Source: https://www.federalregister.gov/documents/2002/04/18/02-9251/assignment-of-firm-capacity-on-upstream-interstate-pipelines-notice-of-proposed-rulemaking
Timestamp: 2017-08-18 03:51:50
Document Index: 767803231

Matched Legal Cases: ['art 284', '§\u2009284', '§\u2009284', 'art 284', 'art 380', 'art 1320']

Federal Register :: Assignment of Firm Capacity on Upstream Interstate Pipelines; Notice of Proposed Rulemaking
Assignment of Firm Capacity on Upstream Interstate Pipelines; Notice of Proposed Rulemaking
A Proposed Rule by the Federal Energy Regulatory Commission on 04/18/2002
Written comments are due on or before June 3, 2002.
67 FR 19136
02-9251
https://www.federalregister.gov/d/02-9251 https://www.federalregister.gov/d/02-9251
The Federal Energy Regulatory Commission is proposing to remove from its regulations the Order No. 636 requirement that pipelines assign their upstream capacity to their firm shippers. This requirement was a necessary part of the unbundling of interstate pipelines' gas sales from their gas transportation service required in Order No. 636. On December 14, 2000, the Commission announced a new policy allowing unbundled open access pipelines to acquire and hold capacity on other pipelines without prior Commission approval. Since the unbundling of interstate gas sales from transportation has largely been accomplished, and since the Commission has developed a new policy allowing pipelines to acquire capacity on other pipelines, Subpart H is no longer relevant.
Cecilia Desmond, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 208-2280. Start Printed Page 19137
The Federal Energy Regulatory Commission (Commission) is proposing to remove from its regulations the requirement in subpart H of part 284 of the Commission's regulations (18 CFR 284.241 and 284.242) that pipelines assign their upstream capacity to their firm shippers. The Commission promulgated subpart H in Order No. 636 [1] as a necessary part of the unbundling of interstate pipelines' gas sales from their gas transportation service required in Order No. 636. Since the unbundling of interstate gas sales from transportation has largely been accomplished, and since the Commission has developed a new policy allowing unbundled open access pipelines to acquire capacity on other pipelines, subpart H is no longer relevant. The Commission therefore proposes to remove subpart H from its regulations.
In Order No. 636, the Commission required interstate gas pipelines to unbundle the sale of gas from the sale of transportation and to assign their upstream capacity to their firm shippers.[2] The Commission found that pipelines' access to upstream capacity needed to provide bundled gas sales gave them an undue competitive advantage over other gas merchants since the upstream capacity gave pipelines access to more gas suppliers. The Commission also found that a pipeline's holding upstream capacity inhibited the goal of a competitive national market because the downstream gas purchasers would not be able to access the production areas and gas merchants reached by the downstream pipeline through its upstream capacity.
The Commission adhered to that policy for several years during the individual pipelines' Order No. 636 restructuring proceedings. Then, in Texas Eastern Transmission Corporation (Texas Eastern), the Commission determined that Order No. 636 did not create a per se rule precluding restructured pipelines from entering into contracts for transportation or storage capacity on other pipelines (offsystem capacity).[3] The Commission reasoned that pipelines had completed the unbundling of gas sales and transportation service required by Order No. 636 and that the market had become sufficiently competitive to allow pipelines to hold capacity on other pipelines. Therefore, the Commission said it would decide whether to allow pipelines to acquire offsystem capacity on a case-by-case basis.
Two pipelines appealed the Texas Eastern requirement for case-specific approval, claiming that it discriminated against pipelines because non-pipeline shippers could acquire capacity without prior approval.[4] They also argued that the Commission's blanket certificate and capacity release regulations, which require pipelines to make transportation services available on a nondiscriminatory basis under Commission-approved open access tariffs, were sufficient to control unduly discriminatory or anticompetitive actions that might arise when a pipeline acquires offsystem capacity. The court agreed and remanded the case.
On December 14, 2000, the Commission issued its Order on Remand in the Texas Eastern proceeding.[5] In that order, the Commission announced a new policy that unbundled open access pipelines will no longer be required to seek Commission approval before acquiring offsystem capacity, that existing safeguards provide the necessary protection against discriminatory and anticompetitive actions with respect to acquired offsystem capacity, and that pipelines will be at-risk for the costs of any such capacity. Before transporting gas for others on any acquired offsystem capacity, the Commission required a pipeline to seek a blanket waiver of the shipper-must-hold-title policy by amending its tariff to include a general statement that it will only transport for others on offsystem capacity pursuant to its existing open access tariff and rates.[6]
As the Commission has noted numerous times, the natural gas marketplace has fundamentally changed since the issuance of Order No. 636. In the Texas Eastern series of orders, the Commission developed and modified its policy with respect to pipelines' acquiring capacity on other pipelines in light of these changes. Since the requirement to assign upstream capacity contained in § 284.242 was specific to the implementation of Order No. 636, the restructuring of the natural gas industry under Order No. 636 has been accomplished, and the Commission now allows pipelines to acquire capacity on other pipelines as can any other shipper without seeking Commission, subpart H is no longer necessary. However, we reiterate that the removal of the regulation will not modify our Texas Eastern policy under which the appropriateness of a pipeline's acquisitions of capacity on other pipelines is subject to review in a subsequent general section 4 rate proceeding or the Commission's requirement that the shipper must hold title to any gas being shipped through the acquired capacity.
