136 FERC ¶ 61,109 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 260 

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

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

(Issued August 16, 2011) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Order on Rehearing. 

SUMMARY: In this Order, the Federal Energy Regulatory Commission (Commission) 

generally denies rehearing and reaffirms the findings made in Order No. 710-B. The 

Commission does, however, revise the burden estimate to more accurately account for 

initial start-up costs, grant rehearing on the issue of whether to include page 521d, and 

grant additional time to comply with Order No. 710-B. 

FOR FURTHER INFORMATION CONTACT: 

Brian Holmes (Technical Information) 

Office of Enforcement 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-6008, e-mail: brian.holmes@ferc.gov

Robert Sheldon (Technical Information) 

Office of Energy Market Regulation 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-8672, e-mail: robert.sheldon@ferc.gov
Docket No. RM07-9-004 -iiGary D. Cohen (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-8321, e-mail: gary.cohen@ferc.gov

SUPPLEMENTARY INFORMATION: 
 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Jon Wellinghoff, Chairman; 

 Marc Spitzer, Philip D. Moeller, 

 John R. Norris, and Cheryl A. LaFleur. 

Revisions to Forms, Statements, and Reporting 

Requirements for Natural Gas Pipelines 

Docket No. RM07-9-004 

ORDER NO. 710-C 

ORDER ON REHEARING 

(Issued August 16, 2011) 

1. Earlier in this proceeding, the Commission issued a Final Rule (Order No. 710-B) 

revising its financial forms, statements, and reports for natural gas companies, contained 

in FERC Form Nos. 2, 2-A, and 3-Q, to provide greater transparency on fuel data by 

requiring the reporting of functionalized fuel data on pages 521a through 521c of those 

forms, and to include on those forms the amount of fuel waived, discounted or reduced as 

part of a negotiated rate agreement.1

 

2. In response to the Final Rule, the Interstate Natural Gas Association of America 

(INGAA) filed a request for rehearing raising eleven separate objections to the Final 

Rule. In this order on rehearing, we generally deny rehearing and reaffirm the findings 

we made in Order No. 710-B. We do, however, revise the burden estimate to more 

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

Pipelines, Order No. 710-B, 76 FR 4516 (Jan. 26, 2011), 134 FERC ¶ 61,033 (2011) 

(Order No. 710-B or Final Rule). 
Docket No. RM07-9-004 -2- 

accurately account for initial start-up costs, grant rehearing on the issue of whether to 

include page 521d and we grant filers additional time before they must begin filing Form 

Nos. 2, 2-A, and 3-Q in accordance with the requirements established in Order No. 710-B 

and this rehearing order. 

I. Background

3. This matter began in 2008, when the Commission issued a Final Rule (Order No. 

710) revising its financial forms, statements, and reports for natural gas companies, 

contained in FERC Form Nos. 2, 2-A, and 3-Q, to make the information reported in these 

forms more useful by updating them to reflect current market and cost information 

relevant to interstate natural gas pipelines and their customers.2

 The information 

provided in these forms included data on fuel use, but did not require these data to be 

functionally disaggregated. 

4. On rehearing, the American Gas Association (AGA) argued that the fuel data 

would be more useful if such data were broken out by different pipeline functions, 

including transportation, storage, gathering, and exploration/production, and should 

include, by function, the amount of fuel waived, discounted or reduced as part of a 

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

Pipelines, final rule, Order No. 710, FERC Stats. & Regs. ¶ 31,267 (2008) (Order No. 

710). 
Docket No. RM07-9-004 -3- 

negotiated rate agreement. This argument was rejected in Order No. 710-A,3

 but was 

reconsidered in a Notice of Proposed Rulemaking issued on June 17, 2010.4

 AGA 

supported the Commission’s proposal while INGAA opposed it. After considering all the 

comments and reply comments, the Commission issued a Final Rule adding additional 

transparency to the reporting of fuel data. Specifically, the Final Rule revised FERC 

Form Nos. 2, 2-A, and 3-Q, revising pages 521a, 521b, and page 520, and adding page 

521c to FERC Form Nos. 2, 2-A, and 3-Q to include functionalized fuel data, including 

the amount of fuel waived, discounted or reduced as part of a negotiated rate agreement.5

5. In response to the Final Rule, INGAA filed a request for rehearing reiterating many 

of the concerns that it raised earlier in the proceeding (in its comments and reply 

comments on the June 2010 NOPR). 

