356 Federal Register / Vol. 60, No. 2 / Wednesday, January 4, 1995 / Rules and Regulations

1Cost-of-Service Reporting and Filing

Requirements for Oil Pipelines, Order No. 571, 59

FR 59137 (November 16, 1994), III Stats. & Regs.

¶ 31,006 (1994).

2 49 App. U.S.C. 1 (1988).

3See 18 CFR 342.1 (a) and (b), to be effective

January 1, 1995.

4Revisions to Oil Pipeline Regulations Pursuant

to the Energy Policy Act, Order No. 561, 58 FR

58785 November 4, 1993), III FERC Stats. & Regs.

¶ 30,985 (1993), order on reh’g and clarification,

Order No. 561–A, 59 FR 40243 August 8, 1994), III

FERC Stats. & Regs. ¶31,000 (1994). These orders

are jointly referred to as ‘‘Order No. 561,’’ unless

the text clearly specifies otherwise.

5Section 12 provides, in material part, that ‘‘The

Commission may obtain from such carriers * * *

such information as the Commission deems

necessary to carry out the provisions of this chapter

obviously be a much larger obstacle to

financing than the Federal takeover

possibility that Congress eliminated in 1953.

Thus, as argued in the comments, the

imposition of a decommissioning

requirement would directly undermine and

be contrary to the specific intent of Public

Law No. 83–278.

Although the policy statement indicates

that the Commission rarely expects to

mandate project decommissioning, the

decision to imply such authority has

significant consequences. While this

Commission may exercise that authority

narrowly, parties and intervenors will

continue to call for its broad application,

including the imposition of trust funds at

each project, as well as contributions to

regional funds. Indeed, the policy statement

concludes that, should later experience with

decommissioning demonstrate a stronger

need, the Commission can reassess the issue

of establishing some type of industry-wide

fund.

I question whether the Federal Power Act

contemplates such a scheme. In addition,

there will be social and economic

consequences that flow from such decisions.

Decommissioning funds, should they be

required, are traditionally included in rates.

The likely increase in electric rates for

consumers in potentially large regions of the

country and the possible negative impact on

the financial viability of certain projects are

issues not addressed by the policy statement.

In sum, there are major social

consequences, in the broadest sense, that

derive from the decision to imply authority

here, and I am unwilling to assume lightly

that authority. Sections 14 and 15 of the

Federal Power Act outline the relicensing

process to be implemented by the

Commission. Many of the issues raised by the

decommissioning debate are not solely

FERC’s to decide and I believe should be

addressed in a broader forum.

Vicky A. Bailey,

Commissioner.

[FR Doc. 95–63 Filed 1–3–95; 8:45 am]

BILLING CODE 6717–01–P

18 CFR Part 347

(Docket No. RM94–2–001)

Cost-of-Service Reporting and Filing

Requirements for Oil Pipelines; Order

on Rehearing and Clarification

Issued December 28, 1994.

AGENCY: Federal Energy Regulatory

Commission.

ACTION: Final rule; Order on rehearing

and clarification.

SUMMARY: The Federal Energy

Regulatory Commission in ruling on a

request for rehearing is making a minor

change to its regulations that provide

revised filing requirements for oil

pipelines seeking to establish new or

changed depreciation rates, and

clarifying Order No. 571, issued October

26, 1994. The change is to ensure that

the information provided is in a format

that will protect individual shippers.

EFFECTIVE DATE: The amendment to the

regulations is effective January 1, 1995.

FOR FURTHER INFORMATION CONTACT:

Harris S. Wood, Office of the General

Counsel, Federal Energy Regulatory

Commission, 825 North Capitol Street

NE., Washington, DC 20426, (202) 208–

0224.

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

in room 3104, 941 North Capitol 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 (202) 208–1397. 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 for 60 days from

the date of issuance in ASCII and

WordPerfect 5.1 format. After 60 days

the document will be archived, but still

accessible. 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.

Before Commissioners: Elizabeth Anne

Moler, Chair; Vicky A. Bailey, James J.

Hoecker, William L. Massey, and Donald F.

Santa, Jr.

Order on Rehearing and Clarification

Issued December 28, 1994.

On October 28, 1994, the Federal

Energy Regulatory Commission

(Commission) issued Order No. 571, in

which it established filing requirements

for cost-of-service rate filings for oil

pipelines; filing requirements for oil

pipelines seeking to establish new or

changed depreciation rates; and new

and revised pages of FERC Form No. 6,

Annual Report for Oil Pipelines.1 On

November 28, 1994, the Association of

Oil Pipe Lines (AOPL) filed a request for

rehearing and clarification of Order No.

571. As discussed below, the

Commission clarifies Order No. 571,

and grants in part and denies in part

AOPL’s request for rehearing.

