120 FERC ¶ 61,249 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 157 

(Docket No. RM06-7-002; Order No. 686-B) 

Revisions to the Blanket Certificate Regulations and Clarification Regarding Rates 

 (Issued September 20, 2007) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Order on Rehearing. 

SUMMARY: On June 22, 2007, the Commission issued an Order on Rehearing and 

Clarification in response to motions seeking rehearing and clarification of an October 19, 

2006 Final Rule. The Final Rule expanded the scope and scale of activities that may be 

undertaken pursuant to blanket certificate authority and clarified Commission rate policy. 

The revised regulations allow interstate natural gas pipelines to employ the streamlined 

blanket certificate procedures for larger projects and for a wider variety of projects, 

thereby increasing efficiencies, and decreasing the time and cost associated with the 

construction and maintenance of the nation’s natural gas infrastructure. This order grants 

a request for rehearing of the June 22, 2007 Order. 

EFFECTIVE DATE: The modifications made in this request for rehearing will become 

effective [insert date 30 days after publication in the FEDERAL REGISTER]. 
Docket No. RM06-7-002 

- 2 -

FOR FURTHER INFORMATION CONTACT: 

Gordon Wagner 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

gordon.wagner@ferc.gov 

(202) 502-8947 

Michael McGehee 

Office of Energy Projects 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

michael.mcgehee@ferc.gov 

(202) 502-8962 

Lonnie Lister 

Office of Energy Projects 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

lonnie.lister@ferc.gov 

202-502-8587 

SUPPLEMENTARY INFORMATION

:
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Joseph T. Kelliher, Chairman; 

 Suedeen G. Kelly, Marc Spitzer, 

 Philip D. Moeller, and Jon Wellinghoff. 

Revisions to the Blanket Certificate Regulations Docket No. RM06-7-002 

 and Clarification Regarding Rates 

ORDER ON REHEARING 

(Issued September 20, 2007) 

I. Introduction

1. On October 19, 2006, the Federal Energy Regulatory Commission (Commission) 

issued a Final Rule in Order No. 6861

 amending Part 157, Subpart F, of its regulations to 

expand the scope and scale of activities that may be undertaken pursuant to blanket 

certificate authority by (1) broadening the types of natural gas projects permitted under 

blanket certificate authority to include certain mainline, storage, and liquefied natural gas 

(LNG) and synthetic gas pipeline facilities, and (2) increasing the blanket certificate 

project cost limits from $8,200,000 to $9,600,000 for automatic authorization projects 

 1

 Order No. 686, Revisions to the Blanket Certificate Regulations and Clarification 

Regarding Rates, 71 FR 63680 (October 31, 2006), FERC Stats & Regs ¶ 31,231 (2006). 

This rulemaking proceeding was initiated in response to a petition submitted under 

18 CFR 385.207(a) (2007) of the Commission’s regulations by the Interstate Natural Gas 

Association of America jointly with the Natural Gas Supply Association. 
Docket No. RM06-7-002 - 2 -

and from $22,700,000 to $27,400,000 for prior notice projects.2

 In addition, Order No. 

686 clarified that a natural gas company is not necessarily engaged in an unduly 

discriminatory practice if it charges different customers different rates for the same 

service when those customers commit to service on different dates. The revised blanket 

certificate regulations are intended to allow interstate natural gas companies to employ 

the streamlined blanket certificate procedures for larger projects and additional types of 

projects, thereby increasing efficiencies and decreasing the time and cost associated with 

the construction and maintenance of the nation’s natural gas infrastructure. On June 22, 

2007, the Commission issued an order in response to motions seeking rehearing and 

clarification of the October 2006 Final Rule.3

 In this order, for the reasons discussed 

below, the Commission grants a request for rehearing of the June 2007 Order. 

II. Request for Rehearing

2. New § 157.210 permits companies to rely on blanket certificate authority to 

“acquire, construct, modify, replace, and operate natural gas mainline facilities, including 

compression and looping.” Revised § 157.216(b)(2) provides for the abandonment of 

such facilities. The Interstate Natural Gas Association of America (INGAA) asked the 

Commission to clarify whether the Final Rule’s revised § 157.216(b)(2) abandonment 

 2

 These cost limits now stand at $9,900,000 for an automatic authorization project 

and $28,200,000 for a prior notice project. See Natural Gas Pipelines; Project Cost and 

Annual Limits, 72 FR 5614 (Feb. 7, 2007). 

