providing a single list

 in a rate case filing of all facilities that have an "at-risk"

 provision. This will ensure that the Commission and all parties

 are able to thoroughly evaluate whether the at-risk condition has

 been satisfied or should continue to apply to the pipeline.

 NI-Gas argues this schedule should specify the reasons why

 the pipeline has assigned the particular revenues to the at-risk

 facilities, rather than to general unsubscribed system capacity. 

 This suggestion was not adopted because Schedule G-4 requires the

 pipeline to provide at-risk revenues by customer by rate

 schedule. If parties disagree with the pipeline's assignment of

 revenues to specific customers or rate schedules, they may

 challenge the pipeline on this issue in the litigated phase of

 the rate proceeding. Pipelines are encouraged to address this

 issue at the time they file to remove their at-risk conditions. 

 22. Schedule G-5, Other Revenues 

 Schedule G-5 collects revenue data regarding the sale of

 products extracted from natural gas and other activities reported

 in Accounts 487-495. New requirements to quantify and explain

 changes to base period actuals and provide information about

Page 118
Order No 582.txt

 releases, penalties, cash outs, other imbalances, and exit fees



 Docket No. RM95-3-000 - 114 -

 are incorporated in this schedule. Revenues from miscellaneous

 services still must be reflected in Account 495. Further,

 pipelines must explain the circumstances relating to revenues

 from "special" types of "X" rate schedules. Revenues from the

 release of Account 858 capacity must be reflected as a credit to

 Account 858 in both Schedule G-5 and Schedule I-4.

 Panhandle maintains that the information required by 

 proposed Schedule G-5 should only be required of those pipelines

 who do not have separate tariff provisions dealing with the

 disposition of cashout revenues, exit fees, and penalty revenues. 

 The Commission disagrees. The items identified by Panhandle

 would apply to some items included in Account 495 - Other

 Revenues. However, Schedule G-5 also requires information on

 sales of products extractions, revenues from gas processed by

 others, incidental gasoline and oil sales, rents from gas

 properties and interdepartmental rents (Accounts 490-494). Not

 requiring the information if a pipeline has a tariff provision on

 a non-related item will prevent the Commission and parties from

 receiving an accurate portrait of the pipeline's revenues for

 base and test period. Further, theinformation on all of the

 accounts is necessary for auditing purposes. The requirement is

 not intended to modify the pipeline's existing tariff provisions

 on releases, cashouts, imbalances or exit fees.

 23. Statement H-1

 Columbia and INGAA states that the proposal to identify

 specific months when a proposed test period adjustment will occur



Page 119
Order No 582.txt

 Docket No. RM95-3-000 - 115 -

 serves no purpose in Staff's rate analysis and the company would

 be required to speculate an event which places upon the company

 an unnecessary burden with no probable benefit or purpose and

 should be eliminated. The Commission agrees with Columbia and

 INGAA s comments and has eliminated the requirement to identify

 the month of the proposed test period adjustment.

 The Pacific Northwest Commenters suggest that if the

 Commission intends to deal with rate case issues expeditiously,

 the Commission should require a pipeline to provide more

 adjustment information on Operation and Maintenance Expenses,

 than required in the proposed Statement H-1 description. 

 Proposed Statement H-1 requires a detailed explanation of

 the basis for each adjustment with supporting workpapers. If

 additional information is necessary, the parties can, through a

 data request, obtain the information. We want to reduce the

 filing burden, not increase it by requiring the filing of more

 adjustment information. 

 24. Schedule H-1(1)

 AGD recommends that expenses associated with project

 development including engineering, administrative and legal, and

 market development expenses be separately itemized by project. 

 AGD is concerned that a pipeline may be accruing expenses over

 its cash expenditures. AGD recognizes that some accruals may be

 in order, however, it seeks data that will allow customers to

 test whether a pipeline is inflating its expenses in order to

 increase its rates. AGD recommends that the Commission require a



Page 120
Order No 582.txt

 Docket No. RM95-3-000 - 116 -

 pipeline to reconcile its base period expenses with actual cash

 expenditures as a part of Schedule H-1(1).

 The Commission agrees with AGD's recommendation to require a

 pipeline to reconcile the base period expenses to actual cash

 expenditures. Proposed Schedule H-1 requires the disclosure and

 explanation of any special accruals and will be modified to

 require identification of all accruals which will met the AGD s

 recommendation.

 25. Schedules H-1(1)(c), H-1(3)(a), and H-1(3)(b)

 Northwest/Williams recommends that Schedules H-1(1)(c), 

 H-1(2)(a), and H-1(2)(b) should only be submitted by a pipeline

 utilizing an authorized PGA mechanism.

 The Commission rejects Northwest/Williams' recommendation. 

 Compressor fuel usage is reflected on these schedules and is used

 to determine the appropriate fuel retention percentage whether or

 not a pipeline has an authorized PGA mechanism.

 Williston states that because fuel costs are recovered by a

 separate mechanism under a pipeline's existing tariff such costs

 should not be subject to review. Therefore, Schedule H-1(1)(c)

 should be eliminated. However, Williston contends volume data

 should be provided for gas balance purposes.

 The Commission must review all fuel costs, whether recovered

 in a separate mechanism or not. Fuel usage is an important

 element of a pipeline's costs and though these costs may be

 tracked, a pipeline's tracker may require a redetermination of

 the base level in a rate proceeding. This data is reflected on



 Docket No. RM95-3-000 - 117 -

Page 121
Order No 582.txt

 Schedule H-1(1)(c) and therefore, can not be eliminated. Since

 both volumes and costs are recorded in the fuel accounts, the

 data is readily available. Thus, Schedule H-1(1)(c) will

 continue to reflect both volumes (quantities) and costs

 (expenses).

 NGSA recommends that the following be grouped together and

 reconciled with purchased gas costs and other fuel reimbursement: 

 Schedule H-1(1)(c) expenses and associated quantities applicable

 to Account Nos. 810, 811, and 812; Schedule H-1(3)(a) accounts

 used to record fuel use or gas losses; and Schedule H-1(3)(b)

 account used to record other gas supply expenses. NGSA maintains

 this modification would allow pipeline gas use to be better

 understood and tracked.

 We agree with NGSA that these schedules could be grouped

 together. However, we would prefer not to mix the fuel use

 schedule with the system gas reimbursement and exchange gas

 schedules. Since both Proposed Schedules H-1(3)(a) and (b)

 present primarily system gas transactions, we will combine them

 into a new schedule incorporating the same reporting

 requirements. Proposed Schedule H-1(1)(c) which reflects the

 company-used gas will not be revised.

 Columbia states with the advent of Order No. 636 and the

 elimination of the merchant function throughout the industry, the

 need to retain gas for operations is nearly universal. Because

 the rate that shippers pay for the gas that is ultimately

 retained by a pipeline varies, the rate assigned for reflecting



 Docket No. RM95-3-000 - 118 -

 an expense for gas used on the system in Schedules H-1 and 

Page 122
Order No 582.txt

 H-1(1)(c) is not meaningful for purposes of reporting expenses in

 these schedules.

 The Commission agrees with Columbia. However Schedule 

 H-1(1)(c) does not require the rate assigned for reflecting an

 expense for gas used on the system. Only the costs (expenses)

 and volumes (quantities) are be required.

 26. Schedules H-1(2)(a) and H-1(2)(b)

 These schedules were required for pipelines with Commission

 approved PGA clauses in their tariffs. Since these schedules

 would apply to only two pipelines, there is no reason to maintain

 them in the regulations. The data reported on these schedules

 will be gathered through the data request process. Thus,

 Schedules H-1(2)(a) and H-1(2)(b) are deleted. All subsequent

 schedules will be renumbered.

 27. Schedule H-1(2)[Proposed Schedule H-1(3)]

 Columbia recommends that Schedule H-1(3) be eliminated

 because the data is also provided in FERC Form No. 2.

 The Commission disagrees with Columbia that the data

 reflected on Schedule H-1(2) in provided in FERC Form No. 2. The

 data in the FERC Form No. 2 is reported on a calendar year basis

 and may not reflect the base period of a proposed rate filing.

 28. Schedule H-1(2)(j)[Proposed Schedule H-1(3)(k)]

 NGSA recommends that proposed Schedule H-1(3)(k) be expanded

 under (iv) to require a pipeline to: (1) document and demonstrate

 the derivation of the allocation bases used to allocate costs



 Docket No. RM95-3-000 - 119 -

 among affiliated companies; (2) identify (by account number) all

 costs paid to, or received from affiliated companies which are

 included in a pipeline's cost-of-service for both the base and

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Order No 582.txt

 test periods; and (3) explain each test period adjustment to base

 period actuals for intercompany costs included in the cost-of-

 service. NGSA considers this information necessary where a

 pipeline has affiliated gas related companies providing non-

 jurisdictional services (e.g., marketing and gathering).

 The Commission recognizes that NGSA's recommendations would

 provide valuable information on the non-jurisdictional services

 of a pipeline. As recommended by NGSA, the language in paragraph

 (iv) of Schedule H-1(2)(j) will be modified to incorporate NGSA's

 recommendations (1) and (2). Statement H-1 requires an

 explanation of all adjustments, and therefore, NGSA's

 recommendation (3) is not necessary.

 The Pacific Northwest Commenters recommends that the

 Commission ensure that Schedule H-1(3)(k) or a separate schedule

 provides: (1) complete and clear disclosure of all corporate

 overheads allocated to a pipeline; (2) a full explanation of the

 service provided; (3) a demonstration that such service is not

 duplicative of functions performed by the pipeline itself; and

 (4) the savings that result from sharing such services with other

 corporate affiliates. In addition, the Pacific Northwest

 Commenters recommend that where a pipeline uses an allocation

 formula, the pipeline must show all calculations using the

 formula.



 Docket No. RM95-3-000 - 120 -

 Pacific Northwest Commenters's recommendations raise a valid

 area of concern regarding pipelines' overhead allocation. 

 However, requiring a pipeline to provide the requested level of

 detail would be extremely labor intensive and it would be

Page 124
Order No 582.txt

 difficult for a pipeline to determine the savings without a

 costly study. We will clarify our instructions to incorporate

 language requiring a complete and clear disclosure of all

 corporate overhead allocated to the company with calculations

 underlying all allocation formulas.

 AGD states in order to determine how joint costs are

 allocated between a pipeline and its affiliated entities, the

 Commission should clarify its regulations by declaring that a

 pipeline bears the burden of proving that all charges from

 affiliates and all overhead charges are just and reasonable,

 including per book amounts. AGD further recommends that a

 pipeline's failure to fully support charges from affiliates and

 overhead allocations should be grounds for summary rejection of

 any claimed amounts, including amounts taken from its books.

 The Commission agrees with AGD and clarifies that a pipeline

 bears the burden of proving that all charges from affiliates and

 all overhead charges are just and reasonable. However, AGD's

 recommendation for summary rejection of any claimed amounts would

 be prejudging a pipeline s case prior to a appropriate hearing

 before this Commission. The Commission disagrees with this

 recommendation.



