Fuel Retention Practices of Natural Gas Companies, 55762-55765 [E7-19386]

Download as PDF 55762 Federal Register / Vol. 72, No. 189 / Monday, October 1, 2007 / Notices (866) 208–3676 (toll free). For TTY, call (202) 502–8659. Nathaniel J. Davis, Sr., Acting Deputy Director. [FR Doc. E7–19283 Filed 9–28–07; 8:45 am] BILLING CODE 6717–01–P I. Current Commission Policy on Fuel Retention DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. RM07–20–000] Fuel Retention Practices of Natural Gas Companies September 20, 2007. Federal Energy Regulatory Commission, DOE. ACTION: Notice of Inquiry. AGENCY: SUMMARY: The Federal Energy Regulatory Commission is seeking comments on its policy regarding the inkind recovery of fuel and lost and unaccounted-for gas by natural gas pipeline companies. The Commission is inviting interested persons to submit comments, and other information on the matters, issues and specific questions identified in this notice. DATES: Comments are due November 30, 2007. ADDRESSES: You may submit comments, identified by Docket No. RM07–20–000. by one of the following methods: Æ Agency Web Site: https:// www.ferc.gov. Follow the instructions for submitting comments via the eFiling link found in the Comment Procedures Section of the preamble. Æ Mail: Commenters unable to file comments electronically must mail an original and 14 copies of their comments to: Federal Energy NE., Washington, DC, 20426. Please refer to the Comment Procedure Section of the preamble for additional information on how to file paper comments. FOR FURTHER INFORMATION CONTACT: Ingrid M. Olson, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502–8406. SUPPLEMENTARY INFORMATION: Notice of Inquiry mstockstill on PROD1PC66 with NOTICES September 20, 2007. 1. In this Notice of Inquiry, the Commission is seeking comments on its policy regarding the in-kind recovery of fuel and lost and unaccounted-for gas by natural gas pipeline companies. Current policy, described below, gives pipelines two options for recovering these costs, and pipelines follow a variety of VerDate Aug<31>2005 18:31 Sep 28, 2007 practices regarding fuel and lost and unaccounted-for gas. The Commission is seeking comments on whether it should change its current policy and prescribe a uniform method for all pipelines to use in recovering these costs.1 Jkt 214001 2. Interstate natural gas pipelines frequently require that customers contribute a small percentage of the volumes of natural gas tendered for transportation service to provide fuel for compressors and to make up for lost and unaccounted-for gas.2 Each pipeline states the percentage it retains in its open access tariff. Currently effective tariff fuel retention rates range from fractions of a percent to as high as 13 percent.3 3. The Commission established its current policy concerning the in-kind recovery of fuel and unaccounted-for gas in ANR Pipeline Company (ANR).4 In its January 2005 order in the ANR case,5 the Commission stated that pipelines have two options to recover these costs. The first option is to establish a fixed fuel retention percentage in a general section 4 rate case, and leave that percentage unchanged until the pipeline files its next general section 4 rate case. The 1 In this proceeding, the Commission is seeking comments on several specific proposals for rate recovery of fuel and lost and unaccounted-for gas, as well as answers to specific questions. It also should be noted that the Commission has initiated a separate proceeding in Docket No. RM07–9–000 inquiring about the need for changes or revisions in the Commission’s reporting requirements for its financial forms including the Form Nos. 2 and 2– A, Annual Reports of Major and Nonmajor Natural Gas Companies. Assessment of Information Requirements for FERC Financial Forms, Notice of Inquiry, FERC Stats & Regs. ¶ 35,554 (February 15, 2007). The Commission received a number of comments and suggestions in that proceeding regarding the adequacy of information reported in the Form No. 2 concerning gas retained, used for compression, and lost and unaccounted-for. Accordingly, the reporting requirements related to gas retained, used for compression, and lost and unaccounted-for will be addressed in the Notice of Proposed Rulemaking which the Commission is concurrently issuing in Docket No. RM07–9–000, 120 FERC ¶ 61,256. 2 Some pipelines do not require shippers to contribute in-kind a portion of the gas tendered to the pipeline for transportation for the pipeline’s use. 3 See, e.g., MIGC, Inc., FERC Gas Tariff, First Revised Volume No. 1, Eleventh Revised Sheet No. 6 (fuel retention percentages up to 13 percent); Gas Transmission Northwest, FERC Gas Tariff, Third Revised Volume No. 1–A, Seventh Revised Sheet No. 6 (0.005 percent fuel retention). 4 ANR Pipeline Co., order on compliance filing, 108 FERC ¶ 61,050 (2004), order inviting comments, 109 FERC ¶ 61,038 (2004), order on reh’g and compliance filing, 110 FERC ¶ 61,069 (2005), order on reh’g and compliance filing, 111 FERC ¶ 61,290 (2005). 5 110 FERC ¶ 61,069, at P18–28. PO 00000 Frm 00027 Fmt 4703 Sfmt 4703 second option allows the pipeline to include in its tariff a mechanism permitting periodic changes in its fuel retention percentage outside of a general section 4 rate case, as allowed by section 154.403 of the Commission’s regulations.6 ANR held that, if a pipeline chooses the second option, it must include in its tariff a mechanism to true-up any over- and underrecoveries of fuel, absent agreement otherwise by all interested parties. 4. In ANR, the Commission explained that its general ratemaking policy, established in Order No. 436, is that pipelines must design their rates based on estimated units of service without any type of true-up mechanism.7 This means that the pipeline is at risk for under-recovery of its costs between rate cases and may retain any over-recovery. This gives pipelines an incentive both to minimize their costs and maximize the service they provide. A cost tracker undercuts these incentives by guaranteeing the pipeline revenues sufficient to recover its costs regardless of the level of costs or services provided. 5. However, as the Commission explained in ANR, it had permitted an exception to this policy for a few cost items that are subject to significant changes from year to year and thus are difficult to predict. Among these cost items is fuel. The Commission explained that section 154.403 of its regulations permits a pipeline to adjust its fuel retention percentages in periodic limited section 4 rate filings pursuant to a methodology set forth in the pipeline’s tariff. The Commission stated that section 154.403 does not expressly require that pipelines include true-up mechanisms as part of the tariff provision permitting periodic adjustments to their fuel retention percentages. Instead, the Commission stated, it had addressed this issue on a case-by-case basis and required a trueup when the facts of a particular case so warranted. 