Discussion

A. AOPL argues that the Commission

cannot prescribe initial filing

requirements for cost-of-service rates in

excess of requirements specified in

Section 6 of the Interstate Commerce

Act (ICA).2 Section 6(3) provides that a

carrier must file a notice of rate change

‘‘which shall plainly state the changes

proposed to be made in the schedule

then in force and the time when the

changed rates * * * will go into effect;

and the proposed changes shall be

shown by printing new schedules

* * *’’ These requirements of Section

6(3) are preserved intact in sections

346.1 (a) and (b) of the regulations

adopted by the Commission in Order

No. 571.3 Thus, AOPL’s dispute is with

section 346.1(c), which requires that an

oil pipeline file statements and

supporting workpapers to make an

Opinion No. 154–B cost-of-service

showing as set forth in section 346.2, on

the basis that these requirements go

beyond the limiting provisions of

section 6(3).

As the Commission explained in

Order No. 571, the requirement that a

pipeline file these statements and

workpapers is justified, not by the filing

of information as a part of a notice of

rate change, but by the requirement of

Order No. 561 4 that the oil pipeline

meet the threshold test of demonstrating

a substantial divergence between rates

at the indexed ceiling level and the

pipeline’s cost of service. Rather than a

‘‘filing requirement’’ for a notice of rate

change, the statements and workpapers

must be filed to demonstrate that the

pipeline is entitled to change rates on a

cost-of-service basis as an exception to

changing rates under the indexing

methodology.

The Commission relied on section 12

of the ICA as the statutory authority for

requiring a pipeline to demonstrate that

it meets the threshold test specified in

Order No. 561.5 AOPL argues, however,
Federal Register / Vol. 60, No. 2 / Wednesday, January 4, 1995 / Rules and Regulations 357

* * *. The Commission is authorized and required

to execute the provisions of this chapter * * *’’.

6Section 12(1) of the ICA as it existed on October

1, 1977, governs the authority and duties of the

Commission. See also 49 U.S.C. 10321(a) which by

Public Law 95–473, Oct. 17, 1978, 92 Stat. 1337,

codified and restated in comprehensive form,

without substantive change, the material part of

section 12(1). Section 10321(a) provides:

The Interstate Commerce Commission shall carry

out this subtitle. Enumeration of a power of the

Commission in this subtitle does not exclude

another power the Commission may have in

carrying out this subtitle. The Commission may

prescribe regulations in carrying out this subtitle.

7Order No. 571, mimeo at 11.

8 42 U.S.C. 7172 note (West Supp. 1993).

9Order No. 571, mimeo at 16–24.

10The Commission found, in Order No. 571, that

‘‘The final rule will reduce the existing reporting

burden associated with Form No. 6 by an estimated

1,628 hours annually, or an average of 11 hours per

response based on an estimated 148 responses. This

estimate includes the addition of two new

schedules, the elimination of several schedules, and

increasing the reporting thresholds for which oil

pipelines must analyze and report certain data.’’

Order No. 571, mimeo at 4.

11According to AOPL’s own numbers, contained

in Attachment A to AOPL’s comments filed in this

proceeding on September 8, 1994, the burden of

producing page 700 shown by some companies is

as small as four hours per year.

that section 6 establishes initial filing

requirements for a rate change and thus

bars the Commission from requiring the

threshold filings at issue here. The

Commission disagrees.

Contrary to AOPL’s contention,

section 6(3) of the ICA is not a

limitation on the Commission’s

authority to establish initial filing

requirements but is rather no more than

a specification of the form that a notice

of a proposed change in rates must take.

Thus, the Commission’s requirements in

section 346.1(c) are not contrary to the

ICA. Moreover, the Commission here

affirms its view that section 12(1)

confers on the Commission broad

powers to regulate the transportation of

oil by pipeline, including those that

AOPL claims are precluded by section

6(3), and thus authorizes the

Commission to establish reasonable

filing requirements for a cost-of-service

rate change proposal.6

Rehearing on this first specification

error is therefore denied.

B. AOPL’s second specification of

error, that the Commission imposed

unduly burdensome initial filing

requirements for cost-of-service-based

rates, is likewise without merit. AOPL

claims that the Commission, by

imposing any filing requirements,

ignored its comments regarding the

resulting burden that pipelines would

have to bear. AOPL’s position, however,

is based on the premise, already

rejected, that section 6(3) bars any

initial filing requirements. Thus, the

thrust of AOPL’s argument is that any

initial filing requirement other than a

mere notice of the rate change proposed,

regardless of what it might be, is too

burdensome for pipelines to bear. The

Commission disagrees.