3

 Order No. 686-A, Order on Rehearing and Clarification, 72 FR 37431 (July 10, 

2007), FERC Statutes and Regulations ¶ 31,249 (2007)(June 2007 Order). 
Docket No. RM06-7-002 - 3 -

provisions would apply exclusively to mainline facilities put in place under the new 

§ 157.210 or would also apply to mainline facilities already in place. 

3. In its June 2007 Order, the Commission stated that facilities which were 

constructed under case-specific certificate authorization, but which would have met the 

criteria for construction under the current blanket certificate program, may be abandoned 

pursuant to the provisions § 157.216(b). The Commission stated that in considering 

whether existing facilities would have met the criteria for blanket certificate 

authorization, “the facilities must have been installed subsequent to the Commission’s 

implementation of the blanket certificate program and the facilities’ original cost must 

have met the § 157.208 project cost cap in effect at the time of their construction.” 

4. INGAA requests rehearing of the June 2007 Order to ask the Commission to 

remove this qualification because it precludes § 157.216 abandonment of facilities put in 

place prior to 1982, i.e., the year the blanket certificate program was initiated. INGAA 

notes that the Commission did not impose the qualification that the project cost not 

exceed the blanket certificate cost cap in effect at the time of construction with respect to 

its 1999 expansion of the blanket certificate abandonment provisions to cover gas supply 

facilities and services.4

 INGAA contends rather than comparing the per project cost cap 

in effect at the time a facility was constructed with the facility’s actual original cost, to 

 4

 See Order No. 603, Revision of Existing Regulations under the Natural Gas Act, 

64 FR 26572 (May 14, 1999), FERC Stats. & Regs. ¶ 31,073 (1999); Order No. 603-A, 

64 FR 54522 at 54532-34 (Oct. 7, 1999), FERC Stats. & Regs. ¶ 31,081 at 30,936 (1999), 

adopting a similar approach with respect to automatic abandonments under 18 CFR 

157.216(a) (2007). 
Docket No. RM06-7-002 - 4 -

determine whether the blanket certificate abandonment provisions might apply to an 

existing facility, the Commission should compare the per project cost cap currently in 

effect with the estimated cost to duplicate the facility today. INGAA states this approach 

will permit facilities put in place prior to the 1982 initiation of the blanket certificate 

program to qualify for abandonment under the blanket program. 

5. The Commission will grant INGAA’s request for rehearing. Instead of restricting 

§ 157.216 abandonments to facilities put in place after the effective date of the blanket 

certificate program and comparing a facility’s original cost to the cost cap in effect at the 

time the facility was placed in service, companies will be required to compare the 

estimated current cost to replicate an existing facility to the current § 157.208(d) per 

project cost cap. This will permit companies to employ blanket certificate authority to 

abandon a facility put in place under case-specific authority, provided the existing facility 

could qualify for authorization under the current blanket program 

6. To effect this expansion of abandonment authority, the Commission will revise 

§§ 157.216(c)(1) and (d)(1) to specify that a company seeking to rely on its blanket 

certificate to abandon a facility which was not initially constructed or acquired under 

blanket certificate authority must estimate the current cost to replicate the facility. 

Provided the estimated current cost to replicate the facility would not exceed the 

currently-effective § 157.208(d) project cost cap, and provided the existing facility would 

qualify for authorization under the currently-effective blanket regulations, the company 

may rely on abandonment authority under § 157.216. Note that in calculating an 

estimated cost, the Commission anticipates a company will account for the current values 
Docket No. RM06-7-002 - 5 -

of a facility’s various component costs, such as land acquisition, public outreach, agency 

involvement, materials, labor, and environmental mitigation and remediation.5

 In 

addition, the Commission will revise §§ 157.216(a)(2) and (b)(2) to clarify that any 

existing facility that could be constructed or acquired under the currently-effective 

blanket certificate program criteria can be abandoned under blanket certificate authority, 

provided that, as is currently the case, the blanket certificate holder obtains the written 

consent of each customer served using the facility during the past 12 months. 

