Contract Reporting Requirements of Intrastate Natural Gas Companies, 80685-80697 [2010-32112]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 75, Number 246 (Thursday, December 23, 2010)]
[Rules and Regulations]
[Pages 80685-80697]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32112]



[[Page 80685]]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM09-2-001; Order No. 735-A]


Contract Reporting Requirements of Intrastate Natural Gas 
Companies

Issued December 16, 2010.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Order on rehearing.

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SUMMARY: In this Order on Rehearing, the Commission addresses pending 
requests to reconsider or clarify Order No. 735, in which it reformed 
its reporting requirements and instituted Form No. 549D--Quarterly 
Transportation and Storage Report for Intrastate Natural Gas and 
Hinshaw Pipelines. Order No. 735-A generally reaffirms the Final Rule. 
It also retracts the increased requirements for contract end dates and 
per-customer revenue, extends the filing deadlines from 30 days to 60 
days after each reporting quarter, and offers clarification on several 
matters. Simultaneously with this order, the Commission is issuing a 
Notice of Inquiry under a separate docket to explore reforms to the 
semi-annual storage reporting requirements for interstate and 
intrastate storage companies.

DATES: Effective Date:
    The revisions made in this Order on Rehearing are 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:

Table of Contents

 
                                                               Paragraph
                                                                  No.
 
I. Background...............................................          3.
II. Discussion..............................................         15.
    A. Changes to the Quarterly Reporting Requirement.......         17.
        1. Interruptible Contract End-Dates.................         17.
        2. Customer Revenues................................         20.
        3. Quarterly Reporting Deadlines....................         24.
    B. Justification for Increased Transparency Required by          26.
     the Rule...............................................
        1. Statutory Authority To Require Public Disclosure.         31.
        2. Harm to Storage Providers With Market-Based Rates         39.
        3. Evidence.........................................         48.
        4. Insufficiency of Periodic Rate Review............         58.
        5. Burden...........................................         61.
    C. Identification of Receipt Points.....................         64.
    D. Identification of Shippers...........................         67.
    E. Prior Period Adjustment and Inactive Contracts.......         70.
    F. Semi-Annual Storage Report...........................         74.
    G. Effective Date and Technical Workshop................         77.
III. Information Collection Statement.......................         79.
IV. Environmental Analysis..................................         82.
V. Regulatory Flexibility Act...............................         83.
VI. Document Availability...................................         84.
VII. Effective Date.........................................         87.
 


Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer, Philip 
D. Moeller, John R. Norris, and Cheryl A. LaFleur.

Order on Rehearing

    1. On May 20, 2010, the Commission issued Order No. 735,\1\ 
revising the contract reporting requirements for (1) intrastate natural 
gas pipelines \2\ providing interstate transportation service pursuant 
to pursuant to section 311 of the Natural Gas Policy Act of 1978 (NGPA) 
\3\ 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 Sec.  284.224 of the 
Commission's regulations.\4\ Order No. 735 sought to bring the less 
stringent transactional reporting requirements for section 311 and 
Hinshaw pipelines closer in line with the reporting requirements for 
interstate pipelines, without imposing unduly burdensome requirements 
on the pipelines. Specifically, Order No. 735 revised Sec.  284.126(b) 
of the Commission's regulations and replaced 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,\5\ (3) establish a 
procedure for Form No. 549D

[[Page 80686]]

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. Order No. 
735 also modified Commission 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.
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    \1\ Contract Reporting Requirements of Intrastate Natural Gas 
Companies, Order No. 735, 75 FR 29404, FERC Stats. & Regs. ] 31,310 
(2010) (Order No. 735 or Final Rule).
    \2\ Under 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).
    \3\ 15 U.S.C. 3372.
    \4\ Section 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).
    \5\ This Final Rule does not eliminate or revise 18 CFR 
284.126(c) and the corresponding Form No. 537, which require a semi-
annual storage report.
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    2. In this order, the Commission addresses requests for rehearing 
or clarification of Order No. 735. Five requests for rehearing or 
clarification of Order No. 735 were timely filed, by Arkansas Oklahoma 
Gas Corporation (AOG), Enstor Operating Company, LLC (Enstor), Enogex 
LLC (Enogex), Jefferson Island Storage & Hub, L.L.C. (Jefferson), and 
the Texas Pipeline Association (TPA). As discussed below, we largely 
affirm Order No. 735, granting a limited number of rehearing requests 
and clarifying the order.\6\
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    \6\ The Appendix to this order includes a static PDF version of 
the draft revised Form No. 549D. The Appendix will not be included 
in the Federal Register, but is available on the Commission's 
eLibrary site. The draft revised form is being submitted to the 
Office of Management and Budget (OMB) for review and approval.
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I. Background