II. Discussion

A. Overview

6. INGAA raises eleven separate objections to the Final Rule. First, INGAA argues 

that Order No. 710-B erred by finding that reporting of functionalized fuel data by 

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

Pipelines, order on reh’g and clarification, Order No. 710-A, 123 FERC ¶ 61,278 

(2008). 

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

Pipelines, Notice of Proposed Rulemaking, 75 FR 35700 (June 23, 2010), FERC Stats. & 

Regs. ¶ 32,659 (June 17, 2010) (June 2010 NOPR). 

5

 Order No. 710-B, 134 FERC ¶ 61,033, at P 1, 7, 37. The Final Rule has a more 

complete discussion of the procedural history of this case. We will not reiterate that 

complete history here. 
Docket No. RM07-9-004 -4- 

 

contract rate category does not require tracking of fuel by individual contracts. Second, 

INGAA argues that adding this level of detail increases the reporting burden. Third, 

INGAA argues that the Commission erred by not adopting its alternative proposal which 

it maintains would have met the Commission’s needs with a lesser burden to filers. 

Fourth, INGAA claims that the requirement to allocate lost and unaccounted for gas 

(LAUF) among negotiated, discounted and recourse transportation customers ignores 

fundamental nature of LAUF, forcing an allocation that is meaningless. Fifth, INGAA 

argues that the requirement to disclose the disposition of excess gas or gas acquired to 

meet deficiencies by contract rate category also is meaningless. Sixth, INGAA reiterates 

its objection to reporting discounted rates as a separate category, claiming that disclosing 

this information does not serve any regulatory purpose because pipelines are prohibited 

from discounting. Seventh, INGAA argues that the Commission erred by not granting 

the clarification requested by MidAmerican6

 (that the rule should only cover (1) contracts 

with discounted and negotiated fuel rates and (2) headings should be changed to be 

“discounted fuel rate” and “negotiated fuel rate”). INGAA argues this would be less 

burdensome but would accomplish the Commission’s stated goals. Eighth, INGAA 

argues that the Commission erred by assuming that MidAmerican’s proposal would have 

excluded many contracts that otherwise would be reported. Ninth, INGAA argues that 

6

 In this proceeding, we are referring to Northern Natural Gas Company and Kern 

River Gas Transmission Company, collectively, as MidAmerican. 
Docket No. RM07-9-004 -5- 

the Final Rule orders the collection of data too soon and that data under the new 

categories should not be required to be collected until calendar year 2012. Tenth, 

INGAA requests clarification that “backhaul service offered under tariff” means that, if 

tariff does not include a “backhaul” rate schedule, then nothing need be reported for this. 

Finally, INGAA argues that the Commission should keep blank page 521d, which was 

included in the June 2010 NOPR and omitted in the Final Rule. We will now examine 

each of these arguments. 

B. Does the Final Rule Require the Tracking of Individual Contracts?

7. INGAA argues that Order No. 710-B erred by finding that reporting of 

functionalized fuel data by contract rate category does not require the tracking of fuel by 

individual contracts. 

8. INGAA states that, in Order No. 710-B, the Commission found that the reporting 

of functionalized fuel data by contract rate category does not require the tracking of fuel 

by individual contracts. INGAA disputes this finding and argues that such tracking 

would be necessitated, despite the Commission’s finding to the contrary. We reject this 

interpretation. As we stated in Order No. 710-B, at paragraph 74: 

In this Final Rule, the Commission is not imposing any additional reporting 

requirements that change how those pipelines track fuel. Pipeline billings 

are provided on an integrated basis, accounting for sales based on whether 

the volumes are negotiated, recourse, or discounted. Moreover, contrary to 

INGAA’s assertions, the Commission is not requiring pipelines to track 

fuel by individual contracts, but merely continuing the current practice of 

requiring the assignment of fuel based on an allocation of throughput or 

stated fuel rate. The revisions to page 521a through 521c require the same 
Docket No. RM07-9-004 -6- 

accounting mechanism for fuel, enabling parties to better understand how 

fuel use costs are assigned. 

