29404 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

1Pursuant to section 2(16) of the NGPA, 15 U.S.C. 

3301(16), the term ‘‘intrastate pipeline’’ may refer to 

all entities engaged in natural gas transportation 

under section 311 of the NGPA or section 1(c) of 

the NGA. For consistency, this Final Rule will also 

use the terms ‘‘transportation,’’ ‘‘pipeline,’’ and 

‘‘shippers’’ to refer inclusively to storage activity 

(except where noted). 

and its practical application during the 

original 30-day comment period. 

Therefore, the FAA will re-open the 

comment period for 30 days. 

ALPA has not formally submitted to 

the public docket its specific questions 

about the policy’s practical application 

and, as mentioned, few commenters 

provided input in this regard during the 

open comment period. To receive 

appropriate consideration, therefore, the 

FAA requests specific information 

regarding these concerns be provided 

during the next 30 days of the re-opened 

comment period. 

Re-Opening of Comment Period 

In accordance with Sec. 11.47(c) of 

title 14, Code of Federal Regulations, the 

FAA has reviewed ALPA’s comment for 

extension of the comment period to 

Docket FAA–2009–0773. Since the 

comment period has already closed, the 

FAA will re-open it for a period of 30 

days. The petitioner has shown a 

substantive interest in the policy and 

has provided good cause to grant reopening of the comment period. The 

FAA has determined that re-opening the 

comment period is consistent with the 

public interest and that good cause 

exists for taking this action. 

Accordingly, the comment period is 

re-opened until June 25, 2010. 

Issued in Washington, DC, on May 20, 

2010. 

Frederick E. Tilton, 

Federal Air Surgeon. 

[FR Doc. 2010–12576 Filed 5–25–10; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 284 

[Docket No. RM09–2–000; Order No. 735] 

Contract Reporting Requirements of 

Intrastate Natural Gas Companies 

May 20, 2010. 

AGENCY: Federal Energy Regulatory 

Commission. 

ACTION: Final rule. 

SUMMARY: In this Final Rule, the 

Commission revises the contract 

reporting requirements for those natural 

gas pipelines that fall under the 

Commission’s jurisdiction pursuant to 

section 311 of the Natural Gas Policy 

Act or section 1(c) of the Natural Gas 

Act. The Final Rule revises § 284.126(b) 

and replaces Form No. 549—Intrastate 

Pipeline Annual Transportation Report 

with the new Form No. 549D— 

Quarterly Transportation and Storage 

Report for Intrastate Natural Gas and 

Hinshaw Pipelines. The Final Rule 

makes changes so as to increase the 

reporting frequency from annual to 

quarterly, include certain additional 

types of information and cover storage 

transactions as well as transportation 

transactions, establish a procedure for 

the Form No. 549D reports to be filed in 

a uniform electronic format and posted 

on the Commission’s Web site, and hold 

that those reports must be public and 

may not be filed with information 

redacted as privileged. The Commission 

is also modifying its policy concerning 

periodic reviews of the rates charged by 

section 311 and Hinshaw pipelines to 

extend the cycle for such reviews from 

3 years to 5 years. 

DATES: Effective Date: This rule will 

become effective April 1, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Vince Mareino (Legal Information), 

Office of the General Counsel, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 

20426, (202) 502–6167, 

Vince.Mareino@ferc.gov. 

James Sarikas (Technical Information), 

Office of Energy Markets Regulation, 

Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426, (202) 502– 

6831, James.Sarikas@ferc.gov. 

Thomas Russo (Technical Information), 

Office of Enforcement, Federal Energy 

Regulatory Commission, 888 First 

Street, NE., Washington, DC 20426, 

(202) 502–8792, 

Thomas.Russo@ferc.gov. 

SUPPLEMENTARY INFORMATION: 

Before Commissioners: Jon 

Wellinghoff, Chairman; Marc Spitzer, 

Philip D. Moeller, and John R. Norris. 

Order No. 735 

Final Rule 

Issued May 20, 2010. 

Paragraph 

Nos. 

I. Introduction and Summary .................................................................................................................................................................. 1 

II. Background ........................................................................................................................................................................................... 2 

III. Statutory Authority for the Rule ........................................................................................................................................................ 15 

IV. Need for the Rule ............................................................................................................................................................................... 22 

V. Details of Pipeline Posting Requirements .......................................................................................................................................... 41 

A. Overview and Summary of Requirements .................................................................................................................................. 41 

B. Definition of Reportable Service .................................................................................................................................................. 43 

C. Reporting Frequency .................................................................................................................................................................... 49 

D. Identification of Receipt and Delivery Points and Shippers ..................................................................................................... 54 

E. Requests for Exemptions and Safe Harbor .................................................................................................................................. 62 

F. Public Status of Reports ............................................................................................................................................................... 68 

G. Data Format and Technical Protocols ......................................................................................................................................... 80 

VI. Periodic Rate Review ......................................................................................................................................................................... 89 

VII. Effective Date of the Final Rule and Compliance Deadlines .......................................................................................................... 97 

VIII. Information Collection Statement ................................................................................................................................................... 103 

IX. Environmental Analysis ..................................................................................................................................................................... 109 

X. Regulatory Flexibility Act ................................................................................................................................................................... 110 

XI. Document Availability ....................................................................................................................................................................... 112 

XII. Effective Date and Congressional Notification ................................................................................................................................ 115 

I. Introduction and Summary 

1. In this Final Rule, the Commission 

revises the contract reporting 

requirements for (1) intrastate natural 

gas pipelines 1 providing interstate transportation service pursuant to 

section 311 of the Natural Gas Policy 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 29405 

2 15 U.S.C. 3372. 

3Section 1(c) of the NGA exempts from the 

Commission’s NGA jurisdiction those pipelines 

which transport gas in interstate commerce if (1) 

they receive natural gas at or within the boundary 

of a state, (2) all the gas is consumed within that 

state and (3) the pipeline is regulated by a state 

Commission. This exemption is referred to as the 

Hinshaw exemption after the Congressman who 

introduced the bill amending the NGA to include 

section 1(c). See ANR Pipeline Co. v. Federal Energy 

Regulatory Comm’n, 71 F.3d 897, 898 (1995) 

(briefly summarizing the history of the Hinshaw 

exemption). 

4This Final Rule does not eliminate or revise 

§ 284.126(c) and the corresponding Form No. 537, 

which require a semi-annual storage report. 

5 15 U.S.C. 3371(c). 

6EPGT Texas Pipeline, 99 FERC ¶ 61,295 at 

62,252–3 (2002). 

7Certain Transportation, Sales, and Assignments 

by Pipeline Companies not Subject to Commission 

Jurisdiction Under Section 1(c) of the Natural Gas 

Act, Order No. 63, FERC Stats. & Regs. ¶ 30,118, at 

30,824–25 (1980). 

8See 18 CFR §§ 284.7(b), 284.9(b) and 284.122. 

9Associated Gas Distributors v. FERC, 824 F.2d 

981, 1002–1003 (D.C. Cir. 1987) (AGD); Mustang 

Energy Corp. v. Federal Energy Regulatory Comm’n, 

859 F.2d 1447, 1457 (10th Cir. 1988), cert. denied, 

490 U.S. 1019 (1988); see also EPGT Texas Pipeline, 

99 FERC ¶ 61,295 (2002). 

10Regulation of Natural Gas Pipelines After 

Partial Wellhead Decontrol, Order No. 436, FERC 

Stats. & Regs. ¶ 30,665, at 31,502 (1985). 

11Pipeline Service Obligations, and Revisions to 

Regulations Governing Self-Implementing 

Transportation Under Part 284 of the Commission’s 

Regulations; Regulation of Natural Gas Pipelines 

After Partial Wellhead Decontrol, Order No. 636–B, 

61 FERC ¶ 61,272, at 61,992 n.26 (1992), order on 

reh’g, 62 FERC ¶ 61,007 (1993), aff’d in part and 

remanded in part sub nom. United Distribution Cos. 

v. FERC, 88 F.3d 1105 (D.C. Cir. 1996), order on 

remand, Order No. 636–C, 78 FERC ¶ 61,186 (1997). 

12Regulation of Short-Term Natural Gas 

Transportation Services and Regulation of 

Interstate Natural Gas Transportation Services, 

Order No. 637, FERC Stats. & Regs. ¶ 31,091, 

clarified, Order No. 637–A, FERC Stats. & Regs. 

¶ 31,099, reh’g denied, Order No. 637–B, 92 FERC 

¶ 61,062 (2000), aff’d in part and remanded in part 

sub nom. Interstate Natural Gas Ass’n of America 

v. FERC, 285 F.3d 18 (D.C. Cir. 2002), order on 

remand, 101 FERC ¶ 61,127 (2002), order on reh’g, 

106 FERC ¶ 61,088 (2004), aff’d sub nom. American 

Gas Ass’n v. FERC, 428 F.3d 255 (D.C. Cir. 2005). 

Act of 1978 (NGPA) 2 and (2) Hinshaw 

pipelines providing interstate service 

subject to the Commission’s Natural Gas 

Act (NGA) section 1(c) jurisdiction 

pursuant to blanket certificates issued 

under § 284.224 of the Commission’s 

regulations.3 The revised reporting 

requirements are intended to increase 

market transparency, without imposing 

unduly burdensome requirements on 

the pipelines. Specifically, the Final 

Rule revises § 284.126(b) and replaces 

Form No. 549—Intrastate Pipeline 

Annual Transportation Report with the 

new Form No. 549D, so as to (1) 

increase the reporting frequency from 

annual to quarterly, (2) include certain 

additional types of information and 

cover storage transactions as well as 

transportation transactions,4 (3) 

establish a procedure for Form No. 549D 

to be filed in a uniform electronic 

format and posted on the Commission’s 

Web site, and (4) hold that those reports 

must be public and may not be filed 

with information redacted as privileged. 

The Commission is also modifying its 

policy concerning periodic reviews of 

the rates charged by section 311 and 

Hinshaw pipelines to extend the cycle 

for such reviews from 3 years to 5 years. 

II. Background 

A. Current Reporting Requirements 

2. NGPA section 311 authorizes the 

Commission to allow intrastate 

pipelines to transport natural gas ‘‘on 

behalf of’’ interstate pipelines or local 

distribution companies served by 

interstate pipelines ‘‘under such terms 

and conditions as the Commission may 

prescribe.’’ 5 NGPA section 601(a)(2) 

exempts transportation service 

authorized under NGPA section 311 

from the Commission’s NGA 

jurisdiction. Congress adopted these 

provisions in order to eliminate the 

regulatory barriers between the 

intrastate and interstate markets and to 

promote the entry of intrastate pipelines 

into the interstate market. Such entry 

eliminates the need for duplication of 

facilities between interstate and 

intrastate pipelines.6 Shortly after the 

adoption of the NGPA, the Commission 

authorized Hinshaw pipelines to apply 

for NGA section 7 certificates, 

authorizing them to transport natural 

gas in interstate commerce in the same 

manner as intrastate pipelines may do 

under NGPA section 311.7

3. Subpart C of the Commission’s Part 

284 open access regulations (18 CFR 

§ 284.121–126) implements the 

provisions of NGPA section 311 

concerning transportation by intrastate 

pipelines. Those regulations require that 

intrastate pipelines performing 

interstate service under NGPA section 

311 must do so on an open access 

basis.8 However, consistent with the 

NGPA’s goal of encouraging intrastate 

pipelines to provide interstate service, 

the Commission has not imposed on 

intrastate pipelines all of the Part 284 

requirements imposed on interstate 

pipelines.9 For example, when the 

Commission first adopted the Part 284 

open access regulations in Order No. 

436, the Commission exempted 

intrastate pipelines from the 

requirement that they offer open access 

service on a firm basis.10 The 

Commission found that requiring 

intrastate pipelines to offer firm service 

to out-of-state shippers could discourage 

them from providing any interstate 

service, because such a requirement 

could progressively turn the intrastate 

pipeline into an interstate pipeline 

against its will and against the will of 

the responsible state authorities. 

Similarly, Order No. 636–B exempted 

intrastate pipelines from the 

requirements of Order No. 636.11 Those 

requirements included capacity release, 

electronic bulletin boards (now Internet 

Web sites), and flexible receipt and 

delivery points. 

4. Section 284.224 of the regulations 

provides for the issuance of blanket 

certificates to Hinshaw pipelines to 

provide open access transportation 

service ‘‘to the same extent that, and in 

the same manner’’ as intrastate pipelines 

are authorized to perform such service 

by Subpart C. 

5. The Commission currently has less 

stringent transactional reporting 

requirements for NGPA section 311 

intrastate pipelines and Hinshaw 

pipelines, than for interstate pipelines. 

In Order No. 637,12 the Commission 

revised the reporting requirements for 

interstate pipelines in order to provide 

more transparent pricing information 

and to permit more effective monitoring 

for the exercise of market power and 

undue discrimination. As adopted by 

Order No. 637, § 284.13(b) requires 

interstate pipelines to post on their 

Internet Web sites basic information on 

each transportation and storage 

transaction with individual shippers, 

including revisions to a contract, no 

later than the first nomination under a 

transaction. This information includes: 

• The name of the shipper. 

• The contract number (for firm 

service). 

• The rate charged. 

• The maximum rate. 

• The duration (for firm service). 

• The receipt and delivery points and 

zones covered. 

• The quantity of natural gas covered. 

• Any special terms or details, such 

as any deviations from the tariff. 

• Whether any affiliate relationship 

exists. 

6. Section 284.13(c) of the 

Commission’s regulations also requires 

interstate pipelines to file with the 

Commission on the first business day of 

each calendar quarter an index of its 

firm transportation and storage 

customers and to publish the same 

information on their Web sites. The 

information required to be included in 

the Index of Customers does not include 

the rates paid by the customers. Section 

284.13(e) requires interstate pipelines to 

file semi-annual reports of their storage 

injection and withdrawal activities, 

including the identities of the 


emcdonald on DSK2BSOYB1PROD with RULES
29406 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

13Contract Reporting Requirement of Intrastate 

Natural Gas Companies, FERC Stats. & Regs. 

¶ 35,559 (2008). 

14SG Resources Mississippi, L.L.C. (SGRM). 

15SGRM, 125 FERC ¶ 61,191 (2008). 

