Revisions to Procedural Regulations Governing Transportation by Intrastate Pipelines, 45850-45863 [2013-17822]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 78, Number 146 (Tuesday, July 30, 2013)]
[Rules and Regulations]
[Pages 45850-45863]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-17822]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM12-17-000; Order No. 781]


Revisions to Procedural Regulations Governing Transportation by 
Intrastate Pipelines

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: In this Final Rule, the Federal Energy Regulatory Commission 
amends its regulations to provide optional notice procedures for 
processing rate filings by those natural gas pipelines that fall under 
the Commission's jurisdiction pursuant to the Natural Gas Policy Act of 
1978 or the Natural Gas Act. The rule results in regulatory certainty 
and a reduction of regulatory burdens.

DATES: This rule is effective September 30, 2013.

FOR FURTHER INFORMATION CONTACT: 
David Tishman (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, (202) 502-8515, David.Tishman@ferc.gov.
James Sarikas (Technical Information), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-6831, James.Sarikas@ferc.gov.

SUPPLEMENTARY INFORMATION: The Final Rule generally adopts the 
regulations proposed in the October 18, 2012, Notice of Proposed 
Rulemaking, published November 6, 2012, at 77 FR 66568, but revises 
that proposal in two respects. First, the Final Rule revises the 
Commission's periodic rate review requirement policy to allow 
intrastate pipelines with unchanged state-based rates to meet the 
requirement by certifying that the state-approved rates continue to 
satisfy the requirements of the Commission's regulations for using a 
state-based rate. Second, the Final Rule extends the deadline for 
interventions and initial comments to 21 days after the date of the 
filing or such other date established by the Secretary of the 
Commission. The Final Rule also makes technical corrections to the 
proposed rules.

144 FERC ] 61,034

Final Rule

Table of Contents

 
                                                               Paragraph
                                                                 Nos.
 
I. Background...............................................           2
    A. The NOPR.............................................           9
    B. Comments.............................................          15
II. Whether To Adopt Optional Notice Procedures.............          16
    A. The NOPR.............................................          16
    B. Comments.............................................          17
    C. Commission Determination.............................          23
III. Time Periods Allowed To Intervene and Protest in a Sec.          30
   284.123(g) Proceeding....................................
    A. The NOPR.............................................          30
    B. Comments.............................................          31
    C. Commission Determination.............................          37
IV. Procedures for Resolving Contested Cases................          41
    A. The NOPR.............................................          41
    B. Comments.............................................          42
    C. Commission Determination.............................          44
V. Ex Parte Rules...........................................          45
    A. The NOPR.............................................          45
    B. Comments.............................................          46
    C. Commission Determination.............................          47
VI. Market-Based Rates Which Must Be Revised to Cost-Based            48
 Rates......................................................
    A. Comments.............................................          48
    B. Commission Determination.............................          49
VII. Periodic Rate Review...................................          50
    A. The NOPR.............................................          50
    B. Comments.............................................          52
    C. Commission Determination.............................          56

[[Page 45851]]

 
VIII. Miscellaneous.........................................          65
    A. Section 284.123(g)(8)................................          65
    1. The NOPR.............................................          65
    2. Comments.............................................          66
    3. Commission Determination.............................          68
    B. Section 284.123(g)(4)................................          70
    1. The NOPR.............................................          70
    2. Comments.............................................          71
    3. Commission Determination.............................          72
    C. Clarifications.......................................          73
IX. Information Collection Statement........................          74
    A. The NOPR.............................................          74
    B. Comments.............................................          77
    C. Commission Determination.............................          78
X. Environmental Analysis...................................          83
XI. Regulatory Flexibility Act..............................          84
XII. Document Availability..................................          86
XIII. Effective Date and Congressional Notification.........          89
 

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

    (Issued July 18, 2013.)

    1. In this Final Rule, the Commission revises its Part 284 
regulations governing open access transportation service to include 
optional notice procedures which intrastate pipelines may elect to use 
when filing proposed rates or operating conditions pursuant to Sec.  
284.123 of the Commission's regulations.\1\ The revised procedures are 
intended to result in regulatory certainty and a reduction of 
regulatory burdens on intrastate pipelines. The Final Rule generally 
adopts the regulations proposed in the Notice of Proposed 
Rulemaking.\2\ However, the Final Rule revises the Commission's 
periodic rate review requirement policy to allow intrastate pipelines 
with unchanged state-approved rates to meet the periodic rate review 
requirement by certifying that their state-based rates continue to 
satisfy the requirements of Sec.  284.123(b)(1) of the Commission's 
regulations for using state-based rates. The Final Rule also extends 
the deadline for interventions and initial comments to 21 days after 
the date of a filing under the optional notice procedures or such other 
date established by the Secretary of the Commission. The Commission 
clarifies that the optional notice procedures are not available for 
market-based rate filings by intrastate pipelines, i.e., seeking 
approval for market-based rates pursuant to Sec.  284.503, or Hinshaw 
pipelines seeking approval of a blanket certificate and initial rates 
pursuant to Sec.  284.224. The Final Rule also makes technical 
corrections to the proposed rules.
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    \1\ 18 CFR 284.123 (2012).
    \2\ Revisions to Procedural Regulations Governing Transportation 
by Intrastate Pipelines, 77 FR 66568 (Nov. 6, 2012), FERC Stats. and 
Regs. ] 32,695 (2012) (NOPR).
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I. Background

    2. Section 284.123 applies to filings by: (1) Intrastate pipelines 
providing interstate services pursuant to section 311 of the Natural 
Gas Policy Act of 1978 (NGPA) \3\ and (2) Hinshaw \4\ pipelines 
providing interstate services subject to the Commission's Natural Gas 
Act (NGA) jurisdiction pursuant to blanket certificates issued under 
Sec.  284.224 of the Commission's regulations.\5\ NGPA section 311 
authorizes the Commission to allow intrastate pipelines to transport 
gas ``on behalf of'' interstate pipelines or local distribution 
companies served by interstate pipelines ``under such terms and 
conditions as the Commission may prescribe.'' \6\ NGPA section 
601(a)(2) exempts transportation service authorized under NGPA section 
311 from the Commission's NGA jurisdiction. Shortly after the adoption 
of the NGPA, the Commission authorized Hinshaw pipelines to apply for 
NGA section 7 certificates authorizing them to transport gas in 
interstate commerce in the same manner as section 311 pipelines may do 
under NGPA section 311.\7\
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    \3\ 15 U.S.C. 3372.
    \4\ Section 1(c) of the NGA exempts from the Commission's NGA 
jurisdiction 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) (ANR v. 
FERC) (briefly summarizing the history of the Hinshaw exemption).
    \5\ 18 CFR 284.224 (2012).
    \6\ 15 U.S.C. 3371(c).
    \7\ 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 30,824-825 (1980).
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    3. Subpart C of the Commission's Part 284 open access regulations 
(18 CFR 284.121-126 (2012)) implements the provisions of NGPA section 
311 concerning transportation by intrastate pipelines. NGPA section 311 
provides that the rates of intrastate pipelines performing 
transportation service under the NGPA shall be fair and equitable. 
Section 284.123 of the regulations provides procedures for section 311 
and Hinshaw pipelines to establish fair and equitable rates for 
interstate services.
    4. Section 284.123(b) allows intrastate pipelines an election of 
the methodology upon which to base their rates for interstate services. 
Section 284.123(b)(1) permits an intrastate pipeline to elect to base 
its rates on the methodology used by the appropriate state regulatory 
agency (1) to design rates to recover transportation or other relevant 
costs included in a then effective firm sales rate for city-gate 
service on file with the state agency; or (2) to determine the 
allowance permitted by the state agency to be included in a natural gas 
distributor's rates for city-gate natural gas service. Section 
284.123(b)(1) also permits an intrastate pipeline to use the rates 
contained in one of its then effective transportation rate schedules 
for intrastate service on file with the appropriate state regulatory 
agency which the intrastate pipeline determines covers service 
comparable to service under Subpart C of Part 284.
    5. If the intrastate pipeline does not make an election under 
paragraph (b)(1) of Sec.  284.123, Sec.  284.123(b)(2) requires