9. Thus, it can be seen that, if a pipeline has twelve gas service contracts, the Final 

Rule is not requiring the pipeline to report the details of each of those contracts. Instead, 

the Final Rule is requiring the pipeline to report the totals for fuel (for all twelve 

contracts) by function which can be determined on an allocation of throughput or stated 

fuel rate. To accomplish this, however, the pipelines would need to continue their current 

practice of assessing shippers for services provided to each customer. 

C. Reporting Burden 

10. INGAA argues that adding the level of detail required by the Final Rule increases 

the reporting burden. In light of INGAA’s concerns, we have further reviewed the 

burden estimate contained in the Final Rule and have determined that we can improve the 

accuracy of our burden estimate if we distinguish between the initial start-up costs, which 

include all of the work needed to identify and create a mechanism to report the 

information required to be reported under the Final Rule, as compared to the ongoing 

costs of reporting the information required to be reported under the Final Rule once the 

reporting mechanism is in place. This revised burden estimate is shown below in the 

Information Collection Statement that begins at paragraph 28 of this order. 
Docket No. RM07-9-004 -7- 

D. INGAA’s Alternative Proposal

11. INGAA argues that the Commission erred by not adopting its alternative proposal 

which it maintains would have met the Commission’s needs with a lesser burden to filers. 

The Commission addressed this issue in Order No. 710-B, where we stated: 

We find that requiring the reporting of fuel costs and revenues by rate 

structure broken down by function will increase the ability of the 

Commission and interested parties to assess whether a pipeline’s existing 

shippers are subsidizing the pipeline’s negotiated rate program. Thus, we 

find that INGAA’s proposal would effectively delete much of the valuable 

information sought in the June 2010 NOPR.[7] 

The revised forms also will now allow the user to better determine where 

on the pipeline system fuel costs are being incurred and how they are being 

allocated. This added transparency, which is supported by the majority of 

the commenters, will ensure that the Commission and pipeline customers 

have sufficient information to be able to assess the justness and 

reasonableness of pipeline rates. The collection and public availability of 

this information is consistent with our goal of having sufficient information 

to allow the Commission and pipeline customers to assess the impact on 

pipeline rates of changing fuel costs.[8] 

 

By contrast, if we adopted INGAA’s suggestion to limit the revisions to 

FERC Form No. 2 to those originally proposed by AGA, then the benefits 

of increased transparency of rates, particularly within the negotiated rate 

program, which are described in the two preceding paragraphs, would not 

be fully realized.[9]

 7

 Order No. 710-B, 134 FERC ¶ 61,033 at P 37. 

8 Id. P 38. 

9 Id. P 39. 
Docket No. RM07-9-004 -8- 

12. INGAA’s rehearing reiterates arguments it advanced earlier in this proceeding that, 

for the reasons quoted above, the Commission rejected in Order No. 710-B. We reaffirm 

those findings and reject INGAA’s proposal. 

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

in Operations 

13. INGAA argues that Order No. 710-B suggests that fuel consumed in compressor 

stations, LAUF and fuel used in operations, which are all drawn from a commingled and 

fungible gas stream, can be traced back to individual shipper contracts. INGAA further 

argues that the requirement to allocate LAUF among negotiated, discounted and recourse 

transportation customers ignores fundamental nature of LAUF, forcing an allocation that 

is meaningless. INGAA also argues that, except in some limited and unique 

circumstances, such tracing is impractical, if not impossible.10 

 10 INGAA states that “[p]ipelines do track or allocate fuel consumed separately for 

incremental rate services in which the Commission in its orders has required the pipeline 

to keep the incremental rate customers’ fuel costs and revenues separate. Other than for 

such very limited incremental rate purposes, however, pipelines are not required to 

allocate or track fuel used by individual contract even in general section 4 rate 

proceedings. In its orders approving pipelines’ negotiated rate contracts, the Commission 

requires pipelines to separately account for the negotiated rate transaction’s volumes, 

revenues, billing determinants, rate components and surcharges. But, the Commission 

does not require that fuel used, or any other cost for that matter, associated with 

negotiated rate transactions be separately accounted for.” INGAA Rehearing at n.1. As 

discussed further in paragraph 21 below, this contention is incorrect because fuel use is a 

rate component. 

 
Docket No. RM07-9-004 -9- 

 

14. The reporting requirements established in the Final Rule do not require fuel use to 

be traced back to individual shipper contracts.11 The information reported on pages 521a 

and 521b -- even before issuance of the Final Rule -- already included a requirement for 

pipelines to report monthly fuel use by Dth. The Final Rule added the requirement for 

pipelines (on lines 1-65 on pages 521a and 521b) to allocate these totals among 

discounted rates, negotiated rates, and recourse rates. The Final Rule did not impose a 

requirement that these allocations be made based on a review of individual contracts. 