 Docket No. RM95-3-000 - 121 -

 Columbia and INGAA state that this schedule is voluminous

 and usually the only item of importance is overhead allocations,

 which are detailed on Schedule H-1(3)(f) (Account 923). They

 recommend that Schedule H(1)-(3)(k) should reflect only total

 amounts, not monthly amounts, and should reflect only major

 intercompany transactions. This can be accomplished by

 increasing the minimum dollar level reported to $500,000.

Page 125
Order No 582.txt

 Intercompany transactions affect many operating accounts,

 not, just Account 923. However, to the extent details of

 intercompany transactions affecting Account 923 are provided in

 Schedule H-1(2)(j), pipelines may group all such transactions

 together in Schedule H-1(2)(e). The Commission must scrutinize

 affiliate transactions, particularly those with marketing

 affiliates. Therefore, a high threshold is not appropriate.

 Panhandle states that a complete explanation and workpapers

 supporting each adjustment to base period expenses are already

 required by instructions for Statement H-1. There is no need to

 report these same adjustments separately in Schedule H-1(3)(k). 

 The proposed regulation does not provide any justification or

 explanation for this added burden on the filing company.

 Proposed Schedule H-1(3)(k) is a workpaper reporting the

 details of these intercompany and interdepartmental transactions,

 by account. Statement H-1 reports only the actual book balances

 for operating expense accounts and proposed adjustments to these

 accounts. The account details are necessary to determine the

 appropriateness of the individual charges, which is only



 Docket No. RM95-3-000 - 122 -

 available on this schedule. Thus, the Commission will not revise

 Schedule H-1(2)(j) to reflect Panhandle's recommendation.

 Panhandle states that the additional requirement to report

 charges or credits to associated or affiliated companies should

 not be adopted since the amounts charged to affiliates are not

 included in O&M Expenses for the cost-of-service to the pipeline

 and are irrelevant to a determination of the pipeline's rates. 

 Panhandle asserts further that the reporting of this data will

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Order No 582.txt

 add significantly to a pipeline's burden without providing any

 demonstrated need for the data.

 The Commission disagrees with Panhandle. Credits for

 charges to affiliates reduce the pipeline's operating expenses

 and therefore, are relevant to rate determinations. This

 requirement to report charges or credits to associated or

 affiliated companies is not a new requirement, and Panhandle has

 not provided a sufficient argument to change this requirement.

 29. Schedule H-1(2)(k)[Proposed Schedule H-1(3)(l)]

 Panhandle states that the details of all lease payments over

 $500,000 are not required by Order No. 636, nor does this data

 appear to be required by any current articulated ratemaking

 policy of the Commission. Panhandle states that the Commission

 is imposing a significant new reporting burden without an

 explanation of why the information in Schedule H-1(3)(k) is

 needed or how it is significant. Panhandle states that the

 requirement should be deleted or limited to leases applicable to

 gas operations. The Commission clarifies that this schedule is



 Docket No. RM95-3-000 - 123 -

 for reporting only the leases applicable to gas operations.

 30. Schedule H-2(1)

 Northwest/Williams states that the information included on

 Schedule H-2(1) can be found on other statements or schedules.

 Williston notes that Schedule H-2(1) rarely, if ever, draws

 inquiry. Williston believes the information on this schedule

 serves no regulatory purpose and should be deleted.

 The Commission s disagrees with Northwest/Williams and

 Williston that the information on Schedules H-2(1), H-3(3), and

 H-3(4) are not useful in evaluating a rate filing or serves no

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Order No 582.txt

 regulatory purpose. Schedules H-2(1) provides the reconciliation

 of depreciable plant to the gas plant reflected in Schedule C-1. 

 The Commission is unaware of this information being available in

 another schedule.

 31. Statement H-3

 NGSA recommends that Proposed 154.305, Tax Normalization, 

 be incorporated into the instructions for income taxes under 

 154.312, Statement H-3. The Commission agrees with NGSA and 

 modified Statement H-3, accordingly. 

 32. Schedules H-3(1)-(3)

 Columbia avers that Schedules H-3(1) through (3) are rarely

 relied upon and should be eliminated and asks that the Commission

 clarify the exact intent of this schedule with respect to the

 proposed changes to 154.306(d)(2). 

 INGAA states that Schedule H-3(1) is seldom used in rate

 analysis and should be deleted from the filing requirements.



 Docket No. RM95-3-000 - 124 -

 Columbia and INGAA states that virtually all interstate gas

 companies utilize "full normalization" concept in computing

 income taxes, therefore no differences exist and Schedule H-3(2)

 should be deleted from the filing.

 Northwest/William states that Schedule H-3(3) is not useful

 in evaluating a rate filing. Williston notes that Schedule 

 H-3(3) rarely, if ever, draw inquiry. Williston believes the

 information on this schedule serve no regulatory purpose and

 should be deleted.

 Schedules H-3(1) was intended to report the reconciliation

 of book and taxable net income for a pipeline. The data as

Page 128
Order No 582.txt

 reported rarely reflects the same time period as the base period

 of the rate filing. Thus, we find the information has limited

 use in the overall analysis by our staff. Therefore, we have

 deleted Schedule H-3(1).

 Proposed Schedule H-3(2) had required reporting the

 differences between book and tax depreciation on a straight-line

 basis and the excess of liberalized depreciation for tax

 purposes. As noted by INGAA, most pipelines utilize the "full

 normalization" concept in computing income taxes, therefore no

 differences exist. Thus, the Commission will delete Schedule H-

 3(2) in the final rule.

 Proposed Schedule H-3(3)[New Schedule H-3(1)]reflects the

 state income taxes paid during the current and/or previous year

 covered by the test period. This is the only schedule of a rate

 filing where state income taxes paid by state are reflected. A



 Docket No. RM95-3-000 - 125 -

 thorough evaluation of the state tax rates, allocation factors,

 etc. is necessary to complete our analysis of a rate filing. 

 33. Schedule H-3(4)

 Columbia recommends that the regulatory asset or liability,

 net of deferred tax amounts, be included in a reconciliation of

 Schedule H-3(4) or a workpaper be established to support the

 calculation of the regulatory asset or liability on Schedule B-2.

 The Commission agrees with Columbia that the regulatory

 asset or liability net of deferred tax amounts should be included

 in a reconciliation of Schedule H-3(4) or as a workpaper to

 support the calculation if included on Schedule B-2, if recovery

 of these costs are included in the computation of rate base. 

 However, the gross amounts should also be included. 

Page 129
Order No 582.txt

 Williston notes that Schedule H-3(4) rarely, if ever, draws

 inquiry. Williston believes the information on this schedule

 serve no regulatory purpose and should be deleted.

 Schedule H-3(4) presents accumulated deferred income taxes

 for the latest reporting period reflected on Statement B, Rate

 Base. The information reported on this schedule is vital for the

 determination of a pipeline s appropriate rate base level and

 will not be deleted. Proposed Schedule H-3(4) is renumbered

 Schedule H-3(2).

 34. Schedule H-4

 INGAA states that the value of identifying the amounts

 expended or accrued during the rate period would not be

 comparative. This is so because there is usually an overlapping



 Docket No. RM95-3-000 - 126 -

 of a payment year and the reported year in a rate filing. 

 Proposed Schedule H-4, except for editorial revisions, is

 identical to the prior regulations. INGAA's arguments have not

 persuaded us that there is no longer a need for this information

 to be reported. The amounts reflected on this schedule provide

 the Commission with a beginning point in the overall analysis of

 other taxes by furnishing the expended and accrued taxes for the

 base period. 

 35. Schedule I-1, Functionalization of Cost-of-service 

 Schedule I-1 replaces current Statement I (Allocation of

 overall cost-of-service). The information on jurisdictional and

 nonjurisdictional sales allocation is eliminated as no longer

 needed. 

 Schedule I-1 (c) requires a pipeline that maintains its

Page 130
Order No 582.txt

 records by zones and proposes a zone rate methodology to provide

 functionalized costs for each zone. NGSA suggests that Schedule

 I-1 (c) should only be required for pipelines which separate

 their cost-of-service by zones. This is already the case. 

 Section 154.310 requires a cost-of-service by zone only if a

 pipeline maintains records of costs by zones and proposes a zone

 rate methodology based on these costs. (See the discussion of 

 154.310.) 

 NGSA also states that on Schedule I-1 (d), pipelines should

 be required to show the basis for allocating all costs (A&G,

 working capital) among functions. This showing will be required

 by the new regulations as it is required by the current



 Docket No. RM95-3-000 - 127 -

 regulations. 

 36. Schedules I-2(i) and (ii) 

 Schedules I-2(i) and (ii) replace present Schedule I-2. 

 Schedule I-2(iii) requires an explanation of all changes in

 classification from the pipeline's currently effective rates. 

 This information is required by current Schedule K-2, but is

 often difficult to distinguish from other information.

 INGAA, ANR, and CIG state that in Schedule I-2,

 classification of administrative and general expenses by account

 serves no useful purpose in rate analysis. Columbia notes that

 the classification of A&G costs by account is not useful if the

 pipeline allocates on a direct labor basis because the

 classification is fixed and recoveries occur through the demand

 charge. The Commission disagrees. A&G costs by account, are

 used to determine whether costs should be allocated by plant or

 direct labor under the Kansas-Nebraska method. Accordingly, the

Page 131
Order No 582.txt

 proposed requirement to provide A&G costs by account has not been

 removed.

 NGSA states that Schedule I-2 should require the

 classification of revenue credits by account. Revenue credits

 generally include Accounts 490-495. The amounts reflected in

 several of these accounts (such as Account 492-Incidental

 Gasoline and Oil Sales) would ordinarily be classified as

 variable costs. However, the revenues from Account 493-Rent From

 Gas Property would be classified as a fixed cost. Thus, a

 breakout of the classification of revenue credits by account is



 Docket No. RM95-3-000 - 128 -

 needed. The Commission modified proposed Schedule I-2

 accordingly.

 37. Schedule I-3, Allocation of Cost-of-Service 

 Schedule I-3 replaces current Schedule J. Schedule I-3(ii)

 bridges the gap between the cost-of-service and rates. The

 information required is now filed under current Schedule K-1. 

 Schedule I-3(ii) follows a more logical order. It also

 recognizes that there are often several allocation steps before

 rates are actually calculated. Schedule I-3(iii) requires the

 formulae and allocation determinants. Schedule I-3(iv) requires

 an explanation of any changes from the current methodology, as is

 required under current Schedule K-2.

 38. Schedule I-4, Transmission and Compression of Gas by Others

 (Account 858) 

 Schedule I-4 replaces current Schedule I-4. The revisions

 reflect current operations. Schedule I-4(i) requires information

 on the expiration date of each contract with an upstream

 pipeline. This will provide the Commission with information

Page 132
Order No 582.txt

 about the status of contracts. Schedule I-4(iii) requires the

 pipeline to report monthly usage volumes and monthly costs. 