    3. 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.'' \7\ 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. 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.\8\
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    \7\ 15 U.S.C. 3371(c).
    \8\ Certain 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).
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    4. 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.\9\ However, as 
described in Order No. 735, the Commission has not imposed on 
intrastate pipelines all of the Part 284 open access transportation 
requirements imposed on interstate pipelines, consistent with the 
NGPA's goal of encouraging intrastate pipelines to provide interstate 
service.\10\ Thus, the Commission does not require intrastate pipelines 
to offer firm open access service, or comply with the requirements of 
Order No. 636, such as capacity release and flexible receipt and 
delivery points.\11\ Section 284.224 of the Commission's 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.
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    \9\ See 18 CFR 284.7(b), 284.9(b), and 284.122.
    \10\ See Associated Gas Distributors v. FERC, 824 F.2d 981, 
1002-1003 (D.C. Cir. 1987) (Associated Gas Distributors); 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).
    \11\ Pipeline 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).
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    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, Sec.  284.13(b) 
of the Commission's regulations requires interstate pipelines to post 
on their internet websites basic information on each transportation and 
storage transaction with individual shippers, no later than the first 
nomination under a transaction. This information includes:
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    \12\ Regulation 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).
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     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. In addition, Sec.  284.13(e) of the Commission's regulations 
requires interstate pipelines to file semi-annual reports of their 
storage injection and withdrawal activities, including the identities 
of the customers, the volumes injected into and withdrawn from storage 
for each customer and the unit charge and total revenues received.
    7. The Commission has not imposed any daily transactional posting 
requirement on section 311 and Hinshaw pipelines comparable to the 
daily posting requirement in Order No. 637. Until Order No. 735, Sec.  
284.126(b) of the Commission's regulations only required intrastate 
pipelines to file annual reports of their transportation transactions 
with the Commission, excluding storage transactions. Those reports 
included 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' transactional posting 
requirements adopted by Order No. 637, Sec.  284.126(b) of the 
Commission's regulations did not require intrastate pipelines to report 
the rate charged under each contract, the duration of the contract, the 
receipt and delivery points, and the zones or segments covered by each 
contract, whether the contract includes any special terms and 
conditions, or whether there is an affiliate relationship between the 
pipeline and the shipper.
    9. Section 284.126(c) of the Commission's regulations requires 
section 311 intrastate pipelines and Hinshaw pipelines to file a semi-
annual report of their storage activity, within 30 days of the end of 
each complete storage and injection season. This requirement

[[Page 80687]]

is substantially the same as the 18 CFR 284.13(e) requirement that 
interstate pipelines file such semi-annual reports of their storage 
activity.
    10. In November 2008, the Commission denied a request by SG 
Resources Mississippi, L.L.C. (SGRM), an interstate storage provider 
with market-based rates, for waiver of the Order No. 637 requirements 
that interstate pipelines post the rates charged in each transaction no 
later than first nomination for service. SGRM contended that the Order 
No. 637 daily posting requirements placed market-based rate interstate 
storage providers at a competitive disadvantage with market-based rate 
NGPA section 311 intrastate storage providers, who were subject only to 
semi-annual storage and annual transportation reporting requirements. 
The Commission held that the interstate pipeline posting requirements 
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.\13\ 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.'' \14\
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    \13\ SG Resources Mississippi, L.L.C., 125 FERC ] 61,191 (2008) 
(SGRM).
    \14\ 15 U.S.C. 717c(c).
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    11. However, simultaneously with the denial of SGRM's waiver 
request, the Commission commenced this proceeding with a Notice of 
Inquiry (NOI) in order to explore (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 reporting requirements for section 311 
intrastate pipelines and Hinshaw pipelines in order to make them more 
comparable to the 18 CFR 284.13(b) posting requirements for interstate 
pipelines.\15\ Based upon the comments received in response to the NOI, 
the Commission issued a Notice of Proposed Rulemaking (NOPR),\16\ 
proposing to revise its transactional reporting requirements for 
intrastate pipelines. The Commission determined not to impose the full 
interstate pipeline daily transactional positing requirements on 
section 311 and Hinshaw pipelines. The Commission was concerned that 
the burden of a daily internet posting requirement could discourage 
section 311 and Hinshaw pipelines from performing interstate service, 
contrary to the purpose of the NGPA. In addition, it did not appear 
from the comments that there was widespread concern among interstate 
pipelines that foregoing a daily posting requirement would cause 
significant adverse competitive effects. However, the Commission 
proposed increased transactional reporting requirements for section 311 
and Hinshaw pipelines in order to provide shippers and the Commission 
with more timely and useful information concerning the transactions 
entered into by section 311 and Hinshaw pipelines.
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    \15\ Contract Reporting Requirement of Intrastate Natural Gas 
Companies, FERC Stats. & Regs. ] 35,559 (2008) (NOI).
    \16\ Contract Reporting Requirements of Intrastate Natural Gas 
Companies, FERC Stats. & Regs. ] 32,644 (2009) (NOPR).
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    12. As adopted by Order No. 735, the increased transactional 
reporting requirements for section 311 and Hinshaw pipelines are as 
follows. First, the Commission modified the existing 18 CFR 284.126(b) 
annual transportation reporting requirement to require section 311 and 
Hinshaw pipelines to make the report on a quarterly basis. Second, the 
Commission required that the reports cover storage transactions as well 
as transportation transactions. Third, Order No. 735 required that the 
reports must contain 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.
    13. Finally, Order No. 735 established 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 held that those reports must be public 
and may not be filed with information redacted as privileged. The 
Commission found that these transactional reporting requirements 
appropriately balanced the need for increased transparency of section 
311 and Hinshaw pipeline transactions, while avoiding unduly burdensome 
requirements that might discourage such pipelines from participating in 
the interstate market.
    14. While Order No. 735 revised the 18 CFR 284.126(b) report to 
include storage transactions, the Commission continued to require 
section 311 and Hinshaw pipelines to make the semi-annual storage 
activity reports currently required by Sec.  284.126(c) of the 
Commission's regulations. The Commission explained in the NOPR that 
those reports included information that is not contained in the 
proposed quarterly transactional reports. Specifically, Sec.  
284.126(c) of the Commission's regulations requires section 311 and 
Hinshaw pipelines to report total volumes injected into storage during 
each complete storage injection season and total volumes withdrawn from 
storage during each complete storage withdrawal season. Such seasonal 
information is not captured by the new 18 CFR 284.126(b) quarterly 
transactional reports, because those reports do not correlate with the 
typical five-month withdrawal and seven-month injection seasons. The 
Commission also stated that retaining the 18 CFR 284.126(c) semi-annual 
storage activity report for section 311 and Hinshaw pipelines is 
consistent with the Commission's existing requirement, in Sec.  
284.13(e) of the Commission's regulations, that interstate pipelines 
also make such semi-annual storage activity reports in addition to 
posting transactional information pursuant to Sec.  284.13(c) of the 
Commission's regulations.