One reasonable approach would be to take the total volume of throughput and allocate it 

among the three contract categories (i.e., contracts with discounted rates, contracts with 

negotiated rates, and contracts with recourse rates) based on the percentage of gas 

transported for each contract type, which is already known and available to a pipeline for 

invoicing shippers on a monthly basis. For example, if, hypothetically, a pipeline has a 

monthly transportation volume of 1000 Dth and 5 percent of its volume is associated with 

contracts with discounted rates, 10 percent is associated with negotiated rates contracts, 

and 85 percent associated with recourse rate contracts, then the pipeline could develop an 

allocation of fuel used at compressor stations, LAUF, and gas used in operations based on 

a ratio of the throughput. Such an allocation could be used for all the various allocations 

11 The Commission does not expect pipelines to develop and administer a process 

by which the fuel in each compressor, as it is burned, is assigned in some manner among 

individual shipper contracts. 
Docket No. RM07-9-004 -10- 

needed to complete pages 521a and 521b. Thus, it is evident that we are not requiring

pipelines to assess individual contracts to make this allocation. 

15. In addition, while admittedly imperfect, allocating costs by function is a standard 

practice for pipelines for numerous cost categories. The allocation of fuel consumed in 

compressor stations, LAUF and fuel used in operations, and among negotiated, 

discounted and recourse transportation customers are a few, among many, of such cost 

allocations. The allocation of costs is a standard practice for pipeline companies to bill 

their customers for services rendered. The fact that such allocations are not 100 percent 

precise does not negate the necessity for such allocations being made. Pipelines collect 

fuel (including LAUF) from customers and the Final Rule requires the reporting of how 

that fuel is assigned. 

16. INGAA’s position is that the allocation of fuel costs required by this rule is 

“meaningless” given the nature of LAUF as gas that is lost and unaccounted for.12 We 

disagree. In our view, allowing customers to see exactly how fuel costs are assigned to 

various customers groups is important because it allows customers to assure themselves 

that the fuel costs being assigned to them are reasonable and do not cross-subsidize other 

customer groups. Thus, we find that making such allocations transparent is extremely 

meaningful. 

 12 INGAA Rehearing at 3 & 8-9. 
Docket No. RM07-9-004 -11- 

F. Disclosure of Disposition of Excess Gas or Gas Acquired to Meet 

Deficiency by Contract Rate Category

17. INGAA raises the same objections to the reporting of the disposition of excess gas 

or the reporting of gas acquired to meet deficiencies that it raised regarding the reporting 

of the allocation of fuel used in compressor stations, LAUF, and fuel used in operations. 

Specifically, INGAA argues that, 

[t]he reporting of disposition of excess gas or the reporting of gas acquired 

to meet deficiencies on pages 521b and 521c (lines 38-65) by contract rate 

category would provide little benefit. A pipeline does not track disposition 

or acquisition of gas by categories of transportation contracts. Assignment 

to contract rate categories could be accomplished by utilizing an arbitrary 

allocation methodology. However, the allocation of a pipeline’s system gas 

dispositions or acquisitions would not yield any meaningful information. 

Only the reporting of total dispositions or total acquisitions of system gas 

would produce a cogent result. Accordingly, INGAA requests rehearing 

and asks the Commission to allow pipelines to report total disposition or 

total acquisitions of system gas on pages 521b and 521c.[13] 

18. As discussed above in paragraph 14, the allocations required by the Final Rule do 

not require an analysis of individual contracts. Moreover, while the allocations required 

by this rule may not be precise, few allocations are, and these allocations are routinely 

made for customer billing purposes. 