6. In ANR, the Commission changed this approach and held that, if a pipeline wishes to take full advantage of the incentives underlying our general ratemaking policy with respect to inkind fuel recovery, then it can choose the first option which requires establishing a fixed fuel retention percentage. However, if the pipeline chooses the second option and tracks its fuel costs, then there must be an assurance that the fuel costs are tracked accurately so that the pipeline does not over-recover its fuel costs under any 6 18 7 18 CFR 154.403. CFR 284.10(c)(2). E:\FR\FM\01OCN1.SGM 01OCN1 mstockstill on PROD1PC66 with NOTICES Federal Register / Vol. 72, No. 189 / Monday, October 1, 2007 / Notices circumstances. Therefore, the second option requires a true-up mechanism. The Commission explained that allowing a particular cost item to be tracked gives the pipeline the opportunity to increase that cost item without regard to the possibility of any offsetting cost reductions. The Commission stated that in return for this opportunity, there should be an assurance that the individual cost item is tracked accurately, and the pipeline should not in any circumstances be permitted to over-recover those costs. 7. In reaching this conclusion, the Commission rejected ANR’s contention that it should be permitted to retain its existing tracker without a true-up mechanism because the existing tracker provided it with an incentive to reduce fuel costs and a true-up mechanism would eliminate this incentive. ANR argued that because its fuel recovery mechanism bases each year’s fuel retention percentage on the average of fuel use on its system during the three preceding years, ANR was able to retain a portion of any over-recoveries of fuel resulting from a downward trend in fuel use and, on the other hand, must absorb a portion of any under-recoveries if fuel use trends upward. ANR argued that with this tracker in place, it had in fact reduced its fuel use which resulted in savings to its customers. 8. The Commission rejected ANR’s argument, stating that allowing ANR to over-recover fuel from its customers is not a necessary incentive to encourage the company to minimize its use of fuel gas. The Commission concluded, with regard to fuel use and lost and unaccounted-for gas, that the benefits of requiring a true-up outweigh any disadvantages. 9. While ANR established a general policy of requiring pipelines such as ANR that have a fuel tracker to include true-up mechanisms, the Commission has only enforced that policy in individual cases where parties raise the issue. Thus, pipelines continue to follow a variety of practices regarding fuel and lost and unaccounted-for gas which can be described as fitting into one of three categories. • The first category is the stated-rate approach, where a fixed percentage is stated in the tariff as a non-negotiable fee-in-kind retained from the volumes tendered for shipment by each shipper and changed only in a general section 4 rate case. Of 70 major pipelines, 24 have a stated rate.8 8 These categories and the number of pipelines noted within each category were identified in a Commission staff analysis of the FERC tariffs of 70 major pipelines. VerDate Aug<31>2005 18:31 Sep 28, 2007 Jkt 214001 • The second category is the tracker approach, where provisions in a pipeline’s tariff allow the pipeline to make prospective adjustments to its fuel retention rates from time-to-time, but do not include a mechanism to allow the pipeline to reconcile past over-or underrecoveries of fuel. Eight pipelines have tracker mechanisms without true-up requirements. • The third category is the tracker with a true-up approach, where provisions in a pipeline’s tariff allow for periodic adjustments to its fuel retention rates, and also provide for a true-up of past over- and underrecoveries of fuel and lost and unaccounted-for gas. Thirty-eight pipelines have tracker mechanisms with true-ups in their tariffs. II. Discussion 10. Pipeline customers have expressed concerns that in-kind gas retained by pipelines for fuel and unaccounted-for gas requirements is excessive, and provides pipelines with significant profits. For example, the Natural Gas Supply Association, in its recent study of pipeline returns, estimated that in aggregate 32 pipelines, representing 80 percent of interstate throughput, generated about $2.1 billion in excess retained fuel over the five-year period ending in 2005.9 In a recent complaint against National Fuel Gas Supply Corporation, the principal concern was excessive fuel retention.10 11. The Commission’s review of information filed by pipelines in their 2005 Form No. 2 filings indicates that major pipelines appear to have retained or carried over in their accounts a net sum of over 97 Bcf in fuel beyond what was consumed, lost, or unaccountedfor.11 At average 2005 prices, this represents over $711 million in value.12 Of that amount, 58 Bcf, with a value of $427 million, is attributable to those pipelines that do not have a tracker mechanism in their tariff, and nearly 39 Bcf, with a value of over $285 million, 9 Natural Gas Supply Association, Pipeline Cost Recovery of 32 Major Pipelines, FERC Form No. 2 Data (2001–2005) at 4, available upon request at Natural Gas Supply Association, 805 15th Street, N.W., Suite 510, Washington, D.C. 20005. 10 Pub. Serv. Comm’n of N.Y. v. National Fuel Gas Supply Corp., 115 FERC ¶ 61,299, reconsideration granted in part, 115 FERC ¶ 61,368 (2006), order on settlement, 118 FERC ¶ 61,091 (2007). 11 Commission staff examined available Form No. 2 data for 2005 to derive the sum of the net fuel retained (the amount received from shippers minus the amount consumed for operations or lost or unaccounted-for). 12 The Energy Information Administration (EIA) reports the average wellhead price of natural gas for 2005 was $7.33 per MMBtu. (https:// tonto.eia.doe.gov/dnav/ng/ ng_sum_lsum_dcu_nus_a.htm). PO 00000 Frm 00028 Fmt 4703 Sfmt 4703 55763 is attributable to pipelines with a tracker and no true-up or a tracker with a trueup mechanism. 12. Moreover, with the tightening in natural gas supplies in recent years, there have been substantial increases in the price of natural gas. As a result, the pipeline’s fuel charges now make up a significantly greater percentage of the overall cost of transporting natural gas.13 13. The increasing significance of pipeline fuel charges in the overall cost of transportation and the concerns about pipeline cost over-recoveries suggest that further investigation of in-kind fuel retention practices is warranted. Therefore, the Commission is seeking comments on whether its current policy with regard to the in-kind recovery of fuel and unaccounted for gas should be modified, both for the purpose of providing pipelines a greater incentive to reduce their fuel use and lost gas and for the purpose of minimizing pipeline over-recoveries of these costs. Specifically the Commission is requesting comments on the following questions: (1) Should the Commission Continue to Allow Recovery of Pipeline Fuel Costs Through Fixed Fuel Retention Percentages? 