Document ID: FERC-2010-0841-0001
Agency: ferc
Document Type: Proposed Rule
Title: Five-Year Review of Oil Pipeline Pricing Index
Posted Date: 2010-06-21T04:00Z

[Federal Register: June 21, 2010 (Volume 75, Number 118)]
[Proposed Rules]               
[Page 34959-34960]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jn10-23]                         

[[Page 34959]]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 342

[Docket No. RM10-25-000]

 
Five-Year Review of Oil Pipeline Pricing Index

June 15, 2010.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of Inquiry.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) invites 
comments on its five-year review of the oil pipeline pricing index 
established in Revisions to Oil Pipeline Regulations Pursuant to the 
Energy Policy Act of 1992, Order No. 561, FERC Stats. & Regs. [Regs. 
Preambles, 1991-1996] ] 30,985 (1993). Specifically, the Commission 
proposes to use the Producer Price Index for Finished Goods (PPI) plus 
1.3 percent (PPI+1.3) as the index for annual changes to the oil 
pipeline rate ceiling over the five-year period commencing July 1, 
2011. Commenters are invited to submit and justify alternatives to the 
continued use of PPI+1.3.

DATES: Written comments on this Notice of Inquiry are due on August 20, 
2010. Reply comments must be received by the Commission 30 days after 
the filing date for initial comments.

ADDRESSES: You may submit comments, identified by docket number by any 
of the following methods:
     Agency Web Site: http://www.ferc.gov. Documents created 
electronically using word processing software should be filed in native 
applications or print-to-PDF format and not in a scanned format.
     Mail/Hand Delivery: Commenters unable to file comments 
electronically must mail or hand deliver an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Michael Lacy (Technical Information), 
Office of Energy Market Regulation, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8843; Andrew R. Knudsen (Legal Information), Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6527.

SUPPLEMENTARY INFORMATION:

Notice of Inquiry

    1. In this notice of inquiry (NOI), the Commission invites comments 
on its intended utilization of the Producer Price Index for Finished 
Goods (PPI) \1\ plus 1.3 percent (PPI+1.3) as the index for determining 
annual changes to the oil pipeline rate ceiling during the next five 
years beginning July 1, 2011.\2\ The index of PPI+1.3 was previously 
adopted by the Commission for the five-year period starting July 1, 
2006.\3\ The Commission proposes to continue to apply the index of 
PPI+1.3 to an oil pipeline's existing rate ceiling level to determine 
the rate ceiling level for the next year.\4\
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    \1\ The PPI represents the Producer Price Index for Finished 
Goods, also written PPI-FG. The PPI-FG is determined and issued by 
the Bureau of Labor Statistics, U.S. Department of Labor. Pursuant 
to 18 C.F.R. section 342.3(d)(2) (2009), ``The index will be 
calculated by dividing the PPI-FG for the calendar year immediately 
preceding the index year by the previous calendar year's PPI-FG.'' 
Multiplying the rate ceiling on June 30 of the index year by the 
resulting number gives the rate ceiling for the year beginning the 
next day, July 1.
    \2\ The five-year review process was established in Order No. 
561. See Revisions to Oil Pipeline Regulations Pursuant to the 
Energy Policy Energy Policy Act, FERC Stats. & Regs. [Regs. 
Preambles, 1991-1996] ] 30,985 (1993); order on reh'g, Order No. 
561-A, FERC Stats. & Regs. [Regs. Preambles, 1991-1996] ] 31,000 
(1994), affirmed, Association of Oil Pipelines v. FERC, 83 F.3d 1424 
(D.C. Cir. 1996).
    \3\ Order Establishing Index for Oil Price Change Ceiling 
Levels, 114 FERC ] 61,293 (2006).
    \4\ The Commission publishes the final annual change in the PPI-
FG, expressed as a percent, after the final PPI-FG becomes available 
from the Bureau of Labor Statistics, U.S. Department of Labor in May 
of each calendar year. Pipelines are required to calculate the new 
ceiling level applicable to their indexed rates based on this annual 
change.
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I. Background

    2. In Order No. 561, the Commission established an index 
methodology to regulate changes to oil pipeline rates and adopted an 
index of PPI minus one percent (PPI-1) as the most appropriate index to 
track oil pipeline industry cost changes from one year to the next. The 
Commission also undertook to review every five years the continued 
effectiveness of its index for tracking changes to oil pipeline 
industry costs.
    3. After its initial five-year review, the Commission adopted PPI, 
without the (-1) percent adjustment, as the appropriate index for 
tracking oil pipeline industry costs for the five-year period beginning 
July 2001.\5\ In its second five-year review of the oil pricing index, 
the Commission adopted an index of PPI+1.3 for the five-year period 
commencing July 1, 2006.\6\
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    \5\ Five-Year Review of Oil Pipeline Pricing Index, 102 FERC ] 
61,195 (2003), affirmed, Flying J Inc., et al., v. FERC, 363 F.3d 
495 (DC Cir. 2004).
    \6\ Order Establishing Index for Oil Price Change Ceiling 
Levels, 114 FERC ] 61,293.
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II. Proposal and Comments

    4. The Commission proposes to continue to utilize PPI+1.3 for the 
next five-year period as the index to track changes to the costs of the 
oil pipeline industry and to apply to rate ceiling levels for oil 
pipeline rate changes. The Commission invites interested persons to 
submit comments on the continued use of PPI+1.3 and to propose, 
justify, and fully support, any alternative indexing proposals.

III. Comment Procedures

    5. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due August 20, 2010. Comments must refer to 
Docket No. RM10-25-000, and must include the commenters' name, the 
organization they represent, if applicable, and their address.
    6. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://
www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    7. Commenters that are not able to file comments electronically 
must send an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Office of the Secretary; 888 First 
Street, NE., Washington, DC 20426.
    8. All comments will be placed in the Commission's public files and 
may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

IV. Document Availability

    9. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission'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.
    10. From the Commission's Home Page on the Internet, this 
information is

[[Page 34960]]

available on eLibrary. The full text of this document 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.
    11. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or e-mail 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.

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2010-14874 Filed 6-18-10; 8:45 am]
BILLING CODE 6717-01-P