 Schedule I-4(v) requires minimal information about capacity

 release. It does not request any information on the identity of

 the contracting party. The information on revenues for releases

 is necessary to ensure that the pipelines' customers that pay the

 Account 858 costs receive a credit for revenue from capacity

 releases made by the pipeline of this upstream capacity.



 Docket No. RM95-3-000 - 129 -

 AGD states that Schedule I-4 should require the reporting of

 rates that are in effect subject to refund and a statement of

 last approved rates. AGD avers that the additional information

 will notify parties of any refund contingencies reflected in the

 pipeline's Account 858 costs and will provide a basis for the

 Commission to order the flowthrough of refunds to customers. The

 Commission declines to add this administrative burden. Such

 information is not generally required for a rate case.

 Northwest/Williams states that Schedule I-4 is no longer

 needed in an Order No. 636 environment. The Commission

 disagrees. Several pipelines retain capacity on upstream

 pipelines for operational purposes. This statement is needed to

 ensure that the level of such Account 858 costs is appropriate. 

 We note that pipelines that do not retain upstream capacity for

 operational purposes do not need to file this information.

 The Industrial Groups note that proposed Schedule I-4(d)

 required monthly "revenues" but should refer to "costs." The

 regulation has been corrected.

 39. Schedule I-5

Page 133
Order No 582.txt

 Current Schedule I-5 requiring information on meters, is

 deleted. 

 The NOPR had proposed a new Schedule I-5, Three-day peak

 deliveries, to replace current Schedule I-6. However, in light

 of comments and reconsideration, the Commission has determined

 that the information on 3-day peak deliveries is no longer



 Docket No. RM95-3-000 - 130 -

 generally useful in a rate case. 68/ 

 Northwest/Williams notes that, in a restructured

 environment, contract demand or MDQs are the primary basis for

 the design of firm transportation reservation charge, therefore

 the average 3-day peak information is not required for rate

 design for many pipelines. Northwest/Williams is generally

 correct; however, if a pipeline allocates costs on the basis of

 3-day peaks, it must provide the basis for such allocation in

 Schedule I-3(c). 

 40. Schedule I-5, Gas Balance 

 Schedule I-5 replaces current Schedule I-7 with the deletion

 of that schedule's last sentence. 69/

 Williston commented that this schedule should be deleted

 because it does not provide useful information for the design of

 base rates and requires information also required in FERC Form

 No. 2. Williston is mistaken. This schedule shows the

 pipeline's actual and projected physical operations. Such

 information assists the Commission and parties in evaluating

 whether the pipeline's rate design is appropriate for its

 operating characteristics. For example, if transportation

 throughput during the winter is significantly higher than during

 the summer, seasonal rates may be appropriate. Further, FERC

Page 134
Order No 582.txt

 Form No. 2 does not provide test period data. 

 

 68/ Pipelines with non-jurisdictional sales must provide this

 data in Statement J.

 69/ This schedule appeared in the NOPR as proposed Schedule I-6.



 Docket No. RM95-3-000 - 131 -

 41. Statement J, Comparison and Reconciliation of Estimated

 Revenues With Cost-of-service 

 Statement J replaces current Statement K. Statement J will

 provide the same type of comparison as the current schedule,

 except that Schedule-J specifically requires that Schedule G-2

 must be compared to Statement I. Statement J also requires that

 surcharges be reflected and recognizes that they are not derived

 from the cost-of-service, but are jurisdictional revenues. Also,

 discounting adjustments are provided in this statement.

 42. Schedule J-1, Summary of Billing Determinants 

 Schedule J-1 will help correlate the volumes in Schedule G

 to the volumes used to develop rates.

 ANR and CIG state that this schedule seeks the same

 information as Schedule G-3, but on a summary level, therefore,

 the requirements of Schedule G-3 should also apply to 

 Schedule J-1 so that the supporting calculations are provided

 with the summary. Williston states that this schedule duplicates

 existing information in Schedule G and should be deleted. The

 Commission disagrees. Schedule G-3 provides detailed information

 for each proposed adjustment to actual base period billing

 determinants while the information in Schedule J-1 is summarized

 for rate design purposes. Each schedule is retained because each

 serves a different purpose. 

Page 135
Order No 582.txt

 Columbia states that the requirement to include surcharges

 as part of the revenues in Schedule G needlessly complicates the

 reconciliation process. Columbia advocates ignoring surcharges

 of limited duration or those subject to intermittent changes. 



 Docket No. RM95-3-000 - 132 -

 The Commission recognizes that surcharges are not part of

 the cost-of-service; however, surcharge information enables the

 Commission and parties to verify whether discounts are attributed

 to base rates or surcharges consistent with 154.109. 

 AGD states that requirements should be supplemented to

 facilitate reconciliation calculations. AGD recommends requiring

 the pipeline to include a summary by rate schedule and by zone of

 billing determinant adjustments provided in Statement G. The

 Commission disagrees. As stated above, all reconciliations to

 billing determinants in the design of rates, including

 discounting adjustments, must take place in Statement J, not

 Statement G.

 43. Schedule J-2, Derivation of Rates 

 Schedule J-2 replaces current Schedule K-1. Schedule J-2

 more clearly specifies what information is required and requires

 that costs and billing determinants be cross-referenced.

 44. Schedule J-2(iii) 

 Schedule J-2(iii) requires the same information as current

 Schedule K-2.

 Pacific Northwest Commenters states that the Commission

 should expand the requirements to include a full narrative of the

 method used and step-by step calculations for each rate component

 of each rate. The Commission notes that such narratives are

 already required by Schedule G-3 and 154.201(b)(2). 

Page 136
Order No 582.txt

 Columbia seeks clarification that the rate component

 referenced relates to a reservation/usage distinction and not a



 Docket No. RM95-3-000 - 133 -

 distinction based on the individual components of the cost-of-

 service. Columbia's interpretation is correct. 

 NI-Gas suggests that pipelines be required to include

 schedules with Statement I that specify the impact of each

 proposed change in functionalization, classification, allocation

 or rate design. NI-Gas also suggests that the explanation of

 changes in rate derivation required by Schedule J-2 provide the

 impact on shippers of each change. Such impacts and explanations

 are not required under the current regulations and would be too

 burdensome as a generally applicable requirement. Section

 154.201 (b)(2) requires a pipeline to support rate changes with

 step-by-step calculations and a written narrative to allow the

 parties to duplicate the pipeline's calculations. Section

 154.313, Statements I and J, set out guidelines on how a pipeline

 should present its rate case. These requirements should provide

 sufficient information for a party to compute the impact of each

 change. Moreover, as the need arises, additional information may

 be provided through discovery at a hearing.

 The Industrial Groups state that this schedule should

 incorporate the Schedule K-2 requirements verbatim. The

 Commission did not adopt this suggestion because such

 requirements are found in 154.201(b)(2) and so, no change is 

 necessary.

 45. Statement P

 AGD, APGA, Consumers Power, Brooklyn Union, IPAA, JMC,

Page 137
Order No 582.txt

 Michigan, Pacific Northwest Commenters, Columbia Distribution,



 Docket No. RM95-3-000 - 134 -

 LDC Caucus, NDG, SoCal, and UDC support the initial filing of

 Statement P as part of the pipeline's rate filing. Many of these

 commenters note that Statement P is the key element in

 understanding a pipeline's rate filing. The availability of a

 properly prepared Statement P will help the pipeline's customers

 identify the real issues presented by the rate filing in time for

 the issues to be raised in initial interventions and pleadings. 

 In addition, by requiring that Statement P be filed with the rate

 case, the number of protests should be reduced, since intervenors

 will only have to file protests when warranted, rather than

 protectively. IPAA states that filing Statement P with the rate

 case will allow for more expeditious processing of rate cases and

 will shorten the time period during which shippers can be held

 hostage to unjust and unreasonable rates collected subject to

 refund. The LDC Caucus notes that many state Public Utility

 Commissions (PUCs) require Local Distribution Companies (LDCs) to

 file testimony concurrently with their rate cases. Finally,

 Brooklyn Union notes in support of the proposed Statement P

 requirement, that the Commission's regulations require electric

 utilities to file testimony with rate increase filings.

 ANR/CIG, INGAA, NGT and Panhandle suggest, as an

 alternative, that a two-phase filing of Statement P be

 considered. In Phase I, pipelines would file testimony with the

 rate case concerning the rate case issues for which refunds are

 not a remedy. In Phase II, 15 or 30 days later, the pipeline

 would file remaining testimony on the "boiler plate" issues of



Page 138
Order No 582.txt

 Docket No. RM95-3-000 - 135 -

 cost-of-service, billing-determinants levels, rate base, etc. 

 Columbia questions whether filing Statement P with the rate

 case filing has any significant benefit or purpose. Columbia

 supports maintaining the old rule (15-day lag) with respect to

 cost-of-service and rate testimony, but would not object to the

 new rule with respect to issues where rate refunds are not an

 adequate remedy. 

 KNI contends that the extra 15 days presently allowed for

 filing Statement P provides time to develop more comprehensive

 and detailed testimony than would otherwise be produced if

 Statement P had to be submitted concurrently with all other

 schedules. KNI contends that more "polished" testimony is likely

 to reduce discovery requests.

 MRT submits that requiring testimony to be filed

 concurrently with a rate case would create an enormous and

 unnecessary burden on pipelines. If, however, the Commission

 requires Statement P to be filed concurrently, then MRT proposes

 that the Commission take additional actions to reduce the burden. 

 MRT requests that the Commission amend 154.304(a)(1) to 

 lengthen the time from the last day of the base period to the

 filing date from 4 months to 5 months. Alternatively, MRT

 requests that pipelines not be required to file all schedules and

 statements with the rate case. Rather, schedules "which are not

 essential to the Commission's development of a suspension order"

 should be delayed until 15 days after the initial filing.



Page 139
Order No 582.txt

 Docket No. RM95-3-000 - 136 -

 Panhandle is concerned about the requirement that a pipeline

 must be prepared to sustain its burden of proof on the proposed

 changes solely on the basis of the prepared testimony submitted

 with its initial rate case filing. Panhandle states that this

 requirement could be interpreted to require a pipeline to

 anticipate and address every issue which may be raised in the

 rate case. In addition, Panhandle is concerned about the

 proposed regulation could be interpreted to preclude a pipeline

 from filing either supplemental direct or rebuttal testimony to

 address issues raised subsequent to the rate filing. Panhandle

 states that if the proposed regulations on Statement P are

 adopted, they should be clarified to make it clear that the

 pipeline has the right to file both supplemental and rebuttal

 testimony. Panhandle also states that if it is required to make

 its case-in-chief solely on the Statement P evidence, then the

 Staff and intervenors should not be allowed to use actual

 information for the test period as the basis of their testimony

 to show that the pipeline's estimates should be rejected and

 substituted with "better" actual numbers.