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

17Contract Reporting Requirements of Intrastate 

Natural Gas Companies, FERC Stats. & Regs. 

¶ 32,644 (2009) (NOPR). 

18Contract Reporting Requirements of Intrastate 

Natural Gas Companies, FERC Stats. & Regs. ¶ 

35,051 (2009) (Information Notice). 

customers, the volumes injected into 

and withdrawn from storage for each 

customer and the unit charge and total 

revenues received. Order No. 637 did 

not modify the reporting requirements 

for NGPA section 311 intrastate 

pipelines and Hinshaw pipelines 

provided in § 284.126(b) and (c) of the 

Commission’s regulations. 

7. Section 284.126(b) of the 

Commission’s regulations requires 

intrastate pipelines to file with the 

Commission annual reports of their 

transportation transactions, but not their 

storage transactions. Those Form No. 

549 reports must include the following 

information: 

• The name of the shipper receiving 

transportation service. 

• The type of service performed (i.e. 

firm or interruptible). 

• The total volumes transported for 

the shipper, including for firm service a 

separate statement of reservation and 

usage quantities. 

• Total revenues received for the 

shipper, including for firm service a 

separate statement of reservation and 

usage revenues. 

8. Unlike the interstate pipelines’ 

reporting requirement (§ 284.13(b)), the 

current version of § 284.126(b) does not 

require intrastate pipelines to include in 

these Form No. 549 reports the rate 

charged under each contract, the 

duration of the contract, the receipt and 

delivery points and zones or segments 

covered by each contract, whether the 

contract includes any special terms and 

conditions, and whether there is an 

affiliate relationship between the 

pipeline and the shipper. 

9. Section 284.126(c) requires Section 

311 intrastate pipelines and Hinshaw 

pipelines to file Form No. 537, a semiannual report of their storage activity, 

within 30 days of the end of each 

complete storage and injection season. 

This requirement is substantially the 

same as the § 284.13(e) requirement that 

interstate pipelines file such semiannual reports of their storage activity. 

B. The NOPR 

10. In November 2008, the 

Commission issued a Notice of Inquiry 

(NOI), requesting comments on whether 

the Commission should impose 

additional reporting requirements on 

NGPA section 311 intrastate pipelines 

and on Hinshaw pipelines.13 The NOI 

stated that, in a contemporaneous order, 

the Commission was denying a request 

by interstate storage provider with 

market based rates 14 for waiver of the 

requirements that interstate pipelines 

post the rates charged in firm and 

interruptible transactions no later than 

first nomination for service. In that 

order, the Commission held that the fact 

some interstate storage companies have 

been authorized to charge market-based 

rates does not justify exempting them 

from the requirements in section 

284.13(b) that they post the rates 

charged in each storage transaction. The 

SGRM order held that the existing 

posting requirements for interstate 

pipelines are necessary to provide 

shippers with the price transparency 

they need to make informed decisions, 

and the ability to monitor transactions 

for undue discrimination and 

preference.15 The Commission also 

found that the requested exemption 

would be contrary to NGA section 4(c)’s 

requirement that ‘‘every natural gas 

company * * * keep open * * * for 

public inspection * * * all rates.’’ 16

11. However, in recognition of 

interstate storage providers’ concern 

about the competitive effects of the 

disparate reporting requirements for 

interstate pipelines and section 311 

intrastate pipelines, the NOI stated that 

the Commission was interested in 

exploring (1) whether the disparate 

reporting requirements for interstate and 

intrastate pipelines have an adverse 

competitive effect on the interstate 

pipelines and (2) if so, whether the 

Commission should modify the posting 

requirements for Section 311 intrastate 

pipelines and Hinshaw pipelines in 

order to make them more comparable to 

the § 284.13(b) posting requirements for 

interstate pipelines. Accordingly, the 

Commission sought comments to assist 

it in evaluating whether changes in the 

Commission’s posting requirements 

should be considered in order to remove 

any competitive disadvantage for 

interstate pipelines, as compared to 

intrastate pipelines providing interstate 

transportation and storage services 

under Section 311 of the NGPA and to 

Hinshaw pipelines providing such 

service pursuant to a § 284.224 blanket 

certificate. 

12. Based upon a review of the 

comments received in response to the 

NOI, the Commission issued a Notice of 

Proposed Rulemaking (NOPR),17

proposing to revise its transactional 

reporting requirements for intrastate and 

Hinshaw pipelines in order to increase 

market transparency, without imposing 

unduly burdensome requirements on 

those pipelines. The Commission 

proposed to increase the availability and 

usefulness of the transactional 

information reported by intrastate and 

Hinshaw pipelines by requiring that (1) 

the existing annual § 284.126(b) 

transactional reports be filed on a 

quarterly basis, (2) the quarterly reports 

include certain additional types of 

information and cover storage 

transactions as well as transportation 

transactions, (3) the quarterly reports be 

filed in a uniform electronic format and 

posted on the Commission’s Web site, 

and (4) the reports must be public and 

may not be filed with information 

redacted as privileged. 

13. The Commission invited all 

interested parties to comment on all 

aspects of the NOPR. The Commission 

also elaborated on the proposed uniform 

electronic format in a separate Notice 

Requesting Comments On Proposed 

Standardized Electronic Information 

Collection (Information Notice).18

14. Comments on the NOPR and 

Information Notice were due on 

November 4, 2009. Sixteen parties filed 

comments. A list of Commenters and 

Abbreviations is included as an 

appendix to this order. Most 

commenters were Section 311 or 

Hinshaw pipelines or their associations, 

but interstate pipelines, exploration & 

production companies, and an 

association of municipal consumers also 

filed comments. We discuss the 

comments below in the context of 

reviewing, amending, and promulgating 

each aspect of this Final Rule. 

III. Statutory Authority for the Rule 

15. In this section, we address 

contentions by some commenters that 

the Commission lacks authority under 

NGPA section 311 to require intrastate 

pipelines to file more detailed 

transactional reports. While some 

commenters contest specific aspects of 

our proposal as it affects Hinshaw 

pipelines, no commenter questions the 

Commission’s general authority under 

NGA sections 4 and 10 to require 

Hinshaw pipelines to file more detailed 

transactional reports. 

A. NOPR 

16. In the NOPR, the Commission 

stated that NGPA section 311(c) 

authorizes the Commission to prescribe 

the ‘‘terms and conditions’’ under which 

intrastate pipelines perform interstate 

service. The NOPR concluded that its 

proposal to require intrastate pipelines 

to file and make public the proposed 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 29407 

19TPA at 2. See also id. at 12, 13, 16. 

20Enogex at 6. Enogex and several other 

commenters also raise this concern as a policy 

argument instead of an argument on statutory 

authority; these policy arguments are addressed in 

the subsequent section on the Need for the Rule. 

21Clayton Williams at 4 (quoting H.R. Rep. No. 

543, 95th Cong. 1st Sess. 45 (1977)). 

22Texas Alliance at 8. 

23Clayton Williams at 3–4. 

24Apache at 3. 

25Apache at 6. 

26 15 U.S.C. 3371(c). 27Revisions to Uniform System of Accounts, 

Forms, Statements, and Reporting Requirements for 

Natural Gas Companies, Order No. 581, 60 FR 

53019, 53050–51, FERC Stats. & Regs. ¶ 31,026 

(1995), order on reh’g, Order No. 581–A, FERC 

Stats. & Regs. ¶ 31,032 (1996) (Order No. 581). 

28TPA at 2. 

29 Mustang Energy Corp. v. Federal Energy 

Regulatory Comm’n, 859 F.2d 1447, 1457 (10th Cir. 

1988), cert. denied, 490 U.S. 1019 (1988); see also 

EPGT Texas Pipeline, 99 FERC ¶ 61,295 (2002). 

30 824 F.2d 981, 1002–1003 (D.C. Cir. 1987) 

(AGD). 

31 Id. at 1018 (citation omitted). 

32NOPR at 1, 16. 

33NOPR at 16. 

34NOPR at 19. 

35NOPR at 17. 

transactional reports so that shippers 

and others can monitor NGPA section 

311 transactions for undue 

discrimination is well within the 

Commission’s broad conditioning 

authority under § 311(c). 

B. Comments 

17. TPA claims that the Commission 

lacks statutory authority to enact the 

proposed regulations, arguing that 

‘‘Congressional intent [was] that 

transactions under NGPA Section 311 

are to be subjected to minimal 

regulation.’’ 19 Enogex, along with TPA, 

adds that the proposed reporting 

requirements are ‘‘in direct 

contravention of Section 311 of the 

NGPA and the legislative intent,’’ 

because compliance would be ‘‘unduly 

burdensome,’’ and because disclosure 

would harm the pipelines’ business 

position.20

18. Other commenters, citing the 

legislative history of the NGPA, argue 

that the proposed regulations are lawful. 

Clayton Williams states that ‘‘to the 

extent the intrastate pipeline is involved 

in an authorized’’ interstate transaction, 

the Commission has jurisdiction to 

review that transaction.21 Similarly, 

Texas Alliance argues that claims of 

undue burden are too conclusory, and 

that the NGPA’s jurisdiction is actually 

based on whether a given activity of a 

Section 311 pipeline is interstate or 

intrastate.22 Clayton Williams argues 

that it is the purpose of Section 311 to 

‘‘help integrate gas markets,’’ and that 

‘‘reasonable rules have always been part 

of the 311 world.’’ 23 Further, Apache 

argues for even more frequent and 

detailed reporting, stating, ‘‘the 

Commission has jurisdiction and 

discretion to require * * * [intrastate] 

pipelines to report the same information 

during the same time frame about 

natural gas transactions that the 

interstate pipelines are required to 

report.’’ 24 Apache reasons ‘‘that 

interstate pipelines and Section 311 and 

Hinshaw pipelines are held to the same 

prohibition on undue discrimination,’’ 25

so the transparency regulations 

necessary to ensure compliance should 

be the same as well. 

C. Commission Determination 

19. The Commission’s statutory 

authority to impose reporting 

requirements on Section 311 pipelines 

derives from NGPA section 311(c), 

which states, ‘‘any authorization granted 

under this section shall be under such 

terms and conditions as the Commission 

may prescribe.’’ 26 This blanket authority 

is well-established as the ground for the 

previous reporting requirements for 

Form No. 549. As the Commission 

reasoned in the rulemaking establishing 

a previous version of this reporting 

requirement, ‘‘section 311 tasks the 

Commission with the responsibility to 

ensure rates and charges are fair and 

equitable. For the Commission to carry 

out this responsibility, it is important 

for rates charged to be reported.’’ 27

None of the commenters in this docket 

challenge the legality of the previous 

reporting requirements. The new 

reporting requirements are not so 

different in scope or burden as to 

generate serious questions about the 

Commission’s long-established statutory 

authority to require transactional 

reporting. 

20. TPA’s characterization that the 

NGPA limits the Commission to 

‘‘minimal regulation,’’ 28 is misleading 

and unsupported. While Congress 

sought to encourage intrastate pipelines 

to participate in the interstate 

transportation market by enabling them 

to do so without bearing the burden of 

full Commission regulation under the 

NGA,29 this does not mean that 

Commission regulation under NGPA 

section 311 was to be minimal. In 

Associated Gas Distributors v. FERC,30

the court affirmed the Commission’s use 

of its NGPA section 311(c) conditioning 

authority to impose conditions 

necessary to assure that section 311 

intrastate pipelines do not engage in 

undue discrimination. The court also 

stated ‘‘that the Commission has been 

correct in its belief that under § 311 it 

should assert the traditional regulatory 

approach in areas where it is needed to 

protect the public from market 

dominance by natural gas 

companies.’’ 31 Requiring intrastate 

pipelines to file quarterly transactional 

reports to permit the Commission, 

shippers, and others to monitor for 

undue discrimination is fully within the 

scope of this conditioning authority. 

21. While the Commission will 

consider the burden question in more 

detail below, commenters have 

provided no persuasive evidence that 

the Final Rule is somehow so 

burdensome as to be beyond 

Commission’s jurisdiction. As compared 

to the requirements for interstate 

pipelines, the Final Rule is limited in 

the scope of the reports, the burden of 

publishing a report, and the frequency 

of the reports. As discussed below, the 

Commission held itself to these 

limitations so that the § 284.126(b) 

requirements should remain lighter than 

the § 284.13(b) interstate requirements 

and so that the value of the increased 

flow of information exceeds the 

increased burden of reporting. Any 

further lightening would risk 

undermining the Final Rule’s ability to 

increase transparency and improve the 

functioning of the transportation 

market. 

IV. Need for the Rule 

A. NOPR 

22. Upon review of the comments 

received in response to the NOI, the 

Commission held that its primary goal 

in revising the transactional reporting 

requirements for intrastate and Hinshaw 

pipelines would be to increase market 

transparency.32 As the Commission 

reasoned, ‘‘[t]ransactional information 

provides price transparency so shippers 

can make informed purchasing 

decisions, and also permits both 

shippers and the Commission to 

monitor actual transactions for evidence 

of possible abuse of market power or 

undue discrimination.’’ 33 The 

Commission found that certain types of 

additional information should be 

published in order to enable shippers, 

other market participants, and the 

Commission ‘‘to determine the extent to 

which particular transactions are 

comparable to one another,’’ 34 a 

prerequisite for determining the rights 

of similarly situated shippers and for 

detecting undue discrimination. 

23. The Commission stated in the 

NOPR that it ‘‘believes that the revised 

reporting requirements * * * avoid[ ] 

unduly burdensome requirements that 

might discourage * * * participating in 

the interstate market.’’ 35 In proposing 


emcdonald on DSK2BSOYB1PROD with RULES
29408 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

36NOPR at 28–29. 37E.g., OneOK at 3, TPA at 3. 38Enogex at 5. 39AOG at 1. 40TPA at 11. 41TPA at 2, 4, 10. 42E.g., AGA at 7; AOG at 7; Jefferson at 2, 6. 43E.g., Enogex at 8; TPA at 14. 

44Enogex at 8. 

45Enogex at 11–12. 

46Enstor at 7. 

47Atmos at 5 (citing Transparency Provisions of 

Section 23 of the Natural Gas Act, Order No. 704, 

FERC Stats. & Regs. ¶ 31,260 at P. 88 (2007); order 

on reh’g, Transparency Provisions of Section 23 of 

the Natural Gas Act, Order No. 704–A, FERC Stats. 