II. Discussion

    15. For the reasons discussed below, the Commission generally 
denies rehearing of Order No. 735. However, the Commission does grant 
rehearing in several respects. First, the Commission removes the 
requirement that the new quarterly reports include the contract end-
date for interruptible transactions. Second, the Commission eliminates 
the increased per-customer revenue reporting requirements by requiring

[[Page 80688]]

such revenues to be reported only on an annual basis and excluding 
storage revenues from the report. Third, the Commission extends the 
deadline for submitting the quarterly reports from approximately 30 
days after the end of the quarter to 60 days. With these modifications, 
the Commission reaffirms all other aspects of Order No. 735, including 
the requirements that the quarterly reports be filed in a uniform 
electronic format with no information redacted as privileged and be 
posted on the Commission's Web site. Contemporaneously with this order, 
the Commission is also issuing an NOI in Docket No. RM11-4-000 to 
consider issues related the existing semi-annual storage reporting 
requirement for both interstate pipelines and section 311 and Hinshaw 
pipelines.
    16. Below, we first discuss the modifications to Order No. 735 we 
are making on rehearing. We then turn to the other objections to Order 
No. 735.

A. Changes to the Quarterly Reporting Requirement

1. Interruptible Contract End-Dates
    17. Section 284.126(b)(1)(vi) of the Commission's regulations, as 
adopted by Order No. 735, requires that section 311 and Hinshaw 
pipelines include in their quarterly transactional reports the duration 
of each active contract for both firm and interruptible service, 
including the beginning and ending date. Before Order No. 735, 18 CFR 
284.126(b) did not require this information from intrastate pipelines. 
Currently 18 CFR 284.13(b)(1)(v) requires interstate pipelines to post 
the duration of firm contracts but 18 CFR 284.13(b)(2) has no similar 
requirement to post the duration of interruptible contracts. In 
addition, 18 CFR 284.13(c)(2)(iv) requires interstate pipelines to 
report the effective and expiration dates for firm transportation and 
storage contracts quarterly as part of their Index of Customers, but 
not for interruptible contracts.\17\ Neither the interstate nor 
intrastate semi-annual storage reports require this information.
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    \17\ 18 CFR 284.13 (c)(2)(iv) (2010, prior to effective date of 
Order No. 735).
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    18. On rehearing, Enstor objects to the requirement that section 
311 and Hinshaw pipelines reveal the ending dates of their 
interruptible storage contracts, including contracts for park and loan 
service. Enstor states that it enters into separate contracts for each 
interruptible transaction and that the end date of those transactions 
is commercially sensitive. Despite the time lag between the execution 
of a contract and its ultimate disclosure in a quarterly report, the 
ending date of an interruptible transaction may still be in the future 
when the quarterly report is filed. Enstor states that knowledge of the 
forward month when a parking or lending transaction will end will 
enable other market participants to recreate the storage position of 
individual Enstor customers. Enstor states that, as a result, a 
potential storage customer interested in a short-term parking 
arrangement customer will be able to ``lowball'' Enstor based on its 
knowledge of Enstor's inventory and pricing information. Enstor argues 
that requiring market-based intrastate pipelines to reveal this 
information, while not imposing a similar requirement on interstate 
pipelines, results in unduly disparate treatment of the two types of 
pipelines.\18\ Enstor urges the Commission to remove the requirement to 
report the end-date of interruptible transactions in order to maintain 
its policy in Order No. 735 of equalizing NGA and section 311/Hinshaw 
reporting requirements. Enogex makes a similar argument from a 
theoretical perspective, arguing that the expansion of the reporting 
requirements would indirectly impose a greater burden on section 311 
companies than on interstate pipelines which, it argues, is contrary to 
the intent of the NGPA.\19\
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    \18\ None of the commenters on the NOPR objected specifically to 
the proposal to require the ending dates of interruptible contracts 
to be reported, although they did raise concerns generally about 
commercially sensitive data.
    \19\ Enogex at 16.
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    19. The Commission will revise 18 CFR 284.126 (b)(1)(vi) so that 
section 311 and Hinshaw pipelines are only required to report contract 
end-dates for firm transportation and firm storage contracts, not for 
interruptible contracts. Because interstate pipelines are not required 
to report the end-dates of their interruptible transactions, imposing 
such a requirement on section 311 and Hinshaw pipelines is contrary to 
Order No. 735's purpose of making the reporting requirements for the 
two sets of pipelines more similar. The absence of such a reporting 
requirement for interstate pipelines does not appear to have hampered 
the ability of the Commission and other interested parties to monitor 
the market for undue discrimination. Moreover, some pipelines, unlike 
Enstor, do not enter into separate contracts for each interruptible 
transaction, but rather enter into a single master interruptible 
contract under which multiple individual transactions may occur. In 
such circumstances, the end-date of the interruptible contract is of 
limited significance.
2. Customer Revenues
    20. Before Order No. 735, Sec.  284.126(b) of the Commission's 
regulations required section 311 and Hinshaw pipelines to report, on an 
annual basis, the actual revenues collected from each transportation 
customer, not including storage.\20\ The Commission does not currently 
require interstate pipelines to report revenues received from each 
customer for non-storage services. Both the interstate and intrastate 
semi-annual storage reports, however, do require reporting of the 
revenues received from each storage customer during storage injection 
and withdrawal seasons.\21\ Section 284.126(b)(1)(viii) of the 
Commission's regulations, as adopted by Order No. 735, requires section 
311 and Hinshaw pipelines to report the total revenues received from 
each shipper on a quarterly basis for both transportation and storage.
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    \20\ 18 CFR 284.126(b)(4) (2010, prior to effective date of 
Order No. 735).
    \21\ 18 CFR 284.13(e)(5), 284.126(c)(5).
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    21. In its rehearing request, Enstor urges the Commission to exempt 
storage providers with market-based rates from the requirement to 
report per-customer revenues publicly. Among other arguments, Enstor 
points out that interstate storage providers are not required to report 
this information in their daily Web site postings. Enstor therefore 
asserts that, in this respect, the new quarterly reports required by 
Order No. 735 actually require more information from intrastate than 
interstate storage providers, contrary to the Commission's stated 
intent of bringing the intrastate and interstate reporting requirements 
more in line with each other. Enstor asserts that the requirement would 
put intrastate storage providers at a competitive disadvantage to 
interstate storage providers. Enstor also states that while such 
customer-by-customer revenue information is included in the semi-annual 
storage reports of both interstate and intrastate pipelines, Enstor and 
other pipelines file such reports subject to a request for privileged 
treatment.
    22. We grant rehearing in part on this issue, and will revise 18 
CFR 284.126(b)(1)(viii) and the analogous lines of Form No. 549D so as 
to (1) collect per-customer revenue information only on an annual basis 
and (2) exclude storage revenues from the report. This will return the 
per-customer revenue reporting requirement to the status quo before 
Order No. 735. As a result, section 311 and Hinshaw storage