 A filing pipeline has the statutory burden to support its

 rates as just and reasonable. The Commission emphasizes that it

 expects pipelines to make their case-in-chief at the outset of

 the case and not rely on supplemental and rebuttal testimony for

 that purpose. However, as a proceeding progresses through the

 hearing process, the need may arise for the pipeline to

 supplement its prepared testimony and to present testimony in



 Docket No. RM95-3-000 - 137 -

 rebuttal to the adverse positions of others. 

Page 140
Order No 582.txt

 m. Section 154.313 Schedules for Minor Rate

 Changes

 The Commission intends that the filing burden for minor rate

 increases and rate decreases be less than that for other rate

 changes. 70/ Minor rate increases usually relate to a few

 schedules and are designed to bring such schedules into harmony

 with general tariff policy, to eliminate inequities, and to

 achieve other formal adjustments, in cases where any increase in

 revenue is subordinate to some other purpose. They include

 changes that are not designed to provide general revenue

 increases such as to offset increased costs or otherwise achieve

 a fair return on the overall jurisdictional business. Increases

 in rates or charges which, for the test period, do not exceed the

 smaller of $1,000,000 or 5 percent of the revenues under the

 jurisdiction of the Commission will be considered minor. A

 change in rate level, no part of which directly or indirectly

 results in any increased charge to a customer or class of

 customers, will also be considered a minor rate change.

 MoPSC recommends that the specific words "rate decrease" be 

 added to 154.313, to clarify what requirements are applicable 

 for rate decrease applications. In addition, MoPSC believes the

 threshold definition for minor rate changes is too broad. MoPSC

 recommends a minor rate decrease be redefined as "a change which

 does not increase a company's revenues by $1,000,000 and does not

 

 70/ This regulation appeared in the NOPR as 154.314. 



 Docket No. RM95-3-000 - 138 -

 directly or indirectly increase a rate or charge to any customer

 by more than 2%". 

Page 141
Order No 582.txt

 Comments concerning the threshold definition were

 considered. However, in light of the probable burden of

 reporting the rate impact to specific customers the threshold was

 not revised.

 NDG states that while the net impact of the "minor" change

 on the pipeline's customers in aggregate may be minimal, the

 impact on individual customers may be significant. NDG proposes

 that the standard for what constitutes a "minor" rate change be

 based on the magnitude of individual customer specific impacts

 resulting from the filing. Thus any rate change which increases

 a single customer's costs by more than the lesser of $250,000 or

 10% of the amount previously being charged for the effected

 services, should be considered to be a major rate change and

 should be required to be supported by the full filing

 requirements.

 The Commission notes that the requirements for rate decrease

 filings should be clarified. These filings must meet the same

 criteria as rate increase filings, i.e., increases or decrease in

 rates or charges which, for the test period, do not exceed the

 smaller of $1,000,000 or 5 percent of the revenues under the

 jurisdiction of the Commission will be considered minor.

 Northern Border states that proposed 154.301, 154.311, 

 and 154.312 appear to have overlooked the ratemaking

 circumstances for pipelines utilizing a cost-of-service form of



 Docket No. RM95-3-000 - 139 -

 tariff. Northern Border believes 154.313 (minor increases) is 

 designed for stated rate tariffs and would not be appropriate for

 the cost-of-service form of tariff. Therefore, Northern Border

Page 142
Order No 582.txt

 recommends that the Commission reinstate Statement N for

 pipelines with the cost-of-service form of tariff.

 With regards to Northern Border's comments recommending the

 reinstatement of Statement N for pipeline with the cost-of-

 service form of tariffs, the Commission understands the

 particular problems relating to this pipeline. Because of the

 nature of cost-of-service tariffs, Northern Border would only

 file under 154.314 when changes in approved rate of return or 

 services are proposed. Any other filings to recoup costs are

 considered limited section 4 filings and would not be affected

 by this section. Cost-of-service tariff holders filings under

 this section must request a waiver of the test period adjustments

 and updating, since these pipelines are required to recover only

 actual costs, not adjusted costs. Therefore, the Commission will

 not provide any specific revisions for cost-of-service tariff

 holders.

 n. Section 154.314 Other Support for a Filing

 Section 154.314 provides that any company filing for a rate

 change is responsible for preparing prior to filing, and

 maintaining, workpapers sufficient to support the filing. 71/ 

 In addition to the workpapers, the NOPR provided that certain

 other material, related to the test period, must be provided,

 

 71/ This regulation appeared in the NOPR as 154.315. 



 Docket No. RM95-3-000 - 140 -

 such as copies of monthly financial reports prepared for

 management purposes, and copies of accounting analyses of balance

 sheet accounts.

 INGAA is opposed to the submission of financial reports

Page 143
Order No 582.txt

 prepared for management and the accounting analysis of such

 financial statements. INGAA states that this information is

 sensitive and is not generally provided to the general public. 

 The requirement to provide this other material to the

 Commission upon request has been removed from the revised

 regulation. This information can be obtained by any party

 through discovery after a rate case has been set for hearing. 

 5. Subpart E - Limited Rate Changes

 a. Section 154.401 RD&D Expenditures

 Section 154.401 replaces current 154.38(d)(5). 

 b. Section 154.402 ACA Expenditures

 Section 154.402 replaces current 154.38(d)(6). 

 c. Section 154.403 Periodic Rate Adjustments

 New 154.403 governs the passthrough, on a periodic basis, 

 of a single cost item or revenue item not otherwise covered by

 subpart E, such as remaining purchased gas adjustment mechanisms,

 fuel loss and unaccounted-for gas, and transition cost filings. 

 These new regulations are consistent with current Commission

 policy governing these filings and generally reflect currently

 effective tariff provisions.

 The requirements of this section are subdivided into two

 parts. The initial part sets forth the minimum general



 Docket No. RM95-3-000 - 141 -

 requirements the pipeline must meet if it proposes, or the

 Commission requires, a periodic passthrough mechanism in the

 future. Significant among the new requirements of this section

 is the requirement to include a sample calculation in the tariff

 of the periodic rate change methodology. This sample calculation

 will assist the Commission and interested parties in

Page 144
Order No 582.txt

 understanding the proposal and ensure that the tariff language

 adequately explains the calculation steps. Further, it will

 provide a template for future filings under the tariff provision. 

 The general requirements portion of 154.403 also include 

 the requirement that all periodic rate change mechanisms include

 a description of the timing and methodology of the adjustments,

 including a description of all mathematical calculations. No

 steps should be excluded. Given the numbers from the source

 documents, anyone reading the tariff should be able to arrive at

 the rate component by following the steps described in the

 tariff.

 The second portion of 154.403 addresses the information to 

 be submitted with each filing. The filings should contain

 workpapers which show the calculations described by the tariff. 

 The Commission intends to collect sufficient supporting

 calculations to show a clear path from the source data to the

 rate component.

 Pacific Northwest Commenters generally support the proposed

 rules governing filings to track specific cost items where

 permitted. However, they believe the rules should be clarified



 Docket No. RM95-3-000 - 142 -

 to provide that (1) the general terms and conditions for a

 tracker must be approved and effective before a rate change is

 filed, and (2) any filing of a rate change under a tracker should

 include a summary table showing the impact on customers.

 The proposed regulation was not modified as Pacific

 Northwest Commenters suggest. Commonly, a cost tracker is

 adopted during a general rate proceeding where the tracker can be

Page 145
Order No 582.txt

 established prior to its use. The parties subject to the tracker

 have ample opportunity to explore issues related to the tracker

 in the rate proceeding. Further, there should be sufficient data

 available in the filing, tariff, and service agreement to permit

 each customer to determine the impact of the tracker adjustments. 

 No customer impact statement will be required.

 CNG requests clarification to assure that these new

 requirements will not be retroactively applied to existing tariff

 provisions. The Commission affirms that any tariff provisions

 which have been approved will not be reviewed anew to determine

 their compliance with these regulations. Any future filings

 under currently effective tariff provisions must comply with 

 154.403(d), however. 

 INGAA wants the Commission to expand the items tracked

 (allowed for periodic rate adjustments) to include costs incurred

 to comply with governmental regulations under federal and state

 environmental and safety laws. Pipelines should be afforded the

 option of a limited Section 4 filing or a deferred account to

 recover costs associated with compliance with environmental and



 Docket No. RM95-3-000 - 143 -

 safety regulations without incurring the costs of filing a full

 rate case.

 KNI would also like to see recovery of Department of

 Transportation (D.O.T.) pipeline user fees via a periodic rate

 adjustment (tracker). D.O.T. user fees are presently recovered

 as part of the cost-of-service reflected in the demand charge;

 however, these fees are similar to ACA and GRI charges and should

 be similarly tracked and recovered through a surcharge. KNI

 argues that, as it stands now, any changes in D.O.T. fees can

Page 146
Order No 582.txt

 only be reflected in rates by making a general rate case filing. 

 KNI maintains that use of a tracker would avoid the need for a

 rate case filing to recover the significant increase in these

 federal taxes currently under consideration.

 The Commission is not adopting regulations for each

 different type of cost or revenue tracked. By adopting a

 generally applicable provision, the Commission avoids having to

 modify its regulations every time a new cost is tracked or ceases

 being tracked.

 The Commission is adopting regulations to be generally

 applicable. The specific types of costs or revenues subject to

 these regulations are not an issue for this rulemaking. Instead,

 pipelines may propose trackers for costs incurred to comply with

 governmental regulations under federal and state environmental

 and safety laws, such as D.O.T. user fees, in individual

 proceedings.



 Docket No. RM95-3-000 - 144 -

 NGSA states that, for clarity and to ensure that the filings

 contain the proper information necessary to evaluate the proposed

 changes, the regulations should be written separately for the

 types of filings to which they apply (i.e., fuel filings, GSR

 filings, Account 858 filings, IT revenue credit filings, etc.). 

 NGSA suggests the following items be required with filings made

 under this section:

 a. Reconciliation information for the past period which

 compares the volumes and revenues actually recovered to

 the volumes and costs used to design the rates

 previously in effect, with discounted transactions

Page 147
Order No 582.txt

 separately identified, and showing any past period

 underrecovery to be included in the new rate;

 b. Actual data on costs incurred since the last filing,

 compared to the costs on which the previous rates were

 based;

 c. Derivation of any discounting adjustment included in

 the proposed rates, citing the authority under which

 such adjustment is being made;

 d. Citations to data sources and approval order for data

 used which is derived elsewhere; and

 e. Requirement that costs, volumes, allocation and rate

 design be shown by zone of receipt/zone of delivery or

 other category used to charge rates, where appropriate.