Commission regulations describe the circumstances where preparation of an environmental assessment or an environmental impact statement will be required.[7] The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment.[8] No environmental consideration is necessary since the proposed action is clarifying, corrective, or procedural and affects transportation of natural gas that requires no construction of facilities.[9]
The Regulatory Flexibility Act of 1980 (RFA)[10] generally requires a description and analysis of proposed rules that will, if promulgated, have a significant economic impact on a substantial number of small entities. The Commission is not required to make such analysis if a rule would not have such an effect.[11]
The Commission does not believe that the proposed rule removal would have such an impact on small entities. The proposed removal of regulations would have an impact only on interstate pipelines, which generally do not fall within the RFA's definition of small entity.[12] Accordingly, pursuant to Start Printed Page 19138section 605(b) of the RFA, the Commission proposes to certify that the removal of regulations proposed here will not have a significant economic impact on a substantial number of small entities.
The Office of Management and Budget's (OMB) regulations require that OMB approve certain information collection requirements imposed by agency rules.[13] However, this proposed rule contains no information reporting requirements, and therefore is not subject to OMB approval.
The Commission invites interested persons to submit comments, data, views and other information concerning matters set out in this notice.
To facilitate the Commission's review of the comments, commenters are requested to provide an executive summary of their position on the issues raised in the notice. Commenters are requested to identify each specific issue that their discussion addresses and to use appropriate headings. Additional issues the commenters wish to raise should be identified separately. The commenters should double space their comments.
Comments may be filed on paper or electronically via the Internet and must be received by the Commission within 45 days after publication in the Federal Register. Those filing electronically do not need to make a paper filing. For paper filings, the original and 14 copies of such comments should be submitted to the Office of the Secretary, Federal Energy Regulatory Commission, 888 First Street, NE, Washington DC 20426 and should refer to Docket No. RM01-6-000.
User assistance for electronic filing is available at 202-208-0258 or by E-Mail to efiling@ferc.gov. Comments should not be submitted to the E-Mail address. All comments will be placed in the Commission's public files and will be available for inspection in the Commission's Public Reference Room at 888 First Street, NE, Washington D.C. 20426, during regular business hours. Additionally, all comments may be viewed, printed, or downloaded remotely via the Internet through FERC's Homepage using the RIMS link.
User assistance for RIMS is available at 202-208-2222, or by E-mail to RimsMaster@ferc.gov.
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 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.
-—RIMS contains images of documents submitted to and issued by the Commission after November 16, 1981. Documents from November 1995 to the present can be viewed and printed from FERC's Home Page using the RIMS link or the Energy Information Online icon. Descriptions of documents back to November 16, 1981, are also available from RIMS-on-the-Web; requests for copies of these and other older documents should be submitted to the Public Reference Room.
User assistance is available for RIMS, CIPS, and the Website during normal business hours from our Help line at (202) 208-2222 (E-Mail to WebMaster@ferc.gov) or the Public Reference at (202) 208-1371 (E-Mail to public.referenceroom@ferc.gov).
§§ 284.241 and 284.242
(Subpart H) [Removed and reserved]
1. Pipeline Service Obligations and Revisions to Regulations Governing Self-Implementing Transportation Under Part 284 of the Commission's Regulations, Order No. 636, 57 FR 13267 (Apr. 16, 1992), FERC Stats & Regs., Regulations Preambles January 1991-June 1996 ¶ 30,939 (Apr. 8, 1992).
2. The Commission allowed pipelines to retain upstream capacity for operational management and balancing purposes and no-notice transportation service.
3. 74 FERC ¶ 61,074 (1996); 78 FERC ¶ 61,277 (1997); order on remand, 93 FERC ¶ 61,273 (2000); reh'g denied, 94 FERC ¶ 61,139; reh'g denied, 95 FERC ¶ 61,056 (2001).
4. See Colorado Interstate Gas Co. v. FERC, 146 F.3d 889 (D.C. Cir. 1998).
5. Texas Eastern Transmission Corp., 93 FERC ¶ 61,273 (2000); reh'g denied, 94 FERC ¶ 61,139; reh'g denied, 95 FERC ¶ 61056 (2001).
6. See Texas Eastern, 95 FERC ¶ 61056 (2001).
7. Regulations Implementing National Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), codified at 18 CFR Part 380.
8. 18 CFR 380.4.
9. See 18 CFR 380.4(a)(2)(ii), 380.4(a)(27).
12. 5 U.S.C. 601(3), citing to section 3 of the Small Business Act, 15 U.S.C. 632. Section 3 of the Small Business Act defines a “small business concern” as a business which is independently owned and operated and which is not dominant in its field of operations.
13. 5 CFR Part 1320.
[FR Doc. 02-9251 Filed 4-17-02; 8:45 am]