19. The information reported in lines 38-65 would be useful in determining among 

which classes of shippers over and under recoveries of fuel are occurring (i.e., recourse, 

negotiated, or discounted customers). For example, recourse rate shippers could provide 

 13 INGAA Rehearing at 8. 
Docket No. RM07-9-004 -12- 

more fuel than necessary and negotiated rate shippers could have a capped fuel rate such 

that recourse shippers may be subsidizing negotiated rate shippers. The recourse rate 

shippers should be in a position to fully understand whether over recovered fuel for 

recourse rate contracts is being used to make up a deficiency of fuel for negotiated rate 

contracts. Similarly, shippers should be aware to the extent a pipeline is purchasing gas 

associated with a fuel deficiency attributable to negotiated rate contracts. Additionally, 

while generally more applicable to pipelines with stated fuel rates, shippers should be in a 

position to know whether the disposition of excess fuel is being sold or if the gas is used 

for imbalances such that pipelines are recovering the cost through periodic imbalance 

cashout reports. We find that reporting this information provides useful transparency 

regarding the amount of fuel used to operate compressor stations, the disposition of 

excess gas and how the deficiency was acquired, and how fuel costs and LAUF are 

allocated among customers. Consequently, we deny rehearing of this issue. 

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

Separate Category

20. INGAA reiterates its objection to reporting fuel assigned to discounted rates as a 

separate category, claiming that disclosing this information does not serve any regulatory 

purpose, because pipelines are prohibited from discounting fuel. Fuel expenses 

constitute a significant portion of the total expenses recovered by natural gas rates. 

Obscuring this information makes it harder for entities to track the reasonableness of 

these expenses. Contrary to INGAA’s arguments, pipelines are not prohibited from 
Docket No. RM07-9-004 -13- 

 

discounting fuel under all circumstances.14 In addition, the additional transparency 

provided by this Final Rule serves the important regulatory objective of assuring that 

rates are just and reasonable. If a pipeline is not discounting fuel then it should simply 

report zero in Column (K), Volume (in Dth) Not Collected. This approach provides an 

affirmative confirmation that fuel is not being discounted. Combining the discount rate 

category with negotiated rates would eliminate this confirmation. Consequently, we will 

retain the separate discount rate category. 

21. Additionally, based on its contention that there is no cross-subsidy in instances 

where a negotiated rate customer pays the same fuel rate as a recourse rate customer, 

INGAA argues that there is no need to separate the reporting of recourse and negotiated 

rate contracts. The Commission has long required pipelines to separately account for rate 

components associated with negotiated rates.15 We are not persuaded to modify that 

policy in this rule. Moreover, while INGAA points to certain circumstances where it 

argues that no cross-subsidy would occur, the reporting requirements of this rule apply to 

all negotiated rate contracts and thus INGAA’s example does not suffice to contradict the 

need for this provision. 

14 For example, in Transwestern Pipeline Company, 54 FERC ¶ 61,319, at 62,007 

(1991), the Commission approved Transwestern’s proposal to provide fuel discounts, 

provided that the minimum rate would not be lower than actual fuel costs, if any. 

15 See, e.g., NorAm Gas Transmission Company, 75 FERC ¶ 61,322, at 62,029 

(1996); Texas Eastern Transmission, LP, 133 FERC ¶ 61,220, at P 19 (2010); Gulf 

Crossing Pipeline Company LLC, 123 FERC ¶ 61,100, at P 87 (2008). 
Docket No. RM07-9-004 -14- 

H. MidAmerican’s Requested Clarification 

22. INGAA argues that the Commission erred by not granting the clarification 

requested by MidAmerican (that the rule should only cover (1) contracts with discounted 

and negotiated fuel rates and (2) headings should be changed to be “discounted fuel rate” 

and “negotiated fuel rate”). INGAA argues this approach would be less burdensome but 

would accomplish the Commission’s stated goals. 

23. As we stated in Order No. 710-B,16 the proposal to limit the scope of the rule to 

only require the reporting of fuel costs in contracts that include a specific provision for 

discounted or negotiated fuel would elevate form over substance and would omit 

contracts with negotiated and discounted rates, unless they include a specific provision 

covering discounted or negotiated fuel. This is contrary to the objective of the Final Rule 

of enhancing the transparency of fuel costs and we deny rehearing. Also, given our 

finding on the required reporting of gas contracts with discounted or negotiated fuel, we 

affirm our finding on the appropriate headings to be used.17

I. Excluded Contracts 

24. INGAA argues that the Commission erred by assuming that MidAmerican’s 

proposal would have excluded many contracts that otherwise would be reported. As we 

stated in Order No. 710-B, MidAmerican commented that, to its knowledge, very few 

 16 Order No. 710-B, 134 FERC ¶ 61,033 at P 55. 

17 Id. P 56. 
Docket No. RM07-9-004 -15- 

discounted and negotiated rate agreements include a provision for discounted and 

negotiated fuel.18 We concluded that, if this were true or if future contracts are written to 

make it true, then excluding the reporting of contracts not including a specific provision 

identifying discounted and negotiated fuel would be problematic.19 INGAA argues that 

we erred in relying on MidAmerican’s statement, but in no way rebuts it. Moreover, we 

were concerned that, even if contracts are not currently drafted in this fashion, future 

contracts could be rewritten to achieve this end and we do not wish to open this 

possibility. Accordingly, we deny INGAA’s request for rehearing on this issue. 