 NGSA suggests several specific modifications to the proposed

 regulations in 154.403. Section 154.403(c) directs the 



 Docket No. RM95-3-000 - 145 -

 pipeline to include in its tariff information about the mechanism

 which will be used to adjust the pipeline's rates. The

 Commission anticipates that all the information NGSA seeks will

 be available through the tariff or in the filing. No

 modification to the regulations is required.

 Northern Border recommends eliminating the requirement that

 a company that recovers fuel use and unaccounted-for gas in-kind

 state its reimbursement percentages in its tariff. Northern

 Border prefers that pipelines be allowed to show such changes by

 posting on the EBBs, in lieu of numerous and untimely tariff

 filings. Northern Border maintains that due to the operation of

 its system, percentages change monthly or more often, and changes

 are computed and implemented within one week. Northern Border

Page 148
Order No 582.txt

 currently uses its EBB in such a manner, and it is considered an

 efficient and accepted practice by its customers.

 By far, the most common practice among pipelines is to state

 their fuel reimbursement percentages in the tariffs. The

 Commission is adopting the regulation to reflect this common

 practice. The manner in which Northern Border posts its fuel

 reimbursement percentages has already been approved by the

 Commission and the Commission does not intend to apply this

 regulation to pipelines with approved tariffs that provide

 otherwise. 

 Northwest/Williams believes that the requirement that

 tariffs contain step-by-step descriptions of the amounts

 calculated and of the flowthrough mechanism is burdensome because



 Docket No. RM95-3-000 - 146 -

 it will require many pages of text and will be difficult to

 predict every possible scenario that might impact the

 calculations. Northwest/Williams would like to see the step-by-

 step descriptions eliminated and a general description included

 in the tariff instead, with any further explanations handled

 through data requests or informal technical conferences. 

 Williston also requests deletion of the step-by-step description

 requirement because it is unnecessary and will clutter the tariff

 making it inflexible and potentially unworkable.

 Columbia argues that a clarification is necessary because,

 as drafted, the regulations could be read to require that a

 pipeline incorporate into each rate schedule "a sample

 calculation in the tariff provision governing the periodic rate

 change methodology." Similarly, El Paso argues that no sample

Page 149
Order No 582.txt

 mathematical calculations should be required in the tariff. El

 Paso states it is unclear what the Commission wants included in

 the tariffs, but El Paso opposes inclusion of a sample

 calculation because it would duplicate information already

 provided in the workpapers of each filing and use of the

 Commission's software does not allow for the use of special

 characters, resulting in a difficult and burdensome task which

 will reduce the reader's ability to understand the information

 provided.

 Individual shippers that are asked to pay a rate have a

 right to know how the rate is derived without having to seek

 basic information about the rate derivation through data requests



 Docket No. RM95-3-000 - 147 -

 and technical conferences. Requiring the tariff to contain a

 clear statement of how a rate is calculated is not unreasonable. 

 As we stated in the preamble to the NOPR, these new regulations

 are consistent with current Commission policy and generally

 reflect currently effective tariff provisions that include a

 general description of the calculations.

 Columbia and El Paso are correct: the preamble states that a

 sample calculation will be included in the tariff. However, the

 regulations do not reflect this provision. In this case, the

 preamble is in error. No further action is required.

 NI-Gas finds the increased specificity in periodic rate

 adjustments is an improvement over existing practice. NI-Gas

 maintains, however, that shippers subject to pipeline trackers

 should be able to argue that they are entitled to refunds from

 pre-tracker periods. Otherwise, pipelines will have a strong

 incentive to allocate refunds to pre-tracker periods, while

Page 150
Order No 582.txt

 agreeing to higher rates for tracked periods. As a general

 matter, NI-Gas asserts that pipeline shippers do not have the

 means to aggressively participate in all proceedings which give

 rise to or affect tracked costs.

 The section to which NI-Gas refers, 154.403(d)(4), is not 

 intended to apply to refunds due as a result of a Commission

 determination that increased rates or charges are not justified

 or to refunds approved by the Commission as part of a settlement. 

 The reference to the return of revenues in this section refers to

 revenues subject to a revenue crediting mechanism approved under



 Docket No. RM95-3-000 - 148 -

 this section. The section underscores the precept that the

 effect of any new rate recovery mechanism is prospective not

 retroactive.

 Finally, Foothills filed comments to state that it does not

 oppose the deletion of 154.201 through 154.213 of the 

 regulations with regard to the tracker mechanism that allows

 pipeline shippers to track ANGTS charges in their own rates. 

 Foothills states these regulations are unnecessary in the post-

 Order No. 636 period because interstate pipelines are no longer

 in the merchant business and no longer hold capacity on third-

 party pipelines. Foothills emphasizes its continued reliance,

 however, on the Commission's unwavering support of the ANGTS

 project. As stated previously, the Commission continues to

 support the ANGST project.

 6. Subpart F - Refunds and Reports

 a. Section 154.501 Refunds

 Section 154.501 replaces current 154.67(c). The refund 

Page 151
Order No 582.txt

 carrying charge rule, currently 154.38(d)(4), applies to all 

 refunds. The new section reflects current Commission policy. 

 The Commission has added a requirement for pipeline refunds

 to be made within 60 days of the order date to ensure refunds are

 disbursed on a timely basis. Refunds received by the pipeline

 must be disbursed within 30 days of receipt. This period of time

 should be adequate to disburse refunds. 

 Section 154.501(c) is added to reflect current Commission

 policy with respect to supplier refunds which apply to the period



 Docket No. RM95-3-000 - 149 -

 during which the company had a purchased gas adjustment clause in

 its tariff. Instructions regarding the contents of a refund

 report are added to provide additional guidance.

 INGAA argues that the Commission's refund policy should not

 obligate pipelines to refund amounts that have not been collected

 in full. Section 154.501(a)(1) sets a 60-day refund period. 

 This provision may require pipelines to pay out refunds before

 surcharges recover the full amount of the refunds. INGAA

 suggests removing the 60-day limit or specifying that refunds

 will only be paid out to the extent the amounts have been

 collected in full.

 INGAA also urges the Commission to delete the proposal in 

 154.501(a)(2) that any natural gas company must refund to its 

 jurisdictional customers the jurisdictional portion of any refund

 it receives within 30 days of receipt. In the alternative, INGAA

 suggests allowing pipelines a reciprocal right to surcharge

 jurisdictional customers, if they are subject to paying a higher

 rate to upstream pipelines, within the 30 days.

 ANR/CIG argue that the proposed language mandates the

Page 152
Order No 582.txt

 institution of a one-way tracker and imposes the obligation on a

 pipeline to pass through refunds to customers in 30 days, but

 does not provide the pipeline with a reciprocal right to begin

 surcharging jurisdictional customers within 30 days if the

 pipeline is subjected to paying a higher rate to another pipeline

 for services. ANR/CIG states that this should only be imposed if

 it tracks both the refunds received by the pipeline and the cost



 Docket No. RM95-3-000 - 150 -

 increases incurred by the pipeline for particular services. 

 Panhandle argues that this section should be limited to

 refunds of costs tracked in the pipeline's rates or for which the

 pipeline has a pre-existing refund obligation. Otherwise,

 Panhandle states, the section may be interpreted to require

 vendor refunds, or rebates from manufacturers or suppliers when

 no such refunds are required under the law. Panhandle proposes

 the following revision to 154.501(a)(2): 

 "Any natural gas company must refund to its jurisdictional

 customers the jurisdictional portion of any refund it

 receives which is required by prior Commission order to be

 flowed through to its jurisdictional customers or is an

 amount previously included in a tracker filing and charged

 and collected from jurisdictional customers within thirty

 days of receipt."

 Williston opposes the 30-day time period, arguing that it

 may not be enough time within which to issue refunds. Williston

 states that the time period should be the same as in 

 154.501(a), 60 days. Columbia also recommends that the 30-day

 period be extended to "within 60 days of receipt" to allow for

 refunds received shortly before bills are issued to be disbursed

 as billing credits with the second billing after receipt of the

 refund.

Page 153
Order No 582.txt

 CNG urges the Commission to revise the proposal to provide

 that each pipeline's current tariff should control the timing and

 method of flowing through refunds from other pipelines.

 Northwest suggests adding language regarding normalization

 of income tax timing differences in paragraph (d) similar to that

 proposed in 154.403(c)(7). 



 Docket No. RM95-3-000 - 151 -

 AGD recommends that the Commission eliminate the 30-day lag

 in the pipeline's obligation to submit its report explaining its

 refund of excessive charges. AGD states that the refund report

 should be in hand before the refund check is cashed as the

 cashing of a check may be treated legally as full compensation by

 the pipeline. Pacific Northwest Commenters recommend refund

 reports be served on all customers, interested state commissions,

 and designated representatives. Williston asserts a provision

 should be added to 154.501(e) providing that each shipper will 

 only be provided with its applicable portion of the refund report

 in order to ensure that confidentiality of commercially sensitive

 information is maintained.

 Williston argues that refunds should be required only upon

 issuance of a final Commission order. Williston states that,

 when a pipeline requests rehearing or circuit court review of a

 Commission order, refunds should be deferred until after the

 final order to avoid the necessity for further refunds or

 rebilling of prematurely refunded amounts.

 Williston also suggests that 154.501(d)(1) and (2) be 

 deleted from the regulations as no they are no longer necessary. 

 Pacific Northwest Commenters urge the Commission to add a

 new 154.501(a)(3) requiring that a pipeline offer its customers 

Page 154
Order No 582.txt

 the option of electronic transfer of the refund amount on the

 date refunds are made.

 In response to INGAA's request, the Commission clarifies

 that a pipeline is not required to pay out a refund until it



 Docket No. RM95-3-000 - 152 -

 recovers the full amount of the refund through its rates.

 The Commission agrees with Panhandle that the language of 

 154.501(a)(2) should be clarified. It was not the Commission's 

 intention to require refunds of vendor refunds or manufacturer

 rebates. Rather, the section is intended to apply to refunds

 required by the Commission and passed through by the pipeline to

 its customers. 

 Several commenters seek a different time period for

 disbursement of refunds the pipeline has received. The

 Commission will adopt a single standard which will be generally

 applicable. For refunds received from an upstream supplier,

 thirty days should not be unduly burdensome. However, since many

 pipelines have currently effective tariff provisions providing

 for a different time period or passthrough by a deferred account

 surcharge, the regulatory text will be modified to grandfather

 these provisions. This modification will result in the least

 disruption.

 The Commission disagrees with the position that 

 154.501(a)(2) represents a one-way tracker. The refunds which 

 are the subject of this section are required to be passed through

 by Commission order as clarified above. Cost increases must be

 filed for by the pipeline before being passed through according

 to section 4 of the NGA. If the pipeline wishes to institute a

Page 155
Order No 582.txt

 tracker, it must file tariff provisions with the Commission to do

 so.



 Docket No. RM95-3-000 - 153 -

 The language regarding normalization of income tax timing

 differences found in 154.403(c)(7) is inappropriate here. 