& Regs. ¶ 31,275 (2008); order on reh’g, 

Transparency Provisions of Section 23 of the 

Natural Gas Act, Order No. 704–B, 125 FERC 

¶ 61,302 (2008)). 

48Cities at 3; Clayton Williams at 1; Texas 

Alliance at 8. 

49Cities at 2, 4. 

50Clayton Williams at 5–15. 

51Texas Alliance at 4. 

52Cities at 4; Texas Alliance at 6. 

53Apache at 8. 

54E.g., Yates at 6. 

55Apache at 7–8. 

56Constellation at 4. 

57Texas Alliance at 9–10; Clayton Williams at 12. 

58E.g., Yates at 7. 

59Apache at 8. 

60Texas Alliance at 3. 

the frequency, content, and format of 

the reports, the Commission sought the 

best balance of minimizing the reporting 

burden and maximizing the competitive 

effects on the markets. For example, the 

Commission proposed to host reporting 

data on its own Web site, and 

encouraged intrastate pipelines to 

comment on the preferred file format, in 

order to help the Commission lessen the 

information technology burden for 

pipelines.36

B. Comments 

24. Several intrastate pipelines argue 

that the Commission failed to identify 

sufficiently compelling reasons for 

revising the reporting requirements. 

These commenters argue that further 

transparency is unnecessary, or that the 

proposal would have little practical 

benefit.37 Enogex, for example, argues 

that ‘‘[i]n view of the minimal amount 

of concern expressed by interstate 

pipelines * * * the Commission should 

have terminated this proceeding.’’ 38

AOG suggests that the Commission 

should, if not abandon the proposal, at 

least ‘‘more narrowly tailor[ it] to 

address a perceived problem [regarding] 

* * * transparency.’’ 39 TPA claims that 

further transparency in the section 311 

and Hinshaw transportation and storage 

markets is not needed because the 

United States’ natural gas commodity 

sales hubs are the most pricetransparent in the world.40 TPA further 

complains that commenters have yet to 

‘‘cite[ ] any specific examples of adverse 

market impacts’’ from the status quo, 

and ‘‘no entity has asked the 

Commission to expand the Section 311 

reporting requirements to increase 

transparency,’’ and is therefore ‘‘not 

reasoned decision making.’’ 41

25. Several pipelines argue that the 

new regulations place them at a 

competitive disadvantage compared to 

pipelines that only operate under the 

NGA or under state jurisdiction, or 

compared to shippers. Similarly, several 

pipelines complain that the current 

proposal could be too burdensome,42

potentially causing some pipelines to 

abandon the Section 311 or Hinshaw 

markets.43

26. Enogex and Enstor contend that 

the proposed reporting requirements 

would harm NGPA section 311 storage 

providers with market-based rates. 

Enogex argues that letting competitors 

see its rate information would limit its 

own ability to ‘‘capture rates’’, calling it 

‘‘tantamount to rescinding market-based 

rate authority.’’ 44 Enogex asserts the 

Commission should at least exempt 

storage services provided at marketbased rates. 

Enogex argues that sufficient public 

information already exists on storage 

services, and that the Commission has 

stated when it authorizes market-based 

rates that such providers lack market 

power, thus reducing the need for 

regulatory scrutiny.45 Enstor is also 

concerned that the proposed reporting 

requirements, particularly the 

requirement to report quarterly revenues 

received from each storage customer, 

would allow customers ‘‘to recreate the 

storage positions’’ that resulted in 

another customer receiving favorable 

rates.46 Shippers, Enstor argues, should 

not have more information about the 

pipeline than the pipeline has about its 

shippers. 

27. Atmos goes further, warning ‘‘of 

potential collusion or other 

anticompetitive behaviors that can be 

facilitated by untimely public disclosure 

of transaction-specific information.’’ 47

28. Other commenters, however, 

applaud the NOPR, arguing that the 

information sought in the reports would 

help enable the market to function more 

efficiently. Cities, Clayton Williams, and 

Texas Alliance ask the Commission to 

expand reporting requirements in order 

to provide greater transparency, 

especially in the Texas market.48 Cities 

and others contend that this ‘‘lack of 

competition in the intrastate pipeline 

market in Texas’’ could be ameliorated 

by ‘‘making information and records 

available both to the public and to 

shippers.’’ 49 For example, Clayton 

Williams provides a detailed narrative 

suggesting that it could have pursued 

allegations that a pipeline has been 

engaging in unlawful business practices, 

if only it had more publicly available 

information to support its allegation.50

29. These commenters further argue 

that lack of transparency harms the 

integrity of national price indices,51 and 

that the Commission’s proposed new 

regulations will help state-level 

transparency, and thus state-level 

markets, as well.52 Apache also 

responds to TPA’s argument that 

interstate pipelines have not sought out 

the proposed regulation: ‘‘It can be 

expected that most interstate pipelines 

would hope to levelize the playing field 

by eliminating regulation for all 

pipelines, rather than increasing 

regulation for all.’’ 53 However, Apache 

urges, new regulations are warranted 

based on the expected usefulness of 

improved access to market information. 

30. These commenters also argue that 

publicly available data is vital to 

eliminate unfair advantages.54 For 

example, Apache argues that intrastate 

and interstate pipelines both face the 

same economic environment and 

therefore should report the same 

information.55 Constellation argues that 

existing regulations harm the market by 

leaving shippers without enough 

information to ‘‘make fully informed 

purchasing decisions.’’ 56 Texas Alliance 

and Clayton Williams, likewise, argue 

that transparency helps limit the abuse 

of the monopoly power that some 

pipelines have over upstream 

shippers.57

31. Commenters also dismiss the 

notion that the current proposal could 

be too burdensome.58 Apache argues, 

‘‘[a] Section 311 pipeline is not going to 

forego the opportunity to earn money 

merely because it must comply with a 

transactional posting requirement.’’ 59

As Texas Alliance phrases it, the reason 

why the rulemaking ‘‘is so strongly 

opposed by the Texas intrastate 

pipelines and their association [is that 

i]t threatens to let sunshine in where 

they prefer the dark.’’ 60

C. Commission Determination 

32. In this Final Rule, the Commission 

is adopting the proposed quarterly 

transactional reporting requirements for 

section 311 and Hinshaw pipelines, 

with several clarifications discussed in 

subsequent sections of this rule. The 

Commission finds that these 

transactional reporting requirements 

appropriately balance the need for 

increased transparency of intrastate and 

Hinshaw pipeline transactions, while 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 29409 

61Revisions to Uniform System of Accounts, 

Forms, Statements, and Reporting Requirements for 

Natural Gas Companies, Order No. 581, 60 FR 

53019, 53051, FERC Stats. & Regs. ¶ 31,026 (1995), 

order on reh’g, Order No. 581–A, FERC Stats. & 

Regs. ¶ 31,032 (1996) (Order No. 581). 

62Order No. 637–A, at 31,614–615. Enstor is 

concerned that the requirement to include the 

revenues received from each interruptible storage 

customer during a quarter will cause competitive 

damage, alleging that such information will allow 

customers to recreate the storage positions that 

resulted in another customer receiving favorable 

rates. However, the existing semi-annual storage 

reports required by § 284.126(c) already require the 

reporting of revenues received from each customer. 

Increasing the frequency of such revenue reports 

from semi-annually to quarterly would not appear 

to significantly affect this concern. 

63Associated Gas Distributors v. FERC, 824 F.2d 

981, 1001–1003 (D.C. Cir. 1987). 

64See, e.g., Transparency Provisions of Section 23 

of the Natural Gas Act, Order No. 704–A, FERC 

Stats. & Regs. ¶ 31,275 at P 17 (2008) (‘‘While we 

acknowledge that removing purchases from 

volumes that must be reported on Form No. 552 

would somewhat reduce the reporting burden on 

certain market participants, we continue to believe 

that the substantial benefits of having such data 

publicly available outweigh this burden.’’), order on 

reh’g, Order No. 704–B, 125 FERC ¶ 61,302 (2008). 

Continued 

avoiding unduly burdensome 

requirements that might discourage 

such pipelines from participating in the 

interstate market. 

33. Transactional information 

provides price transparency so shippers 

can make informed purchasing 

decisions, and also permits both 

shippers and the Commission to 

monitor actual transactions for evidence 

of possible abuse of market power or 

undue discrimination. The existing 

reporting requirements in § 284.126 are 

inadequate for this purpose. For 

example, the annual reports of 

transportation transactions required by 

existing § 284.126(b) do not include 

(1) the rates charged by the pipeline 

under each contract, (2) the receipt and 

delivery points and zones or segments 

covered by each contract, (3) the 

quantity of natural gas the shipper is 

entitled to transport, store, or deliver, 

(4) the duration of the contract, or 

(5) whether there is an affiliate 

relationship between the pipeline and 

the shipper. Similarly, the semi-annual 

storage reports required by existing 

§ 284.126(c) do not include the rates 

charged by the storage provider in each 

contract, the duration of each contract, 

or whether there is an affiliate 

relationship between the storage 

provider and its customer. 

34. However, all this information is 

necessary to allow the Commission, 

shippers, and others to determine the 

extent to which particular transactions 

are comparable to one another for 

purposes of monitoring for undue 

discrimination. For example, contracts 

for service on different parts of a 

pipeline system or with different 

durations may not be comparable to one 

another. In addition, the requirement 

that affiliate relationships between the 

pipeline and its shippers be reported 

will allow the Commission and 

interested parties to monitor whether 

the pipeline is favoring its affiliates. The 

additional information required to be 

reported by the Final Rule is also 

necessary to allow shippers to make 

informed decisions about their capacity 

purchases. Shippers need to know the 

price paid for capacity over a particular 

path to enable them to decide, for 

instance, how much to offer for the 

specific capacity they seek. 

35. The Commission also finds that 

the lack of transparency ultimately 

harms not only shippers, but the 

pipelines themselves, whose individual 

actions to protect market advantage 

work collectively to make intrastate 

transportation less attractive. Without 

transparency and trust, efficient freemarket allocation of resources is not 

possible. As the specific example 

reported by Clayton Williams shows, 

the current market’s lack of 

transparency fosters, at the very least, an 

atmosphere of mistrust. While TPA may 

plausibly assert that natural gas 

commodity sales hubs are the most 

price-transparent commodity markets in 

the world, the same cannot be said of 

the market for intrastate transportation. 

It is the Commission’s obligation to 

ensure transparency at all stages of the 

natural gas market over which it has 

jurisdiction, because inefficiencies and 

unfair treatment in one stage of the 

market can lead to harm elsewhere in 

the market. Accordingly, we find that 

there is a need for revised regulations 

that improve market transparency. 

36. Exempting storage services 

provided at market-based rates is also 

unwarranted. A Commission finding 

that a service provider lacks market 

power should not be read to mean that 

its shippers are at no risk of undue 

discrimination or other unlawful 

practices. Furthermore, it is still in the 

public interest to disseminate market 

information concerning the transactions 

of market-based storage services. As the 

Commission reasoned in a previous 

rulemaking, ‘‘[i]t is even more critical for 

the Commission to review pricing when 

the Commission is relying on 

competition to regulate rates, rather 

than scrutinizing the underlying cost of 

service. Thus, we will not exempt 

intrastate storage companies charging 

market-based rates from the requirement 

to file * * * reports.’’ 61 Posting rates 

charged in previous market-based 

transactions leads to greater 

transparency and competition. As the 

Commission found, in Order No. 637–A, 

with respect to alleged competitive 

harm to individual firms: 

While disclosure of the transactional 

information may cause some commercial 

disadvantage to individual entities, it will 

benefit the market as a whole, by improving 

efficiency and competition. Buyers of 

services need good information in order to 

make good choices among competing 

capacity offerings. Without the provision of 

such information, competition suffers.62

37. Further, we are convinced the 

burdens to respondents will be small 

relative to the gains that the new 

regulations will bring to the market. The 

burden test goes to the heart of our 

regulatory authority: One purpose of the 

NGPA was to induce intrastate pipelines 

to participate in the interstate market by 

ensuring that it would not be unduly 

burdensome to do so.63 As discussed in 

more detail below, we are minimizing 

the burden of these new transactional 

reporting requirements in several ways. 

For example, we are not imposing a 

daily posting requirement, such as we 

have required of interstate pipelines. 

Therefore, the transactional reports 

required by the Final Rule will not 

require section 311 and Hinshaw 

pipelines to maintain internet Web sites. 

We are also clarifying several of the 

specific proposed reporting 

requirements as requested by 

commenters in a manner that should 

reduce the burden of compliance. 

Finally, while the reports must be filed 

in a standardized electronic format, the 

Commission will develop an electronic 

form in a PDF format that can be 

downloaded from the FERC Web site 

and saved to a user’s computer desktop. 

In addition, the Commission will 

develop an XML Schema that can be 

used by Respondents who wish to file 

an XML file. 

38. In addition, since the 

establishment of the first intrastate 

pipeline reporting requirements, 

electronic communications have 

reduced the cost of reporting 

transactional information. Given these 

advances in data management, 

collecting and compiling information 

for the proposed quarterly reports 

should be no more burdensome at 

present than it was to manage the lesser 

amount of information required when 

the Commission first established 

transactional reporting for intrastate 

pipelines. 

39. We consider the question of 

undue burden not only in isolation, but 

in the context of a pipeline’s entire 

jurisdictional business, and relative to 

the benefits to the market.64 The new 


emcdonald on DSK2BSOYB1PROD with RULES
29410 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

See also Pipeline Posting Requirements under 

Section 23 of the Natural Gas Act, Order No. 720, 

73 FR 73494, FERC Stats. & Regs. 31,283, at P 56 

(2008) (‘‘We also believe that the goals of this Final 

Rule outweigh the burdens to be placed upon noninterstate and interstate pipelines.’’); order on reh’g, 

Order No. 720–A, FERC Stats. & Regs. ¶ 35,302, at 

P 116 (2010) (‘‘The Commission understands 

commenters’ arguments that posting new points on 

a rolling basis would be burdensome for major noninterstate pipelines, but believes that these burdens 

are overstated and substantially outweighed by the 

transparency benefit of timely posting of newly 

eligible points.’’). 