J. Start Date for New Data Collections 

25. INGAA argues that the Final Rule orders the collection of data to begin too soon 

and that data under the new categories should not be required to be collected until 

calendar year 2012. We agree with INGAA that pipelines may not have the accounting 

systems in place to make the allocations of functionalized fuel by contract rate type 

required by the Final Rule and they may need to develop systems for making such 

allocations. We recognize some pipelines may not currently have in place the required 

accounting systems necessary to allocate fuel costs to negotiated, discounted and recourse 

transportation customers. In light of these considerations, we will grant rehearing and 

further delay the commencement of implementation of the filing requirements of the 

 18 Id. P 53. 

19 Id. P 55. 
Docket No. RM07-9-004 -16- 

Final Rule until the fourth quarter period (“Q4”) of 2011. Thus, the data must be 

reported in the new format starting with the quarterly period October 1 through 

December 31, 2011 in Annual Report Forms 2 and 2-A with a due date of April 18, 2012. 

This should allow sufficient time for filers to develop the necessary data and perform the 

needed allocations. Individual pipeline companies may apply to the Commission for 

further extensions, based on their individual circumstances. Even if an extension is 

granted, the information will still be required to be reported for the Q4 period of 2011 

but, if an extension is granted, the due date for the filing of this information may be 

extended past the April 18, 2012 filing deadline. Pipeline companies seeking an 

extension must provide a detailed explanation of why (for example, an additional analysis 

of data is needed, or allocation factors are still being developed) they cannot meet the 

filing deadline. The Commission will evaluate these requests on a case-by-case basis, 

based on the facts presented. 

K. Requested Clarification of Reported Backhaul Service 

26. INGAA requests clarification that “backhaul service offered under tariff” means 

that, if the tariff does not include a “backhaul” rate schedule, then nothing need be 

reported for this.20 A review of gas tariffs shows that many tariffs recover a charge for 

backhaul service, but do not necessarily provide for a separate backhaul rate schedule for 

 20 In Order No. 710-B, the Commission added lines 66-68 to page 521. The lines 

request a separation of forwardhaul and backhaul throughput volumes in Dths for the 

quarter. 
Docket No. RM07-9-004 -17- 

 

that service. In many instances, the forwardhaul tariff permits backhaul service at or 

below the forwardhaul rate, with no separate backhaul rate schedule.21 If we exclude 

these backhaul volumes, then total backhaul volumes would be understated for these 

transactions. Thus, we reject the argument that information on backhauls should be 

limited to those instances when the tariff includes a separate backhaul rate schedule. 

INGAA’s requested clarification would keep needed information hidden and could 

encourage tariffs to be drafted in a manner to avoid the reporting of this information. We 

note that the discussion in Order No. 710-B at paragraph 52 was addressing the narrow 

instances, such as with reticulated gas systems, where it is not possible to clearly 

determine what is a backhaul and what is a forwardhaul. We did not intend this to restrict 

the reporting of backhauls in systems where the gas flow path can be determined. Put 

differently, if the pipeline is unable to determine whether the volume is forwardhaul or 

backhaul, then the volume can be reported entirely as forwardhaul. Accordingly, we 

affirm the findings we made on this subject at paragraphs 50-52 of Order No. 710-B and 

deny the requested clarification. 