 Refunds do not give rise to a tax timing difference which would

 affect carrying charge calculations.

 The Commission generally has provided for a 30-day time

 period between the date when refunds are ordered and the date

 when and the report of the refund must be filed. 72/ Thirty

 days is a reasonable period to provide the report. The

 Commission reviews refund reports for accuracy. If as a result

 of its review, the Commission finds that a pipeline has failed to

 accurately compute a refund, the pipeline will be directed to

 correct the deficiency. 

 Two commenters address the issue of service. The

 regulations have been revised such that all parties that have

 standing requests for full refund report service will receive a

 copy of a pipeline's entire refund report. Otherwise, parties

 receiving the refund will receive an abbreviated form of the

 refund report. 

 The Commission will not adopt Williston's suggestion. If a

 pipeline believes there is confidential material in a particular

 refund report, the pipeline may request that the Commission treat

 all or part of the report as confidential pursuant to 388.112 

 of the Commission's regulations.

 

 72/ See, e.g., Trunkline Gas Company, 62 FERC 61,199 (1992), 

Page 156
Order No 582.txt

 and Florida Gas Transmission Co., 71 FERC 61.363 (1995). 



 Docket No. RM95-3-000 - 154 -

 The date for disbursement of the refund whether after a

 final Commission order or otherwise is properly the subject of

 the proceeding in which the refund obligation arises. The

 Commission will not adopt language in the regulations mandating a

 specific date.

 Williston suggests removing the portion of the proposed

 regulations which govern the interest level used to calculate

 interest on refunds pre-dating September 30, 1979. Upon further

 reflection, the Commission believes the possibility of requiring

 refunds dating back to this time period are remote. These

 sections of the proposed regulations have been removed.

 The Commission notes that several pipelines have provisions

 in their tariffs offering their customers the option of receiving

 refunds by electronic transfer. 73/ At this point, the

 Commission prefers that the pipelines and their customers work

 out procedures for electronic funds transfers where appropriate. 

 For this reason, the regulations will not mandate electronic

 funds transfers.

 b. Section 154.502 Reports

 New 154.502 requires that tariffs include information 

 about reports required by the Commission.

 Arizona Directs approve of the provision as a convenient

 reference point for a description of all reports required by the

 

 73/ See, e.g., ANR Pipeline Co., Original Sheet No. 146, Second

 Revised Volume No. 1, Columbia Gas Transmission Corp.,

 Second Substitute Original Sheet No. 331, Second Revised

 Volume No. 1, and Panhandle Eastern Pipe Line Co., Original

 Sheet No. 287, First Revised Volume No. 1.



Page 157
Order No 582.txt

 Docket No. RM95-3-000 - 155 -

 Commission to be filed by the pipeline on a periodic basis. They

 recommend, as a modification, that pipelines be required to state

 in their tariffs the name, address, and phone number of the

 company representative who should be contacted if copies of a

 particular report are desired.

 INGAA states that the requirement to include descriptions of

 all filed reports in pipelines' tariffs is redundant and should

 be deleted. The Commission already publishes a directory of all

 reports that interstate pipeline companies are required to file. 

 INGAA states that this regulation is too broad and will lead to a

 significant increase in the size of tariff filings because the

 reports could conceivably include periodic, yet short-term,

 reports that are required for environmental compliance during a

 certificate proceeding. National Fuel argues that this provision

 should either be eliminated or its scope narrowed to reports

 arising out of litigated or settled rate proceedings.

 INGAA misinterprets the scope of this regulation. The

 regulation is not intended to include a list of reporting

 requirements already set forth in the Commission's regulations. 

 This section of the regulations applies to periodic reports

 required by a Commission order or a settlement in a proceeding

 initiated under part 154 or part 284. For example, during

 restructuring several pipelines were required to submit reports

 when they issued an operational flow order. The regulations are

 clarified to more clearly reflect the scope of this requirement.



Page 158
Order No 582.txt

 Docket No. RM95-3-000 - 156 -

 The information on the title page of the tariff contains the

 name, address, and, as modified, the telephone number of an

 individual to whom communications concerning the tariff should be

 directed. This individual should be able to respond to inquiries

 regarding reports filed consistent with this section of the

 regulations.

 7. Subpart G - Other Tariff Changes

 a. Section 154.601 Change in Executed Service

 Agreement

 Section 154.601 replaces current 154.63(d)(2). The 

 section concerns executed service agreements "on file with the

 Commission" and does not refer to "well names."

 b. Section 154.602 Cancellation or Termination

 of a Tariff, Executed Service Agreement or

 Part Thereof

 Section 154.602 replaces current 154.64. The section does 

 not require sales information. It does require a list of the

 affected customers and the contract demand under the service to

 be canceled.

 INGAA and Panhandle object to the new requirement that a

 natural gas company must provide notice to the Commission at

 least 30 days prior to the effective date of a proposed

 cancellation or termination of an effective tariff or contract

 because these transactions have been pre-granted abandonment

 under each pipeline's blanket certificate. In the alternative,

 Panhandle seeks clarification of this provision.

 This requirement is not new but is a revised version of the

 current requirement at 154.64. It only applies to (1) tariff 



 Docket No. RM95-3-000 - 157 -

Page 159
Order No 582.txt

 sheets on file with the Commission, and (2) service agreements

 that are on file with the Commission and not subject to pre-

 granted abandonment. Except for the reduction in filing

 requirements, the Commission does not anticipate any change in

 the operation of this provision.

 c. Section 154.603 Adopting of a Tariff by a

 Successor

 Section 154.603 replaces current 154.65. The section 

 concerns adopted tariffs or contracts "on file with the

 Commission" as opposed to any tariff or contracts.

 C. Comments requesting further changes 

 Most suggestions for additional regulations are discussed

 with the regulation they would logically follow or supplement. 

 Several additional suggestions are addressed below.

 Columbia proposes a requirement that Staff issue a written

 settlement position within 60 days of the initial suspension

 order. AGD suggests a rule requiring that Staff serve top sheets

 within 60 days of the issuance of the suspension order. APGA

 recommends that the Commission adopt a rule requiring submission

 of Staff top sheets within 120 days of a filing. Panhandle

 suggests that an appropriate time for the Staff to file its

 position would be four months after the filing date. To be

 useful, such Staff top sheets should conform in all material

 respects to the proposed 154.301 and 154.304 standards, i.e.  

 to reflect all changes reasonably expected as to any adjustments

 it is proposing to the company's filing along with supporting

 work papers and formulae for any calculations upon which it is



 Docket No. RM95-3-000 - 158 -

 relying. Further, Staff should be required to either accept the

Page 160
Order No 582.txt

 company's position or provide a fully supported alternative

 position. Michigan urges that the Commission reinstate the

 practice of establishing a date for service of top sheets as a

 part of this rulemaking. Michigan notes that revised filing

 requirements will: (1) streamline the discovery process by

 providing Commission Staff and interveners with information much

 sooner than current procedures, and (2) result in the expeditious

 resolution of rate cases. 

 Staff initial settlement positions, or "top sheets," have

 long assisted the settlement process. The Commission expects

 that the timely service of top sheets will assist parties in

 cases set for hearing in the future as well, and the Commission

 will endeavor to continue that practice. However, the Commission

 declines to establish a rigid deadline for service of top sheets

 because of the variety of circumstances that may arise in

 particular cases.

 AGD requests regulations such that rulings on certain issues

 can be secured before the end of the suspension period and

 whereby the Commission may instruct the ALJ to resolve certain

 issues within specified deadlines as justified by circumstances.

 JMC suggests establishing procedures for staff to routinely

 examine rates to determine if they are just and reasonable, under

 Section 5. JMC also suggests conditioning all settlement

 approvals upon a the pipeline's agreement to make a general

 section 4 rate case within 3 years. The Commission will not



 Docket No. RM95-3-000 - 159 -

 adopt these suggestions at this time.

 Northern Border states that its tariff is different from the

Page 161
Order No 582.txt

 industry standard and requests reinstatement of regulations

 (Statement N) that are appropriate for a cost-of-service tariff.

 SoCal urges the Commission to encourage pipelines to have

 pre-filing meetings with customers. NDG suggests regulations

 requiring pipelines to include a description of the workpapers in

 the filing, serve parties workpapers on the filing date, and

 supply information on the electronic format. NDG suggests that

 pipelines requesting confidential treatment must include a

 confidentiality agreement in their filings. NDG suggests that

 every section 4 filing contain a capacity release log for the

 base period and a table showing earned rate of return on equity

 for the base period. These are also helpful suggestions and may

 be considered at a later time, but will not be adopted here.

 NDG suggests that a request for blanket waiver of 

 regulations not be allowed but pipelines must specifically

 identify what waivers are required. This has been adopted in 

 154.7(a)(7). 

 D. Electronic Filing

 1. Industry-wide conference

 The Commission recognizes that changes to these regulations

 and to the forms in the companion rule necessitate modifications

 to the electronic formats for the affected filings and forms. To

 ensure the widest possible input, the NOPR directed Commission

 staff to convene a technical conference to obtain the



 Docket No. RM95-3-000 - 160 -

 participation of the industry and other users of the filed

 information in designing the electronic filing requirements. The

 conference was held on April 4, 1995 (conference), and provided

 an excellent start to the process of modifying the Commission's

Page 162
Order No 582.txt

 electronic filing requirements to complement the revisions to the

 regulations set forth in the companion rules. Most of the

 comments to the NOPR addressed issues discussed at the

 conference. 

 As a result of the conference and comments to the NOPR, the

 Commission is able to make a number of decisions related to

 electronic filing in this rule. The only electronic filing

 requirements affected by this rule deal with the form of notice,

 the tariff sheets and the statements and worksheets required

 under subpart D. The electronic filing requirements for FERC

 Forms 2, 2A, 11, discount rate reports, and Index of Customers

 are dealt with in our companion rulemaking. No changes are

 proposed for the electronic form of notice.

 The Commission will adopt a tab delimited ASCII format for

 most numeric data and a format compatible with the filing

 company's spreadsheet application for selected statements

 required by subpart D of part 154. 74/

 

 74/ ASCII American Standard Code for Information Interchange can

 convey only letters, punctuation and certain symbols. It

 does not convey how the document should be formatted or what

 fonts to use. A delimited file is created by keypunching a

 series of symbols using commas, tab, or some other symbol to

 designate the space at the end of a word or number (thus, 

 "tab delimited," "comma delimited," etc.) 



 Docket No. RM95-3-000 - 161 -

 The electronic tariff sheet formats are modified as proposed

 in the NOPR. However, as Columbia suggested in its comments, the

 electronic tariff sheet formats are modified further in this

 final rule to accommodate 154.102(e)(5) which requires a FERC 

 citation in the margin of the tariff sheet. The FERC Automated

Page 163
Order No 582.txt

 System for Tariff Retrieval (FASTR) software is modified for the

 change also. The modification will not affect the software's

 ability to read, display, or print tariff sheets filed pursuant

 to the pre-existing requirements.