The Commission recognizes that there

is a filing burden for pipelines that seek

to opt out of indexing. However,

because indexing is the Commission’s

prescribed, generally applicable

ratemaking methodology, the

Commission has concluded that a

pipeline must as a threshold matter

justify an exception to that methodology

when it files for cost-of-service rates. As

described earlier, it is well within the

Commission’s broad regulatory powers

to determine how an oil pipeline is to

secure permission to charge rates based

on a method that deviates from the

generally applicable method.

Contrary to AOPL’s claims, the

Commission has required only that data

necessary for a pipeline to show

whether there is a substantial

divergence between its cost of service

and revenues at the index ceiling rate

and thus whether it warrants an

exception to indexing. In fact, the

Commission chose not to require certain

other additional data. For example, it

did not require a filing of individual

point-to-point cost-of-service

calculations in the initial filing of

notices of rate change, recognizing that

the burden of such a requirement would

not be justified, particularly since the

initial filing need only show that there

is a substantial divergence between the

costs of the pipeline, as reflected in

Statement A, and the revenues that

would be produced by the indexed

ceiling rates, as reflected in Statement

G.7 Thus, the Commission was not

arbitrary in its assessment of minimum

filing needs but rather carefully

balanced the need for threshold

information against the burden that

filing requirements could impose on

pipelines.

Rehearing on this second

specification of error is therefore

denied.

C. AOPL’s third specification of error,

that the Commission erred in

determining that new Page 700 of Form

No. 6 would impose only a minimal

burden on oil pipelines, is denied. In

Order No. 571, the Commission

explained in detail why it believed page

700 of Form No. 6 is necessary for

carrying out its regulatory

responsibilities under the ICA and the

Energy Policy Act of 1992.8 It described

the benefits to the shippers of having

this information available as an initial

‘‘substantial divergence’’ screen for

pipeline rate filings, and as a means of

testing the performance of the index

when compared to individual indexed

rates.9 Nothing in AOPL’s request for

rehearing persuades the Commission to

modify its requirements for page 700.

It is correct that if viewed in isolation,

the inclusion of Page 700 in the Form

No. 6 would increase the reporting

burden on oil pipelines. However,

viewed as a whole, Order No. 571 will

reduce the overall individual oil

pipeline reporting burden, since it

reduces or eliminates many of the other

reporting requirements formerly in the

Form No. 6.10 Further, with the overall

reduction in regulatory burden to be

accomplished by the use of the indexing

methodology, the addition of Page 700

as a safeguard should cause minimal

additional burden.11

While the initial computation for

some of the companies which have not

performed the Opinion No. 154–B

calculation may be somewhat lengthy

and may result in an initial, one-time

burden for these companies because of

the need to bring the data forward from

1984 to the current year, any initial

burden on making the calculations is

outweighed by the benefits of having the

information available to the

Commission to carry out its regulatory

responsibilities. In addition, for each

year subsequent to the initial

computation, it would only be necessary

for a company to update the schedules

for the most current year. Thus, the

minimal burden imposed in preparing

and filing new page 700 is entirely

justified when compared to the benefits

to shippers and the Commission of

having the information called for by this

new page.

D. The Commission grants rehearing

as to AOPL’s allegation that the

Commission erred in retaining

depreciation study requirements that

could result in the disclosure of

confidential shipper information in

contravention of the ICA. In Order No.

571, the Commission required that an

oil pipeline that desires to establish

initial depreciation rates or to change its

existing depreciation rates file certain

information supporting such a rate. The

Commission, in response to comments

on the Notice of Proposed Rulemaking

(NOPR) in this docket, recognized that

certain information which had been

proposed in the NOPR might lead to

such disclosure, and therefore modified

the information originally proposed,

providing that the information required

by section 347.1(e)(vi) of the regulations

should be provided in a format that

would prevent disclosure of information

which would violate the ICA. It left to
358 Federal Register / Vol. 60, No. 2 / Wednesday, January 4, 1995 / Rules and Regulations

12Order No. 571, mimeo at 34.

13 Id.

14Order No. 571, mimeo at 34.

15Order No. 571, mimeo at 17.

1Market-Based Ratemaking for Oil Pipelines,

Order No. 572, 59 FR 59148 (November 16, 1994),

III Stats. & Regs. ¶ 31,007 (1994).