14. As described above, the Commission’s review of pipeline Form No. 2 data indicates that some pipelines, particularly those with fixed fuel retention percentages, are overrecovering their fuel costs. By contrast, a properly designed fuel tracker and true-up mechanism would ensure that a pipeline does not over-recover its fuel costs. However, allowing pipelines to establish a fixed in-kind fuel retention percentage in a general section 4 rate case is consistent with the Commission’s general ratemaking 13 A comparison between 2002 and 2006 data for Texas Eastern Transmission Corporation (Texas Eastern) illustrates this point. According to EIA, the average wellhead natural gas price rose from $2.95 per MMBtu in 2002, to $6.42 per MMBtu in 2006. Texas Eastern’s maximum rate for interruptible transportation through the full length of the system (Zone STX to Zone M3) in 2002 was $0.6639 per MMBtu, and Texas Eastern retained 8.94 percent of the gas for fuel use, at an additional cost to the shipper of $0.2637 (fuel retention rate times the wellhead price). FERC Gas Tariff, Seventh Revised Volume No. 1, Seventh Revised Sheet No. 49. Thus, the shipper’s total cost was $0.9276 per MMBtu. The fuel cost equaled 28.4 percent of the total. In 2006, the maximum rate for interruptible transportation was $0.6231, and Texas Eastern retained 7.94 percent of the gas for fuel, at an additional cost to the shipper of $0.5097. FERC Gas Tariff, Seventh Revised Volume No. 1, ThirtySecond Revised Sheet No. 49. Thus, in 2006, the shipper’s total cost was $1.1328 per MMBtu. Here, the fuel cost equaled 45 percent of the total, an increase of about 17 percentage points over the 2002 figure. E:\FR\FM\01OCN1.SGM 01OCN1 55764 Federal Register / Vol. 72, No. 189 / Monday, October 1, 2007 / Notices mstockstill on PROD1PC66 with NOTICES policies and section 154.403 of the Commission’s regulations. In ANR, the Commission continued to permit pipelines to use that recovery method, stating that the method gives pipelines an incentive to minimize their fuel use through more efficient operations. These efficiencies could benefit customers when the pipeline files its next general section 4 rate case, although until the pipeline does file a new section 4 rate case it would retain the benefit from any savings. Also, a fixed in-kind fuel retention percentage avoids potentially disruptive changes in the pipeline’s fuel rates outside a general section 4 rate case, thereby giving customers the benefit of greater certainty as to the pipeline’s fuel rates. For that reason, shippers may favor fixed fuel retention percentages. 15. Do the benefits of a fixed retention percentage for recovery of fuel in-kind outweigh the potential for cost overrecovery? Have pipelines with fixed retention percentages reduced their fuel use? If so, provide specific examples. Have pipelines with fixed in-kind retention percentages that have reduced their fuel use filed section 4 rate cases, thereby passing through to customers the benefit of any prospective fuel cost savings? Do pipelines with fixed fuel retention percentages have less incentive to file new section 4 rate cases, such that shippers are not receiving the benefit of any reduced fuel use? Are there barriers that make it difficult for shippers to file section 5 complaints to police over-recovery of fuel costs? Does the benefit to shippers of greater rate certainty from a fixed fuel percentage justify continuing to permit pipelines to use a fixed fuel retention rate? If pipelines were to be allowed to continue using the fixed fuel retention rate approach, should the Commission consider imposing explicit incentive requirements, such as the application of an RPI–X methodology 14 on either a generic or case-specific basis? If the Commission were to adopt incentive provisions to encourage pipelines to reduce fuel use and lost and unaccounted-for gas, should the Commission adopt a standardized incentive approach, such as the sharing between the pipeline and its shippers of any fuel cost over-recoveries and/or 14 An ‘‘RPI–X’’ methodology would allow fuel costs to rise with inflation minus some X-factor deduction to provide a strong incentive towards efficiency and an implicit sharing of future efficiencies with ratepayers. Such methods, if employed in fuel retention provisions, would need to be adapted to fit the circumstances of in-kind retention requirements, rather than monetary payments. VerDate Aug<31>2005 18:31 Sep 28, 2007 Jkt 214001 under-recoveries? If so, which standardized incentive approach should the Commission consider? 16. New compressor stations can be designed to minimize fuel use through, for example, motor selection (size, fuel efficiency, throughput flexibility) as well as minimizing pressure drops through the station (yard pipe and facility sizing). Existing compressors stations can also be redesigned to reduce fuel by minimizing pressure drops through the station or installing gas coolers to reduce the need for compression. How does the type of fuel cost recovery mechanism (fixed fuel retention percentages, tracker with no true-up or tracker with true-up) affect these decisions, if any? Similarly, is the fuel cost recovery or other mechanism a factor when deciding whether to construct a larger diameter pipe instead of compression or use advanced SCADA/control systems to manage line pack? 17. As stated above, if the Commission were to adopt incentive provisions to encourage pipelines to reduce fuel use and lost and unaccounted-for gas, one option would be a mechanism for sharing between the pipeline and its shippers of any fuel cost recoveries and/or under-recoveries. How could such a cost-and-benefitsharing mechanism affect the decisions discussed immediately above? Could a cost-and-benefit-sharing mechanism between the pipeline and its customers ameliorate any concerns that fuel efficient investment is ‘‘gold plating’’ rate base, i.e., making an investment that increases the rate base and the corresponding return without necessarily creating a corresponding benefit to the pipeline’s customers? 18. What are the barriers to cost effective, fuel efficient investment, it any? If barriers exist, how does the Commission remove such barriers? What factors, including, if applicable, the type of fuel cost recovery mechanism, affect the amount of research and development (R&D) being done to advance technology in these areas? How could a cost-and-benefitsharing mechanism between the pipeline and its customers affect the level of R&D? Could fuel efficiency measures impact either directly or indirectly throughput or reliability on the pipeline grid, and if so, in what manner? 19. Some fixed fuel retention provisions were established through settlements. How important are fixed fuel retention provisions to these settlements? If the Commission adopts a new generic policy, should it modify these existing settlements to apply its PO 00000 Frm 00029 Fmt 4703 Sfmt 4703 new policy? If the Commission adopts a generic fuel retention policy, should it permit pipelines and shippers to reach settlements thereafter that provide for recovery of fuel costs in a manner different from that policy? (2) Should the Commission Mandate That All Pipelines Must Have a Tracker Mechanism for the Recovery of Fuel? 20. While the Commission’s general policy is that rates should be based on projections of future costs based on test period experience, the Commission permits certain costs that are volatile and thus particularly difficult to project, to be tracked. Is fuel use and lost and unaccounted-for gas difficult to predict with precision? If so, does the volatility of pipeline fuel use and the experience with the fixed retention percentage justify a blanket requirement that all pipelines recover their fuel costs through a tracker? If not, should the Commission continue the exception that permits pipelines to make limited section 4 filings tracking their fuel costs? Do the recent increases in the cost of fuel further justify use of a tracker? 