7. In view of the above described revisions to the June 2007 order and blanket 

certificate abandonment regulations, INGAA’s request for rehearing is granted. 

III. Information Collection Statement

8. The Office of Management and Budget (OMB) regulations require that OMB 

approve certain information collection requirements imposed by an agency.6

 The Final 

Rule’s revisions to the information collection requirements for blanket certificate projects 

were approved under OMB Control Nos. 1902-0128 and 1902-0060. While this order on 

rehearing clarifies aspects of the existing information collection requirements for the 

blanket certificate program, it does not add to these requirements. Accordingly, a copy of 

this order will be sent to OMB for informational purposes only. 

 5

 See, e.g., the reporting requirements for describing a project’s costs in 18 CFR 

157.208(e)(3) (2007). The Commission suggests a blanket certificate holder 

contemplating action under 18 CFR 157.216 review the record in this proceeding, which 

includes comments on past and present project cost comparisons. 

6

 5 CFR 1320.11 (2007). 
Docket No. RM06-7-002 - 6 -

IV. Document Availability

9. In addition to publishing the full text of this document in the Federal Register, the 

Commission provides all interested persons an opportunity to view and print the contents 

of this document via the Internet through FERC's website (http://www.ferc.gov) and in 

FERC's Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. 

Eastern time) at 888 First Street, N.E., Room 2A, Washington D.C. 20426. User 

assistance is available for FERC’s web site during normal business hours (8:30 a.m. to 5 

p.m. Eastern time, Monday to Friday) from FERC’s Online Support at 202-502-6652, toll 

free at 1-866-208-3676, or by e-mail at ferconlinesupport@ferc.gov, and from the Public 

Reference Room at 202-502-8371, TTY at 202-502-8659, or by e-mail at 

public.referenceroom@ferc.gov. 

V. Effective Date and Congressional Notification

10. The modifications made in this request for rehearing will become effective [insert 

date 30 days after publication in the FEDERAL REGISTER]. The provisions of 5 

U.S.C. 801 regarding Congressional review of rulemaking do not apply to this order on 

rehearing, since it clarifies agency procedure and practice. 
Docket No. RM06-7-002 - 7 -

List of subjects in 18 CFR Part 157

Administrative practice and procedure, Natural gas, Reporting and recordkeeping 

requirements 

By the Commission. 

( S E A L ) 

 Kimberly D. Bose, 

 Secretary. 

 

 
Docket No. RM06-7-002 - 8 -

In consideration of the foregoing, the Commission amends part 157, Chapter I, 

Title 18, Code of Federal Regulations, as follows: 

PART 157--APPLICATIONS FOR CERTIFICATES OF PUBLIC 

CONVENIENCE AND NECESSITY AND FOR ORDERS PERMITTING 

AND APPROVING ABANDONMENT UNDER SECTION 7 OF THE 

NATURAL GAS ACT

1. The authority citation for part 157 continues to read as follows: 

Authority: 15 U.S.C. 717-717w. 

2. In § 157.216, paragraphs (a)(2), (b)(2), (c)(1), and (d)(1) are revised to read as 

follows: 

§ 157.216 Abandonment. 

 (a) * * * 

(2) A facility that did or could now qualify for automatic authorization as 

described in § 157.203(b), provided the certificate holder obtains the written consent of 

each customer served using the facility during the past 12 months. 

(b) * * * 

(2) Any other facility that did or could now qualify for prior notice 

authorization as described in § 157.203(c), provided the certificate holder obtains the 

written consent of each customer served using the facility during the past 12 months. 

(c) * * * 
Docket No. RM06-7-002 - 9 -

(1) The location, type, size, and length of the subject facilities. For facilities 

not constructed or acquired under blanket certificate authority, an estimate of the current 

cost to replicate such facilities; 

* * * * * 

(d) * * * 

(1) A description of the facilities abandoned under this section. For facilities 

not constructed or acquired under blanket certificate authority, an estimate of the current 

cost to replicate such facilities; 

* * * * *