165 FERC ¶ 61,110

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Neil Chatterjee, Chairman;

 Cheryl A. LaFleur and Richard Glick.

Millennium Pipeline Company, L.L.C. Docket Nos. RP19-65-000

RP19-66-000

ORDER ON RATE REDUCTION FILING AND FERC FORM NO. 501-G

(Issued November 15, 2018)

On October 11, 2018, in Docket No. RP19-66-000, Millennium Pipeline 

Company, L.L.C. (Millennium) filed revised tariff records1 pursuant to section 4 of the 

Natural Gas Act (NGA) to implement a rate reduction consistent with section 154.404 of 

the Commission’s regulations.2

 The Commission accepts Millennium’s revised tariff 

records effective December 1, 2018, as proposed.

 1 See Appendix.

2 18 C.F.R. § 154.404(a) (2018), which provides:

Purpose. The limited rate filing permitted by this section is 

intended to permit:

(1) a natural gas company subject to the federal corporate 

income tax to reduce its maximum rates to reflect the 

decrease in the federal corporate income tax rate pursuant to 

the Tax Cuts and Jobs Act of 2017, and

(2) a natural gas company organized as a pass-through entity 

either (i) to eliminate any income tax allowance and 

accumulated deferred income taxes reflected in its current 

rates or (ii) to reduce its maximum rates to reflect the 

decrease in the federal income tax rates applicable to partners 

pursuant to the Tax Cuts and Jobs Act of 2017.
Docket Nos. RP19-65-000 and RP19-66-000 - 2 -

Background and Proposal 

On July 18, 2018, the Commission issued Order No. 849,

3 a final rule adopting 

procedures for determining which jurisdictional natural gas pipelines may be collecting 

unjust and unreasonable rates in light of: (1) the income tax reductions provided by the 

Tax Cuts and Jobs Act

4

; and (2) the Commission’s Revised Policy Statement5 and 

Opinion No. 511-C6 establishing a policy that master limited partnerships (MLPs) may 

not recover an income tax allowance in response to the decision of the United States 

Court of Appeals for the District of Columbia Circuit (D.C. Circuit) in United Airlines.

7

 

Order No. 849 required, pursuant to sections 10 and 14(a) of the NGA, that all interstate 

natural gas companies, with cost-based stated rates, that filed a 2017 FERC Form No. 2 

or 2-A, must file a FERC Form No. 501-G informational filing.8

 The FERC Form No. 

501-G is designed to collect financial information to evaluate the impact of the Tax Cuts 

and Jobs Act and United Airlines Issuances on interstate natural gas pipelines’ revenue 

requirements. Using the data in the pipelines’ 2017 FERC Form Nos. 2 and 2-A, the

form estimates: (1) the percentage reduction in the pipeline’s cost of service resulting 

from the Tax Cuts and Jobs Act and the Revised Policy Statement; and (2) the pipeline’s 

current return on equity (ROE) before and after the reduction in corporate income taxes 

and the elimination of income tax allowances for MLP pipelines. 

 3 Interstate and Intrastate Natural Gas Pipelines; Rate Changes Relating to 

Federal Income Tax Rate, Order No. 849, 83 Fed. Reg. 36,672 (July 30, 2018), FERC 

Stats. & Regs. ¶ 31,404 (2018) (cross-referenced at 164 FERC ¶ 61,031) (Order 

No. 849).

4 An Act to provide for reconciliation pursuant to titles II and V of the concurrent 

resolution on the budget for fiscal year 2018, Pub. L. No. 115-97, 131 Stat. 2054 (2017) 

(Tax Cuts and Jobs Act).

5 Inquiry Regarding the Commission’s Policy for Recovery of Income Tax Costs, 

Revised Policy Statement, 83 FR 12,362 (Mar. 21, 2018), FERC Stats & Regs. ¶ 35,060 

(2018), order on reh’g, 164 FERC ¶ 61,030 (2018). 

6 SFPP, L.P., Opinion No. 511-C, 162 FERC ¶ 61,228, at P 9 (2018).

7 United Airlines, Inc. v. FERC, 827 F.3d 122 (D.C. Cir. 2016). For purposes of 

this order, the Revised Policy Statement, United Airlines, and Opinion No. 511-C will 

collectively be referred to as “United Airlines Issuances.”

8 The One-time Report on Rate Effect of the Tax Cuts and Jobs Act is referred to 

interchangeably as “One-time Report” or “FERC Form No. 501-G.”
Docket Nos. RP19-65-000 and RP19-66-000 - 3 -

Order No. 849 also provided several options each interstate natural gas pipeline 

may choose from to address the changes to the pipeline’s revenue requirement as a result 

of the income tax reductions, including a limited NGA section 4 rate reduction filing. 