21. In Order No. 637, the Commission established a principle that pipelines should not profit from the penalty provisions in their tariffs for imbalances, unauthorized overruns, scheduling violations, etc.15 This was intended to eliminate any incentive for pipelines to propose unnecessary penalties that hinder efficiency.16 Does permitting pipelines to profit from fuel retention also create undesirable incentives for pipelines? For example, do the profits from excess fuel retention lead some pipelines to avoid updating their base tariff rates because, on balance, they are receiving an adequate cash flow in aggregate? (3) If the Commission Requires Pipelines To Use a Tracker, Should It Require a True-Up Mechanism? As stated above, in ANR, the Commission concluded that if a pipeline has a tracker and is therefore able to recover its fuel costs outside of a general section 4 proceeding, it should track those costs accurately and not be permitted to over-recover its fuel costs in any circumstances. Accordingly, the Commission required all pipelines with trackers to include a true-up mechanism. With both a tracker and a true-up mechanism, the pipeline simply passes through its fuel costs to its customers, and, therefore, there may in 15 18 CFR 284.12(b)(v). No. 637, FERC Stats. & Regs. ¶ 31,091 at 16 Order 31,315. E:\FR\FM\01OCN1.SGM 01OCN1 Federal Register / Vol. 72, No. 189 / Monday, October 1, 2007 / Notices fact be little incentive for the pipeline to try to reduce those costs. 22. In ANR, the Commission found that the inclusion of a true-up mechanism in a tracker does not remove all incentives for the pipeline to reduce its fuel use. The Commission explained that pipelines do face some competitive pressures in obtaining marginal throughput, for example, obtaining customers with access to alternative fuels. Because the Commission has held that pipelines may not discount their fuel use percentages since those costs are variable, the only way a pipeline can reduce its fuel percentages in order to help obtain marginal business is by reducing its fuel usage. 23. Was the Commission’s conclusion in ANR, that the benefits of requiring a true-up as part of a tracker outweigh the disadvantages of reduced incentives for efficient operation accurate? What impact does a true-up mechanism have on a pipeline’s incentive to reduce fuel costs? Is there evidence that pipelines with tracker and true-up mechanisms operate less efficiently than pipelines without such mechanisms? 24. Is there a benefit to giving pipelines an incentive to reduce fuel use, such as the inclusion in the tracker of a profit or loss sharing mechanism? If the pipeline could retain some benefit of fuel cost reductions, would it have a greater incentive to reduce those costs? Would customers benefit from the reduced costs and from sharing in any cost over-recoveries? How important are fuel costs relative to total transportation costs? (4) Should the Commission Retain Its Current Policy? 25. Finally, the Commission seeks comments on whether it should retain its current policy which gives pipeline discretion over whether to have a tracker mechanism governing the recovery of fuel costs. What are the benefits and/or costs of retaining the current policy? What factors should the Commission consider in deciding whether a change in fuel retention policy is warranted at this time? mstockstill on PROD1PC66 with NOTICES III. Procedure for Comments 26. The Commission invites interested persons to submit comments, and other information on the matters, issues and specific questions identified in this notice. Comments are due 60 days from the date of publication in the Federal Register. Comments must refer to Docket No. RM07–20–000, and must include the commenter’s name, the organization it represents, if applicable, and its address. VerDate Aug<31>2005 18:31 Sep 28, 2007 Jkt 214001 27. To facilitate the Commission’s review of the comments, commenters are requested to provide an executive summary of their position. Commenters are requested to identify each specific question posed by the Notice of Inquiry that their discussion addresses and to use appropriate headings. Additional issues the commentors wish to raise should be identified separately. The commenters should double space their comments. 28. Comments may be filed on paper or electronically via the eFiling link on the Commission’s Web site at https:// www.ferc.gov. The Commission accepts most standard word processing formats and commentors may attach additional files with supporting information in certain other file formats. Commentors filing electronically do not need to make a paper filing. Commenters that are not able to file comments electronically must send an original and 14 copies of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street, NE., Washington, DC 20426. 29. 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 are not required to serve copies of their comments on other commenters. IV. Document Availability 30. 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 (https:// 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. 31. From the Commission’s Home Page on the Internet, this information is available in the Commission’s document management system, 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) in the docket number field. 32. User assistance is available for eLibrary and the Commission’s Web site during normal business hours. For assistance, please contact the Commission’s Online Support at 1–866– 208–3676 (toll free) or 202–502–6652 (email at FERCOnlineSupport@ferc.gov or the Public Reference Room at 202–502– PO 00000 Frm 00030 Fmt 4703 Sfmt 4703 55765 8371, TTY 202–502–8659 (e-mail at public.referenceroom@ferc.gov). By direction of the Commission. Nathaniel J. Davis, Sr., Acting Deputy Secretary. [FR Doc. E7–19386 Filed 9–28–07; 8:45 am] BILLING CODE 6717–01–P ENVIRONMENTAL PROTECTION AGENCY [FRL–8476–3] Proposed Settlement Agreement, Clean Air Act Citizen Suit Environmental Protection Agency (EPA). ACTION: Notice of Proposed Settlement Agreement; Request for Public Comment. AGENCY: SUMMARY: In accordance with section 113(g) of the Clean Air Act, as amended (‘‘Act’’), 42 U.S.C. 7413(g), notice is hereby given of a proposed settlement agreement, to address a lawsuit filed by Rocky Mountain Clean Air Action (‘‘RMCAA’’) in the United States Court of Appeals for the D.C. Circuit: Rocky Mountain Clean Air Action v. EPA, No. 07–1012 (D.C. Cir.). Petitioner filed a petition for review challenging EPA’s final rule entitled ‘‘Final Extension of the Deferred Effective Date for 8-Hour Ozone National Ambient Air Quality Standards (‘‘NAAQS’’) for Early Action Compact Areas,’’ 71 FR 69022 (Nov. 29, 2006). Under the terms of the proposed settlement agreement, deadlines have been established for EPA and the State of Colorado to take specific actions related to the Denver Early Action Compact (‘‘Denver EAC’’) area. Petitioner’s sole remedy if EPA or the State fails to take one of these actions is to request the court to lift the stay and to set a briefing schedule. DATES: Written comments on the proposed settlement agreement must be received by October 31, 2007. ADDRESSES: Submit your comments, identified by Docket ID number EPA– HQ–OGC–2007–0991, online at https:// www.regulations.gov (EPA’s preferred method); by e-mail to oei.docket@epa.gov; mailed to EPA Docket Center, Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Washington, DC 20460–0001; or by hand delivery or courier to EPA Docket Center, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC, between 8:30 a.m. and 4:30 p.m. Monday through Friday, excluding legal holidays. Comments on a disk or CD– E:\FR\FM\01OCN1.SGM 01OCN1