[[Page 45852]]

that it ``apply for Commission approval, by order, of the proposed 
rates and charges'' pursuant to the procedures in that paragraph. 
Section 284.123(b)(2)(i) provides for the pipeline to file a petition 
for approval of the proposed rates and charges, as well as information 
showing the proposed rates and charges are fair and equitable. Upon 
filing the petition for approval, the intrastate pipeline is permitted 
to commence the transportation service and charge and collect the 
proposed rate, subject to refund. Section 284.123(b)(2)(ii) provides 
that the rate proposed in the application will be deemed to be fair and 
equitable and not in excess of an amount which interstate pipelines 
would be permitted to charge for providing similar transportation 
service, unless within the 150-day period after the date on which the 
Commission received a filed application, the Commission either extends 
the time for action, or institutes a proceeding in which all interested 
parties will be afforded an opportunity for written comments and for 
the oral presentation of views, data, and arguments. The Commission has 
extended this 150-day period when necessary, for example to allow 
settlement in contested proceedings or initiate proceedings in complex 
cases.
    6. Section 284.123(e) requires that, within thirty days of 
commencement of a new service, any intrastate pipeline that engages in 
transportation arrangements under Subpart C of Part 284 must file with 
the Commission a statement that includes the pipeline's interstate 
rates, the rate election made pursuant to Sec.  284.123(b) of that 
section, and a description of how the pipeline will engage in these 
transportation arrangements, including operating conditions, such as 
gas quality standards and the creditworthiness of the shipper. This 
statement is generally referred to as the pipeline's ``Statement of 
Operating Conditions'' (SOC). Section 284.123(e) also requires that, if 
the pipeline changes its operations, rates, or rate election, it must 
amend the SOC and file such amendments no later than thirty days after 
commencement of the change in operations or the change in rate 
election.
    7. As part of its regulation of section 311 and Hinshaw pipelines, 
the Commission has a policy of requiring a review of the rates of both 
section 311 and Hinshaw pipelines every five years. While this periodic 
rate review requirement is not part of the Commission's regulations, 
the Commission has consistently imposed that requirement in its orders 
approving each rate filing by an intrastate pipeline. In Order No. 735, 
the Commission modified its previous triennial rate review policy in 
order to decrease the frequency of review from three to five years from 
the date the approved rates took effect.\8\ The Commission imposes this 
requirement, both when the intrastate pipeline has chosen to elect a 
state-based rate pursuant to Sec.  284.123(b)(1) or has proposed a rate 
for a Commission-approved rate pursuant to Sec.  284.123(b)(2).\9\
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    \8\ Contract Reporting Requirements of Intrastate Natural Gas 
Companies, Order No. 735, 75 Fed. Reg. 29,404 (May 26, 2010), FERC 
Stats. & Regs. ] 31,310, at P 96 (2010) (Order No. 735), order on 
reh'g, Order No. 735-A, 75 Fed. Reg. 80,685 (Dec. 23, 2010), FERC 
Stats. & Regs. ] 31,318 (2010).
    \9\ Order No. 735, FERC Stats. & Regs. ] 31,310 at P 92 and 
cases cited.
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    8. Finally, currently, a request to withdraw a filing must be filed 
under the Commission's general Rules of Practice and Procedure.

A. The NOPR

    9. On October 18, 2012, the Commission issued the NOPR, in which it 
proposed to add a new section 284.123(g) to its regulations to provide 
optional notice procedures for processing rate filings by section 311 
and Hinshaw pipelines. The Commission proposed that an intrastate 
pipeline may elect to use these procedures for approval of a filing 
pursuant to Sec.  284.123 of the Commission's regulations. The 
Commission proposed that, under this procedure, the intrastate 
pipeline's filing would be approved without any order of the 
Commission, if the filing is not protested within a specified period 
after notice of the filing or if any protests are resolved during a 
reconciliation period.
    10. Specifically, the optional notice procedure as proposed in the 
NOPR would operate as follows: Proposed Sec.  284.123(g)(3) provided 
that, within ten days after a filing by an intrastate pipeline pursuant 
to the optional notice procedure, the Secretary of the Commission would 
issue a notice of the filing, which would be published in the Federal 
Register. That notice would provide a deadline for interventions and 
initial comments fourteen days after the date of the filing, or such 
other date established by the Secretary. It would also provide a 
separate deadline for final comments and protests sixty days after the 
date of the filing or such other date established by the Secretary. As 
proposed, any person or the Commission's staff is permitted to file a 
protest prior to the 60-day protest deadline. If no protest is filed 
within the time allowed, the filing would be deemed approved without a 
Commission order, upon expiration of the time for filing protests, 
unless the intrastate pipeline has withdrawn, amended, or modified its 
filing or the filing is rejected prior to that date.
    11. If a protest is filed, proposed Sec.  284.123(g)(5) allows a 
reconciliation period for negotiations in a structured process to 
promote settlement of contested cases. Specifically, this section would 
permit the intrastate pipeline, the person who filed the protest in 
accordance with proposed Sec.  284.123(g)(4), any intervenors, and 
staff thirty days from the deadline for protests to the pipeline's 
filing to resolve the protest and to convene informal settlement 
conferences to assist in resolving the protest. If all protests to the 
filing are withdrawn pursuant to proposed paragraph (g)(6) by the end 
of the reconciliation period, the filing would be deemed approved. 
Alternatively, proposed paragraph (g)(7) permits the pipeline to amend 
or modify a tariff record in order to resolve concerns raised in an 
initial comment or a protest. Proposed paragraph (g)(7) provides that 
such a filing will toll the notice periods established under paragraph 
(g)(3) of this section for the original filing, and the Secretary of 
the Commission will issue a notice establishing new deadlines for 
comments and protests for the entire filing pursuant to paragraph 
(g)(3). The intrastate pipeline may request a deadline for protests 
less than 60 days after the date of the filing. If there are no 
protests to the amendment or modification and any protests to the 
entire filing which have been filed are withdrawn, the amended filing 
would be deemed approved as of the day after the new deadline for 
protests established by the Secretary.
    12. If a filing is still contested after the above procedures are 
completed, the filing would not be deemed approved and, within sixty 
days from the deadline for filing protests, the Commission would 
establish procedures to resolve the proceeding. The 150-day period in 
existing Sec.  284.123(b)(2)(ii) under which filings are deemed 
approved unless the Commission acts within that period does not apply 
to filings pursuant to the new notice procedures.
    13. The Commission also proposed in Sec.  284.123(g)(9) to apply 
the Commission's existing periodic rate review policy to rates approved 
under the optional notice procedures. Therefore, proposed Sec.  
284.123(g)(9) requires that a NGPA section 311 intrastate pipeline 
whose rates are approved under the optional notice procedures file an 
application for rate