Order No. 849 adopted section 154.404 of the Commission’s regulations, authorizing 

natural gas pipelines to submit limited NGA section 4 filings to reduce their rates to 

reflect the Tax Cuts and Jobs Act and the United Airlines Issuances, without making any 

other rate changes. Section 154.404 permits pass-through pipelines, including MLPs, to 

either eliminate their tax allowances or reduce their rates to reflect the reduced income 

tax expenses provided by the Tax Cuts and Jobs Act. In order to provide an additional 

incentive for pipelines to make a limited NGA section 4 rate reduction filing, Order 

No. 849 included a guarantee that the Commission will not, for a three-year moratorium 

period, initiate an NGA section 5 rate investigation of a pipeline that makes such a filing, 

if that filing reduces the pipeline’s ROE to 12 percent or less.9

On October 11, 2018, in Docket No. RP19-65-000, Millennium filed FERC Form 

No. 501-G and an Addendum consistent with the reporting requirements of Order 

No. 849. Millennium’s FERC Form No. 501-G shows that its indicated cost-of-service

reduction is 8.8 percent, or approximately $15.2 million, and that its Total Estimated 

ROE would be 14.6 percent, after adjustment to reflect the Tax Cuts and Jobs Act and 

United Airlines Issuances. In its Addendum, Millennium calculates a 10.3 percent, or 

approximately $17.9 million, reduction to its indicated cost of service, and a Total 

Estimated ROE of 14.2 percent, after adjustment to reflect the Tax Cuts and Jobs Act and 

United Airlines Issuances. Millennium notes that it selected “yes” as the answer to the 

question of whether Millennium is a tax paying entity in its Addendum but answered 

“no” to this question in its FERC Form No. 501-G.10 

On October 11, 2018, in Docket No. RP19-66-000, Millennium filed a limited 

NGA section 4 rate reduction pursuant to section 154.404 of the Commission’s 

regulations. Millennium states that it utilized the version of the FERC Form No. 501-G 

provided in its Addendum to calculate the rate reduction used in the limited NGA 

section 4 filing. Millennium states that the 10.3 percent indicated cost-of-service

reduction in the Addendum is higher than the indicated cost-of-service reduction of 

8.8 percent in its FERC Form No. 501-G. Therefore, Millennium proposes to reduce its 

currently effective rates by 10.3 percent, effective December 1, 2018.

11

 9 Order No. 849, FERC Stats. & Regs. ¶ 31,404 at PP 199-200.

10 Millennium Rate Reduction Filing at 4. 

11 Id. at 4-6.
Docket Nos. RP19-65-000 and RP19-66-000 - 4 -

Millennium also argues that the Commission should accept its proposed rate 

reduction and take no further action concerning its rates. Millennium explains that 

approximately 90 percent of the reservation charge revenues it receives under its firm 

service agreements come from negotiated rates, all of which are lower than its current 

maximum recourse rates. Millennium further argues that the remaining 10 percent of its 

firm reservation charge revenues are from service agreements providing for discounted 

rates, all of which will remain lower than the recourse rates following the rate reduction. 

Therefore, Millennium argues, Commission action intended to further reduce 

Millennium’s rates under NGA section 5 would not benefit its shippers.12

Notice of Filing, Interventions, and Protests

Public notice of Millennium’s FERC Form No. 501-G filing in Docket No. RP19-

65-000 was issued on October 15, 2018. Public notice of Millennium’s limited NGA 

section 4 filing in Docket No. RP19-66-000 was also issued on October 15, 2018. 

Interventions and protests were due as provided in section 154.210 of the Commission’s 

regulations.13 Pursuant to Rule 214,14 all timely filed motions to intervene and any 

unopposed motions to intervene filed out-of-time before the issuance date of this order 

are granted. Granting late intervention at this stage of the proceeding will not disrupt this 

proceeding or place additional burdens on existing parties. No protests or adverse 

comments were filed.

Discussion

The Commission finds that Millennium’s proposal to reduce its rates by 10.3

percent is consistent with section 154.404 of the Commission’s regulations and provides 

a net benefit to Millennium’s customers. Accordingly, the Commission accepts 

Millennium’s tariff records referenced in the Appendix to be effective December 1, 2018.

The Commission notes that Millennium’s FERC Form No. 501-G reflects a Total 

Estimated Return on Equity of 14.6 percent,15 after adjustment to reflect the Tax Cuts and 

Jobs Act and United Airlines Issuances. As such, Millennium is not eligible for the threeyear moratorium period established in Order No. 849. Therefore, although the 

Commission is accepting Millennium’s rate reduction filing, the Commission is not 

 12 Id. at 3, 6.

13 18 C.F.R. § 154.210 (2018).

14 18 C.F.R. § 385.214 (2018).

15 Millennium FERC Form No. 501-G, page 3, line 26, column (E). 
Docket Nos. RP19-65-000 and RP19-66-000 - 5 -

precluded from establishing a hearing under NGA section 5 to investigate whether a 

further rate reduction is justified in Docket No. RP19-65-000.

The Commission orders:

Millennium’s revised tariff records are accepted, effective December 1, 2018.

By the Commission. Commissioner McIntyre is not voting on this order.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.
Docket Nos. RP19-65-000 and RP19-66-000 - 6 -

Appendix

Millennium Pipeline Company, L.L.C.

FERC NGA Gas Tariff

Millennium Tariffs

Tariff Records Accepted Effective December 1, 2018

Currently Effective Rates, Section 1. FT-1 Rates, 5.0.0

Currently Effective Rates, Section 2. FT-2 Rates, 6.0.0

Currently Effective Rates, Section 3. BH-1 Rates, 5.0.0

Currently Effective Rates, Section 4. HT-1 Rates, 5.0.0

Currently Effective Rates, Section 5. IT-1 Rates, 5.0.0

Currently Effective Rates, Section 6. PALS Rates, 1.0.0