Agencies

[Federal Register Volume 72, Number 189 (Monday, October 1, 2007)]
[Notices]
[Pages 55762-55765]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-19386]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RM07-20-000]


Fuel Retention Practices of Natural Gas Companies

September 20, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of Inquiry.

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SUMMARY: The Federal Energy Regulatory Commission is seeking comments 
on its policy regarding the in-kind recovery of fuel and lost and 
unaccounted-for gas by natural gas pipeline companies. The Commission 
is inviting interested persons to submit comments, and other 
information on the matters, issues and specific questions identified in 
this notice.

DATES: Comments are due November 30, 2007.

ADDRESSES: You may submit comments, identified by Docket No. RM07-20-
000. by one of the following methods:
    [cir] Agency Web Site: https://www.ferc.gov. Follow the instructions 
for submitting comments via the eFiling link found in the Comment 
Procedures Section of the preamble.
    [cir] Mail: Commenters unable to file comments electronically must 
mail an original and 14 copies of their comments to: Federal Energy 
NE., Washington, DC, 20426. Please refer to the Comment Procedure 
Section of the preamble for additional information on how to file paper 
comments.

FOR FURTHER INFORMATION CONTACT: Ingrid M. Olson, Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8406.

SUPPLEMENTARY INFORMATION:

Notice of Inquiry

September 20, 2007.
    1. In this Notice of Inquiry, the Commission is seeking comments on 
its policy regarding the in-kind recovery of fuel and lost and 
unaccounted-for gas by natural gas pipeline companies. Current policy, 
described below, gives pipelines two options for recovering these 
costs, and pipelines follow a variety of practices regarding fuel and 
lost and unaccounted-for gas. The Commission is seeking comments on 
whether it should change its current policy and prescribe a uniform 
method for all pipelines to use in recovering these costs.\1\
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    \1\ In this proceeding, the Commission is seeking comments on 
several specific proposals for rate recovery of fuel and lost and 
unaccounted-for gas, as well as answers to specific questions. It 
also should be noted that the Commission has initiated a separate 
proceeding in Docket No. RM07-9-000 inquiring about the need for 
changes or revisions in the Commission's reporting requirements for 
its financial forms including the Form Nos. 2 and 2-A, Annual 
Reports of Major and Nonmajor Natural Gas Companies. Assessment of 
Information Requirements for FERC Financial Forms, Notice of 
Inquiry, FERC Stats & Regs. ] 35,554 (February 15, 2007). The 
Commission received a number of comments and suggestions in that 
proceeding regarding the adequacy of information reported in the 
Form No. 2 concerning gas retained, used for compression, and lost 
and unaccounted-for. Accordingly, the reporting requirements related 
to gas retained, used for compression, and lost and unaccounted-for 
will be addressed in the Notice of Proposed Rulemaking which the 
Commission is concurrently issuing in Docket No. RM07-9-000, 120 
FERC ] 61,256.
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I. Current Commission Policy on Fuel Retention

    2. Interstate natural gas pipelines frequently require that 
customers contribute a small percentage of the volumes of natural gas 
tendered for transportation service to provide fuel for compressors and 
to make up for lost and unaccounted-for gas.\2\ Each pipeline states 
the percentage it retains in its open access tariff. Currently 
effective tariff fuel retention rates range from fractions of a percent 
to as high as 13 percent.\3\
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    \2\ Some pipelines do not require shippers to contribute in-kind 
a portion of the gas tendered to the pipeline for transportation for 
the pipeline's use.
    \3\ See, e.g., MIGC, Inc., FERC Gas Tariff, First Revised Volume 
No. 1, Eleventh Revised Sheet No. 6 (fuel retention percentages up 
to 13 percent); Gas Transmission Northwest, FERC Gas Tariff, Third 
Revised Volume No. 1-A, Seventh Revised Sheet No. 6 (0.005 percent 
fuel retention).
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    3. The Commission established its current policy concerning the in-
kind recovery of fuel and unaccounted-for gas in ANR Pipeline Company 
(ANR).\4\ In its January 2005 order in the ANR case,\5\ the Commission 
stated that pipelines have two options to recover these costs. The 
first option is to establish a fixed fuel retention percentage in a 
general section 4 rate case, and leave that percentage unchanged until 
the pipeline files its next general section 4 rate case. The second 
option allows the pipeline to include in its tariff a mechanism 
permitting periodic changes in its fuel retention percentage outside of 
a general section 4 rate case, as allowed by section 154.403 of the 
Commission's regulations.\6\ ANR held that, if a pipeline chooses the 
second option, it must include in its tariff a mechanism to true-up any 
over- and under-recoveries of fuel, absent agreement otherwise by all 
interested parties.
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    \4\ ANR Pipeline Co., order on compliance filing, 108 FERC ] 
61,050 (2004), order inviting comments, 109 FERC ] 61,038 (2004), 
order on reh'g and compliance filing, 110 FERC ] 61,069 (2005), 
order on reh'g and compliance filing, 111 FERC ] 61,290 (2005).
    \5\ 110 FERC ] 61,069, at P18-28.
    \6\ 18 CFR 154.403.
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    4. In ANR, the Commission explained that its general ratemaking 
policy, established in Order No. 436, is that pipelines must design 
their rates based on estimated units of service without any type of 
true-up mechanism.\7\ This means that the pipeline is at risk for 
under-recovery of its costs between rate cases and may retain any over-
recovery. This gives pipelines an incentive both to minimize their 
costs and maximize the service they provide. A cost tracker undercuts 
these incentives by guaranteeing the pipeline revenues sufficient to 
recover its costs regardless of the level of costs or services 
provided.
---------------------------------------------------------------------------