[[Page 45853]]

approval under Sec.  284.123 on or before the date five years following 
the date it filed the application for approval of the rates pursuant to 
Sec.  284.123(g). Similarly, a Hinshaw pipeline whose rates are deemed 
approved under Sec.  284.123(g) would be required to file either (1) 
cost and throughput data sufficient to allow the Commission to 
determine whether any change to the pipeline's rates should be ordered 
pursuant to section 5 of the Natural Gas Act or (2) a petition for rate 
approval pursuant to Sec.  284.123, on or before the date five years 
following the date it filed the application for approval of rates 
pursuant to Sec.  284.123(g).\10\
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    \10\ The courts have held that the Commission cannot require 
interstate pipelines subject to its NGA jurisdiction to make new 
rate filings under NGA section 4. Public Service Commission of New 
York v. FERC, 866 F.2d 487 (D.C. Cir. 1989). Consumers Energy Co. v. 
FERC, 226 F.3d 777 (6th Cir. 2000). Because the Commission regulates 
interstate services performed by Hinshaw pipelines under the NGA, 
the Commission gives them the option of filing a cost and revenue 
study every five years, instead of a new petition for rate approval. 
Consumers Energy Co., 94 FERC ] 61,287 (2001).
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    14. Finally, the Commission proposed in Sec.  284.123(h) to codify 
the procedures for section 311 and Hinshaw pipelines to withdraw any 
filing under Sec.  284.123 in its entirety prior to its approval, 
including filings made under the existing procedures in Sec.  284.123. 
Section 284.123(h)(2) would make the pipeline's withdrawal of its 
filing effective at the end of 15 days from the date of filing the 
withdrawal motion, if no opposition to the motion is filed within that 
period and the Commission does not issue an order disallowing the 
motion. Proposed Sec.  284.123(h)(1) would require the pipeline to 
acknowledge that any amounts collected subject to refund in excess of 
the rates authorized by the Commission will be refunded with interest 
and a refund report will be filed. The refunds must be made within 
sixty days of the date the withdrawal motion becomes effective. A 
shipper would have 15 days to respond to the pipeline's filing.

B. Comments

    15. Comments on the NOPR were due on December 6, 2012. Thirteen 
parties filed comments.\11\ In general, most commenters support the 
Commission's efforts to increase regulatory certainty and reduce 
regulatory burdens. However, some commenters either oppose the rule or 
request that the Commission modify or clarify the proposal. The 
comments are discussed below in the context of the relevant aspect of 
this Final Rule.
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    \11\ Comments were filed by Independent Petroleum Association of 
America (IPAA); American Gas Association (AGA); Duke Energy Ohio, 
Inc. and Duke Energy Kentucky, Inc. (Duke); The East Ohio Gas 
Company d/b/a Dominion East Ohio and Hope Gas Inc. d/b/a Dominion 
Hope (Dominion); Texas Pipeline Association (TPA); MGTC Inc. (MGTC); 
Enstor Operating Company, LLC (Enstor); Cranberry Pipeline 
Corporation (Cranberry); Calpine Corporation (Calpine); Apache 
Corporation, BP America Production Company, BP Energy Company, Noble 
Energy, Inc., and Occidental Energy Marketing, Inc. (Indicated 
Shippers); BG Energy Merchants, LLC and Marathon Oil Company 
(Indicated Marketers); Oklahoma Independent Petroleum Association 
(OIPA); and Dawn Hearty.
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II. Whether To Adopt Optional Notice Procedures

A. The NOPR

    16. In the NOPR, the Commission explained that it had proposed the 
new optional notice procedures in an effort to reduce burdens on 
regulated entities and provide regulatory certainty. The Commission 
stated that this proposal permitting a filing to be deemed approved 
without a Commission order under the conditions described above was 
part of its commitment to continually review its regulations and 
streamline or eliminate requirements that impose an unnecessary burden 
on regulated entities. The Commission further stated that it believes 
that these notice procedures would provide an expedited and less 
burdensome method of processing filings by section 311 and Hinshaw 
pipelines which present few, if any, contested issues. The Commission 
noted that many of the intrastate pipeline companies filing rates and/
or statements of operating conditions pursuant to Sec.  284.123 are 
small and have few interstate shippers. The Commission further noted 
that discount rate agreements are common, with the result that the 
pipeline often performs most of its interstate services at rates which 
are discounted substantially below its maximum rates for such services. 
The Commission stated that most Sec.  284.123 filings are not protested 
by any shipper and, if protested, those protests often raise issues 
which are relatively amenable to settlement.

B. Comments

    17. The commenters generally support adoption of the optional 
notice procedures, although several request clarifications or 
modifications to the regulations proposed in the NOPR. Generally, the 
commenters supporting the proposal, including AGA, MGTC, TPA, Dominion, 
Duke, Calpine, and Cranberry, support the proposal due to the expedited 
and less burdensome procedure which they believe will benefit 
intrastate pipelines. TPA states that it is a more rapid process than 
the existing procedures and will achieve certainty earlier at a reduced 
cost to the pipeline, shippers and the Commission. Dominion asserts 
that the proposal will expedite the regulatory filing and approval 
process in uncontested cases while at the same time ensuring that any 
contested matter receives full consideration and review by the 
Commission before a final determination is made.
    18. However, Indicated Shippers, Indicated Marketers, and OIPA 
oppose the adoption of the proposed optional notice procedures. 
Indicated Shippers, Indicated Marketers, and OIPA argue that the 
proposed optional notice procedures improperly reduce or eliminate the 
Commission's statutory responsibilities and the independent staff 
review that is required for filings pursuant to Sec.  284.123 of the 
Commission's regulations. Indicated Shippers argues that the proposed 
rule would, in fact, impermissibly permit automatic implementation of 
rates.
    19. Indicated Marketers contends that, while the volume of protests 
may be small, this likely results from the section 311 market structure 
and the shippers' difficulty accessing capacity on large section 311 
intrastate pipelines. Indicated Marketers argues\12\ that the increase 
of large section 311 intrastate pipelines requires more oversight, 
especially with the increasing supply of shale gas.\13\
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    \12\ Indicated Marketers at 9-13.
    \13\ Indicated Marketers cites the Notice of Inquiry (NOI) 
proceeding in Docket No. RM11-1-000, Capacity Transfers on 
Intrastate Natural Gas Pipelines, FERC Stats. & Regs. ] 35,567 
(2010) (cross-referenced at 133 FERC ] 61,065 (2010)), which 
requested comments on whether and how holders of firm capacity on 
intrastate pipelines should be permitted to allow others to make use 
of their firm interstate capacity.
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    20. Indicated Marketers and OIPA argue that the proposed regulation 
shifts the burden of proof to shippers. Indicated Marketers contends 
that this proposal: (1) Lacks any provision for parties to conduct 
discovery; (2) fails to consider the fact that a shipper's commercial 
concerns may prevent it from filing a protest; and (3) fails to protect 
prospective shippers. Finally, Indicated Marketers argues that the 
Commission's expectation that all matters can be resolved through 
negotiations is unreasonable. Indicated Marketers contends that the 
changes to terms and conditions of service of intrastate pipelines (1) 
may be less likely to be resolved and involve policy issues or 
operational changes that require the Commission resolution and (2) may 
be implemented immediately and are not required to be filed until

[[Page 45854]]

thirty days after the commencement of service.\14\
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    \14\ (Citing 18 CFR 284.123(e) (2012)).
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    21. OIPA argues that the optional notice procedures together with 
lengthening of the periodic rate review to 5 years seem to be tilting 
the playing field in favor of intrastate pipelines.
    22. While AGA supports adoption of the optional notice procedures, 
it requests that the Commission clarify that those procedures will not 
apply to rate filings seeking authorization to charge market-based 
rates.