[[Page 80689]]

providers will not be subject to any greater per-customer revenue 
reporting requirement than interstate pipelines. Both sets of pipelines 
will continue to be required to report per-customer revenues for 
storage services in the semi-annual storage reports, required by 18 CFR 
284.126(c)(5) for section 311 and Hinshaw pipelines and by 18 CFR 
284.13(e)(5) for interstate pipelines. In a contemporaneous NOI, the 
Commission is requesting comments on whether the existing semi-annual 
storage reporting requirements for both interstate pipelines and 
section 311 and Hinshaw pipelines should be modified. The issue of 
whether any change is warranted in the current per-customer storage 
revenue reporting requirement, including the confidentiality of that 
information, will be considered in that proceeding.
    23. The Commission recognizes that the requirement that section 311 
and Hinshaw pipelines report annual non-storage revenues imposes a 
greater reporting requirement on those pipelines, than on interstate 
pipelines. Interstate pipelines are not required to make any report of 
per-customer non-storage revenues. However, that is a reporting 
disparity that exists in the Commission's current regulations. The 
Commission relies on the existing annual reports of per-customer non-
storage revenues to verify information submitted by section 311 and 
Hinshaw pipelines in their rate cases, and therefore finds that such 
information should continue to be collected. In addition, the rehearing 
applicants do not appear to have significant concerns about the 
commercial sensitivity of non-storage revenue information. Rather, they 
are primarily concerned that making storage revenue public on a 
quarterly basis could place storage providers with market-based rates 
at a competitive disadvantage against their shippers who could use the 
relatively fresh revenue information to seek lower prices than they 
might otherwise obtain.
3. Quarterly Reporting Deadlines
    24. Order No. 735 required that each quarterly report be filed on 
the first day of the month one month after the end of the relevant 
quarter, or roughly 30 days from the end of each quarter. Jefferson and 
TPA both urge the Commission to extend the due dates for filing 
quarterly reports. Both parties argue that Form No. 549D is much more 
detailed than previous reports, and thus will require more time to 
compile. TPA notes that some pipelines' measurement and accounting 
systems are designed to only send invoices 30 days after the end of the 
service month, and so they could not file reports so soon. Jefferson 
seeks a 90-day window between the close of the reporting period and the 
date when the report is due; TPA seeks a 60-day window.
    25. The Commission will revise 18 CFR 284.126(b)(2) so as to 
provide a roughly 60-day window. While the Commission has used 30-day 
windows for other natural gas pipeline reports,\22\ Form No. 549D is 
fairly detailed and may require more time to complete. It may be more 
comparable in this sense to the Form No. 3-Q quarterly financial 
report, which uses a 60-day window.\23\ Accordingly, 18 CFR 
284.126(b)(2) is amended to state that the quarterly Form No. 549D 
report for the period January 1 through March 31 must be filed on or 
before June 1; the quarterly report for the period April 1 through June 
30 must be filed on or before September 1; the quarterly report for the 
period July 1 through September 30 must be filed on or before December 
1; and the quarterly report for the period October 1 through December 
31 must be filed on or before March 1.
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    \22\ Intrastate pipelines must file semi-annual storage reports 
within 30 days of the end of each complete storage injection and 
withdrawal season. 18 CFR 284.126(c).
    \23\ Natural gas companies that file a FERC Form 2 must file the 
FERC Form 3-Q within 60 days after the reporting quarter, and 
companies that file a FERC Form 2-A must file the FERC Form 3-Q 
within 70 days. 18 CFR 260.300(b)(vii), (c)(vii).
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B. Justification for Increased Transparency Required by the Rule