21 See Trailblazer Pipeline Co., 39 FERC ¶ 61,103, at 61,324 (1987), where we 

stated that, as backhaul volumes are included within the definition of transportation in 

section 284.1(a) of the Commission’s regulations (18 C.F.R. § 284.1(a)), Trailblazer may 

perform backhaul service pursuant to its firm and interruptible rate schedules and we did 

not require Trailblazer to adopt a separate backhaul rate in that proceeding. We also note 

that, for example, the Iroquois Gas Transmission System, L.P., FERC Gas Tariff, at 

Section 13 of the General Terms and Conditions, Second Revised Sheet No. 76, provides 

for backhaul transportation service to be provided pursuant to the firm transportation 

service rate schedule and not under a separate backhaul rate schedule. 
Docket No. RM07-9-004 -18- 

L. Need for Page 521d 

27. Finally, INGAA argues that the Commission should retain the blank page 521d that 

we proposed in the June 2010 NOPR but omitted in Order No. 710-B. This omission was 

an oversight and we agree with INGAA that a filer would need this page to properly 

complete the Forms. Thus, we will correct this oversight and will include page 521d on 

the various forms.22 We, likewise, are including pages 521a-d in the FERC Form Nos. 

2/2-A/3-Q Submission Software System. 

III. Information Collection Statement

28. The Office of Management and Budget’s (OMB) regulations require approval of 

certain information collection requirements imposed by agency rules.23 Previously, the 

Commission submitted to OMB the information collection requirements arising from 

Order No. 710-B and OMB approved those requirements.24 In this order, the 

Commission is making no substantive changes to the content of the forms and the 

information that is required to be submitted. However, by adding in blank page 521d and 

re-estimating the reporting burden arising from Order No. 710-B, the Commission finds it 

 22 This page is shown as an attachment to this order. 

23 5 CFR 1320.11. 

24 OMB approved the information collections prescribed in Order No. 710-B on 

May 16, 2011 for FERC Form No. 2 (OMB Control No. 1902-0028, ICR# 201101-1902-

001), FERC Form No. 2-A (OMB Control No. 1902-0030, ICR# 201101-1902-003) and 

FERC Form No. 3-Q (OMB Control No. 1902-0205, ICR# 201101-1902-004). 
Docket No. RM07-9-004 -19- 

necessary to make a formal submission to OMB for review and approval under section 

3507(d) of the Paperwork Reduction Act of 1995. 25 

29. This order affects the following existing data collections: 

Title: FERC Form No. 2, “Annual Report for Major Natural Gas Companies”; 

FERC Form No. 2-A, “Annual Report for Nonmajor Natural Gas Companies. 

Action: Proposed information collection. 

OMB Control Nos. 1902-0028 (FERC Form No. 2); 1902-0030 (FERC Form No. 

2-A). 

Respondents: Businesses or other for profit. 

Frequency of responses: Annually (FERC Form Nos. 2 and 2-A). 

Necessity of the information: The information maintained and collected under the 

requirements of 18 CFR 260.1 and 18 CFR 260.2 is essential to the Commission’s 

oversight duties. The data previously reported in the forms did not provide sufficient 

information to the Commission and the public to permit an evaluation of the filers’ 

jurisdictional rates. Since the triennial restatement of rates requirement was abolished 

and pipelines are no longer required to submit this information, the need for current and 

relevant data is greater than in the past. 

30. Without the information required in Order No. 710-B, it is difficult for the 

Commission and the public to perform an assessment of pipeline costs, and thereby help 

to ensure that rates are just and reasonable. Order No. 710-B accounts for the possibility 

 25 44 U.S.C. § 3507(d). 
Docket No. RM07-9-004 -20- 

that multiple pipelines may be required to develop and implement new procedures in 

order to provide the data in the revised forms. In any event, we believe the additional 

information required in Order No. 710-B will allow the Commission and form users to 

better analyze pipeline fuel costs, an important component in assessing the justness and 

reasonableness of pipelines’ rates. 

Burden Statement: As indicated in the above discussion, INGAA contends that 

the Commission underestimated the burden associated with implementing the changes 

mandated in Order No. 710-B. In light of INGAA’s arguments, the Commission 

acknowledges that some filers may have to modify existing systems in order to collect the 

necessary data. To account for this, the Commission estimates a one-time burden of 80 

hours per filer. This will increase the burden as follows: 

Data Collection 

Form26

Number of 

Respondents 

One-time filing 

per Respondent 

Filings 

Per Year 

One-time additional 

hours for this Form 

FERC Form No. 

2 84 80 1 6,720 

FERC Form No. 

2-A 44 80 1 3,520 

Totals 10,240 

Information Collection Costs: 10,240 hours at $120/hour= $1,228,800. 