C. Commission Determination

    23. The Commission finds that the optional notice procedures, as 
modified herein, will provide an expedited and less burdensome method 
of processing the significant percentage of filings by section 311 and 
Hinshaw pipelines which present few, if any, contested issues. This 
will reduce burdens on section 311 and Hinshaw pipelines, particularly 
those performing relatively little interstate service, and their 
customers. It will also allow the Commission to devote more resources 
to cases where significant issues are raised.
    24. The Commission rejects commenters' assertions that these 
procedural revisions would reduce or eliminate staff review of the 
subject filings or violate the Commission's statutory and regulatory 
obligations to ensure fair and equitable rates, terms and conditions of 
service. Contrary to the arguments of the commenters regarding the 
proposed opportunity to review and protest filings and asserted changes 
in the characteristics of intrastate pipelines and the natural gas 
markets, the Commission finds that nothing in the proposed rule, as 
modified herein, reduces the necessary review by the Commission or the 
opportunity for participation by shippers.\15\ Staff will continue to 
thoroughly review intrastate pipeline filings under the revised 
procedures in the same manner as it reviews such filings under the 
existing procedures. Section 284.123(g)(4)(i) permits the Commission's 
staff to file a protest to an optional notice filing, even if no party 
files a protest.\16\ In addition, there will be a full opportunity for 
interested parties to participate in filings pursuant to Sec.  
284.123(g). In fact, in some respects, shippers will have a greater 
ability to participate and contest the intrastate pipeline's filing. 
Section 284.123(g)(3), as revised below, gives shippers 21 days to 
submit initial comments and a 60-day period for final protests. The 
optional notice procedures approved in the Final Rule, including the 
30-day reconciliation period after final protests are filed, provides a 
framework to resolve contested issues by agreement between the parties 
in an expeditious manner. If, however, a shipper continues to contest a 
filing after the reconciliation period, Sec.  284.123(g)(8) provides 
that the filing will not be deemed approved, and instead the Commission 
will establish additional procedures to consider the contested issues.
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    \15\ OIPA argues that while, as the NOPR recognizes (citing 
NOPR, FERC Stats. & Regs. ] 32,695 at P 9) that discount rates from 
the maximum rate are common for the intrastate pipelines, those 
discounts are charged to the cost-of-service in many instances and, 
therefore, maximum rate customers pay a higher maximum rate. 
However, the Commission's statement was made in the context of its 
discussion of the lack of contested issues in and protests to 
filings pursuant to section 284.123. Further, in any case, the 
approval without a Commission order under the optional notice 
procedure is limited to uncontested filings and, therefore, 
customers paying the maximum rate may protest a filing and prevent 
such approval.
    \16\ Indicated Marketers argues that there is little precedent 
for the ability of Commission staff to protest set forth in section 
284.123(g)(4)(i). However, the Commission staff's use of protests in 
blanket certificate proceedings pursuant to a similar provision in 
section 157.205(e) of the prior notice procedures provides a 
precedent. The Commission believes that the ability of Commission 
staff to protest filings will be used to effectively assist the 
Commission in implementing its responsibilities under section 311.
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    25. Indicated Shippers argues that the proposed rule would 
impermissibly permit ``automatic'' implementation of rates\17\ through 
light-handed regulation,\18\ including permitting market-based rates 
without the required finding of a lack of market power. Similarly, 
Indicated Marketers\19\ and OIPA argue that the burden of proof has 
been shifted to shippers. They assert that the proposed rules lack 
discovery procedures and ignore the fact a shipper's commercial 
concerns may prevent it from filing a protest. They further assert that 
the proposed rules also ignore prospective shippers.
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    \17\ Indicated Shippers contends that the Commission must 
``provide a reasonable justification for excluding'' an intrastate 
pipeline from a requirement that binds interstate pipelines and that 
the proposed rules would set a bad regulatory precedent. Indicated 
Shippers at 3, quoting ANR v. FERC, 71 F.3d 897, 902. The quoted 
language is directed to the Commission's failure provide a 
reasonable justification for rejection of objections by an 
intervenor in that case. However, the proposed optional notice 
procedure provides a full opportunity to present any objections by 
the intervenors or Commission staff and for appropriate resolution 
of any contested issues by the Commission.
    \18\ Indicated Shippers asserts that the proposed rules 
unnecessarily minimize regulatory oversight in conflict with the 
Commission's goal of fostering a national pipeline grid and the 
appropriate implementation of section 311 (citing EPGT Texas 
Pipeline, L.P., 99 FERC ] 61,295, at 62,252 (2002)). However, as 
explained in this order, the proposed rules do not minimize the 
Commission's regulatory oversight and this assertion is rejected as 
unsupported.
    \19\ Indicated Marketers objects to the Commission's statement 
the proposed optional notice procedures would reduce regulatory 
burden similar to the prior notice procedures for interstate 
pipelines set forth in section 157.205 since it implies those 
procedures are applicable to the section 284.123 filings covered by 
these rules. However, the Commission's statement did not concern the 
applicability of the prior notice procedures to these section 
284.123 filings. The Commission was referring to its belief 
regarding the similar result of these procedures in reducing 
regulatory burdens. NOPR, FERC Stats. & Regs. ] 32,695 at P 10.
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    26. The Commission disagrees. The proposed rules only eliminate the 
need for a Commission order in the limited circumstance where filings 
are unopposed. This does not lessen, in any manner, the requirements 
for approval of filings pursuant to Sec.  284.123, and the pipeline 
will continue to have the burden of proof to support its proposed 
rates, terms and conditions. As described above, parties will continue 
to have a full opportunity to protest a Sec.  284.123 filing. With 
regard to discovery procedures, the existing rules do not permit 
parties to conduct discovery, unless a case is set for hearing before 
an Administrative Law Judge. However, the Commission staff does issue 
data requests to obtain needed information,\20\ and nothing in the 
proposed procedures would prevent the staff from continuing to issue 
such data requests, as needed.
---------------------------------------------------------------------------

    \20\ See, e.g., Peoples Gas Light and Coke Co., 118 FERC ] 
61,203 (2007); Crosstex LIG, LLC, 129 FERC ] 61,284 (2009).
---------------------------------------------------------------------------

    27. Further, as provided in Sec.  284.123(g)(1), the optional 
notice procedures are applicable only to filings seeking approval of 
rates, a statement of operating conditions, and any amendments thereto, 
pursuant to Sec.  284.123. The Commission's regulations require that 
intrastate pipelines seeking approval for market-based rates must do so 
pursuant to Sec.  284.503, and Hinshaw pipelines seeking approval of a 
blanket certificate and initial rates must do so pursuant to Sec.  
284.224. Therefore, the Commission clarifies the optional notice 
procedures are not available for market-based rate filings by 
intrastate pipelines or for blanket certificate applications by Hinshaw 
pipelines.
    28. Finally, Indicated Marketers argue that Commission's 
expectation that all matters may be resolved through negotiation is 
unreasonable.\21\ Indicated Marketers assert that terms and conditions 
of service may be less likely to be resolved than rates and may include 
policy issues which require resolution by the Commission. Indicated

[[Page 45855]]

Marketers further asserts that there is lack of protection for shippers 
because Sec.  284.123(e) of the Commission's regulations does not 
require intrastate pipelines to file changes to an SOC until 30 days 
after commencement of the change.
---------------------------------------------------------------------------

    \21\ Indicated Marketers at 16-17.
---------------------------------------------------------------------------

    29. The Commission does not believe that all contested issues under 
the proposed rules will be resolved through negotiations. While Sec.  
284.123(g)(5) designates a new structured 30-day reconciliation period 
after the deadline for filing protests to improve the opportunity to 
resolve any remaining contested issues, the Commission is required 
after the end of that period to establish procedures to resolve the 
proceeding when a contested filing has not been resolved within 60 days 
of the deadline for filing protests. The new procedures do not put the 
shipper at a greater disadvantage than the current procedures or reduce 
staff or Commission involvement and, in fact, they increase the 
opportunity for participation by both shippers and staff and to resolve 
contested issues in a new procedural framework. The Commission believes 
that specifying a thirty-day period reconciliation period will promote 
settlement of contested issues and increase the opportunity for the 
parties and the Commission staff to participate in the settlement 
process.