    26. Order No. 735 adopted increased transactional reporting 
requirements for section 311 and Hinshaw pipelines in order to provide 
greater transparency to the market.\24\ The Commission found such 
transparency to be necessary so shippers can make informed purchasing 
decisions, and also to permit both shippers and the Commission to 
monitor actual transactions for evidence of possible abuse of market 
power or undue discrimination. The Commission found that the existing 
reporting requirements in 18 CFR 284.126 were inadequate for this 
purpose. For example, the annual reports of transportation transactions 
required by existing 18 CFR 284.126(b) did 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 18 CFR 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.
---------------------------------------------------------------------------

    \24\ Order No. 735, FERC Stats. & Regs. ] 31,310 at P 73-79.
---------------------------------------------------------------------------

    27. Order No. 735 found that 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. 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.
    28. Order No. 735 also held that, as a matter of policy, section 
311 and Hinshaw pipelines must file the new quarterly transactional 
reports as public in order to achieve the Final Rule's purpose of 
improving transparency, monitoring discrimination, and fostering 
efficient markets. The Commission recognized the concern of some 
pipelines that disclosure of commercially sensitive information would 
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. However, the Commission found that 
its requirement that the reports be filed quarterly would permit a 
significant delay between contract execution and disclosure, and that 
delay should temper any potential adverse effects from disclosure.
    29. Order No. 735 concluded that 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 stated that it 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.
    30. On rehearing, Enogex and Enstor contend that the Commission has 
failed to support the increased transactional reporting and public 
disclosure requirements which Order No. 735 imposes on section 311 
pipelines. In

[[Page 80690]]

general, they contend that (1) the Commission lacks statutory authority 
under the NGPA to impose these requirements on section 311 pipelines, 
(2) these requirements will harm section 311 storage providers with 
market based rates, (3) the Commission has failed to show that there is 
an industry problem which these requirements will ameliorate, and (4) 
these requirements impose unnecessary burdens on section 311 pipelines. 
For the reasons set forth below, we find these contentions unpersuasive 
and reaffirm the Final Rule.
1. Statutory Authority To Require Public Disclosure
    31. In discussing its statutory authority for the increased 
reporting and public disclosure requirements of Order No. 735, the 
Commission first addressed its statutory authority with respect to 
Hinshaw pipelines. The Commission pointed out that it regulates the 
interstate services of Hinshaw pipelines under the NGA.\25\ 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.'' While 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.\26\ Therefore, Order No. 735 concluded that its requirement 
that the quarterly reports of Hinshaw pipelines be posted without any 
information redacted was simply carrying out NGA section 4(c)'s 
requirement for public disclosure of rate and contract information 
``under such rules and regulations as the Commission may prescribe.'' 
The Commission also pointed out that NGA section 23(a)(1) directs the 
Commission ``to facilitate price transparency in markets for the sale 
or transportation of physical natural gas in interstate commerce.'' 
\27\
---------------------------------------------------------------------------

    \25\ Consumers 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).
    \26\ SGRM, 125 FERC ] 61,191 at P 23 (quoting Order No. 637-A, 
FERC Stats. & Regs. ] 31,099 at 31,614).
    \27\ 15 U.S.C. 717t-2(a)(1). See Energy Policy Act of 2005, Pub. 
L. 109-58, section 316 (Natural Gas Market Transparency Rules), 119 
Stat. 594 (2005).
---------------------------------------------------------------------------

    32. Order No. 735 then turned to the Commission's statutory 
authority with respect to section 311 pipelines. The Commission 
recognized that the NGPA does not contain an express public disclosure 
provision similar to NGA section 4(c). However, the Commission stated 
that NGPA section 311(c) authorizes the Commission to prescribe the 
``terms and conditions'' under which intrastate pipelines perform 
interstate service. Order No. 735 concluded that 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).\28\
---------------------------------------------------------------------------

    \28\ See, e.g., Associated Gas Distributors, 824 F.2d at 1015-18 
(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).
---------------------------------------------------------------------------

    33. Enogex and Enstor do not contest the Commission's authority 
under NGA section 4(c) to require Hinshaw pipelines to report and 
publicly disclose all the information in the quarterly reports adopted 
by Order No. 735. However, they contend that imposing these 
requirements on section 311 pipelines goes beyond the Commission's 
conditioning authority under NGPA section 311(c). Enogex points out 
that the purpose of the NGPA is to allow intrastate pipelines to 
compete in the interstate transportation market without bearing the 
burden of full NGA regulation. It asserts that, when coupled with the 
existing triennial rate review requirement for section 311 pipelines 
and other reporting requirements, the new quarterly reporting and 
disclosure requirements of Order No. 735 would regulate section 311 
pipelines on a level nearly equivalent to the regulatory oversight to 
which interstate pipelines are subject under the NGA. Enstor contends 
that, in Associated Gas Distributors,\29\ the court held that the 
Commission's exercise of its NGPA section 311(c) conditioning authority 
should conform to the overall purposes of the NGPA, namely ``to assure 
adequate supplies of natural gas at fair prices.'' Enstor contends that 
Order No. 735 failed to explain how the new quarterly reports will 
accomplish that goal.
---------------------------------------------------------------------------