 26 The FERC Form No. 3-Q (OMB Control No. 1902-0205) is not directly affected 

by the one-time burden increase because the filers will be making this one-time change in 

preparation for filing the FERC Form Nos. 2 and 2A in April 2012. It is expected that 

well before the date of the next FERC Form No. 3Q filing the one-time burden will have 

already been expended. However, the Commission intends to submit the FERC Form 

No. 3-Q to OMB for informational purposes. 
Docket No. RM07-9-004 -21- 

31. Internal Review: The Commission has reviewed the proposed changes and has 

determined that the changes are necessary. These requirements conform to the 

Commission’s need for efficient information collection, communication, and 

management within the energy industry. The Commission has assured itself, by means 

of internal review, that there is specific, objective support associated with the 

information requirements. 

32. Interested persons may obtain information on the reporting requirements by 

contacting: Federal Energy Regulatory Commission, 888 First Street, NE, Washington, 

DC 20426 [Attention: Ellen Brown, Office of the Executive Director, email: 

DataClearance@ferc.gov, phone (202) 502-8663, fax: (202) 273-0873]. For submitting 

comments concerning the collections of information and the associated burden estimates, 

please submit comments to FERC in this Docket No. and to the Office of Information 

and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, 

Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory 

Commission, phone: (202) 395-4638, fax: (202) 395-7285]. Due to security concerns, 

comments should be sent electronically to the following e-mail address: 

oira_submission@omb.eop.gov. Please refer to OMB Control Nos. 1902-0028 (FERC 

Form No. 2), and 1902-0030 (FERC Form No. 2-A), and the docket number of this Final 

Rule in your submission. 
Docket No. RM07-9-004 -22- 

IV. Regulatory Flexibility Act

33. The Regulatory Flexibility Act of 1980 (RFA)27 generally requires a description 

and analysis of final rules that will have significant economic impact on a substantial 

number of small entities.28 However, the RFA does not define “significant” or 

“substantial.” Instead, the RFA leaves it up to an agency to determine the effect of its 

regulations on small entities. 

34. In Order No. 710-B the Commission certified that the additional reporting 

requirements would not have a significant economic impact on a substantial number of 

small entities.29 With the understanding that a one-time burden has now been added, the 

Commission affirms that the certification provided in Order No. 710-B remains accurate 

and no further justification is needed under the RFA. 

The Commission orders: 

(A) INGAA’s request for rehearing is hereby denied in part and granted in part, as 

discussed in the body of this order. 

 27 5 U.S.C. §§ 601-612. 

28 The RFA definition of “small entity” refers to the definition provided in the 

Small Business Act, which defines a “small business concern” as a business that is 

independently owned and operated and that is not dominant in its field of operation. 

15 U.S.C. 632. The Small Business Size Standards component of the North American 

Industry Classification System defines a small natural gas pipeline company as one 

whose total annual revenues, including its affiliates, are $6.5 million or less. 13 CFR 

121, 201. 

29 Order No. 710-B, 134 FERC ¶ 61,033 at P 89-91. 
Docket No. RM07-9-004 -23- 

(B) This order shall be published in the Federal Register. 

By the Commission. 

( S E A L ) 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 
Docket No. RM07-9-004 -24- 

Note: This attachment will not be published in the Code of Federal Regulations. 

Name of Respondent This Report is: 

(1)  An Original 

(2)  A Resubmission 

Date of Report 

(Mo, Da, Yr) 

 / / 

Year/Period of Report 

End of Year/Qtr

Shipper Supplied Gas for the Current Quarter (continued) 

Amount Collected (Dollars) Volume (in Dth) Not Collected 

Month 1 

Discounted 

Rate 

Amount 

(f) 

Month 1 

Negotiated Rate 

Amount 

(g) 

Month 1 

Recourse Rate 

Amount 

(h) 

Month 1 

Total 

Amount 

(i) 

Month 1 

Waived 

Dth 

(j) 

Month 1 

Discounted 

Dth 

(k) 

Month 1 

Negotiated 

Dth 

(l) 

Month 1 

Total 

Dth 

(m) 

Month 1 

Account(s) 

Debited 

(n) 

Month 1 

Account(s) 

Credited 

(o) 

FERC FORM NO. 2 (REVISED 12-10) Page 521d 

FERC FORM NO. 2-A (REVISED 12-10) 

FERC FORM NO. 3-Q (REVISED 12-10)