    \7\ 18 CFR 284.10(c)(2).
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    5. However, as the Commission explained in ANR, it had permitted an 
exception to this policy for a few cost items that are subject to 
significant changes from year to year and thus are difficult to 
predict. Among these cost items is fuel. The Commission explained that 
section 154.403 of its regulations permits a pipeline to adjust its 
fuel retention percentages in periodic limited section 4 rate filings 
pursuant to a methodology set forth in the pipeline's tariff. The 
Commission stated that section 154.403 does not expressly require that 
pipelines include true-up mechanisms as part of the tariff provision 
permitting periodic adjustments to their fuel retention percentages. 
Instead, the Commission stated, it had addressed this issue on a case-
by-case basis and required a true-up when the facts of a particular 
case so warranted.
    6. In ANR, the Commission changed this approach and held that, if a 
pipeline wishes to take full advantage of the incentives underlying our 
general ratemaking policy with respect to in-kind fuel recovery, then 
it can choose the first option which requires establishing a fixed fuel 
retention percentage. However, if the pipeline chooses the second 
option and tracks its fuel costs, then there must be an assurance that 
the fuel costs are tracked accurately so that the pipeline does not 
over-recover its fuel costs under any

[[Page 55763]]

circumstances. Therefore, the second option requires a true-up 
mechanism. The Commission explained that allowing a particular cost 
item to be tracked gives the pipeline the opportunity to increase that 
cost item without regard to the possibility of any offsetting cost 
reductions. The Commission stated that in return for this opportunity, 
there should be an assurance that the individual cost item is tracked 
accurately, and the pipeline should not in any circumstances be 
permitted to over-recover those costs.
    7. In reaching this conclusion, the Commission rejected ANR's 
contention that it should be permitted to retain its existing tracker 
without a true-up mechanism because the existing tracker provided it 
with an incentive to reduce fuel costs and a true-up mechanism would 
eliminate this incentive. ANR argued that because its fuel recovery 
mechanism bases each year's fuel retention percentage on the average of 
fuel use on its system during the three preceding years, ANR was able 
to retain a portion of any over-recoveries of fuel resulting from a 
downward trend in fuel use and, on the other hand, must absorb a 
portion of any under-recoveries if fuel use trends upward. ANR argued 
that with this tracker in place, it had in fact reduced its fuel use 
which resulted in savings to its customers.
    8. The Commission rejected ANR's argument, stating that allowing 
ANR to over-recover fuel from its customers is not a necessary 
incentive to encourage the company to minimize its use of fuel gas. The 
Commission concluded, with regard to fuel use and lost and unaccounted-
for gas, that the benefits of requiring a true-up outweigh any 
disadvantages.
    9. While ANR established a general policy of requiring pipelines 
such as ANR that have a fuel tracker to include true-up mechanisms, the 
Commission has only enforced that policy in individual cases where 
parties raise the issue. Thus, pipelines continue to follow a variety 
of practices regarding fuel and lost and unaccounted-for gas which can 
be described as fitting into one of three categories.
     The first category is the stated-rate approach, where a 
fixed percentage is stated in the tariff as a non-negotiable fee-in-
kind retained from the volumes tendered for shipment by each shipper 
and changed only in a general section 4 rate case. Of 70 major 
pipelines, 24 have a stated rate.\8\
---------------------------------------------------------------------------

    \8\ These categories and the number of pipelines noted within 
each category were identified in a Commission staff analysis of the 
FERC tariffs of 70 major pipelines.
---------------------------------------------------------------------------

     The second category is the tracker approach, where 
provisions in a pipeline's tariff allow the pipeline to make 
prospective adjustments to its fuel retention rates from time-to-time, 
but do not include a mechanism to allow the pipeline to reconcile past 
over-or under-recoveries of fuel. Eight pipelines have tracker 
mechanisms without true-up requirements.
     The third category is the tracker with a true-up approach, 
where provisions in a pipeline's tariff allow for periodic adjustments 
to its fuel retention rates, and also provide for a true-up of past 
over- and under-recoveries of fuel and lost and unaccounted-for gas. 
Thirty-eight pipelines have tracker mechanisms with true-ups in their 
tariffs.

II. Discussion

    10. Pipeline customers have expressed concerns that in-kind gas 
retained by pipelines for fuel and unaccounted-for gas requirements is 
excessive, and provides pipelines with significant profits. For 
example, the Natural Gas Supply Association, in its recent study of 
pipeline returns, estimated that in aggregate 32 pipelines, 
representing 80 percent of interstate throughput, generated about $2.1 
billion in excess retained fuel over the five-year period ending in 
2005.\9\ In a recent complaint against National Fuel Gas Supply 
Corporation, the principal concern was excessive fuel retention.\10\
---------------------------------------------------------------------------

    \9\ Natural Gas Supply Association, Pipeline Cost Recovery of 32 
Major Pipelines, FERC Form No. 2 Data (2001-2005) at 4, available 
upon request at Natural Gas Supply Association, 805 15th Street, 
N.W., Suite 510, Washington, D.C. 20005.
    \10\ Pub. Serv. Comm'n of N.Y. v. National Fuel Gas Supply 
Corp., 115 FERC ] 61,299, reconsideration granted in part, 115 FERC 
] 61,368 (2006), order on settlement, 118 FERC ] 61,091 (2007).
---------------------------------------------------------------------------

    11. The Commission's review of information filed by pipelines in 
their 2005 Form No. 2 filings indicates that major pipelines appear to 
have retained or carried over in their accounts a net sum of over 97 
Bcf in fuel beyond what was consumed, lost, or unaccounted-for.\11\ At 
average 2005 prices, this represents over $711 million in value.\12\ Of 
that amount, 58 Bcf, with a value of $427 million, is attributable to 
those pipelines that do not have a tracker mechanism in their tariff, 
and nearly 39 Bcf, with a value of over $285 million, is attributable 
to pipelines with a tracker and no true-up or a tracker with a true-up 
mechanism.
---------------------------------------------------------------------------

    \11\ Commission staff examined available Form No. 2 data for 
2005 to derive the sum of the net fuel retained (the amount received 
from shippers minus the amount consumed for operations or lost or 
unaccounted-for).
    \12\ The Energy Information Administration (EIA) reports the 
average wellhead price of natural gas for 2005 was $7.33 per MMBtu. 
(https://tonto.eia.doe.gov/dnav/ng/ng_sum_lsum_dcu_nus_a.htm).
---------------------------------------------------------------------------