 The Commission will adopt submittal on diskette as the

 standard medium on which pipelines will submit their reports and

 filings. CD-ROM will be accepted as well.

 Other issues remain. Therefore, the Commission directs

 staff to convene another technical conference in order to resolve

 the outstanding electronic filing issues jointly with the

 industry. This second conference is to be held as soon as

 possible after issuance of this rule.

 2. Delayed implementation of electronic filing

 requirements

 Many commenters urge the Commission to delay implementation

 of the revised electronic filing requirements until after the

 final rule is issued and procedures and formats have been further 

 developed.

 INGAA suggests a grace period during which a pipeline could

 file a rate case under either the current or revised regulations

 depending on its progress in making the necessary changes to its

 data acquisition and accounting systems. In its comments, Great



 Docket No. RM95-3-000 - 162 -

 Lakes argued for an immediate suspension of the current

 electronic filing requirements, stating the current filing

 requirements are obsolete. Great Lakes argued that the

 suspension would not have prejudiced any party wishing to review

 a pipeline's rate application but simply would have moved the

 suspension date forward. 

Page 164
Order No 582.txt

 The Commission did not suspend the electronic filing

 requirements at the time Great Lake's comments were filed. The

 Commission disagreed with Great Lakes' contention that the

 electronic filing requirements were obsolete. The Commission

 noted in the NOPR the possibility of suspending the electronic

 filing requirements due to the fact that the paper filing

 requirements in this rule could be made effective before the

 electronic filing requirement specifications could be made ready. 

 Until that time, however, the Commission continued to derive

 benefits from the existing electronic filing requirements. 

 Therefore, the Commission declined to act on Great Lakes'

 request. That request is denied.

 The Commission will not adopt INGAA's suggestion to allow

 filing a rate case under the old or new regulations depending on

 the pipeline's capabilities. However, since all of the revisions

 to the electronic filing requirements will not be completed by

 the issuance date of this rule, the Commission is suspending the

 requirement to submit the filings made pursuant to subpart D

 electronically until the new electronic filing requirements are

 fully developed. During the suspension, only paper copies of the



 Docket No. RM95-3-000 - 163 -

 filings under subpart D are required. The electronic version of

 the tariff sheets and the notice of filing must continue to be

 filed electronically.

 3. Software

 Northwest/Williams suggests retaining only that portion of

 the rate case requirements referred to as "File 3." 75/ 

 Northwest/Williams lists numerous shortcomings with the

 Commission's current rate case filing requirements and software

Page 165
Order No 582.txt

 and questions whether the Commission uses the data. 

 With the exception of the tariff sheets and notice of

 filing, all of the current electronic filing instructions,

 including those Northwest/Williams finds objectionable, will be

 revised. The Commission intends to seek the cooperation of the

 industry in developing the file structure required for each

 filing or form. The Commission does not intend to develop form

 fill, edit, or print software for use by the natural gas

 industry. Allowing private industry to develop software is the

 most cost-effective and efficient process. Software developed by

 the Commission would need to accommodate all potential users. 

 The Commission believes that any such product would unnecessarily

 restrict the flexibility of individual companies. Accordingly,

 

 75/ For general rate cases, three files are filed

 electronically. File 1 consists of the filing in a standard

 format designated by the Commission for use by all

 companies. The Commission provides edit check and print

 software. File 2 contains the footnotes for File 1. File 3

 contains the rate filing in a format preferred by the

 company ("free form"). This data is converted to an ASCII

 file and appears exactly as the hard copy.



 Docket No. RM95-3-000 - 164 -

 the Commission will not attempt to develop the associated

 software but will allow the industry to develop software that

 meets the requirements of both the company and the regulations.

 4. Using Rich Text Format for Text

 Several alternatives for electronic filing formats were

 discussed at the conference. Many pipelines recommended the use

 of Rich Text Format (RTF) for text. 76/ INGAA states that use

 of RTF for text is most efficient since it allows any party to

 access the files using commonly available software packages.

Page 166
Order No 582.txt

 The Commission is seeking to adopt a format for text that is

 compatible with use in a database, does not lead to excess errors

 in the text after conversion, and is available through several

 software packages. In light of comments strongly recommending

 RTF, the Commission staff has considered the efficacy of RTF for

 reporting text. 77/ The conference participants should

 

 76/ RTF permits the transfer of word files that have embedded

 text enhancement such as bold or underscoring. RTF was

 developed by Microsoft as a word processing

 document-exchange format and is available royalty free. It

 permits documents to be exchanged among diverse platforms. 

 Since its inception it has gained most prominence as a

 format for the creation of Graphical-User-Interface based

 "Help" files. Apparently, this is related in part to its

 support of hyper-text. 

 77/ RTF is essentially a primitive example of a genre called

 text markup languages. It allows both the content and the

 appearance of a body of text to be represented as a stream

 of plain ASCII text, unlike a typical word processor

 document which consists of text interleaved with binary

 control information. The text stream is made up of special

 reserved commands and delimiters interspersed with the

 actual text. White space in the file is essentially ignored;

 line, paragraph, and page breaks are controlled by RTF

 commands, as are fonts, colors, margins, tabstops, and every

 (continued...)



 Docket No. RM95-3-000 - 165 -

 address alternatives to RTF and whether: the data would be error

 free when translated, translation would be available in the most

 popular word processing programs, and RTF text would be usable in

 databases. Further, the basic issue of when to employ RTF and

 when to employ delimited ASCII must be resolved to ensure uniform

 treatment.

 5. Appropriate Format for Numeric Data

 Comments regarding the appropriate format to adopt for

 numeric data broke down into two camps -- those supporting

 delimited ASCII and those arguing for a spreadsheet format.

Page 167
Order No 582.txt

 Many pipelines recommended the use of delimited formats for

 numeric files. INGAA states that use of ASCII delimited formats

 for numeric files allows any party to access the files using

 commonly available software packages. Panhandle and Williston

 agree noting that a delimited format permits columnar data fields

 to be imported and exported into and out of most off-the-shelf

 spreadsheet and database applications. Panhandle and INGAA note

 that many pipelines recommended at the conference that electronic

 filing requirements should allow a pipeline to use its current

 hardware. Delimited ASCII would allow them to do so. 

 Several pipelines argued against submission of numeric data

 in a spreadsheet format. Northwest states that submitting its

 rate case in spreadsheet format would require 23 diskettes. 

 

 77/(...continued)

 other characteristic of text appearance you can imagine.

 PC Magazine, February 7, 1995, v14, n3, p. 267.



 Docket No. RM95-3-000 - 166 -

 INGAA notes that pipelines, regulatory agencies, and intervenors

 employ a wide range of software and hardware products, sometimes

 using different releases of a single software package. Panhandle

 states that mandating particular application software with which

 to manipulate data would force parties to use a single format,

 and restrict parties' ability to use data filed with the

 Commission. Several commenters object to providing data with

 formulas and linkages embedded. INGAA notes that these equations

 tend to be complex, cumbersome, and hard to follow even in modest

 rate case filings. As an alternative, INGAA suggests that

 formulas could be provided in written form. Northwest argues

Page 168
Order No 582.txt

 that formulas and links developed by Northwest should remain

 confidential and proprietary and so, Northwest might seek

 copyrights on such information. 

 On the other hand, several commenters argue that numeric

 data should be filed in a spreadsheet format with formulas and

 links intact. The Industrials, AGD, and APGA urge that pipelines

 be required to submit spreadsheets with embedded formulas and

 linkages. The Industrials argue that having PC-compatible

 spreadsheet files with formulas and linkages intact available to

 customers and intervenors will speed the processing of rate cases

 and allow many issues to be resolved in the suspension order. 

 The Industrials argue that the formulas which substantiate

 rate increase proposals are not proprietary. Requiring parties,

 including staff, to input all the figures from the rate case and

 spend weeks and rounds of testimony to recreate the pipeline's



 Docket No. RM95-3-000 - 167 -

 computations is grossly inefficient and unduly burdensome. The

 Industrials state that the regulations should explicitly state

 that the filing must be in spreadsheet format with formulas and

 linkages intact; and, that failure to do so is grounds for

 rejection. Industrials state that receiving the rate case in a

 manipulable format will be critical given the 10-day period for

 comment and protest. 

 Williston notes that using the formats of the software the

 pipeline employs, the tab-delimited format, or RTF allows use of

 pre-determined row/column identifier formats. However, free form

 type structures should be utilized as much as possible to allow

 for the myriad of differences among the various pipelines' data

Page 169
Order No 582.txt

 processing requirements. Williston does not oppose filing data

 in the format of the application software it uses; provided

 numerical data does not include formulas or links.

 One of the stated goals of the conference was to ensure that

 all spreadsheets contain the underlying formulas and links. 

 Delimited formats are not capable of transmitting formulas and

 equations. The Commission agrees with the parties arguing for a

 spreadsheet format where the formulas in the workpaper or

 statement are important to the understanding of the pipeline's

 filing. To be useful, the data, required in subpart D, by

 Statements I and J and the state tax formulations in Statement H,

 must be received with the formulas included. These formulas are

 necessary to understand the pipeline's position with respect to

 cost allocation and rate design. In section 4 rate cases, the



 Docket No. RM95-3-000 - 168 -

 Commission has routinely obtained the formulas through data

 requests asking that the information be in spreadsheet form. The

 requirement that the initial filing be in spreadsheet format

 avoids the burden of having the same data submitted once as a tab

 delimited file and again, in response to a data request, in

 spreadsheet form, in order to capture the formulas. Accordingly,

 Statements I and J and a portion of H, containing state tax

 formulations submitted pursuant to subpart D, must be filed in

 the same format generated by the spreadsheet software used to

 create the statement or workpaper. These spreadsheets must

 include all the formulas and all links to other spreadsheets

 filed in the same rate case.

 The Commission will not require the entire rate case to be

 filed in spreadsheet form. The other statements in the rate case

Page 170
Order No 582.txt

 generally do not contain formulas of a complex nature. These

 remaining statements will be filed in tab delimited ASCII format. 

 As noted by some of the commenters, a delimited ASCII format for

 numeric data provides a format which can be written or read by

 several software packages on multiple platforms.

 As suggested by several commenters, the Commission is

 specifying "tab" delimited ASCII formats for all other numeric

 data to ensure uniformity in filing. Adopting a delimited ASCII

 format without specifying the delimiters would lead to confusion.

 NDG suggests that, upon request by an interested party, the

 pipeline be required to supply copies of the spreadsheets,

 models, and databases relied upon to prepare the filing in an



 Docket No. RM95-3-000 - 169 -

 electronic format, including all accompanying workpapers. This

 requirement would shorten the time necessary to analyze a rate

 case. The Commission is not convinced that this requirement must

 be made a part of the regulations. The underlying spreadsheets,

 models, and databases relied upon to prepare the filing in an

 electronic format may be discoverable at hearing if found

 necessary in a particular case.