65NOPR at 19. 

66Statharos v. New York City Taxi & Limousine 

Comm’n, 198 F.3d 317, 323 (2d Cir. N.Y. 1999) 

(citing Louis Brandeis, Other People’s Money and 

How the Bankers Use It 62 (1914)). 

67NOPR at 25. 

68NOPR at 20. 

69E.g., Jefferson at 11. 

70AGA at 2; see also AGA at 9–10. 

71TPA at 4–5. 

72Apache at 3. 

73Apache at 3. 

74 Jefferson at 16. 

75 Jefferson at 15–16. 

requirements aim to empower shippers 

‘‘to determine the extent to which 

particular transactions are comparable 

to one another.’’ 65 In this way, the 

Commission gives shippers increased 

ability to protect themselves from undue 

discrimination, and thus be less 

dependent on Commission 

investigations to protect their rights. 

The new reporting requirements also 

provide information that may assist 

state and local regulatory bodies, 

without interfering in their autonomy of 

action. 

40. In response to the pipelines that 

suggest that they have an overriding 

confidentiality interest, or that even 

raise the specter that increased 

transparency may cause unlawful 

behavior, we disagree. The 

Commission’s decades of experience in 

enforcement have confirmed the 

wisdom of what jurists have long held 

in the related realm of financial 

disclosure: ‘‘confidentiality interest is 

not absolute, however, and can be 

overcome by a sufficiently weighty 

government purpose. * * * ‘Sunlight is 

said to be the best of disinfectants; 

electric light the most efficient 

policeman.’ ’’ 66

V. Details of Pipeline Posting 

Requirements 

A. Overview and Summary of 

Requirements 

41. The Final Rule, in accordance 

with the NOPR, requires Form No. 549D 

transactional reports under § 284.126(b) 

to be filed on a quarterly basis, to 

include certain additional types of 

information and cover storage as well as 

transportation, and to be filed in a 

uniform electronic format and posted on 

the Commission’s Web site without 

redaction. 

42. In addition, the Final Rule 

clarifies or amends the NOPR on several 

points elaborated below. We clarify that 

pipelines are to file their Form No. 549D 

transactional reports on a contract-bycontract basis for each shipper, rather 

than on a transaction-by-transaction 

basis. We adopt a common 

identification requirement for shippers. 

For receipt and delivery points, 

however, pipelines need only use an 

industry common code where one is 

already in use, and may report wells 

and other gathering systems in the 

aggregate. We clarify that pipelines 

should continue to only report on their 

jurisdictional activities. Finally, we 

provide several clarifications regarding 

the data format and technical protocols, 

with the result being a flexible 

framework similar to the ‘‘simple 

spreadsheet’’ concept proposed by some 

commenters. 

B. Definition of Reportable Service 

1. NOPR 

43. The version of § 284.126(b)(1) 

proposed in the NOPR calls for a 

quarterly report that contains 

information on ‘‘each transportation and 

storage service provided.’’ Neither the 

proposed regulations nor the preamble 

to the NOPR directly defined the word 

‘‘service.’’ In the preamble, in the 

context of rejecting daily posting, the 

Commission rejected the option of 

‘‘daily postings of information about 

individual transactions.’’ 67 However, 

the preamble also states that pipelines 

should report ‘‘additional information 

concerning each transaction.’’ 68

2. Comments 

44. Some commenters express 

concern that the NOPR’s phrasing is 

unclear as to whether pipelines are to 

make their reports on a contract-bycontract basis or a transaction-bytransaction basis.69 They point out that 

a shipper may schedule numerous 

transactions during a quarter under a 

single contract. For example, a shipper 

may have a single interruptible contract, 

but may schedule separate transactions 

at different rates using different receipt 

and delivery points on a daily basis. 

AGA, for example, ‘‘urges the 

Commission to clarify that Hinshaw 

pipelines are required to report their 

‘contracts’ on a quarterly basis in a 

manner similar to what they currently 

report [rather than r]equiring 

information to be reported separately for 

each individual ‘transaction.’ ’’ 70 Other 

commenters are concerned that the 

Commission intends to require separate 

reports for each transaction. TPA, for 

example, complains that under ‘‘the 

onerous approach * * * proposed in 

the NOPR,’’ a pipeline with ‘‘multiple 

daily transactions under single contracts 

could [be] * * * reporting thousands of 

individual transportation 

transactions.’’ 71

45. Apache and Jefferson take the 

opportunity to propose alternative 

approaches to the question of what 

should be reported. Apache argues that 

‘‘[f]ull transparency regarding all natural 

gas transactions on a real-time basis, 

comparable to the reporting 

requirements of interstate pipelines, is 

the only comprehensive way to protect 

natural gas consumers to ensure the 

integrity of the market.’’ 72 Nevertheless, 

Apache clarifies that it supports the 

NOPR as ‘‘a helpful improvement over 

the status quo.’’ 73 Jefferson argues that 

the level of detail proposed in the NOPR 

for the reports is too burdensome and 

too far beyond what is required to 

address the actual disparities between 

interstate and intrastate reporting.74

Accordingly, Jefferson proposes limiting 

the report to 22 fields.75

3. Commission Determination 

46. We clarify that pipelines are to 

report the required transactional 

information in Form No. 549D on a 

contract-by-contract basis for each 

shipper, rather than on a transaction-bytransaction basis. In general, a pipeline 

will be required to make a separate data 

entry for each of a shipper’s contracts 

under a given rate schedule. The 

pipeline should aggregate all 

nominations and shipments under each 

contract for the quarter. In other words, 

while the reports will contain 

information on each transaction, that 

information will be aggregated by 

contract for each shipper for each type 

of service provided. 

47. If the pipeline charges a shipper 

multiple prices for different transactions 

or shipments under a single contract 

and service, the pipeline would still file 

a single report for that contract, with the 

following information. The pipeline 

would report the volume-weighted 

average rate charged under that contract 

for the quarter. The pipeline would also 

include a list of all the various rates 

charged during the quarter in the 

appropriate comment field for that 

contract. The pipeline would not be 

required to state the volumes associated 

with each rate or the dates each rate was 

charged. Similarly, the pipeline would 

list the receipt and delivery points used 

during each quarter for each contract, 

but is not required to separately report 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 29411 

76NOPR at P 23. 

77TPA at 6; Atmos at 5. 

78Apache at 2–3; Constellation at 4; Yates at 

5–6. 

79 Duke at 5. 

80TPA at 20. 

81AGD, 824 F.2d at 1001–1003. 

82EPGT Texas Pipeline, L.P., 99 FERC ¶ 61,295 

at 62,252. 

83 Mustang Energy Corp. v. Federal Energy 

Regulatory Comm’n, 859 F.2d 1447, 1457 (10th Cir. 

1988), cert. denied, 490 U.S. 1019 (1988); see also 

EPGT Texas Pipeline, 99 FERC ¶ 61,295 (2002). 

84Constellation at 4. 

85NOPR at P 33. 

86NOPR at P 33. 

87NOPR at P 34. 

the rates charged and volumes received 

and delivered at each point. 

48. We decline the opportunity to 

radically alter the type of information 

reported, as suggested by Apache and 

Jefferson. Based on the comments in this 

docket, the Commission believes that 

refinements to the NOPR are more 

certain to ensure a fair balance of the 

additional transparency benefits that 

would accrue to the market versus the 

administrative costs of compliance. 

C. Reporting Frequency 

1. NOPR 

49. In the NOPR, the Commission 

found that increasing the frequency of 

the § 284.126(b) transactional reports 

from annual to quarterly would provide 

market participants and the Commission 

with more timely and more useful 

information concerning the transactions 

entered into by intrastate pipelines. The 

Commission stated that it sought to 

balance the benefits of increased 

transactional transparency against the 

need to avoid creating undue burden for 

the responding pipelines. The 

Commission highlighted that ‘‘one 

primary difference will remain between 

the reporting requirements for interstate 

pipelines and the Section 311 and 

Hinshaw pipelines: Interstate Pipelines 

will post transactional information daily 

on their Web sites, while Section 311 

and Hinshaw pipelines will submit this 

information in a quarterly report to the 

Commission.’’ 76 The Commission noted 

alternative proposals from commenters, 

but found that a quarterly filing 

requirement would strike the 

appropriate balance. 

2. Comments 

50. Most commenters support 

quarterly reporting. Even some parties 

who urge the Commission to cancel the 

rulemaking docket nevertheless state 

that they could accept limited quarterly 

reporting.77 Some shippers, while 

generally supportive of the NOPR, state 

that they would prefer daily reporting is 

the best way to ensure transparency and 

competitive markets.78 The pipelines, 

however, consider the possibility of 

daily reporting to be ‘‘very costly, 

particularly if daily posting on a Web 

site was required,’’ 79 due ‘‘to the [sheer] 

volume of reporting’’ of each day’s 

transactions.80

3. Commission Determination 

51. The Final Rule adopts the NOPR’s 

proposal to require quarterly reporting 

by section 311 and Hinshaw pipelines. 

The Commission continues to find that 

a quarterly reporting requirement strikes 

the appropriate balance of increasing 

transparency without imposing undue 

burdens on section 311 and Hinshaw 

pipelines. One purpose of the NGPA 

was to induce intrastate pipelines to 

participate in the interstate market by 

ensuring that it would not be unduly 

burdensome to do so.81 This 

participation by intrastate pipelines 

eliminates the need for duplication of 

facilities between interstate and 

intrastate pipelines.82 Thus, as the court 

has stated, ‘‘Congress intended that 

intrastate pipelines should be able to 

compete in the transportation market 

without bearing the burden of full 

regulation by FERC under the Natural 

Gas Act.’’ 83

52. In the NOPR, the Commission 

stated that a daily reporting requirement 

would require all intrastate and 

Hinshaw pipelines to maintain their 

own Web sites for this purpose, and 

such daily postings of information about 

individual transactions would be 

significantly more burdensome than a 

quarterly reporting requirement. As 

described above, several pipeline 

commenters have reaffirmed that a daily 

posting requirement would be very 

costly. In addition, Constellation, while 

stating that daily posting would provide 

more transparency, agrees that at this 

time such a requirement appears unduly 

burdensome.84

53. Only two commenters request that 

the Commission require daily reporting. 

They contend that real-time reporting of 

individual transaction data would allow 

more immediate monitoring of whether 

the pipeline is engaging in undue 

discrimination and provide more useful 

price transparency. The Commission 

recognizes that daily posting could 

enable shippers and others to observe 

potentially discriminatory actions more 

quickly. However, the quarterly reports 

will provide similar information, 

enabling shippers and others to file 

complaints if they believe such 

information suggests a pattern of 

discrimination by the pipeline. Given 

the interest in avoiding placing undue 

burdens on section 311 and Hinshaw 

pipelines, the Commission finds that the 

quarterly reporting requirement, 

together with our other changes to the 

reporting requirements including the 

requirement that all reports be public, 

appropriately balances the need for 

more transparency with the interest in 

encouraging section 311 and Hinshaw 

pipelines to participate in the interstate 

pipeline grid. 

D. Identification of Receipt and Delivery 

Points and Shippers 

1. NOPR 

54. The NOPR proposed requiring 

intrastate pipelines to report several 

new elements of information, among 

them the primary receipt and delivery 

points covered by the contract. The 

NOPR proposed that the reports include 

the ‘‘industry common code’’ for each 

receipt and delivery point in order to 

minimize any ambiguity as to what 

receipt and delivery points are being 

reported and to ensure that all reporting 

pipelines identify such points in a 

consistent manner.85 Similarly, the 

NOPR proposed that, when reporting 

the identity of a given shipper, 

respondents should include not only the 

full legal name, but also an 

‘‘identification number’’ for each 

shipper.86

55. However, the NOPR stated that, 

while the Commission was aware of 

some shipper identification standards 

and receipt and delivery point codes 

that are used in the natural gas industry 

(for example, Dun & Bradstreet, Inc.’s 

D–U–N–S identification numbers for 

shippers), the Commission was 

reluctant to choose any particular 

standard without input as to that 

standard’s cost-effectiveness and 

usefulness. Accordingly, the 

Commission sought comment on two 

related questions: (1) What sort of 

shipper identification numbers and 

receipt and delivery point common 

industry codes are currently used or 

readily available to section 311 and 

Hinshaw pipelines?; and (2) Which 

shipper identification standard or 

standards and receipt and delivery point 

codes, if any, should be used?87

2. Comments 

56. Some commenters argue that 

using industry common codes to report 

receipt and delivery points would be 

highly burdensome, due to the cost of 

obtaining common code identifiers from 

a third-party registry. According to 

Jefferson, the annual charge for 

licensing common location codes is 


emcdonald on DSK2BSOYB1PROD with RULES
29412 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

88 Jefferson at 9. 

89Enogex at 12. 

90AGA at 2. 

91AOG at 6; Cranberry at 5. 

92AOG at 10. 

93Cranberry at 6. 

94 Jefferson at 9. 

95TPA at 22. 

96AGA at 2. 

97Available at http://smallbusiness.dnb.com/

establish-your-business/12334338-1.html. 

98Available at https://smallbusiness.dnb.com/

ePlatform/servlet/DUNSAdvancedCompanySearch?

storeId=10001&catalogId=70001. 

99See, e.g., NOPR at P 14, 24. 

100AOG at 8. 

101AGA at 1; see also AGA at 8–9. 

102AGA at 3; see also AGA at 15–16. 

$1,670 for 1–20 points, $3,506 for 21– 

100 points, and $5,428 for 100+ 

points.88 Enogex protests that it ‘‘does 

not have ‘primary’ and ‘secondary’ 

points on its system, but rather uses 

standard receipt and delivery points. As 

a result, Enogex does not have * * * 

common codes,’’ and urges that the 

Commission reject this element as 

‘‘base[d] * * * on the business practices 

of interstate pipelines.’’ 89 TPA voices 

similar concerns. Jefferson and ONEOK 

suggest letting respondents use their 

own meter codes instead. AGA suggests, 

as a compromise, that pipelines that do 

not already use common codes should 

be allowed ‘‘to use an interstate 

pipeline’s Data Reference Number 

(DRN) for points of interconnection with 

an interstate pipeline and use [their 

own] proprietary code where a DRN has 

not already been assigned.’’ 90

57. AOG and Cranberry, whose 

pipelines perform gathering functions, 

state that they do not keep organized 

records of who has contract rights to 

which receipt or delivery points.91 AOG 

proposes that, instead of differentiating 

among receipt points that are gas wells, 

they ‘‘would simply identify all receipt 

points as ‘AOG system.’ ’’ 92 Cranberry 

proposes that the Commission waive the 

requirement to report receipt and 

delivery points where, as with their 

system, all shippers have access to all or 

numerous points, and no common 

industry codes exist.93

58. The proposal to require use of 

standardized shipper identification 

numbers also raised some concerns. 