    12. Moreover, with the tightening in natural gas supplies in recent 
years, there have been substantial increases in the price of natural 
gas. As a result, the pipeline's fuel charges now make up a 
significantly greater percentage of the overall cost of transporting 
natural gas.\13\
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    \13\ A comparison between 2002 and 2006 data for Texas Eastern 
Transmission Corporation (Texas Eastern) illustrates this point. 
According to EIA, the average wellhead natural gas price rose from 
$2.95 per MMBtu in 2002, to $6.42 per MMBtu in 2006. Texas Eastern's 
maximum rate for interruptible transportation through the full 
length of the system (Zone STX to Zone M3) in 2002 was $0.6639 per 
MMBtu, and Texas Eastern retained 8.94 percent of the gas for fuel 
use, at an additional cost to the shipper of $0.2637 (fuel retention 
rate times the wellhead price). FERC Gas Tariff, Seventh Revised 
Volume No. 1, Seventh Revised Sheet No. 49. Thus, the shipper's 
total cost was $0.9276 per MMBtu. The fuel cost equaled 28.4 percent 
of the total. In 2006, the maximum rate for interruptible 
transportation was $0.6231, and Texas Eastern retained 7.94 percent 
of the gas for fuel, at an additional cost to the shipper of 
$0.5097. FERC Gas Tariff, Seventh Revised Volume No. 1, Thirty-
Second Revised Sheet No. 49. Thus, in 2006, the shipper's total cost 
was $1.1328 per MMBtu. Here, the fuel cost equaled 45 percent of the 
total, an increase of about 17 percentage points over the 2002 
figure.
---------------------------------------------------------------------------

    13. The increasing significance of pipeline fuel charges in the 
overall cost of transportation and the concerns about pipeline cost 
over-recoveries suggest that further investigation of in-kind fuel 
retention practices is warranted. Therefore, the Commission is seeking 
comments on whether its current policy with regard to the in-kind 
recovery of fuel and unaccounted for gas should be modified, both for 
the purpose of providing pipelines a greater incentive to reduce their 
fuel use and lost gas and for the purpose of minimizing pipeline over-
recoveries of these costs. Specifically the Commission is requesting 
comments on the following questions:

(1) Should the Commission Continue to Allow Recovery of Pipeline Fuel 
Costs Through Fixed Fuel Retention Percentages?

    14. As described above, the Commission's review of pipeline Form 
No. 2 data indicates that some pipelines, particularly those with fixed 
fuel retention percentages, are over-recovering their fuel costs. By 
contrast, a properly designed fuel tracker and true-up mechanism would 
ensure that a pipeline does not over-recover its fuel costs. However, 
allowing pipelines to establish a fixed in-kind fuel retention 
percentage in a general section 4 rate case is consistent with the 
Commission's general ratemaking

[[Page 55764]]

policies and section 154.403 of the Commission's regulations. In ANR, 
the Commission continued to permit pipelines to use that recovery 
method, stating that the method gives pipelines an incentive to 
minimize their fuel use through more efficient operations. These 
efficiencies could benefit customers when the pipeline files its next 
general section 4 rate case, although until the pipeline does file a 
new section 4 rate case it would retain the benefit from any savings. 
Also, a fixed in-kind fuel retention percentage avoids potentially 
disruptive changes in the pipeline's fuel rates outside a general 
section 4 rate case, thereby giving customers the benefit of greater 
certainty as to the pipeline's fuel rates. For that reason, shippers 
may favor fixed fuel retention percentages.
    15. Do the benefits of a fixed retention percentage for recovery of 
fuel in-kind outweigh the potential for cost over-recovery? Have 
pipelines with fixed retention percentages reduced their fuel use? If 
so, provide specific examples. Have pipelines with fixed in-kind 
retention percentages that have reduced their fuel use filed section 4 
rate cases, thereby passing through to customers the benefit of any 
prospective fuel cost savings? Do pipelines with fixed fuel retention 
percentages have less incentive to file new section 4 rate cases, such 
that shippers are not receiving the benefit of any reduced fuel use? 
Are there barriers that make it difficult for shippers to file section 
5 complaints to police over-recovery of fuel costs?
    Does the benefit to shippers of greater rate certainty from a fixed 
fuel percentage justify continuing to permit pipelines to use a fixed 
fuel retention rate? If pipelines were to be allowed to continue using 
the fixed fuel retention rate approach, should the Commission consider 
imposing explicit incentive requirements, such as the application of an 
RPI-X methodology \14\ on either a generic or case-specific basis? If 
the Commission were to adopt incentive provisions to encourage 
pipelines to reduce fuel use and lost and unaccounted-for gas, should 
the Commission adopt a standardized incentive approach, such as the 
sharing between the pipeline and its shippers of any fuel cost over-
recoveries and/or under-recoveries? If so, which standardized incentive 
approach should the Commission consider?
---------------------------------------------------------------------------

    \14\ An ``RPI-X'' methodology would allow fuel costs to rise 
with inflation minus some X-factor deduction to provide a strong 
incentive towards efficiency and an implicit sharing of future 
efficiencies with ratepayers. Such methods, if employed in fuel 
retention provisions, would need to be adapted to fit the 
circumstances of in-kind retention requirements, rather than 
monetary payments.
---------------------------------------------------------------------------

    16. New compressor stations can be designed to minimize fuel use 
through, for example, motor selection (size, fuel efficiency, 
throughput flexibility) as well as minimizing pressure drops through 
the station (yard pipe and facility sizing). Existing compressors 
stations can also be redesigned to reduce fuel by minimizing pressure 
drops through the station or installing gas coolers to reduce the need 
for compression. How does the type of fuel cost recovery mechanism 
(fixed fuel retention percentages, tracker with no true-up or tracker 
with true-up) affect these decisions, if any? Similarly, is the fuel 
cost recovery or other mechanism a factor when deciding whether to 
construct a larger diameter pipe instead of compression or use advanced 
SCADA/control systems to manage line pack?
    17. As stated above, if the Commission were to adopt incentive 
provisions to encourage pipelines to reduce fuel use and lost and 
unaccounted-for gas, one option would be a mechanism for sharing 
between the pipeline and its shippers of any fuel cost recoveries and/
or under-recoveries. How could such a cost-and-benefit-sharing 
mechanism affect the decisions discussed immediately above? Could a 
cost-and-benefit-sharing mechanism between the pipeline and its 
customers ameliorate any concerns that fuel efficient investment is 
``gold plating'' rate base, i.e., making an investment that increases 
the rate base and the corresponding return without necessarily creating 
a corresponding benefit to the pipeline's customers?
    18. What are the barriers to cost effective, fuel efficient 
investment, it any? If barriers exist, how does the Commission remove 
such barriers? What factors, including, if applicable, the type of fuel 
cost recovery mechanism, affect the amount of research and development 
(R&D) being done to advance technology in these areas? How could a 
cost-and-benefit-sharing mechanism between the pipeline and its 
customers affect the level of R&D? Could fuel efficiency measures 
impact either directly or indirectly throughput or reliability on the 
pipeline grid, and if so, in what manner?
    19. Some fixed fuel retention provisions were established through 
settlements. How important are fixed fuel retention provisions to these 
settlements? If the Commission adopts a new generic policy, should it 
modify these existing settlements to apply its new policy? If the 
Commission adopts a generic fuel retention policy, should it permit 
pipelines and shippers to reach settlements thereafter that provide for 
recovery of fuel costs in a manner different from that policy?