2Sinclair Oil Corporation’s motion to file a brief

in response to the AOPL’s request for rehearing is

denied.

the pipeline the specifics of the format

to be used to provide such

information.12 Moreover, the

Commission also suggested that the

pipeline could request confidential

treatment of the information it

provides.13

It was the Commission’s intent that

the caveats expressed not be limited to

section 347.1(e)(vi), but rather apply to

all the Part 347 information that would

be provided by pipelines. Therefore, the

regulations will be modified to reflect

that information required by Part 347 of

the regulations, release of which would

violate Section 15(13) of the ICA, must

be provided in a format that will protect

any individual shipper. Moreover, the

general statement in Order No. 571 that

the information provided will be

publicly available unless specific

confidential treatment is sought by the

carrier is still applicable.14

E. Finally, AOPL seeks clarification

regarding the use of new Page 700 of

Form No. 6, in particular the

significance of the statement that this

schedule would ‘‘permit a shipper to

compare the change in a shipper’s

individual rate with the change in the

pipeline’s average company-wide barrelmile rate.’’ 15 AOPL claims such a

comparison appears to tell a shipper

nothing concerning the justness and

reasonableness of an individual rate.

The information reported on Page 700

will show how a pipeline’s average

barrel-mile rate changes from one year

to the next. A shipper can then compare

the yearly percentage change in the

average barrel-mile rate with the yearly

percentage change in the rate it is

charged to determine whether there is a

substantial divergence between the rate

of change in the two figures such as to

warrant a challenge to an indexed rate.

Thus, the Page 700 information alone is

not intended to show what a just and

reasonable rate should be.

The Commission Orders

The request for rehearing and

clarification is granted in part and

denied in part, as reflected in the body

of this order.

List of Subjects in 18 CFR part 347

Pipelines, Reporting and

recordkeeping requirements.

By the Commission.

Lois D. Cashell,

Secretary.

In consideration of the foregoing, Part

347, Chapter I, Title 18, Code of Federal

Regulations, is amended, as set forth

below.

PART 347—OIL PIPELINE

DEPRECIATION STUDIES

1. The authority citation for Part 347

continues to read as follows:

Authority: 42 U.S.C. 7101–7352; 49 U.S.C.

60502; 49 App. U.S.C. 1–85.

2. In § 347.1, paragraph (e)

introductory text and paragraph

(e)(5)(vi) are revised to read as follows:

§ 347.1 Material to support request for

newly established or changed property

account depreciation studies.

* * * * *

(e) Information to be provided. The

information in paragraphs (e)(1) through

(5) of this section must be provided as

justification for depreciation changes.

Modifications, additions, and deletions

to these data elements should be made

to reflect the individual circumstances

of the carrier’s properties and

operations. Any information in

paragraphs (e)(1) through (5) of this

section, the release of which would

violate Section 15(13) of the Interstate

Commerce Act, must be provided in a

format that will protect individual

shippers.

* * * * *

(5) * * *

(vi) A list of shipments and their

associated receipt points, delivery

points, and volumes (in barrels) by type

of product (where applicable) for the

most current year.

* * * * *

[FR Doc. 95–117 Filed 1–3–95; 8:45 am]

BILLING CODE 6717–01–P

18 CFR Part 348

[Docket No. RM94–1–001; Order No. 572–

A]

Market-Based Ratemaking for Oil

Pipelines

Issued December 28, 1994.

AGENCY: Federal Energy Regulatory

Commission.

ACTION: Final rule; Order denying

rehearing.

SUMMARY: The Federal Energy

Regulatory Commission is issuing an

order denying the request for rehearing

of Order No. 572, the final rule adopting

filing requirements and procedures with

respect to an application by an oil

pipeline for a determination that it lacks

significant market power in the markets

in which it proposes to charge marketbased rates. The final rule adopted

procedural rules in order to implement

the Commission’s Order 561 marketbased ratemaking policy.

EFFECTIVE DATE: This final rule is

effective January 1, 1995.

FOR FURTHER INFORMATION CONTACT:

Jeffrey A. Braunstein, Office of the

General Counsel, Federal Energy

Regulatory Commission, 825 North

Capitol Street NE., Washington, DC

20426, (202) 208–2114.

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

in Room 3104, 941 North Capitol Street

NE., Washington, DC 20426.

The Commission Issuance Posting

System (CIPS), an electronic bulletin

board service, provides access to the

texts of the 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 (202) 208–1397. 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 for 60 days from

the date of issuance in ASCII and

WordPerfect 5.1 format. After 60 days

the document will be archived, but still

accessible. 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.

Order Denying Rehearing

Issued December 28, 1994.

On October 28, 1994, the Federal

Energy Regulatory Commission

(Commission) issued Order No. 572 in

which it adopted procedural rules

governing an oil pipeline’s application

for a Commission finding that the oil

pipeline lacks significant market power

in the relevant markets.1 On November

28, 1994, the Association of Oil Pipe

Lines (AOPL) filed a request for

rehearing of Order No. 572.2 As

discussed below, the Commission

denies the AOPL’s request for rehearing.

In Order No. 561, the Commission

adopted section 342.4(b) of the

regulations, which provides that: ‘‘Until