 6. Security and Reliability of Data

 Williston and INGAA urge the Commission to adopt procedures

 to ensure the integrity of electronic filings and the security of

 any confidential data. Panhandle adds that the Commission should

 safeguard against accidental publishing of confidential data

 submitted electronically.

 Confidential data filed with the Commission electronically

 will receive the same level of care extended to confidential data

Page 171
Order No 582.txt

 filed on paper. Any pipeline seeking confidential treatment for

 electronically filed data should adhere to the requirements of

 385.112. 

 7. Submission of Data to the Commission

 Panhandle supports continuing data submission via diskettes,

 while permitting other options such as CD-ROM or high-speed

 telecommunications. Williston and El Paso also support the use

 of telecommunications for submission and dissemination of

 electronically filed data. However, Williston does not support



 Docket No. RM95-3-000 - 170 -

 the use of EDI for the filings under subpart D. 78/ If

 telecommunication is not used, Williston suggests use of CD-ROM

 as an alternative to diskettes.

 El Paso states that the Commission could permit the filing

 of a document by upload to the OPR bulletin board. Northwest

 suggests that, considering the prominence of electronic mail and

 internet, eventually, pipelines should transmit information only

 electronically. Sending an electronic version with paper

 available upon request would save money on postage and paper. El

 Paso requests that the Commission permit the filing of documents

 by electronic means only and eliminate, or reduce, the

 requirement to file paper copies.

 The Commission will continue to require paper filings to

 accompany Form No. 2, Form No. 2A, Form No. 11, discount rate

 reports, and rate case filings. At the conference, the parties

 should consider whether any submission (such as the discount rate

 report) could effectively be filed through electronic media only. 

 Continuing the paper copies for some filings and forms does not

 signal the Commission's unwillingness to eventually forgo paper

Page 172
Order No 582.txt

 versions of these filings and forms at some future time. The

 Commission intends to continue to work with the industry to

 

 78/ Electronic Data Interchange (EDI) is a means by which

 computers exchange information over communication lines

 using standardized formats. For example, the capacity

 release data posted on a pipeline's electronic bulletin

 board is also available in downloadable files that conform

 to the standards for EDI promulgated by the American

 National Standards Institute (ANSI) Accredited Standards

 Committee (ASC).



 Docket No. RM95-3-000 - 171 -

 overcome the technological and procedural hurdles associated with

 telecommunications and enhance the reliance on electronic

 filings.

 Currently, electronic filings are submitted commonly on

 diskette. Continuation of diskette submission is appropriate as

 the standard means of submission since there continues to be

 substantial support for use of diskettes. The Commission will

 also permit submission on CD-ROM. 79/ The Commission intends

 to continue to work with the industry to overcome the

 technological and procedural hurdles associated with

 telecommunications. The Commission agrees with comments by

 Williston and will not adopt EDI for natural gas rate cases. 

 Many schedules are not standardized and are not compatible with

 this alternative.

 8. Dissemination of Data by the Commission

 Panhandle and Williston suggest that the Commission

 disseminate filed information. Applicants could provide

 electronic information on a voluntary basis. INGAA supports the

 increased dissemination of filed documents through the

 Commission; similar to the successful example of electronic

Page 173
Order No 582.txt

 dissemination of tariff sheets. INGAA and Williston suggest the

 elimination of hard copy dissemination whenever possible. 

 The Commission will continue to make paper copies of filings

 available since all members of the public are not prepared to

 

 79/ Technical specifications for CD-ROM submission will appear

 in the electronic filing instructions for each individual

 form or filing.



 Docket No. RM95-3-000 - 172 -

 rely solely on electronic dissemination. However, except in rare

 cases where the file size makes downloading impractical, the

 Commission intends to disseminate all filed electronic data to

 the general public through the Commission's gas pipeline data

 bulletin board. Dissemination electronically by the Commission

 will greatly reduce demands on the pipelines for such information

 in either paper or electronic form.

 The Registry recommends the rate case data be made available

 to intervenors in a rate case in zipped (compressed) files on

 3.5" diskettes in both edit protected and edit enabled modes in

 at least one of the following three applications: Excel, Lotus

 and, QuattroPro. 80/ Where edit-protection cannot be password

 locked, the diskette should be marked appropriately. The

 uncompressed file names should appear on the label or sleeve

 wrapper of the diskette.

 The Industrials argue that, while there are good grounds for

 submitting a password protected version of the filing, the

 pipeline should give Commission staff and, upon request, others,

 a version without such password protection. The unprotected

 version should be available through downloadable electronic

 postings and/or on diskette.

Page 174
Order No 582.txt

 Password protection or other forms of security should be

 discussed at the conference. However, as long as a paper copy is

 

 80/ The National Registry of Capacity Rights (The Registry)

 filed comments in Docket No. RM95-4-000. However, this

 comment related solely to rate case filings and, therefore,

 is addressed here.



 Docket No. RM95-3-000 - 173 -

 available, there is a reliable way to check the accuracy of the

 electronic data. Both the electronic data and the paper version

 of the filing are part of the official filing and should contain

 the same information.

 The Commission will not favor one commercial vendor over

 another; and so, will not adopt a specific file compression or

 spreadsheet software. When the pipeline has a file it believes

 needs to be compressed, the pipeline should contact the

 Commission to determine if the Commission can accommodate the

 file compression the pipeline chooses to use. The Commission

 will accept rate case data in the file form generated by the

 spreadsheet used by the filing pipeline.

 Northwest asserts that only those electronic filings that do

 not contain formulas and links should be accessible to the

 public. The Commission disagrees, if the spreadsheets do not

 contain confidential data, there is no reason why they cannot be

 released to the public as submitted.

 9. Fees for costs of electronic filing

 Panhandle asserts that the Commission should permit

 pipelines to assess fees to recover the costs of implementing and

 providing the new data requirements. However, the issue of cost

 recovery for implementing the electronic filing requirements is

Page 175
Order No 582.txt

 dealt with more appropriately in a rate proceeding and not in

 this rulemaking.



 Docket No. RM95-3-000 - 174 -

 V. REGULATORY FLEXIBILITY ACT CERTIFICATION

 The Regulatory Flexibility Act (RFA) 81/ requires

 agencies to prepare certain statements, descriptions, and

 analyses of proposed rules that will have a significant economic

 impact on a substantial number of small entities. The Commission

 is not required to make such analyses if a rule would not have

 such an effect.

 The Commission does not believe that this rule will have

 such an impact on small entities. Most filing companies

 regulated by the Commission do not fall within the RFA's

 definition of small entity. 82/ Further, the filing

 requirements of small entities are reduced by the rule. 

 Therefore, the Commission certifies that this rule will not have

 a significant economic impact on a substantial number of small

 entities.

 VI. ENVIRONMENTAL STATEMENT

 The Commission has excluded certain actions not having a

 significant effect on the human environment from the requirement

 to prepare an environmental assessment or an environmental impact

 statement. 83/ No environmental consideration is raised by

 the promulgation of a rule that is clarifying, corrective, or

 

 81/ 5 U.S.C. 601-612.

 82/ 5 U.S.C. 601(3), citing to section 3 of the Small Business

 Act, 15 U.S.C. 632. Section 3 of the Small Business Act

 defines a "small-business concern" as a business which is

 independently owned and operated and which is not dominant

 in its field of operation.

Page 176
Order No 582.txt

 83/ 18 CFR 380.4.



 Docket No. RM95-3-000 - 175 -

 procedural or that does not substantially change the effect of

 legislation or regulations being amended. 84/ The instant

 rule changes the information to be filed, and the manner by which

 that information is filed, with the Commission but does not

 substantially change the effect of the underlying legislation or

 the regulations being replaced or revised. Accordingly, no

 environmental consideration is necessary.

 VII. INFORMATION COLLECTION STATEMENT

 The Office of Management and Budget's (OMB) 

 regulations 85/ require that OMB approve certain information

 and recordkeeping requirements imposed by an agency. The

 information collection requirements in this final rule are

 contained in the following:

 FERC Form 542 "Gas Pipeline Rates: Initial Rates, Rate Change

 and Rate Tracking" (1902-0070); FERC Form 542A Tracking and

 Recovery of Alaska Natural Gas Transportation System" (1902-

 0129); FERC Form 543 "Gas Pipeline Rates: Rate Tracking, Formal

 Rates" (1902-0152); FERC Form 544 "Gas Pipeline Rates: Rate

 Change, Formal Rates" (1902-0153); FERC Form 545 "Gas Pipeline

 Rates: Rate Change, Nonformal Rates" (1902-0154); FERC Form 546

 "Certificated Rate Filings: Gas Pipeline Rates" (1902-0155);

 and, FERC Form 547 Gas Pipeline Rates: Refund Report

 Requirements" (1902-0084).

 

 84/ 18 CFR 380.4(a)(2)(ii).

 85/ 5 CFR 1320.13.

Page 177
Order No 582.txt



 Docket No. RM95-3-000 - 176 -

 By this rule, the Commission is modernizing its regulations

 to reflect the current regulatory environment that it instituted

 with Order No. 636 and the restructuring of the natural gas

 industry. Specifically, the Commission is revising its

 regulations in part 154 to focus on transportation services

 instead of pipeline sales activities. The revised filing

 requirements will improve the internal support of a pipeline's

 filing and facilitate more rapid settlement or adjudication of

 pipeline rate proposals. The Commission's Office of Pipeline

 Regulation uses the data in rate proceedings to review rate and

 tariff changes by natural gas companies for the transportation of

 gas and for general industry oversight under the Natural Gas Act. 

 The Commission's Office of Economic Policy also uses this data in

 its analysis of interstate natural gas pipelines.

 The Commission is submitting to the Office of Management and

 Budget a notification of these collections of information. 

 Interested persons may obtain information on these reporting

 requirements by contacting the Federal Energy Regulatory

 Commission, 888 First Street, NE., Washington, DC 20426

 [Attention: Michael Miller, Information Services Division, (202)

 208-1415]. Comments on the requirements of this 

 rule can be sent to the Office of Information and Regulatory

 Affairs of OMB, Washington, D.C. 20503, (Attention: Desk Officer

 for Federal Energy Regulatory Commission) FAX: (202)395-5167.

 You shall not be penalized for failure to respond to this

 collection of information unless the collection of information



Page 178
Order No 582.txt

 Docket No. RM95-3-000 - 177 -

 displays a valid OMB control number.

 VIII. EFFECTIVE DATE

 The final rule will be effective [insert date 30 days after

 publication in the Federal Register].

 List of Subjects in 18 CFR Part 154

 Natural gas companies, Rate schedules and tariffs.

 By the Commission.

 ( S E A L )

 Lois D. Cashell,

 Secretary.



Page 179