(2) Should the Commission Mandate That All Pipelines Must Have a 
Tracker Mechanism for the Recovery of Fuel?

    20. While the Commission's general policy is that rates should be 
based on projections of future costs based on test period experience, 
the Commission permits certain costs that are volatile and thus 
particularly difficult to project, to be tracked. Is fuel use and lost 
and unaccounted-for gas difficult to predict with precision? If so, 
does the volatility of pipeline fuel use and the experience with the 
fixed retention percentage justify a blanket requirement that all 
pipelines recover their fuel costs through a tracker? If not, should 
the Commission continue the exception that permits pipelines to make 
limited section 4 filings tracking their fuel costs? Do the recent 
increases in the cost of fuel further justify use of a tracker?
    21. In Order No. 637, the Commission established a principle that 
pipelines should not profit from the penalty provisions in their 
tariffs for imbalances, unauthorized overruns, scheduling violations, 
etc.\15\ This was intended to eliminate any incentive for pipelines to 
propose unnecessary penalties that hinder efficiency.\16\ Does 
permitting pipelines to profit from fuel retention also create 
undesirable incentives for pipelines? For example, do the profits from 
excess fuel retention lead some pipelines to avoid updating their base 
tariff rates because, on balance, they are receiving an adequate cash 
flow in aggregate?
---------------------------------------------------------------------------

    \15\ 18 CFR 284.12(b)(v).
    \16\ Order No. 637, FERC Stats. & Regs. ] 31,091 at 31,315.
---------------------------------------------------------------------------

(3) If the Commission Requires Pipelines To Use a Tracker, Should It 
Require a True-Up Mechanism?

    As stated above, in ANR, the Commission concluded that if a 
pipeline has a tracker and is therefore able to recover its fuel costs 
outside of a general section 4 proceeding, it should track those costs 
accurately and not be permitted to over-recover its fuel costs in any 
circumstances. Accordingly, the Commission required all pipelines with 
trackers to include a true-up mechanism. With both a tracker and a 
true-up mechanism, the pipeline simply passes through its fuel costs to 
its customers, and, therefore, there may in

[[Page 55765]]

fact be little incentive for the pipeline to try to reduce those costs.
    22. In ANR, the Commission found that the inclusion of a true-up 
mechanism in a tracker does not remove all incentives for the pipeline 
to reduce its fuel use. The Commission explained that pipelines do face 
some competitive pressures in obtaining marginal throughput, for 
example, obtaining customers with access to alternative fuels. Because 
the Commission has held that pipelines may not discount their fuel use 
percentages since those costs are variable, the only way a pipeline can 
reduce its fuel percentages in order to help obtain marginal business 
is by reducing its fuel usage.
    23. Was the Commission's conclusion in ANR, that the benefits of 
requiring a true-up as part of a tracker outweigh the disadvantages of 
reduced incentives for efficient operation accurate? What impact does a 
true-up mechanism have on a pipeline's incentive to reduce fuel costs? 
Is there evidence that pipelines with tracker and true-up mechanisms 
operate less efficiently than pipelines without such mechanisms?
    24. Is there a benefit to giving pipelines an incentive to reduce 
fuel use, such as the inclusion in the tracker of a profit or loss 
sharing mechanism? If the pipeline could retain some benefit of fuel 
cost reductions, would it have a greater incentive to reduce those 
costs? Would customers benefit from the reduced costs and from sharing 
in any cost over-recoveries? How important are fuel costs relative to 
total transportation costs?

(4) Should the Commission Retain Its Current Policy?

    25. Finally, the Commission seeks comments on whether it should 
retain its current policy which gives pipeline discretion over whether 
to have a tracker mechanism governing the recovery of fuel costs. What 
are the benefits and/or costs of retaining the current policy? What 
factors should the Commission consider in deciding whether a change in 
fuel retention policy is warranted at this time?

III. Procedure for Comments

    26. The Commission invites interested persons to submit comments, 
and other information on the matters, issues and specific questions 
identified in this notice. Comments are due 60 days from the date of 
publication in the Federal Register. Comments must refer to Docket No. 
RM07-20-000, and must include the commenter's name, the organization it 
represents, if applicable, and its address.
    27. To facilitate the Commission's review of the comments, 
commenters are requested to provide an executive summary of their 
position. Commenters are requested to identify each specific question 
posed by the Notice of Inquiry that their discussion addresses and to 
use appropriate headings. Additional issues the commentors wish to 
raise should be identified separately. The commenters should double 
space their comments.
    28. Comments may be filed on paper or electronically via the 
eFiling link on the Commission's Web site at https://www.ferc.gov. The 
Commission accepts most standard word processing formats and commentors 
may attach additional files with supporting information in certain 
other file formats. Commentors filing electronically do not need to 
make a paper filing. Commenters that are not able to file comments 
electronically must send an original and 14 copies of their comments 
to: Federal Energy Regulatory Commission, Secretary of the Commission, 
888 First Street, NE., Washington, DC 20426.
    29. 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 are not required to 
serve copies of their comments on other commenters.

IV. Document Availability

    30. 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 (https://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.
    31. From the Commission's Home Page on the Internet, this 
information is available in the Commission's document management 
system, 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) in the docket number field.
    32. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours. For assistance, please contact 
the Commission's Online Support at 1-866-208-3676 (toll free) or 202-
502-6652 (e-mail at FERCOnlineSupport@ferc.gov or the Public Reference 
Room at 202-502-8371, TTY 202-502-8659 (e-mail at 
public.referenceroom@ferc.gov).

    By direction of the Commission.
 Nathaniel J. Davis, Sr.,
 Acting Deputy Secretary.
 [FR Doc. E7-19386 Filed 9-28-07; 8:45 am]
BILLING CODE 6717-01-P
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