Jefferson estimated that ‘‘it will cost 

approximately $24,000 annually to 

utilize a third-party service to verify a 

unique shipper identification number 

such as a D–U–N–S® number,’’ and 

suggests removing this requirement.94

TPA likewise argues that intrastate 

providers would have no use for 

D–U–N–S numbers other than filing the 

proposed reports. TPA proposes having 

the public reports only ‘‘contain coded 

references to individual shippers and 

points, with the key to the code 

available to the Commission’’ for 

investigation but otherwise kept 

confidential; in the alternative TPA 

suggests that the exact legal name of the 

shipper should be sufficient.95 Most 

pipelines, however, did not object to 

standardized shipper identification, and 

‘‘AGA supports the use of the 

D–U–N–S® Number as a common 

company identifier.’’ 96

3. Commission Determination 

59. We acknowledge the concern of 

some pipelines that requiring all 

pipelines to use industry common codes 

for receipt and delivery points could 

prove to be expensive, and we have 

adjusted § 284.126(b)(1)(iv) of the final 

regulations accordingly. Where 

respondents already use Industry 

Common Codes in their existing 

business practices (such as wherever an 

intrastate system interconnects with an 

NGA interstate system), they must use 

those codes in their reports. However, 

where respondents do not use Industry 

Common Codes, they should report 

using the same point identification 

system that they use for scheduling with 

shippers. In addition, respondents who 

do not use Industry Common Codes 

must publish a list of all the 

jurisdictional receipt and delivery point 

codes they use for scheduling, along 

with the county and state of each point, 

and the name of the jurisdictional 

pipeline (if any) that interconnects at 

each point. This list should be filed as 

a separate narrative alongside the 

respondent’s initial report; if the list 

should change at any time, the 

respondent should include a narrative 

alongside its next quarterly report 

updating the list. 

60. The Commission also 

acknowledges the particular challenges 

in reporting receipt points for systems 

that perform a gathering function. 

Accordingly, for gas received from 

dedicated wells or gathering lines, 

respondents may instead note as the 

receipt point the common point where 

the gathered gas is considered to enter 

the pipeline’s transmission system. 

Respondents who use this method in 

their reports must develop their list of 

jurisdictional receipt and delivery 

points accordingly. 

61. In contrast with receipt and 

delivery points, however, standardized 

shipper identification is not unduly 

burdensome in comparison to the 

benefit to the Commission and market 

participants of being certain of the true 

identity of a pipeline’s shippers. As of 

the date that the Commission approves 

this Final Rule, we observe that it is 

possible to both create a D–U–N–S 

number 97 and search for any company’s 

D–U–N–S number 98 for free. Further, 

since standardized shipper 

identification numbers, by their nature, 

do not change with time, respondents 

will not need to spend time verifying 

each number every quarter. 

Accordingly, the time and expense 

spent on verifying the identity of one’s 

shippers should be reasonable. 

E. Requests for Exemptions and Safe 

Harbor 

1. NOPR 

62. In the NOI, the Commission 

sought comment on whether any of the 

proposed reporting requirements should 

exempt certain classes of respondents, 

based on the type of service provided or 

on the respondent’s size. Having 

considered the comments received, the 

Commission did not provide for any 

exemptions in the NOPR. The 

Commission reasoned that so long as 

reports were hosted on the FERC Web 

site and no more frequent than 

quarterly, they would not be unduly 

burdensome to prepare and file.99

2. Comments 

63. AOG asks the Commission to 

exempt companies with de minimis 

jurisdictional activity. In particular, 

AOG suggests a cut-off ‘‘somewhere 

between 2.2 and 50 million MMBtu,’’ 100

or for entities with under 500 

employees. ONEOK similarly argues 

that it should be excluded, but does not 

proffer a cut-off point. 

64. In addition to the above 

exemption requests, AGA suggests two 

clarifications as a means of minimizing 

the burden for all respondents. First, 

AGA asks the Commission to ‘‘clearly 

state that Hinshaw pipelines are 

required to report only those contracts 

authorized by their limited 

jurisdictional certificates and are not 

required to report on retail or intrastate 

activities that are not regulated by the 

Commission.’’ 101 Second, ‘‘AGA also 

recommends that the Commission 

explicitly state as part of the Final Rule 

in this proceeding that it will not 

prosecute, penalize or otherwise impose 

remedies on parties for inadvertent 

errors in reporting.’’ 102

3. Commission Determination 

65. The Commission rejects the 

requests for exemptions based on size or 

type of activity. As the Commission 

reasoned in the NOPR, since the reports 

and data are to be hosted on the FERC 

Web site and filed no more frequently 

than quarterly, they should not be 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 29413 

103The Commission adopted a similar guideline 

in Transparency Provisions of Section 23 of the 

Natural Gas Act, Order No. 704, 73 FR 1014 (Jan. 

4, 2008), FERC Stats. and Regs. ¶ 31,260 at P 114 

(2007), order on reh’g, Order No. 704–A, 73 FR 

55726 (Sept. 26, 2008), FERC Stats. & Regs. ¶ 31,275 

(2008), order on reh’g, Order No. 704–B, 125 FERC 

¶ 61,302 (2008). 

104 18 CFR 385.1112. 

105NOPR at P 31. 

106E.g., Enogex at 8. 

107TPA at 18. 

108TPA at 5, 16–17; ONEOK at 5. 

109Enstor at 9; ONEOK at 5. 

110Enstor at 6. 

111Enstor at 7. 

112E.g., Apache at 10–11. 

113Clayton Williams at 1. 

114Consumers Energy Co. v. FERC, 226 F.3d 777 

(6th Cir. 2000), holding that the Commission must 

comply with the requirements of NGA section 5 in 

order to require a Hinshaw pipeline to modify its 

rates for interstate service. 

115SGRM, 125 FERC ¶ 61,191 at P 23, quoting 

Order No. 637–A, at 31,614. 

unduly burdensome to prepare and file. 

The Commission has not exempted any 

section 311 or Hinshaw pipelines from 

filing the existing reports required by 

§ 284.126, using current Form No. 549. 

With the clarifications made to the 

technical protocols discussed below, the 

Commission is confident that, after the 

transition to the new reporting format, 

it will not be significantly more 

burdensome for pipelines to prepare 

and file each Form No. 549D report 

required by this rule, than it has been 

to file the existing Form No. 549 

Intrastate Pipeline Annual 

Transportation report. In addition, if a 

pipeline has de minimis jurisdictional 

activity, it follows that it should have 

relatively few transactions to report, 

thereby minimizing its burden of 

completing the necessary report. 

66. We grant AGA’s requested 

clarification that Hinshaw pipelines are 

required to report only those contracts 

authorized by their limited 

jurisdictional certificates and are not 

required to report on retail or intrastate 

activities that are not regulated by the 

Commission. Similarly section 311 

pipelines are only required to report 

contracts for NGPA section 311 

interstate service, and not contracts for 

non-jurisdictional intrastate service. 

67. In response to the AGA’s second 

request, the Commission states that 

because Form No. 549D is a new 

information collection, we will focus 

any enforcement efforts on instances of 

intentional submission of false, 

incomplete, or misleading information 

to the Commission, of failure to report 

in the first instance, or of failure to 

exercise due diligence in compiling and 

reporting data.103

F. Public Status of Reports 

1. NOPR 

68. The NOPR proposed to require 

that the reports filed pursuant to revised 

§ 284.126(c) be posted without any 

information redacted as privileged. The 

Commission stated that currently, when 

a report is filed subject to a request for 

privileged treatment, any person 

desiring to see the report must file a 

formal request, pursuant to the Freedom 

of Information Act (FOIA) and 

§ 385.1112 of the Commission’s Rules of 

Practice and Procedure,104 that the 

Commission make the report public. 

Due to the expense and delay caused by 

this additional step, in practice these 

requests have been infrequent. The 

Commission stated that allowing pricing 

information to be confidential 

undermines the Commission’s goals of 

preventing undue discrimination and 

promoting price transparency, while a 

prohibition on the confidential 

treatment of § 284.126(b) reports would 

further all of these policy goals. The 

Commission noted concerns about the 

commercial sensitivity of the 

information to be reported, but found, 

based on the comments filed, that ‘‘a 

quarterly reporting requirement should 

allay any concerns regarding the 

commercial sensitivity of contract 

data.’’ 105

69. In addition to the policy 

considerations, the Commission found 

that its governing statutes support 

public treatment of data reported both 

by Hinshaw pipelines and by NGPA 

Section 311 pipelines. Accordingly, the 

NOPR proposed that the standardized 

reporting form include a statement that 

the report will be public. 

2. Comments 

70. TPA and some individual 

pipelines argue that the Commission 

must retain the traditional 

confidentiality process in Rule 1112 and 

§ 388.112 of the Commission’s 

regulations.106 TPA argues that a policy 

of public disclosure would violate both 

Commission precedent and § 388.112, 

which call for case-by-case review of 

requests to release information.107

ONEOK and TPA argue that complying 

with the proposed regulations could 

violate the confidentiality provisions of 

existing contracts.108 Enstor and 

ONEOK suggest that many marketoriented shippers and large industrial 

end-users would seek to avoid Section 

311 transactions in order to protect their 

trading positions.109

71. Enstor particularly urges the 

Commission to amend the proposed 

§ 284.126(b)(1)(viii) requirement to 

report ‘‘Total revenues received for the 

shipper.’’ Enstor argues that, when 

applied to ‘‘interruptible storage services 

(such as parking and lending),’’ this 

requirement would compel reporting of 

information ‘‘that is not currently 

disclosed by interstate natural gas 

companies.’’ 110 Especially if 

unredacted, reporting individual 

shipper revenues ‘‘even on a quarterly 

basis’’ would do ‘‘catastrophic’’ damage 

to a pipeline’s ‘‘business model, as well 

as to market liquidity.’’ 111

72. However Apache, Cities, Clayton 

Williams, Texas Alliance, and Yates 

expressly support public reporting, in 

order for the reports to serve the 

purported goal of benefitting market 

participants.112 Clayton Williams cites 

the specific example of Texas’s ‘‘grossly 

inadequate’’ 113 state-level data, which it 

claims is responsible for rampant 

discriminatory behavior in Texas 

markets. 

3. Commission Determination 

73. As we clarified in the preceding 

section, the revised reporting 

requirements adopted by this rule apply 

only to contracts for interstate service 

which are subject to our jurisdiction 

under the NGA in the case of Hinshaw 

pipelines or NGPA section 311 in the 

case of intrastate pipelines. While we 

regulate the interstate services of 

Hinshaw pipelines in a more lighthanded manner than we regulate 

interstate pipelines, nevertheless the 

courts have made clear that such 

regulation of Hinshaw pipelines must 

comply with the basic requirements of 

the NGA, including sections 4 and 5 of 

the NGA.114 In SGRM, the Commission 

pointed out that NGA section 4(c) 

requires that ‘‘under such rules and 

regulations as the Commission may 

prescribe, every natural gas company 

shall * * * keep open for public 

inspection * * * all rates * * * 

together with all contracts which in any 

manner affect or relate to such rates.’’ 

The Commission concluded that: 

Although the NGA gives the Commission 

some discretion with respect to how to 

provide for the disclosure of rate schedules 

and contracts, clearly the public disclosure of 

rate schedules and related contracts, in some 

manner, is required.115

74. Accordingly, our requirement that 

the quarterly reports of Hinshaw 

pipelines concerning their jurisdictional 

contracts be posted without any 

information redacted is simply carrying 

out NGA section 4(c)’s requirement for 

public disclosure of rate and contract 

information ‘‘under such regulations and 

regulations as the Commission may 

prescribe.’’ Furthermore, NGA section 

23(a)(1) directs the Commission ‘‘to 


emcdonald on DSK2BSOYB1PROD with RULES
29414 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

116 15 U.S.C. 717t–2(a)(1). See Energy Policy Act 

of 2005, Public Law 109–58, § 316 (‘‘Natural Gas 

Market Transparency Rules’’), 119 Stat. 594 (2005). 117See, e.g., AGD, 824 F.2d at 1015–1018 (DC Cir. 

1987) (affirming the Commission’s use of Section 

311(c) to require intrastate pipelines to permit their 

interstate sales customers to convert to 

transportation-only service). 

118See Quarterly Financial Reporting and 

Revisions to the Annual Reports, Order No. 646, 

FERC Stats. & Regs. ¶ 31,158, Appendix B at 48 

(‘‘This report is also considered to be a nonconfidential public use form.’’), order on reh’g, 

Order No. 646–A, FERC Stats. & Regs. ¶ 31,163 

(2004); accord Instructions for Filing FERC Forms 

2, 2–A, and 3–Q at I. 119 110 FERC ¶ 61,154 at P 17 (2005). 

120E.g., Jefferson at 9–11. 

121AGA at 7. 

122 Jefferson at 14. 

123 Jefferson at 10. 

facilitate price transparency in markets 

for the sale or transportation of physical 

natural gas in interstate commerce.’’ 116

75. While the NGPA does not contain 

an express public disclosure provision 

similar to NGA section 4(c), Section 

311(c) of the NGPA authorizes the 

Commission to prescribe the ‘‘terms and 

conditions’’ under which intrastate 

pipelines perform interstate service. 

Requiring NGPA section 311 pipelines 

to publicly disclose transactional 

information for the purpose of allowing 

shippers and others to monitor NGPA 

Section 311 transactions for undue 

discrimination is well within the 

Commission’s broad conditioning 

authority under Section 311(c).117

76. We reject TPA’s argument that the 

Commission procedural rules in 

§§ 385.1112 and 388.112 require the 

Commission to allow pipelines to 

request confidential or privileged 

treatment of their transactional reports. 