III. Time Periods Allowed To Intervene and Protest in a Sec.  
284.123(g) Proceeding

A. The NOPR

    30. The proposed procedures provide deadlines of fourteen days for 
interventions and initial comments, and sixty days for final comments 
and protests from the date of the filing of a pipeline's proposed rate 
or operating conditions or such other date established by the Secretary 
of the Commission.

B. Comments

    31. OIPA contends that the fourteen-day deadline for filing 
interventions and initial comments is too short in light of the ten-day 
period allowed for the Secretary to issue notice of a filing using the 
optional notice procedures. OIPA contends that it is extraordinarily 
difficult to discover and appropriately respond to an applicable rate 
filing within the four-day period between the ten-day period allowed to 
issue notices and the fourteen-day deadline for interventions and 
initial comments. As a result, OIPA contends, there will likely be more 
protests than the Commission anticipates.
    32. TPA, on the other hand, argues that the sixty-day deadline for 
final comments and protests is too long. It contends that the NOPR's 
sixty-day deadline for protests results in a protest period 
substantially longer than the fourteen-day period the Commission 
currently allows for protests to filings by intrastate pipelines. TPA 
states that the Commission provides no explanation why such an extended 
protest period is warranted under the new optional notice procedures. 
Although an extended period may be intended to allow additional time 
for resolution before the filing of a final protest, TPA is concerned 
that the process will result in a short protest within the proposed 
fourteen-day deadline for initial comments and a lengthy final protest 
at the sixty-day deadline. TPA asserts this aspect of the proposed 
procedures conflicts with the Commission's efforts to expedite 
regulatory certainty.
    33. TPA contends that a shorter protest period than the proposed 
sixty-day protest period will help the Commission achieve its goals of 
increasing regulatory certainty and reducing the regulatory burden. TPA 
further contends that protests in substantially more complex interstate 
rate and tariff cases are due within twelve days of the filing and that 
there is no reason why simpler filings cannot be analyzed in the same 
time period. TPA prefers a single fourteen-day protest period, 
consistent with the existing practice of allowing fourteen days for any 
interventions or protests, and it asserts this would allow for a longer 
reconciliation period that can be used to achieve resolution. However, 
if the existing time period is lengthened, TPA believes that a single 
intervention or a protest period of thirty days to be a reasonable 
balance under the circumstances.
    34. TPA argues that the proposed protest period with its two 
opportunities to protest will cause unnecessary delay and, therefore, 
should be consolidated into a single shorter period. TPA asserts that 
the Commission should consolidate these protest periods into a single 
period. TPA further asserts that a bifurcated protest period is 
unnecessary and has the potential to needlessly complicate the process. 
TPA further asserts that it is not aware of any other Commission 
regulation that allows a party two opportunities to protest, including 
the prior notice process under the existing blanket certificate 
regulations. TPA contends that a single shorter period would allow the 
reconciliation period to be increased, thus creating more time for the 
parties to resolve their differences which is more productive and 
ultimately will foster a more efficient administrative process.
    35. TPA also argues that to expedite the rate approval process, the 
Commission should revise the NOPR to allow pipelines the opportunity to 
request a shorter notice period if a protest has been resolved within 
the reconciliation period as a result of the pipeline's agreement to 
modify or amend the proposed rate filing.
    36. TPA contends that Sec.  284.123(g)(7) requires the Secretary of 
the Commission to establish new deadlines for comments and protests 
pursuant to paragraph (g)(3) when a filing has been amended or 
modified, but without making any distinction as to the basis for the 
proposed amendment or modification. TPA, therefore, suggests that if 
the rate filing has been amended or modified to resolve a protest, 
pipelines should be allowed to petition the Secretary for a shorter 
notice period under paragraph (g)(3) and additional language should be 
included in paragraph (g)(7) to afford the pipelines the flexibility to 
request a new shortened comment period.

C. Commission Determination

    37. The Commission rejects TPA's request to shorten the proposed 
60-day deadline for final protests, and therefore Sec.  284.123(g)(3) 
adopts the NOPR proposal to provide a 60-day deadline for final 
comments and protests to a filing under the optional notice procedures 
or such other date established by the Secretary of the Commission. 
However, in response to OIPA's comments regarding the time period 
allowed for interventions and initial comments, the Commission will 
revise the deadline for interventions and initial comments in Sec.  
284.123(g)(3) to allow a longer time period of 21 days for 
interventions and initial comments, or such other date established by 
the Secretary.
    38. Consistent with the NOPR, Sec.  284.123(g)(3), as adopted in 
this Final Rule, permits the Secretary a period of up to ten days in 
order to issue a notice of a filing under the optional notice 
procedures in the Federal Register. The Commission is permitting a 
period of up to ten days for noticing the filing, because Sec.  
284.123(g)(2) requires the Director of the Office of Energy Market 
Regulation to reject, within seven days of the date of filing, a filing 
which patently fails to comply with the requirements of Sec.  
284.123(e) or (f) without prejudice to the pipeline refiling a complete 
filing. Those two paragraphs describe the information intrastate 
pipelines must include in their filings and the electronic filing

[[Page 45856]]

requirements. As explained in the NOPR, immediate rejection of filings 
for failure to comply with these requirements should help streamline 
the processing of rate and other filings by intrastate pipelines by 
ensuring that filings must be complete before they are processed. The 
ten-day period for noticing a filing allows staff time to make an 
initial review of a filing to ensure that it complies with the 
Sec. Sec.  284.123(e) and (f) filing requirements before it is noticed. 
However, the Commission recognizes that the ten-day period for the 
Secretary to notice the filing in conjunction with a 14-day deadline 
for filing interventions and initial comments could leave insufficient 
time for an interested party to determine whether it has concerns with 
a filing. Extending the deadline for interventions and initial comments 
to 21 days should address this concern.
    39. The Commission finds that TPA's concerns about the 60-day 
period for filing final comments and protests are misplaced. TPA's 
assertions characterizing the proposed procedures as providing two 
deadlines for filing protests are mistaken. While a protest may be 
filed at any time during the period allowed for protests to the filing, 
there is only one sixty-day deadline for filing protests. The initial 
period allows intervenors to file initial comments to express their 
concerns about a filing without filing a formal protest. As TPA 
recognizes, the Commission proposed the sixty-day period before final 
protests are due in order to provide an opportunity for the applicant 
and potential protestors to resolve concerns raised in initial comments 
and any other questions prior to the protest deadline and thereby avoid 
the filing of any protest.\22\ That would avoid the need for a 
reconciliation period after the deadline for filing protests and thus 
help expedite approval of the pipeline's filing. As explained in the 
NOPR, the Commission continues to believe that Sec.  284.123(g), 
including the 60-day period before final protests are due, will create 
an improved framework in which to achieve settlement of contested 
cases.\23\ Further, a longer time period allowed to protest a filing is 
appropriate in view of the approval of filings which are not protested 
in the proposed rules.
---------------------------------------------------------------------------

    \22\ TPA at 6.
    \23\ NOPR, FERC Stats. & Regs. ] 32,695 at P 10.
---------------------------------------------------------------------------

    40. If an intrastate pipeline amends its filing in order to resolve 
concerns raised either in an initial comment or a final protest, 
paragraph (g)(7) requires the Secretary of the Commission to establish 
new deadlines for comments and protests pursuant to paragraph (g)(3), 
and paragraph (g)(3) allows the Secretary to provide for different 
deadlines than the deadlines ordinarily provided for in that section. 
Therefore, the intrastate pipeline or intervenors may petition the 
Secretary of the Commission pursuant to paragraph (g)(3) to allow a 
shorter time period for the filing of comments and protest on 
amendments to tariff records agreed to by the parties in order to 
resolve concerns raised in initial comments or a final protest. 
Accordingly, TPA's request for revision of paragraph (g)(7) to 
expressly permit such shorter deadlines is unnecessary.