    \29\ 824 F.2d 981 at 1017-18.
---------------------------------------------------------------------------

    34. The Commission finds that requiring section 311 pipelines to 
report and disclose the information contained in the quarterly reports 
required by Order No. 735, as amended in the preceding sections of this 
order, is well within the Commission's conditioning authority under 
NGPA section 311(c). The information contained in these quarterly 
reports is basic information concerning the terms of the section 311 
pipelines' contracts with their shippers.\30\ In the NGA and the 
Federal Power Act (FPA), Congress required the Commission to provide 
for the public disclosure of the rates and contracts of interstate gas 
and oil pipelines and public utilities.\31\ Public disclosure of 
jurisdictional contracts is thus at the heart of each statute adopted 
by Congress prior to the NGPA for regulating the rates, terms, and 
conditions of entities subject to our jurisdiction.
---------------------------------------------------------------------------

    \30\ Enogex and Enstor do not object to the requirement to state 
whether the shipper is an affiliate of the pipeline. While the 
amended requirement to report annual non-storage revenues collected 
from each customer goes beyond reporting contract terms, both Enogex 
and Enstor are primarily concerned with Order No. 735's effect on 
storage providers with market-based rates. Therefore, the removal of 
the requirement that storage revenues be reported addresses their 
concern with respect to the per-customer revenue reporting 
requirement in the Order No. 735 reports.
    \31\ NGA section 4(c); FPA section 205(c).
---------------------------------------------------------------------------

    35. The NGPA does not set forth a comprehensive scheme for 
Commission regulation of interstate service provided by intrastate 
pipelines in the manner of the NGA or FPA. Rather, it delegates to the 
Commission broad authority ``by rule or order [to] authorize any 
intrastate pipeline to transport natural gas on behalf of[] any 
interstate pipeline [or] local distribution company served by any 
interstate pipeline.'' \32\ Consistent with that broad authorization, 
section 311(c) provides that ``Any authorization granted under this 
section shall be under such terms and conditions as the Commission may 
prescribe.'' Given that public disclosure of contracts has been a 
fundamental aspect of the Commission's regulation of all the entities 
subject its jurisdiction, the Commission finds that requiring section 
311 pipelines to report and disclose the terms of their contracts is 
well within the broad authority Congress delegated to us to determine 
under what terms intrastate pipelines may perform interstate 
transportation service.
---------------------------------------------------------------------------

    \32\ NGPA section 311(a)(2)(A).
---------------------------------------------------------------------------

    36. The Commission has recognized throughout this proceeding that 
Congress intended in the NGPA 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.\33\ Contrary to Enogex, the reporting requirements adopted in 
Order No. 735 are substantially less burdensome than the reporting 
requirements we have imposed on

[[Page 80691]]

interstate pipelines regulated under the NGA. The Commission requires 
interstate pipelines to maintain internet Web sites and post the terms 
of each contract before the first nomination for service under that 
contract. By contrast, this rule does not require section 311 pipelines 
to maintain an internet Web site. Order No. 735 only requires section 
311 pipelines to make quarterly reports of the terms of their 
contracts. Moreover, in this order we have extended the deadline for 
each report from 30 days after the end of the quarter to 60 days after 
the end of the quarter. In addition, while the reports must be filed in 
a standardized electronic format, the Commission has developed the 
electronic form in a PDF format and an XML Schema that, upon OMB 
approval, will be available to download from the FERC Web site and save 
to a user's computer desktop.
---------------------------------------------------------------------------

    \33\ 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).
---------------------------------------------------------------------------

    37. In Associated Gas Distributors,\34\ 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 ``Section 311 itself states no explicit standards for the exercise 
of the power, but the overall purposes of the NGPA provide a standard--
somewhat amorphous to be sure--against which we can and must measure 
the Commission decision.'' \35\ The court further stated that the 
Supreme Court had declared that the NGPA's ``aim * * * was to assure 
adequate supplies of natural gas at fair prices.'' \36\ Order No. 735's 
requirement that section 311 pipelines report and disclose 
transactional information is consistent with this goal, because it will 
make the market operate more efficiently. The Commission has 
consistently held that disclosure of transactional information ``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.'' \37\ Similarly, in Order No. 2001, 
adopting the Electric Quarterly Reports (EQRs) required of public 
utilities, the Commission held,
---------------------------------------------------------------------------

    \34\ 824 F.2d 981 at 1002-1003.
    \35\ Id. at 1016 (citation omitted).
    \36\ Id. at 1017, quoting Transcontinental Gas Pipe Line Corp. 
v. State Oil & Gas Board, 474 U.S. 409, 421 (1986).
    \37\ Order No. 637-A, FERC Stats. & Regs. ] 31,099 at 31,614-
615.