The existence of those procedural rules 

does not prevent the Commission from 

establishing, in this rulemaking 

proceeding after notice and comment, a 

category of document, i.e., the Form 

549D reports required by this rule, 

which must be made public in order for 

the Commission to carry out its 

statutory responsibilities under the NGA 

and the NGPA. Such automatic 

disclosure requirements already apply 

to various other reports filed with the 

Commission, including for example the 

FERC Form Nos. 2, 2–A, and 3–Q 

financial reports required by §§ 260.1, 

260.2, and 260.300.118

77. As a matter of policy, we find that 

Hinshaw and section 311 pipelines 

must file their Form No. 549D reports as 

public in order to achieve the Final 

Rule’s purpose of improving 

transparency, monitoring 

discrimination, and fostering efficient 

markets. The Commission recognizes 

the concern of some pipelines that 

disclosure of commercially sensitive 

information will enable a shipper to 

know what the pipeline is charging 

other shippers and thus prevent the 

pipeline from being able to negotiate the 

best price for the services it offers. In 

Order No. 637–A, the Commission 

exercised its discretion concerning the 

manner of public disclosure to delay 

interstate pipelines’ posting of 

transactional information until the first 

nomination of service under the 

contract, rather than requiring posting 

upon execution of the contract. The 

Commission stated that this would 

temper any potential disadvantages 

from the public disclosure requirement, 

because the first nomination could be 

significantly after the contract was 

executed. In light of our more lighthanded regulation of Hinshaw and 

section 311 pipelines and our desire to 

minimize undue burdens on such 

pipelines, we are permitting a longer 

delay between contract execution and 

disclosure by only requiring such 

reports to be filed quarterly. This should 

temper any potential adverse effects 

from disclosure. 

78. However, public disclosure of all 

information in the quarterly reports is 

necessary to permit all market 

participants to monitor the market and 

detect undue discrimination. The 

Commission also expects and hopes that 

market participants will use the 

information from these reports in order 

to educate themselves about market 

conditions. Regardless of any adverse 

effect on individual entities, public 

disclosure will improve the market as a 

whole by improving efficiency and 

competition. 

79. Finally, while ONEOK and TPA 

assert that the disclosure requirement 

could violate the confidentiality 

provisions of pipelines’ existing 

contracts, most jurisdictional contracts 

include provisions that the contract is 

subject to all rules adopted by the 

Commission. Moreover, the Commission 

has previously held that such 

confidentiality provisions violate 

Commission policy. For example, in Bay 

Gas Storage Co.,119 the Commission 

required a section 311 pipeline to 

remove from its Statement of Operating 

Conditions a provision that the terms of 

any storage or transportation service 

agreement must be kept confidential 

with certain exceptions, holding that the 

provision was ‘‘contrary to the 

Commission’s favoring public 

disclosure of the provisions of service 

contracts under NGPA section 311.’’ If 

any Hinshaw or section 311 pipeline 

believes that it is subject to a binding 

contractual obligation to keep 

confidential any information required to 

be disclosed by this rule, it must file 

that contract with the Commission so 

that it can be modified to remove any 

such provision. 

G. Data Format and Technical Protocols 

1. NOPR and Information Notice 

80. The NOPR proposed that 

Commission Staff develop a mandatory, 

standardized electronic format for the 

Form No. 549D reports. The goals are to 

facilitate data submission, to provide 

the public timely and easy access to the 

information, and to avoid the costs of 

requiring intrastate pipelines to 

maintain a NAESB-compliant Web site. 

81. The Commission introduced its 

proposed format in the Information 

Notice. The Information Notice 

provided a table showing proposed 

Form No. 549D data elements to be 

collected each quarter from each 

respondent. It also included an example 

of data entries reported by a sample 

pipeline for one shipper, a Proposed 

Form No. 549D Data Dictionary and 

Reporting Units, and draft Instructions 

for Reporting Data. The Commission 

also asked for comments on the 

technological issue of whether the 

proposed standardized format should be 

developed using XML or an ASP.NET 

Web-based form. 

2. Comments 

82. The discussion of information 

technology in the NOPR and 

Information Notice garnered widespread 

concern from pipelines. The chief 

concern of pipelines is that they may 

have to engage in extensive training or 

outsourcing in order to understand and 

comply with the Commission’s 

directive.120 AGA reports that ‘‘one 

company has estimated the cost of 

developing an in-house solution for 

XML Schema reporting to be 

approximately $30,000.’’ 121 Jefferson 

reported its own estimate of $130,000 

‘‘to develop a quarterly report similar to 

the proposed Form No. 549D in the 

XML Schema format.’’ 122 Jefferson also 

stated, however, that it could not 

support ASP.NET unless the 

Commission could first guarantee that 

the format would not ‘‘require[] a filer to 

manually enter data,’’ or otherwise make 

the data submission and correction 

process laborious.123

83. In order to reduce this compliance 

burden, AGA along with Duke 

recommend that the Commission 

support not only the XML and ASP.NET 

approaches, but also ‘‘a simple 

spreadsheet with the data in tabular 

form that the intrastate and Hinshaw 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 29415 

124AGA at 14; see also Duke at 2–3, 7–9. 

125TPA at 16. 

126TPA at 20; see also ONEOK at 5. 

127AGA at 3; see also AGA at 15. 

128AGA at Appendix A; TPA at 20–25; Jefferson 

at 11–13. 

129Cities at 4; see also Constellation at 4. 

130 Yates at 7. 

131Respondents must choose only one 

methodology in a given quarter to file their 

quarterly report. They do not have to notify 

Commission staff of their selection. 

132See Appendix for a paper copy of the Form 

No. 549D and an example of a completed copy. 133The Form No. 549D database accessible on the 

FERC Web site would only show the latest filing of 

each Respondent. 

134 Gulf Terra Texas Pipeline, L.P., 109 FERC 

¶ 61,350, at P 9 (2004) (Gulf Terra). 

135See, e.g., id. at P 10 (citing Arkansas Western 

Gas Company, 56 FERC ¶ 61,407 (1991), reh’g 

denied, 58 FERC ¶ 61099 (1992)). 

pipelines could complete and file with 

the Commission using the eFiling 

portal.’’ 124 TPA urges the Commission 

to not adopt a form at all, but rather 

allow pipelines to continue to file 

reports similar in format and content to 

what they file now.125 In the alternative, 

TPA recommends making both XML 

and ASP.NET available.126

84. AGA also ‘‘recommends that the 

Commission develop a Frequently 

Asked Questions Web page or other 

Web-based Query System to assist 

intrastate and Hinshaw pipelines in 

complying with the new standardized 

electronic information filing 

requirements.’’ 127 AGA, TPA, and 

Jefferson have several questions in this 

vein regarding specific elements and 

definitions from the Information 

Notice.128

85. Cities, along with Constellation, 

praise the Commission’s decision ‘‘to 

shoulder the burden of Web site 

maintenance and standards 

compliance.’’ 129 Yates, while generally 

supporting the Commission’s proposal, 

argues that it would not be unduly 

burdensome to require pipelines to 

maintain their own Web sites on which 

they regularly publish transactional 

data.130

3. Commission Determination 

86. The Commission will use XML to 

collect and process the data required by 

the Form No. 549D report and present 

it in a timely manner on its Web site. 

The Commission recognizes that some 

respondents may prefer not to use XML. 

Other respondents have experience with 

the format or for efficiency purposes 

would use XML. Therefore, the 

Commission will allow respondents at 

the beginning of each quarter to select 

the method 131 of filing most appropriate 

to their circumstances as described 

below: 

a. Fillable-PDF Form No. 549D 

For respondents who prefer not to use 

XML, the Commission will develop an 

electronic form in a PDF format that can 

be downloaded from the FERC Web site 

and saved to a user’s computer desktop. 

The form can be viewed and updated 

using Adobe Acrobat Reader version 9 

or higher. The fillable-PDF form will 

look like a standard document, so that 

a clerk or any other employee(s) will be 

able collaborate on filling it out, saving 

it, and submitting the fillable-PDF 

electronically to the Commission.132

The data will be verified and validated 

before it will be officially accepted by 

the Commission. Each respondent’s 

filing would be publicly available in 

eLibrary within 1 day after filing. The 

public would also be able to download 

the entire Form No. 549D database for 

the quarter from the FERC Web site a 

few days after the filing deadline. 

Respondents would be able to correct 

any errors in their initial filings by filing 

a revised fillable PDF Form No. 549D 

with the Commission.133

b. File an XML file that validates against 

an XML Schema for Form No. 549D 

This method of filing is for those 

respondents who have some experience 

with XML, or have a relatively large 

number of shippers and contracts to 

report on each quarter. The Commission 

would develop an XML Schema for 

Form No. 549D and make it available for 

download on the FERC Web site. 

Respondents would have to test and 

successfully validate their XML filing 

against the XML Schema for Form No. 

549D prior to submitting it 

electronically to the Commission. Once 

the XML file is submitted, the 

Commission will examine it to ensure 

that it is formatted properly and 

validates against FERC’s XML Schema 

for Form No. 549D before it is officially 

accepted by the Commission. Each 

respondent’s filing would be publicly 

available in eLibrary within 1 day after 

filing. The public would also be able to 

download the entire Form No. 549D 

database for the quarter from the FERC 

Web site a few days after the filing 

deadline. Respondents would be able to 

correct any errors in their initial filings 

by resubmitting another XML file. 

87. An updated data dictionary, paper 

copy of the Fillable PDF Form No. 549D, 

an example of the filled out Form No. 

549D, and Instructions are attached as 

an appendix to this order. At a date 

closer to the deadline for filing the first 

Form No. 549D, the Commission will 

issue a notice for a Workshop in which 

Commission Staff will explain the 

overall filing process, including the 

fillable-PDF Form No. 549D, data 

dictionary, XML Schema and will 

answer any technical questions. 

Commission Staff are also directed to set 

up a form549D e-mail box 

(form549d@ferc.gov) where respondents 

can send questions. Commission staff 

will also provide online filing guidance 

and technical advice to respondents 

who request it, in line with the 

Commission’s current guidelines for 

contact between Staff and regulated 

entities. 

88. Finally, to the extent possible, the 

General Instructions for Form No. 549D 

developed by the Commission Staff will 

conform with the instructions for eTariff 

filing, so that pipelines shall use the 

same names to refer to the same objects 

and concepts in both their Statements of 

Operating Conditions and their 

quarterly reports. In this manner, the 

Commission hopes to address all of the 

above-noted concerns with regard to 

information technology for the Form No. 

549D. 

VI. Periodic Rate Review 

A. Current Policy 

89. Section 311 of the NGPA provides 

that the rates of intrastate pipelines 

performing transportation service under 

the NGPA shall be fair and equitable. 

Section 284.123 of the Commission’s 

regulations implements this 

requirement for section 311 pipelines, 

and § 284.224(e)(i) provides that 

provides that Hinshaw pipelines 

performing interstate service will be 

subject to the same rate requirements 

that apply to intrastate pipelines under 

§ 284.123. As a general matter, the 

Commission’s review of the rates of both 

section 311 and Hinshaw pipelines is 

more light-handed than its review of the 

rates of interstate pipelines. For 

example, when intrastate and Hinshaw 

pipelines file a request for a rate change, 

the Commission does not impose the 

five-month suspension typically 

imposed on interstate pipeline rate 

increases, and it uses advisory, nonevidentiary proceedings to resolve the 

issues, rather than setting the case for an 

evidentiary hearing before an 

Administrative Law Judge, as it does for 

interstate pipeline rate cases.134

90. However, as part of this overall, 

more light-handed regulation of 

intrastate and Hinshaw pipelines, the 

Commission has established a policy of 

reviewing the rates of both types of 

pipelines every three years in order to 

ensure that the rates affecting interstate 

services remain fair and equitable.135

The Commission has stated that the 

triennial rate review of section 311 


emcdonald on DSK2BSOYB1PROD with RULES
29416 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

136 98 FERC ¶ 61,041 at 61,122–3 (2002). 137Public Service Commission of New York v. 

FERC, 866 F.2d 487 (D.C. Cir. 1989). 138 94 FERC ¶ 61,287 (2001). See also Gulf Terra 

at P 12. 139See Centana Intrastate Pipeline Co., 75 FERC 

¶ 61,253 (1996) (Order on Rehearing) (imposing 

triennial rate review on a § 284.123(b)(1) filing); 

Green Canyon Pipe Line Company, L.P., 98 FERC 

¶ 61,041 (2002) (Order on Rehearing) (imposing 

triennial rate review on a § 284.123(b)(2) filing). 

140 Duke at 7. 

141TPA at 3. 

142Enogex at 10–11. 

143 Jefferson at 7. 

144TPA at 6, 15; see also Atmos at 7; ONEOK at 

3. 

145 Jefferson at 8. 

146AGA at 16. 

intrastate and Hinshaw pipelines 

enables the Commission to determine 

whether their rates have become unfair 

and unreasonable because the cost of 

service data upon which they are based 

have become stale. 

91. The primary difference in the 

Commission’s regulation of section 311 

and Hinshaw pipelines is the 

procedural vehicle through which the 

three-year rate review of those 

pipelines’ rates is performed. This 

difference arises from the difference in 

the statutes under which we regulate the 

two types of pipelines. For the reasons 

discussed in full in Green Canyon Pipe 

Line Co.,136 the Commission has broad 

conditioning authority under NGPA 

section 311(c), which it has consistently 

exercised to require intrastate pipelines 

to file new petitions for rate approval 

every three years. However, the United 

States Court of Appeals for the District 

of Columbia Circuit has held that the 

Commission cannot require interstate 

pipelines subject to its NGA jurisdiction 

to make new rate filings under NGA 

section 4.137 Consistent with that 

finding, the Commission in Consumers 

Energy Co.138 only required Hinshaw 

pipelines performing interstate service 

under a § 284.224 certificate to submit a 

triennial informational filing in the form 

specified in § 154.313 of the 

Commission’s regulations for minor rate 

changes. 