IV. Procedures for Resolving Contested Cases

A. The NOPR

    41. If a protest is not resolved within the thirty-day 
reconciliation period after the deadline for filing final protests, the 
pipeline's filing is not deemed approved under the optional notice 
procedures, and the Commission must issue an order resolving the 
contested issues with respect to the pipeline's filing. Section 
284.123(g)(5) accordingly provides that, if a protest is not withdrawn 
or dismissed by the end of the reconciliation period, the Commission 
will ``establish procedures to resolve the proceeding'' within sixty 
days from the deadline to file protests.

B. Comments

    42. TPA argues that proposed Sec.  284.123(g)(5) may unnecessarily 
delay the rate application process and that to streamline the 
resolution of protests, the Commission should include a specific 
procedural method to resolve the protests and encourages the Commission 
to use the staff panel procedures allowed by Sec.  284.123(b)(2)(ii) of 
the Commission's regulations.\24\ Under that procedure, the Director of 
the Office of Energy Market Regulation designates a three-member staff 
panel to conduct an informal advisory proceeding in which all 
interested parties are afforded an opportunity to submit written 
comments and to make an oral presentation of views, data and arguments. 
The Commission then issues an order on the pipeline's filing based on 
the record developed in the staff panel proceeding.
---------------------------------------------------------------------------

    \24\ Section 284.123(b)(2)(ii) allows the Commission to 
institute ``a proceeding in which all interested parties will be 
afforded an opportunity for written comments and for oral 
presentation of views, data and arguments.'' The Commission has 
generally done this through the staff panel procedures described 
above. However, section 284.123(b)(2)(ii) does not expressly refer 
to, or require, those procedures.
---------------------------------------------------------------------------

    43. TPA asserts that a staff panel procedure is familiar and 
affords parties an adequate opportunity to present oral views, data and 
arguments before Commission staff. TPA further contends that the staff 
panel procedures will increase regulatory certainty and allow 
elimination of the sixty-day period referred to in proposed Sec.  
284.123(g)(5).

C. Commission Determination

    44. The Commission denies TPA's request to revise the proposed 
procedures to require the use of a staff panel process in cases where 
the pipeline's filing is not deemed approved under the prior notice 
procedures. The Commission believes that the proposed ability to 
determine the method of resolution of the contested issues based on the 
unique circumstances of each case will allow resolution of the cases in 
the most appropriate and expeditious manner. With respect to TPA's 
request to require that staff panel procedures be used in every case 
where the pipeline's filing is not deemed approved without an order, 
the Commission believes that use of these procedures may not be the 
most appropriate procedure to resolve every case. In some cases, it may 
be possible to resolve contested issues based solely on written 
pleadings without the need for any oral presentation of views, data, 
and argument as permitted under staff panel proceedings. In addition, 
while the Commission does not ordinarily establish formal evidentiary 
hearings before an Administration Law Judge in intrastate pipeline 
cases, the Commission has in rare cases determined that such a hearing, 
including the opportunity for the parties to conduct discovery, is 
necessary.\25\ Therefore, requiring initiation of a staff panel in any 
given case may not necessarily be the best method to expeditiously 
resolve the contested issues and the Commission will not by rule 
restrict its ability to determine the most appropriate procedures for 
resolution of contested cases in each case based on the particular 
circumstances of that case.
---------------------------------------------------------------------------

    \25\ Consumers Power Co., 120 FERC ] 61,252 (2007).
---------------------------------------------------------------------------

V. Ex Parte Rules

A. The NOPR

    45. In the NOPR, the Commission stated that once a proceeding filed 
pursuant to section 284.123(g) is contested, the Commission's ex parte

[[Page 45857]]

rules governing off-the-record communications \26\ will be applicable.
---------------------------------------------------------------------------

    \26\ 18 CFR 385.2201 (2012).
---------------------------------------------------------------------------

B. Comments

    46. TPA contends that the Commission must modify the application of 
its ex parte rules in the Reconciliation Period to ensure that the 
ability to settle cases is not impaired. TPA requests that, in the 
Reconciliation Period, the ex parte rules would not be applicable to 
any communication made as part of a bona fide effort to resolve the 
protest, subject to two limitations. First, notice of the fact of the 
communication, but not its contents, would be required to be provided 
to other parties within two business days. TPA asserts that this 
limitation would allow the staff to continue to serve its role in 
facilitating settlements and discuss issues raised only by staff 
without running afoul of the spirit of the ex parte rules. Second, if a 
staff panel is established, the Commission would make clear in the 
order designating the staff panel members that hence forth they are 
decisional employees and the ex parte rules apply from that date to 
those individuals. TPA asserts that such modifications will not 
undermine the appropriate purpose of the ex parte rules. TPA states 
that it is open to other methods of facilitating the settlement 
process, and its goal is to avoid having the ex parte rules serve as an 
impediment to settlement.

C. Commission Determination

    47. The Commission believes that TPA's request to modify the 
Commission's ex parte rules to limit their application during the 
processing of cases under the optional notice procedures conflicts both 
with the appropriate application and the purpose of those rules and, 
therefore the request is denied. The ex parte rules are designed to 
ensure ``the integrity and fairness of the Commission's decisional 
process'' \27\ and apply whenever a case is contested. The ex parte 
rules have two primary purposes: (1) A hearing is not fair when one 
party has private access to the decision maker and can present evidence 
or argument that other parties have no opportunity to rebut; and (2) 
reliance on ``secret'' evidence may foreclose meaningful judicial 
review.\28\ TPA's requested modification would conflict with these 
purposes. While TPA asserts that application of the ex parte rules 
could impede settlement, as the Commission pointed out in Order No. 
607, the ex parte rules as clarified were not intended to reduce 
communications and, in fact, should improve the meaningful dialogue 
that is necessary for fair and informed decision making.\29\ In fact, 
the ex parte rules are currently being applied in section 311 
proceedings utilizing methods such as Commission staff data requests 
and conferences to provide communication to promote settlement 
resulting in resolution of the vast majority of contested issues. 
Therefore, TPA's request to modify the Commission's ex parte rules for 
the proposed proceedings where the proposed Reconciliation Period is 
applicable is denied as unsupported.\30\
---------------------------------------------------------------------------

    \27\ 18 CFR 385.2201(a) (2012).
    \28\ Regulations Governing Off-the-Record Communications, 63 FR 
51312 (Sept. 25, 1998), FERC Stats. and Regs. ] 32,534, at 33,501 
(1998).
    \29\ Regulations Governing Off-the-Record Communications, Order 
No. 607, 64 FR 51222 (Sept. 22, 1999) FERC Stats. & Regs. ] 31,079, 
at 30,880 (1999) (Order No. 607), order on reh'g, Order No. 607-A, 
65 FR 71247 (Nov. 30, 2000), FERC Stats. & Regs. ] 31,112 (2000).
    \30\ As TPA notes, under the ex parte rules, the Commission may 
modify the rules for a proceeding to the extent permitted by law. 
However, TPA's request to modify the ex parte rules at this time for 
every optional notice proceeding is denied as speculative and 
unsupported.
---------------------------------------------------------------------------

VI. Market-Based Rates Which Must Be Revised to Cost-Based Rates

A. Comments

    48. TPA argues that intrastate pipelines subject to market-based 
rates should be allowed to file under the optional notice procedures if 
the Commission subsequently determines the market-based rates for a 
service are no longer applicable after notice is given by the pipeline 
to the Commission of a significant change in market power status 
pursuant to Sec.  284.504(b) of the Commission's regulations. TPA 
contends that, if the Commission determines that the change in market 
power requires a cost-based rate to be set, the Commission should allow 
the company to utilize any of the options available under the 
Commission's regulations, including the optional notice procedures. TPA 
asserts that, given the existing reporting requirements applicable to 
entities with market-based rates, there is no need for any additional 
filing requirements.