    [W]e believe that disclosure will promote competition and make 
the market operate more efficiently. * * * [E]asy access to contract 
and transaction data will give customers a basis on which to compare 
a variety of suppliers and monitor for market power and anti-
competitive behavior. This information will allow customers to reap 
further benefits from open access transmission by giving them 
improved tools to use in making buying decisions. In addition, the 
Commission hopes that making this information more understandable 
and accessible will promote competition and confidence in the 
---------------------------------------------------------------------------
fairness of the market.\38\

    \38\ Revised Public Utility Filing Requirements, Order No. 2001, 
FERC Stats. & Regs. ] 31,127, P 44-46, 74-85, 104-117, reh'g denied, 
Order No. 2001-A, 100 FERC ] 61,074, P 13-17, 30-35, reh'g denied, 
Order No. 2001-B, 100 FERC ] 61,342, order directing filing, Order 
No. 2001-C, 101 FERC ] 61,314 (2002), order directing filing, Order 
No. 2001-D, 102 FERC ] 61,334 (2003).

    38. Our statutory authority to require section 311 pipelines to 
report and disclose transactional information is buttressed by section 
23(a)(1) of the NGA, adopted by EPAct 2005. That section directs the 
Commission to ``facilitate price transparency in markets for the * * * 
transportation of physical natural gas in interstate commerce, having 
due regard for the public interest, the integrity of those markets, 
fair competition, and the protection of consumers.'' This provision 
applies to all natural gas transportation in interstate commerce, and 
thus applies to section 311 pipelines as well as pipelines subject to 
our NGA jurisdiction. Thus, requiring the Order No. 735 quarterly 
reports by section 311 pipelines to be public is specifically in 
keeping with this directive.
2. Harm to Storage Providers With Market-based Rates
    39. Both Enogex and Enstor argue that the Commission should not 
require market-based storage companies such as themselves to report 
information publicly. Enogex argues that ``its ability to capture rates 
that are truly market-based will be severely compromised if non-section 
311 competitors have access to the rates Enogex is charging and will 
charge under specific storage service agreements.'' \39\ Enogex asserts 
that it must compete with unregulated intrastate pipelines providing 
purely intrastate service that are not subject to any disclosure 
requirements. It asserts that Order No. 735 places it at a competitive 
disadvantage to such pipelines, because the purely intrastate pipelines 
will have access to a section 311 pipeline's rate and customer 
information, while the section 311 pipeline will not have access to 
comparable information concerning the intrastate pipeline.
---------------------------------------------------------------------------

    \39\ Enogex at 13.
---------------------------------------------------------------------------

    40. Enogex contends that this is contrary to the directives of NGA 
section 23. Enogex contends that Order No. 735's public disclosure 
requirement violates the requirement of section 23(a)(1) that the 
Commission have due regard for the integrity of markets and fair 
competition. It also points out that section 23(b)(1) requires the 
Commission to exempt from disclosure information that would be 
detrimental to the operation of an effective market, and section 
23(b)(2) requires the Commission to ``seek to ensure that consumers and 
competitive markets are protected from the adverse effects of potential 
collusion or other anti-competitive behaviors that can be facilitated 
by untimely public disclosure of transaction-specific information.''
    41. Enstor claims that reporting such commercially sensitive 
information would distort the markets and discourage infrastructure 
development. Enstor's primary concern is that Order No. 735 requires 
section 311 and Hinshaw storage providers with market-based rates to 
disclose information which interstate storage providers are not 
required to disclose, specifically the end-date of interruptible 
transactions and revenue collected from each customer. Enstor asserts 
that disclosure of this information will place section 311 and Hinshaw 
storage providers at a competitive disadvantage with interstate 
pipelines. Enstor asserts that despite the fact there will be a 
considerable ``time lag between the execution of a contract and its 
ultimate disclosure in a quarterly report,'' the obligation to report 
nevertheless ``will undermine the very business model that Enstor and 
other like storage providers have used.'' \40\ Shippers would be able 
to ``recreate the storage positions'' of their competitors and ``gain 
valuable insight into'' others' market positions, forcing Enstor's 
prices downward.\41\
---------------------------------------------------------------------------

    \40\ Enstor Request for Rehearing at 15.
    \41\ Id.
---------------------------------------------------------------------------

    42. The Commission has consistently applied its requirements to 
report and disclose transactional information to shippers with market-
based rates on the ground that such disclosure benefits the overall 
market, and those benefits outweigh any commercial disadvantages to 
individual entities in the market. As the Commission held in Order No. 
637-A:

    The disclosure of greater information regarding capacity 
transactions is necessary to achieve these dual goals of fostering 
competition and market monitoring. To foster competition, it is not 
sufficient merely to

[[Page 80692]]

ensure there are multiple competitors, there also needs to be good 
information to enable buyers to make informed choices among the 
competitors. Difficulty in obtaining information can reduce 
competition because buyers may not be aware of potential 
alternatives and cannot compare prices between alternatives. The 
reporting requirements will expand shippers' knowledge of 
alternative offerings by providing more information about the 
capacity available from the pipeline * * *.\42\

    \42\ Order No. 637-A, FERC Stats. & Regs. ] 31,099 at 31,611-2.
---------------------------------------------------------------------------

    43. Thus, Order No. 637-A concluded that ``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.'' \43\ The Commission reached the 
same conclusion in Order No. 2001, requiring public utilities to report 
and disclose similar transactional information. Thus, the requirement 
that section 311 and Hinshaw pipelines with market-based rates publicly 
disclose transactional information is consistent with longstanding 
Commission policy.
---------------------------------------------------------------------------

    \43\ Id., at 31,614-615.
---------------------------------------------------------------------------