92. While the triennial rate review 

requirement is not part of the 

Commission’s regulations, the 

Commission has consistently imposed 

that requirement as a condition of its 

approval of each rate filing by a section 

311 or Hinshaw pipeline. The 

Commission has done this, whether the 

pipeline has chosen to elect a statebased rate pursuant to § 284.123(b)(1) or 

has proposed a rate for a Commissionapproved rate pursuant to 

§ 284.123(b)(2).139

B. Comments 

93. While the NOPR did not directly 

raise the issue of whether the 

Commission should modify its triennial 

rate review policy, Duke points out in 

its comments that Order No. 636 

removed the requirement that interstate 

pipelines file new rate cases every three 

years. It contends that, in order to treat 

section 311 pipelines and Hinshaw 

pipelines similarly: ‘‘the Commission 

should either reimpose a periodic rate 

filing requirement on interstate 

pipelines or eliminate the triennial 

filing requirement currently imposed on 

intrastate and Hinshaw pipelines.’’ 140

94. Other commenters argue that the 

triennial rate review requirement 

renders any additional information 

collection partly or wholly unnecessary. 

TPA predicts that the proposed reports 

‘‘would not likely yield significant 

transparency benefits,’’ because Section 

311 pipelines already must file 

Statements of Operating Conditions 

with maximum rates and submit cost of 

service filings to the Commission and to 

state officials.141 Enogex argues that the 

triennial rate review offers the 

Commission and other interested parties 

sufficient opportunity to review the 

rates and contracts of Section 311 

pipelines. Enogex further argues that 

most interstate pipelines are not subject 

to rate reviews that are as detailed or 

frequent, and that Section 311 pipelines 

would be unduly burdened if further 

reporting were required.142

C. Commission Determination 

95. As noted above, the Commission 

generally requires triennial rate reviews 

of section 311 intrastate and Hinshaw 

pipelines to ensure that the Commission 

has current information and rates have 

not become stale. Since these pipelines 

are not subject to the same reporting 

requirements, nor the same level of rate 

review, as interstate pipelines, the 

Commission can not eliminate periodic 

rate review without abrogating its duty 

to continually assure fair and equitable 

rates. 

96. However, the Commission is 

sensitive to concerns that the improved 

reporting requirements could prove too 

burdensome, when considered in 

aggregation with other burdens such as 

triennial rate review. In recent years, the 

Commission has found it only 

occasionally necessary to impose rate 

reductions during these periodic 

reviews. It is our expectation that the 

improved reporting requirements will 

instill further market discipline, thus 

helping to continue this favorable trend. 

It thus appears that requiring all section 

311 and Hinshaw pipelines to make 

filings for a review of their rates every 

three years imposes an unnecessary 

burden on both the pipelines and the 

Commission, as compared to the public 

benefits obtained by such rate review. 

Accordingly, the Commission has 

decided to modify its triennial rate 

review policy in order to decrease the 

frequency of review from three to five 

years. Therefore, the Commission 

intends in future orders approving rates 

filed by section 311 and Hinshaw 

pipelines to include a condition 

requiring a review of those rates five 

years from the date the approved rates 

took effect. Any pipelines subject to a 

requirement to file a triennial rate 

review after the issuance of this Final 

Rule may file a request for an extension 

of time consistent with the revised 

policy announced here. 

VII. Effective Date of the Final Rule and 

Compliance Deadlines 

A. Comments 

97. Several commenters expressed 

concern over the speed with which the 

Commission would adopt and 

implement the proposed reporting 

requirements. Three suggestions raised 

by Jefferson and others were to hold 

conferences or otherwise delay the 

issuance of the Final Rule, delay the 

effective date of the Final Rule, and 

establish a safe harbor period. 

98. First, Jefferson and others seek to 

delay the issuance of the Final Rule. 

Jefferson argues that the proposed 

format ‘‘[r]equires additional guidance 

in the form of industry conferences and 

workshops prior to the Commission’s 

issuance of a Final Rule to avoid 

conflicts in interpretation of each 

proposed data element, develop a 

consensus regarding proposed technical 

reporting formats, and to give intrastate 

and Hinshaw pipelines an opportunity 

to present information that would more 

accurately represent the burden of 

reporting.’’ 143 TPA, while also 

requesting a conference, urges the 

Commission to postpone any activity in 

this docket until after the Commission 

has completed the implementation and 

appeals process for the rulemaking in 

Order No. 720, which also concerns 

intrastate pipeline reporting, and 

assesses the impact of that rule before 

considering any further regulations.144

99. Second, Jefferson requests ‘‘an 

implementation period of at least 18 

months from the issuance of a final rule 

* * * regardless of the technical format 

ultimately selected.’’ 145 AGA also 

requests a delayed effective date, 

without specifying a length.146

100. Third, Jefferson requests a one 

year safe-harbor period, during which 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 29417 

147 Jefferson at 8. 148See, e.g., Order No. 704 at P 114. 149Atmos at 3. 150AGA at 7. 

151Enogex at 7. 

152AGA at 7. 

153TPA at 15. 

154TPA at 24. 

155 Jefferson at 14. 

156E.g., Jefferson at 9. 

157 5 CFR 1320.11. 

158 44 U.S.C. 3507(d). 

159See 5 CFR 1320.3(b)(2) (‘‘The time, effort, and 

financial resources necessary to comply with a 

collection of information that would be incurred by 

persons in the normal course of their activities (e.g., 

in compiling and maintaining business records) 

will be excluded from the ‘‘burden’’ if the agency 

demonstrates that the reporting, recordkeeping, or 

disclosure activities needed to comply are usual 

and customary.’’). 

160Respondents would have to download the free 

version of Acrobat Reader version 9 to use the 

fillable PDF. 

pipelines will not be penalized for 

inadvertent reporting errors.147

B. Commission Determination 

101. The Final Rule will become 

effective on April 1, 2011. Pursuant to 

the regulations, the Form No. 549D 

quarterly report for the period January 1, 

2011 through March 31, 2011 must be 

eFiled on or before May 1, 2011. Based 

on the comments from all shippers, we 

believe that this allows a sufficient 

period before implementation of the 

revised reporting requirement to allow 

reporting pipelines to familiarize 

themselves with the new reporting 

format and update their internal 

processes, if necessary. As noted above, 

Commission Staff plans to hold a 

technical workshop on a date to be 

announced in the near future for the 

purpose of assisting reporting pipelines 

in this transition. 

102. We will not institute a safeharbor period. However, as stated above 

in this order, because this is a new 

information collection, the Commission 

will focus any enforcement efforts on 

instances of intentional submission of 

false, incomplete, or misleading 

information to the Commission, of 

failure to report in the first instance, or 

of failure to exercise due diligence in 

compiling and reporting data.148

VIII. Information Collection Statement 

A. Original Statement 

103. In the NOPR, in accordance with 

the requirements of the Office of 

Management and Budget (OMB), the 

Commission estimated that on an 

annual basis the burden to comply with 

the rule as proposed would be as 

follows: 

Data collection Number of 

respondents 

Number of 

responses 

Hours per 

response Total hours 

Form No. 549D ................................................................................ 125 4 3.5 1,750 

Using an hourly rate of $150 to 

estimate the costs for filing and other 

administrative processes, the 

Commission estimated the total cost for 

all respondents to be $262,500. 

B. Comments 

104. Many pipelines strongly 

disagreed with the Commission’s 

burden estimate. Most prominently, 

commenters urge the Commission to 

consider the initial implementation 

burden. Atmos states that it spent five 

months on the first annual report 

required by Order No. 704.149 AGA 

estimates that the development of an 

XML Schema alone would cost $30,000 

per respondent, for an initial total 

burden of $3.75 million.150 Enogex 

estimates the ‘‘major information 

systems upgrades to allow Enogex to 

track, report, and maintain the level of 

detailed data necessary * * * [at] $3 to 

$4 million.’’151

105. Commenters also disagreed with 

the estimated ongoing annual burden. 

AGA estimated annual reporting would 

take over 12 hours per respondent to 

complete, which for 125 respondents 

would be an annual burden of 

$900,000.152 TPA also believes that 

annual burdens will be significantly 

higher, especially if the Commission 

chooses a format that requires manual 

data entry.153 ‘‘[D]ue to the large number 

of small-volume, interruptible 311 

transactions * * * the burden of 

additional reporting might outweigh the 

benefits of participating,’’ TPA warns.154

Jefferson estimates 24 hours per quarter 

per respondent, with thousands of 

dollars in fees to third party information 

technology vendors.155 In addition, 

Jefferson and others provide separate 

estimates of the cost of using industry 

common codes for shippers and receipt 

and delivery points, as detailed above in 

this order.156

C. Revised Statement 

106. The Office of Management and 

Budget (OMB) regulations require that 

OMB approve certain reporting, record 

keeping, and public disclosure 

requirements (collections of 

information) imposed by an agency.157

The Commission has submitted 

notification of these proposed 

information collection requirements to 

OMB for its review and approval under 

section 3507(d) of the Paperwork 

Reduction Act of 1995.158

107. The requirement for intrastate 

pipelines to post additional information 

regarding their transactions would 

impose an initial burden on pipelines as 

they organize their corporate data to be 

compatible with the data elements 

selected by the Commission for Form 

No. 549D. Certain pipelines have 

asserted in comments that the costs 

could include the reconfiguring of 

information collection systems. 

However, given that this information is 

used in their business, the Commission 

still believes that the burden that would 

be imposed by this proposed 

requirement is largely for the collection 

of this information.159 As stated above 

in this Final Rule, intrastate pipelines 

can choose to submit their quarterly 

Form No. 549D using a Commissionprovided Fillable PDF form.160 In this 

instance, intrastate pipelines would not 

be required to incur costs to learn XML 

or develop an XML Schema. Even if an 

intrastate pipeline chose to file an XML 

file, it would not incur costs to develop 

an XML Schema. The Schema would be 

developed by the Commission and 

provided to pipelines in order to 

validate their submission before eFiling 

it to the Commission. While the 

Commission erred in not including this 

burden in its original estimate, we 

nevertheless find that the burden 

estimates provided by commenters are 

far too high. These estimates were based 

on assumptions that the Commission 

would require a far more intensive 

volume of reports—transaction-bytransaction reports instead of contractby-contract reports—and that the 

Commission would require the more 

technologically challenging XML data 

format without developing a ‘‘simple 

spreadsheet’’ form to guide respondents. 

108. OMB regulations require OMB to 

approve certain information collection 

requirements imposed by agency rule. 

The Commission submitted notification 

of this rule to OMB. The Commission 

has developed a cost estimate of the 

initial implementation burden and 

revised the estimate of the ongoing 

annual burden concomitant with the 

decision allow multiple versions of the 


emcdonald on DSK2BSOYB1PROD with RULES
29418 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

161Order No. 486, Regulations Implementing the 

National Environmental Policy Act of 1969, 52 FR 

47897 (Dec. 17, 1987), FERC Stats. & Regs., 

Regulations Preambles 1986–1990 ¶ 30,783 (1987). 

162 18 CFR 380.4. 

report. The analysis began with an 

examination of a representative sample 

of over one-third of the companies 

currently filing a Form No. 537, the 

semi-annual storage report, or Form No. 

549, the annual transportation report. 

Studying the level and type of services 

performed for their shippers made it 

possible to split the industry between 

those that would logically file using the 

PDF form because of the relatively small 

number of shippers and services, and 

those that would incur the addition upfront effort associated with developing 

tools for filing the report using the 

Commission’s XML schema. This 

analysis estimates that the 70 percent of 

Respondents that average less than five 

shippers transacting in a given quarter 

would file using the PDF form. The 

other 30 percent would incur addition 

development costs associated with the 

XML-based report to offset the larger ongoing burden cost associated with 

reporting more shippers, services, and 

contracts. Cost estimates were 

developed for the initial burden and the 

on-going burden for each of the 

permissible file methods, using 

prevailing Houston labor costs and the 

most efficient hourly split of manpower 

by legal, accounting, regulatory and IT 

departments. The initial burden was 

split between effort involved in the 

initial review and planning procedures 

to ensure compliance with the 

rulemaking and the effort required to 

develop and implement the new 

procedures. The PDF startup effort 

would require an average 68 personhours or $4,354 per Respondent. The 

XML startup effort would require an 

additional 128 person-hours, primarily 

associated with the increased IT 

development and testing requirements, 

for an estimated initial burden of 

$11,287 per Respondent. The start-up 

burden estimates for complying with 

this Final Rule are as follows: 

INITIAL PUBLIC REPORTING BURDEN

Data collection filing method Number of 

respondents 

Average start-up 

burden per 

respondent 

Total industry 

hours 

Total industry 

costs 

Using PDF Form .............................................................................. 87 $4,354 5,916 $378,798 

Using XML Schema ......................................................................... 38 11,287 7,448 428,906 

Total .......................................................................................... 125 ............................ 13,364 807,704 

To estimate ongoing burden, the 

Commission analyzed two sets of costs: 

The per-report cost for the effort by the 

legal accounting, IT and regulatory 

departments related to changes in the 

mix of shippers and services, and the 

per-contract costs related to the effort 

populate the report with the information 

associated with each shipper by service 

type and by contract. For the first set of 

costs, this analysis estimates the PDF 

form to require 11 person-hours at an 

estimated cost of $596 per report, and 

the XML Schema 10 man-hours at an 

estimated cost of $556 per report. For 

the per-contract set of costs, this 

analysis estimates the PDF form to 

require $663 per report and the XML 

Schema $543 per report, for the average 

Respondent. 

ONGOING PUBLIC REPORTING BURDEN

Data collection filing method Number of 

respondents 

Average annual 

ongoing burden 

per respondent 

Total industry 

hours per year 

Total industry 

costs per year 

Using PDF Form .............................................................................. 87 $2,650 4,294 $230,550 

Using XML Schema ......................................................................... 38 2,171 1,520 82,498 

Total .......................................................................................... 125 ............................ 5,814 313,048 

Title: Form No. 549D. 

Action: Proposed Information Posting 

and Information Filing. 

OMB Control No: xxxx-xxxx. 

Respondents: Business or other for 

profit. 

Frequency of Responses: Quarterly 

posting requirements. 

Necessity of the Information: The 

quarterly filing of additional 

information by intrastate pipelines is 

necessary to provide information 

regarding the price and availability of 

natural gas transportation services to 

market participants, state commissions, 

the Commission, and the public. The 

filing would contribute to market 

transparency by empowering market 

participants to determine the extent to 

which particular transactions are 

comparable to one another; and it would 

allow the monitoring of potentially 

manipulative or unduly discriminatory 

activity. 