B. Commission Determination

    49. When an intrastate pipeline must file for approval of cost-
based rates for a service for which market-based rates were authorized, 
under the circumstances described by TPA, the intrastate pipeline may 
file pursuant to paragraph (g) if it solely files for that approval 
pursuant to Sec.  284.123. However, the intrastate pipeline may be 
required to make such filing in conjunction with other provisions of 
the Commission's regulations, i.e., pursuant to the requirements of 
Sec. Sec.  284.503 and 284.504 related to its other services which are 
market-based. Under such circumstances, as explained above, optional 
notice procedures are limited to filings seeking approval pursuant to 
Sec.  284.123 and would not be available for such filings.

VII. Periodic Rate Review

A. The NOPR

    50. The NOPR proposed to include a five-year periodic rate review 
requirement in the optional notice procedures consistent with the 
Commission's policy of including such a requirement in each order 
approving a rate filing by a section 311 or Hinshaw pipeline. 
Accordingly, the proposed regulations included a requirement that a 
NGPA section 311 intrastate pipeline whose rates are deemed approved 
under the optional notice procedures file an application for rate 
approval under Sec.  284.123 on or before the date five years following 
the date it filed the application for approval pursuant to the optional 
notice procedures. Similarly, a Hinshaw pipeline would be required to 
file either (1) cost and throughput data sufficient to allow the 
Commission to determine whether any change to the pipeline's rates 
should be ordered pursuant to section 5 of the Natural Gas Act; or (2) 
a petition for rate approval pursuant to Sec.  284.123, on or before 
the date five years following the date it made the optional notice 
procedures filing.
    51. As described above, under Sec.  284.123(b), intrastate 
pipelines are afforded two basic methods to establish fair and 
equitable rates for section 311 service: (1) Using a rate based on, or 
on file with, the pipeline's state commission, as provided for under 
Sec.  284.123(b)(1); or (2) by applying to the Commission to set the 
rates by order, as provided for under Sec.  284.123(b)(2). The 
Commission's regulations define an appropriate state regulatory agency 
as one that sets ``rates and charges on a cost-of-service basis.'' The 
Commission has applied its five-year periodic rate review requirement 
on all section 311 and Hinshaw pipeline rates, regardless of which of 
the two basic rate approval methods were used.

B. Comments

    52. TPA argues that if a pipeline is using state-approved rates 
pursuant to Sec.  284.123(b)(1) and those rates have not changed during 
the five-year period, the Commission should only require confirmation 
that the pipeline's underlying state-approved rates remain

[[Page 45858]]

valid and allow these state-approved rates to qualify under the 
proposed optional notice procedures. TPA also requests that the 
Commission utilize this certification process even if an applicant does 
not use the proposed optional notice procedures. TPA requests that, in 
the case of a pipeline that wishes to continue to use its established, 
unchanged section 311 rates based on its state-approved rates, the 
Commission should only require confirmation that the pipeline's 
underlying state approved rates have not changed by adding the phrase 
``or a certification that a rate set under (b)(1) remains valid,'' to 
new paragraph (g)(9). TPA further requests that the Commission revise 
its periodic rate review policy for all such unchanged section 311 
state-approved rates even if an applicant does not use the proposed 
optional notice procedures.
    53. TPA also contends that the five-year period should be measured 
from the time the rate is approved, either by final Commission order or 
operation of law. TPA asserts that, in a contested case, the finally 
approved rate may be in effect for a significantly shorter period than 
five years and shippers are protected by the refund requirement of 
Sec.  284.123(b)(2)(ii), but that any settlement that requires a 
refiling requirement five years from the date of the original filing 
does not provide the pipeline with five years of rate certainty.
    54. TPA further argues that the satisfaction of the periodic review 
requirement by a cost and revenue study should not be limited to 
Hinshaw pipelines but also be applicable to all section 311 pipelines 
if no rate change is proposed. TPA asserts that section 311 rates are 
often deeply discounted and, in order to avoid needless rate change 
applications, pipelines with a rates established by the Commission that 
do not propose a rate change should be allowed the option to file a 
cost and revenue study. TPA further asserts that if the pipeline 
demonstrates that the costs of providing section 311 service exceed the 
revenues from that service that should end the matter. TPA contends 
that there is no reason not to allow the same cost and revenue study in 
lieu of a rate case for all the other section 311 entities. TPA further 
contends that the Commission has approved of interstate pipeline rate 
case settlements that require a cost and revenue study and that, after 
a cost and revenue study is noticed, if protested, the same procedures 
in the NOPR can be followed.
    55. Several other parties request clarification of the periodic 
rate review requirement. MGTC requests that the Commission clarify that 
the optional notice procedures under paragraph (g) may be used to meet 
the periodic rate review requirement. AGA requests that the Commission 
clarify that the approval of operating conditions or terms and 
conditions of service without changing rates will not be subject to the 
periodic rate review requirement. Finally, Enstor seeks clarification 
that the periodic rate review requirement in paragraph (g)(9) will not 
be applicable to market-based rates.

C. Commission Determination

    56. The Commission is modifying its periodic rate review policy 
with respect to rates based on those approved by the appropriate state 
regulatory agency for a comparable service consistent with Sec.  
284.123(b)(1) to permit section 311 and Hinshaw pipelines using state-
based rates to certify that those rates continue to meet the 
requirements of Sec.  284.123(b)(1), rather than filing a new rate 
petition or cost and revenue study. Paragraph (g)(9) of Sec.  284.123, 
as adopted by the Final Rule, reflects this revised policy. This change 
further reduces the regulatory burden on intrastate pipelines.
    57. The Commission finds that this change in its periodic rate 
review policy is consistent with our overall policy of permitting 
intrastate pipelines to base their rates on cost-based rates approved 
by their state regulatory agency. When an intrastate pipeline elects to 
use a state-approved rate, the Commission's examination of these Sec.  
284.123(b)(1) rate elections is limited to whether the rate meets the 
requirements of that section. Section 284.123(b)(1) permits an 
intrastate pipeline to elect to base its rates on the methodology used 
by the appropriate state regulatory agency (1) to design rates to 
recover transportation or other relevant costs included in a then 
effective firm sales rate for city-gate service on file with the state 
agency; or (2) to determine the allowance permitted by the state agency 
to be included in a natural gas distributor's rates for city-gate 
natural gas service. Section 284.123(b)(1) also permits an intrastate 
pipeline to use the rates contained in one of its then effective 
transportation rate schedules for intrastate service on file with the 
appropriate state regulatory agency which the intrastate pipeline 
determines covers service comparable to service under Subpart C of Part 
284.
    58. The Commission's analysis of whether the intrastate pipeline's 
state rate election under Sec.  284.123(b)(1) satisfies these 
requirements focuses on whether the state rate or rate methodology 
elected by the pipeline is for the appropriate city-gate service or a 
transportation service comparable to the interstate serviced to be 
provided by the intrastate pipeline. The Commission does not look 
behind the state regulatory agency's cost and revenue findings to 
determine whether they are reasonably supported. Rather, as part of the 
Commission's regulation of intrastate pipelines performing interstate 
service, the Commission defers to the cost and revenue factual findings 
of the state regulatory agency. By contrast, when the intrastate 
pipeline files a petition for rate approval under Sec.  284.123(b)(2), 
the Commission makes its own cost and revenue findings, based on data 
filed by the pipeline.
    59. Nevertheless, under the Commission's current five-year periodic 
rate review policy, section 311 and Hinshaw pipelines are required to 
make the same application for rate approval or cost and revenue study 
after five years, regardless of what rate election they have 
chosen.\31\ Currently, section 311 and Hinshaw pipelines using state-
based rates typically meet the periodic review requirement by making a 
new filing with the state commission, and then filing the new rate 
approved by that commission with this Commission. Thus, our current 
periodic rate review policy has the effect of requiring the state 
regulatory agencies whose rates are used for interstate service to 
conduct new rate cases for the pipeline's intrastate services every 
five years. The Commission finds that it will be more consistent with 
our overall policy, in the context of Sec.  284.123(b)(1) rate 
elections, of deferring to the cost and revenue determinations of state 
regulatory agencies to allow the state regulatory agencies to determine 
when rates need to be updated to reflect changes in costs and revenues.
---------------------------------------------------------------------------