    44. The Commission also rejects Enogex's contention that Order No. 
735's public disclosure requirement violates the requirements of NGA 
sections 23(a)(1) and 23(b) that any transparency requirements avoid 
detrimental effects on competitive markets. Enogex appears to read 
these provisions as requiring the Commission to exempt from public 
disclosure any information that might have some effect on the 
competitive position of a particular participant in the natural gas 
market. However, these provisions only provide that, in requiring 
public disclosure, the Commission should seek to avoid detrimental 
effects on the operation of the market as a whole and protect against 
``potential collusion or other anti-competitive behaviors.'' As the 
First Circuit stated in Town of Concord v. Boston Edison Co.,

a practice is not ``anticompetitive'' simply because it harms 
competitors. After all, almost all business activity, desirable and 
undesirable alike, seeks to advance a firm's fortunes at the expense 
of its competitors. Rather, a practice is ``anticompetitive'' only 
if it harms the competitive process. It harms that process when it 
obstructs the achievement of competition's basic goals--lower 
prices, better products, and more efficient production methods.\44\

    \44\ 915 F.2d 17, 21-22 (1st Cir. 1990), cert. denied, 499 U.S. 
931 (1991).
---------------------------------------------------------------------------

    45. Neither Enogex nor Enstor have shown that Order No. 735's 
public disclosure requirements harm the competitive process or 
encourage anti-competitive behaviors. Enogex focuses on the fact that 
intrastate pipelines engaging in purely intrastate business are not 
subject to similar disclosure requirements. However, this fact does not 
justify exempting intrastate pipelines from the Order No. 735 
disclosure requirements when they perform interstate service. As Order 
No. 735 clarified, the revised reporting requirements adopted by this 
rule apply only to a section 311 pipeline's contracts for interstate 
service, not its purely intrastate contracts. Therefore, section 311 
pipelines need not disclose the rates they charge in intrastate 
transactions. While Enogex asserts that the same customers likely take 
both intrastate and section 311 services, a contract for section 311 
service allows the shipper access to the interstate natural gas 
markets, while a strictly intrastate contract does not. This fact would 
generally suggest a contract for section 311 interstate service would 
have a different value than a contract for purely intrastate service. 
Thus, a section 311 pipeline's disclosure of pricing information 
concerning its contracts for interstate service is not necessarily 
indicative of the pipeline's pricing policies for its purely intrastate 
services. Moreover, in this order, the Commission is extending the 
deadline for the filing of quarterly reports to two months after the 
end of the relevant quarter. Thus, for example, contracts entered into 
during the period January through March need not be disclosed until 
June 1. This allows a delay in disclosure of from two to five months 
after contract execution, depending upon when in the quarter a contract 
was entered into, thereby minimizing any harm from disclosure of the 
contract's terms.
    46. In these circumstances, the Commission finds that the benefits 
to the interstate market of Order No. 735's public disclosure 
requirements outweigh any harm arising from the fact that there is no 
similar public disclosure requirement for purely intrastate pipelines. 
That a state may not have imposed disclosure requirements for services 
within its jurisdiction should not prevent the Commission from adopting 
public disclosure requirements for the services within our jurisdiction 
and thereby providing the interstate market with the benefit of greater 
transparency.
    47. Enstor's primary concern is that Order No. 735 requires section 
311 storage providers to disclose certain information that interstate 
storage providers are not required to disclose, specifically the end-
date for interruptible contracts and per-customer revenues. However, we 
are eliminating that disparity in this order, by removing both 
requirements from the quarterly reports that section 311 pipelines are 
required to submit by this Final Rule. As revised, we are confident 
that the transactional reporting requirements appropriately balance the 
need for increased transparency of section 311 and Hinshaw pipeline 
transactions, while avoiding unduly burdensome market distortions that 
might discourage such pipelines from participating in the interstate 
market.
3. Evidence
    48. Citing the standards for reasoned decision-making and abuse of 
discretion,\45\ Enogex argues that the Commission failed to support the 
Final Rule with any evidence of market abuse requiring an expansion of 
the scope and frequency of the existing contract reporting 
requirements. Enogex argues that this is contrary to the D.C. Court's 
decision in National Fuel Gas Supply Corp. v. FERC, where the court 
reversed a Commission rule on the ground that the Commission was 
``professing that an order ameliorates a real industry problem but then 
citing no evidence that there is in fact an industry problem.'' \46\ 
Enogex claims that the Order No. 735 failed to cite any examples of 
market abuse, only potential abuse. It also argues that while the 
Commission seeks to increase transparency, ``[i]ncreased transparency 
in of itself is not a sufficient basis to impose a substantial new 
reporting burden.'' \47\
---------------------------------------------------------------------------

    \45\ Enogex at 5, 7-10 (citing, inter alia, Administrative 
Procedure Act, 5 U.S.C. 706(2)(A), (E)).
    \46\ Enogex at 7 (quoting National Fuel Gas Supply Corp. v. 
FERC, 468 F.3d 831, 843 (D.C. Cir 2006) (National Fuel Gas)).
    \47\ Enogex at 9.
---------------------------------------------------------------------------

    49. Enstor makes a similar argument, also citing the court's 
decision in National Fuel Gas, although it only argues for 
reconsidering the Final Rule ``to the extent that it has imposed 
reporting requirements on intrastate storage providers that provide 
service at market-based rates under the NPGA.'' \48\ Enstor notes that 
the record material in the Final Rule concerns allegations about 
intrastate pipeline transportation, but none ``on the part of storage 
companies,'' especially those that ``do not possess market power.''