Interested persons may obtain 

information on the reporting 

requirements by contacting the 

following: 

Federal Energy Regulatory Commission, 

888 First Street, NE., Washington, DC 

20426. [Attention: Data Clearance, 

Phone: (202) 502–8415, fax: (202) 

273–0873] e-mail: 

DataClearance@ferc.gov or by 

contacting: 

Office of Management and Budget, 

Office of Information and Regulatory 

Affairs, Washington, DC 20503, 

[Attention: Desk Officer for the 

Federal Energy Regulatory 

Commission, phone: (202) 395–7345, 

fax: (202) 395–7285]. 

IX. Environmental Analysis 

109. The Commission is required to 

prepare an Environmental Assessment 

or an Environmental Impact Statement 

for any action that may have a 

significant adverse effect on the human 

environment.161 The Commission has 

categorically excluded certain actions 

from these requirements as not having a 

significant effect on the human 

environment.162 The actions taken here 

fall within categorical exclusions in the 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 29419 

163See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5) and 

380.4(a)(27). 164 5 U.S.C. 601–612. 165See 5 U.S.C. 601(3), citing section 3 of the 

Small Business Act, 15 U.S.C. 623. Section 3 of the 

SBA defines a ‘‘small business concern’’ as a 

business which is independently owned and 

operated and which is not dominant in its field of 

operation. The Small Business Size Standards 

component of the North American Industry 

Classification System defines a small natural gas 

pipeline company as one that transports natural gas 

and whose annual receipts (total income plus cost 

of goods sold) did not exceed $7 million for the 

previous year. 

Commission’s regulations for rules that 

are corrective, clarifying or procedural, 

for information gathering, analysis, and 

dissemination, and for sales, exchange, 

and transportation of natural gas that 

requires no construction of facilities.163

Therefore an environmental review is 

unnecessary and has not been prepared 

in this rulemaking. 

X. Regulatory Flexibility Act 

110. The Regulatory Flexibility Act of 

1980 (RFA) 164 generally requires a 

description and analysis of final rules 

that will have significant economic 

impact on a substantial number of small 

entities. The Commission is not 

required to make such analysis if 

proposed regulations would not have 

such an effect. 

111. Most of the natural gas 

companies regulated by the Commission 

do not fall within the RFA’s definition 

of a small entity.165 Approximately 125 

natural gas companies are potential 

respondents subject to the requirements 

adopted by this rule. For the year 2008 

(the most recent year for which 

information is available), 4 companies 

had annual revenues of less than $7 

million. This represents 3.2 percent of 

the total universe of potential 

respondents or only a very few entities 

that may have a significant burden 

imposed on them. In addition, by 

providing entities with an option of how 

they file the information, the 

Commission has provided alternatives, 

thereby lessening the economic impact 

for smaller entities while still 

accomplishing the regulatory objective 

of increasing market transparency. In 

view of these considerations, the 

Commission certifies that this Final 

Rule’s amendments to the regulations 

will not have a significant impact on a 

substantial number of small entities. 

XI. Document Availability 

112. In addition to publishing the full 

text of this document, except for the 

Appendix, in the Federal Register, the 

Commission provides all interested 

persons an opportunity to view and/or 

print the contents of this document, 

including the Appendix, via the Internet 

through FERC’s Home Page (http:// 

www.ferc.gov) and in FERC’s Public 

Reference Room during normal business 

hours (8:30 a.m. to 5 p.m. Eastern time) 

at 888 First Street, NE., Room 2A, 

Washington, DC 20426. 

113. From FERC’s Home Page on the 

Internet, this information is available on 

eLibrary. The full text of this document, 

including the Appendix, is available on 

eLibrary in PDF and Microsoft Word 

format for viewing, printing, and/or 

downloading. To access this document 

in eLibrary, type the docket number 

excluding the last three digits of this 

document in the docket number field. 

114. User assistance is available for 

eLibrary and the FERC’s Web site during 

normal business hours from FERC 

Online Support at 202–502–6652 (toll 

free at 1–866–208–3676) or email at 

ferconlinesupport@ferc.gov, or the 

Public Reference Room at (202) 502– 

8371, TTY (202) 502–8659. E-mail the 

Public Reference Room at 

public.referenceroom@ferc.gov. 

XII. Effective Date and Congressional 

Notification 

115. These regulations are effective 

April 1, 2011. The quarterly report for 

transactions occurring during the period 

January 1, 2011 through March 31, 2011 

must be filed on or before May 1, 2011. 

The Commission has determined that 

this rule is not a ‘‘major rule’’ as defined 

in section 351 of the Small Business 

Regulatory Enforcement Fairness Act of 

1996. 

List of Subjects in 18 CFR Part 284 

Continental shelf, Natural gas, 

Reporting and recordkeeping 

requirements. 

By the Commission. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

■ In consideration of the foregoing, the 

Commission amends Part 284, Chapter I, 

Title 18, Code of Federal Regulations, as 

follows. 

PART 284—CERTAIN SALES AND 

TRANSPORTATION OF NATURAL GAS 

UNDER THE NATURAL GAS POLICY 

ACT OF 1978 AND RELATED 

AUTHORITIES 

■ 1. The authority citation for Part 284 

continues to read as follows: 

Authority: 15 U.S.C. 717–717w, 3301– 

3432; 42 U.S.C. 7101–7352; 43 U.S.C. 1331– 

1356 

■ 2. In § 284.126, paragraph (b) is 

revised to read as follows: 

§ 284.126 Reporting requirements. 

* * * * * 

(b) Form No. 549D, Quarterly 

Transportation and Storage Report of 

Intrastate Natural Gas and Hinshaw 

Pipelines. 

(1) Each intrastate pipeline must use 

Form No. 549D to file a quarterly report 

with the Commission and the 

appropriate state regulatory agency that 

contains, for each transportation and 

storage service provided during the 

preceding calendar quarter under 

§ 284.122, the following information on 

each transaction, aggregated by contract: 

(i) The full legal name, and 

identification number, of the shipper 

receiving the service, including whether 

there is an affiliate relationship between 

the pipeline and the shipper; 

(ii) The type of service performed (i.e., 

firm or interruptible transportation, 

storage, or other service); 

(iii) The rate charged under each 

contract, specifying the rate schedule/ 

name of service and docket where the 

rates were approved. The report should 

separately state each rate component set 

forth in the contract (i.e., reservation, 

usage, and any other charges); 

(iv) The primary receipt and delivery 

points covered by the contract, 

identified by the list of points that the 

pipeline has published with the 

Commission, which shall include the 

industry common code for each point 

where one has already been established; 

(v) The quantity of natural gas the 

shipper is entitled to transport, store, or 

deliver under each contract; 

(vi) The duration of the contract, 

specifying the beginning and ending 

month and year of the current 

agreement; 

(vii) Total volumes transported, 

stored, injected or withdrawn for the 

shipper; and 

(viii) Total revenues received for the 

shipper. The report should separately 

state revenues received under each rate 

component; 

(2) The quarterly Form No. 549D 

report for the period January 1 through 

March 31 must be filed on or before May 

1. The quarterly report for the period 

April 1 through June 30 must be filed on 

or before August 1. The quarterly report 

for the period July 1 through September 

30 must be filed on or before November 

1. The quarterly report for the period 

October 1 through December 31 must be 

filed on or before February 1. 

(3) Each Form No. 549D report must 

be filed as prescribed in § 385.2011 of 

this chapter as indicated in the General 

Instructions and Data Dictionary set out 

in the quarterly reporting form. Each 

report must be prepared and filed in 

conformance with the Commission’s 

software or XML Schema, eTariff filing 

structure, and reporting guidance, so as 


emcdonald on DSK2BSOYB1PROD with RULES
29420 Federal Register / Vol. 75, No. 101 / Wednesday, May 26, 2010 / Rules and Regulations 

to be posted and available for 

downloading from the FERC Web site 

(http://www.ferc.gov). One copy of the 

report must be retained by the 

respondent in its files. 

(4) Intrastate pipelines filing Form No. 

549D are no longer required to file Form 

No. 549—Intrastate Pipeline Annual 

Transportation Report after their March 

31, 2011 filing. 

* * * * * 

[FR Doc. 2010–12614 Filed 5–25–10; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 127 

[Docket No. USCG–2007–27022] 

RIN 1625–AB13 

Revision of LNG and LHG Waterfront 

Facility General Requirements 

AGENCY: Coast Guard, DHS. 

ACTION: Final rule. 

SUMMARY: In this final rule, the Coast 

Guard revises the requirements for 

waterfront facilities handling liquefied 

natural gas (LNG) and liquefied 

hazardous gas (LHG). The revisions 

bring the regulations up to date with 

industry practices and Coast Guard 

policy implemented due to increased 

emphasis on security since the events of 

September 11, 2001. These revisions 

harmonize the Coast Guard’s regulations 

for LNG with those established by the 

Federal Energy Regulatory Commission 

(FERC), the agency with exclusive 

authority to approve or deny an 

application for the siting, construction, 

expansion, or operation of an LNG 

facility located onshore or within State 

waters. This rulemaking does not affect 

LNG deepwater ports. 

DATES: This final rule is effective June 

25, 2010. To the extent this rulemaking 

affects the collection of information in 

33 CFR 127.007, we will not enforce the 

revised collection requirements until 

the collection is approved by the Office 

of Management and Budget (OMB). 

When OMB approves, we will publish 

notification in the Federal Register. 

ADDRESSES: Comments and material 

received from the public, as well as 

documents mentioned in this preamble 

as being available in the docket, are part 

of docket USCG–2007–27022 and are 

available for inspection or copying at 

the Docket Management Facility (M–30), 

U.S. Department of Transportation, 

West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue, SE., 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. You may also 

find this docket on the Internet by going 

to http://www.regulations.gov, inserting 

USCG–2007–27022 in the ‘‘Keyword’’ 

box, and then clicking ‘‘Search.’’ 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

e-mail Commander Patrick Clark, 

CG–5222, U.S. Coast Guard; telephone 

202–372–1410, e-mail 

Patrick.W.Clark@uscg.mil. If you have 

questions on viewing the docket, call 

Renee V. Wright, Program Manager, 

Docket Operations, telephone 202–366– 

9826. 

SUPPLEMENTARY INFORMATION: 

Table of Contents for Preamble 

I. Abbreviations 

II. Regulatory History 

III. Background 

A. Basis and Purpose of the Final Rule 

B. Discussion of FERC Regulations With 

Regard to LNG 

IV. Discussion of Comments and Changes 

A. General Comments 

B. Comments on the Letter of Intent 

C. Comments on Waterway Safety, and the 

Waterway Suitability Assessment 

D. Comments on Frequency of Shipments 

E. Comments on Evaluating the Density 

and Character of Marine Traffic 

F. Comments on the Letter of 

Recommendation 

G. Comments on Timely Issuance of the 

Letter of Recommendation 

H. Comments on the Differences Between 

LNG and LHG 

I. Other Changes 

V. Regulatory Analyses 

A. Regulatory Planning and Review 

B. Small Entities 

C. Assistance for Small Entities 

D. Collection of Information 

E. Federalism 

F. Unfunded Mandates Reform Act 

G. Taking of Private Property 

H. Civil Justice Reform 

I. Protection of Children 

J. Indian Tribal Governments 

K. Energy Effects 

L. Technical Standards 

M. Environment 

I. Abbreviations 

CFR Code of Federal Regulations 

COTP Captain of the Port 

DHS Department of Homeland Security 

FERC Federal Energy Regulatory 

Commission 

FR Federal Register 

LHG Liquefied hazardous gas 

LNG Liquefied natural gas 

LOI Letter of Intent 

LOR Letter of Recommendation 

NEPA National Environmental Policy Act 

of 1969 

NTTAA National Technology Transfer and 

Advancement Act 

NPRM Notice of proposed rulemaking 

NVIC Navigation and Vessel Inspection 

Circular 

OMB Office of Management and Budget 

U.S.C. United States Code 

WSA Waterway Suitability Assessment 

II. Regulatory History 

On April 28, 2009, we published in 

the Federal Register a notice of 

proposed rulemaking entitled ‘‘Revision 

of LNG and LHG Waterfront Facility 

General Requirements’’ (74 FR 19159). 

We received four letters commenting on 

the proposed rule, containing a total of 

38 comments. No public meeting was 

requested and none was held. 

III. Background 

A. Basis and Purpose of the Final Rule 

Over the last decade, the worldwide 

production and transportation of 

liquefied natural gas (LNG) has 

increased substantially. Currently, the 

United States consumes about 25 

percent of the world’s annual natural 

gas production. Over the next 20 years, 

U.S. natural gas consumption is 

projected to increase. Should domestic 

gas production not meet this demand, 

increased marine LNG imports may be 

needed to help resolve this likely 

shortfall. Currently, there are nine 

waterfront LNG facilities in the United 

States: eight are import facilities, and 

one is an export facility. To meet rising 

demand, the energy industry has 

submitted dozens of proposals to build 

LNG import facilities along our coasts, 

and an unspecified number of proposals 

are in the early planning stages. 

We have not seen, and do not expect, 

a similar increase in the production and 

transportation of liquefied hazardous 

gas (LHG). Although LNG and LHG 

facilities and the cargoes they handle 

are different in nature, we believe the 

vessels that transport these cargoes pose 

similar risks to the waterway 

environment and the area surrounding 

the marine transfer area of the facility 

when transfer operations are underway. 

Safety and security of our ports and 

waterways have become paramount 

concerns since the events of September 

11, 2001. Currently, the owner or 

operator intending to construct, modify, 

or reactivate an LNG or LHG facility 

must submit a Letter of Intent (LOI) to 

the Coast Guard. Information obtained 

in the LOI enables the Coast Guard to 

provide specific input, in a Letter of 

Recommendation (LOR), to an agency 

having jurisdiction for siting, 

construction, and operation. The LOR 

serves as the Coast Guard’s 

recommendation to the jurisdictional 

agency as to the suitability of the 

waterway for LNG or LHG marine traffic 

on the waterway associated with the 


emcdonald on DSK2BSOYB1PROD with RULES