    \31\ Order No. 735, FERC Stats. & Regs. ] 31,310 at P 92.
---------------------------------------------------------------------------

    60. Therefore, the Commission will revise its current policy for 
all section 311 and Hinshaw pipelines with state-approved rates which 
have not changed since the previous five-year filing to allow these 
intrastate pipelines to make a filing pursuant to the optional notice 
procedures in paragraph (g) certifying that those rates continue to 
meet the requirements of Sec.  284.123(b)(1) on the same basis on which 
they were approved. However, the Commission will require that, if the 
state-approved rate used for the election is changed at any time, the 
section 311 or Hinshaw pipeline must file a new rate election pursuant 
to Sec.  284.123(b) for its interstate rates not later than 30 days 
after the changed rate becomes effective. This

[[Page 45859]]

will ensure that the state-based rates used for interstate services 
reflect the state regulatory agency's most current cost and revenue 
findings. Accordingly, this Final Rule includes this revised policy as 
part of the optional notice procedures in the added paragraphs 
(g)(9)(ii) and (g)(9)(iii). Certification filings will receive the same 
notice procedures as any other paragraph (g) filing.
    61. The Commission denies TPA's request that the ability to meet 
the periodic rate review requirement through a cost and revenue study 
should be applicable to all section 311 pipelines if no rate change is 
proposed. As the Commission explained above,\32\ the Commission gives 
Hinshaw pipelines the option of filing a cost and revenue study every 
five years, instead of a new petition for rate approval, because the 
courts have held that the Commission cannot require interstate 
pipelines subject to its NGA jurisdiction to make new rate filings 
under NGA section 4. However, the Commission has held that its 
conditioning authority under NGPA section 311(c) permits it to 
condition approval of rates under section 311 on a periodic rate 
refilling requirement.\33\ Therefore, TPA's request that this option 
required by a statutory limitation be available to all section 311 
pipelines is denied as unsupported.
---------------------------------------------------------------------------

    \32\ See n.10 of this order.
    \33\ See GulfTerra Texas Pipeline, L.P., 109 FERC ] 61,350, at P 
10 (2004).
---------------------------------------------------------------------------

    62. TPA's request that the five-year periodic rate review 
requirement be revised to commence on the date that the rate is 
approved is also denied. Requiring periodic review rate filings with 
the Commission is the means by which the Commission can be assured that 
intrastate and Hinshaw pipeline rates approved by the Commission remain 
fair and equitable for interstate transportation. The Commission 
believes that the five-year period established in Order No. 735 
measured from the date of the pipeline's request is an appropriate 
period to allow before requiring a review of the rates in order to 
determine if the information and data upon which the Commission based 
its approval of the pipeline's rate has become stale. Regardless of how 
soon after the intrastate pipeline's rate filing the Commission issues 
its order approving the rate, the Commission's rate determination will 
be based on data from the period before the pipeline made its rate 
filing. Therefore, granting TPA's request to measure the five-year 
period from the date the rates are ultimately approved could result in 
rates remaining in effect for a period significantly longer than the 
five-year period without an updating of cost and revenue data. Use of 
the date of the request results in regulatory certainty for intrastate 
pipelines that the requested rates may be proposed to be effective on 
the filing date and, if approved, the full five-year period will be 
available.
    63. The Commission clarifies, as requested by MGTC, that intrastate 
pipelines may file for approval of rates or to certify state rates 
under Sec.  284.123(g) pursuant to the optional notice procedures under 
paragraph (g) to meet the periodic rate review requirements in 
paragraph (g)(9). The proposed rules are revised to include the 
clarifying language ``under this section'' after the words ``either 
file'' in the second sentence of Sec.  284.123(g)(9)(i). As requested 
by AGA, the Commission also clarifies that filings pursuant to this 
paragraph (g) for approval of operating conditions or terms and 
conditions of service without changing rates are not subject to the 
periodic rate review requirement in paragraph (g)(9).
    64. Finally, as discussed above, the optional notice procedures do 
not apply to requests for approval of market-based rates. Therefore, as 
Enstor requests, the Commission clarifies that the periodic rate review 
requirement in paragraph (g)(9) is not applicable to market-based 
rates. This is consistent with the Commission's existing policy of not 
extending its periodic rate review requirement to intrastate pipelines 
with market-based rates.\34\
---------------------------------------------------------------------------

    \34\ See, e.g., Louisville Gas and Electric Co., 99 FERC ] 
62,040 (2002).
---------------------------------------------------------------------------

VIII. Miscellaneous

A. Section 284.123(g)(8)

1. The NOPR
    65. Proposed Sec.  284.123(g)(8)(i) states that a filing is 
approved ``effective on the day after time expires'' for filing a 
protest unless, among other things, the filing is rejected. Similarly, 
proposed Sec.  284.123(g)(8)(ii) states that if a protest is withdrawn, 
the filing is approved ``effective upon'' the day after the withdrawal 
unless, among other things, the filing is rejected.
2. Comments
    66. TPA argues that the word ``effective'' in those sections 
creates an ambiguity since transportation under 18 CFR 284.121 may 
commence without prior Commission approval. TPA asserts that, if no 
protest is filed, or one is withdrawn, the filing should be deemed 
effective on the date proposed by the pipeline. TPA contends that the 
Commission can correct this problem by deleting the word ``effective'' 
from proposed paragraphs (g)(8)(i) and (g)(8)(ii) and adding the 
following at the end of each paragraph: ``rates approved under this 
subparagraph are effective as of the date specified in the filing for 
approval.''
    67. Dominion requests clarification of the proviso in paragraphs 
(g)(8)(i) and (g)(8)(ii) that the filing is approved after the listed 
conditions are met, ``unless the intrastate pipeline withdraws, amends, 
or modifies its filing or the filing is rejected.'' (Emphasis 
supplied.) Specifically, Dominion requests clarification that the 
reference to rejection of the filing is limited to the initial 7-day 
rejection period only. Dominion requests that the Commission so 
clarify, by revising the last clause in paragraphs (g)(8)(i) and 
(g)(8)(ii) to read ``or the filing is rejected pursuant to paragraph 
(g)(2).''
3. Commission Determination
    68. The Commission agrees that revisions to paragraphs (g)(8)(i) 
and (g)(8)(ii) regarding approval of the filing are appropriate to 
recognize that the rates may be collected subject to refund prior to 
Commission approval and to resolve any ambiguity with respect to the 
effectiveness of the approved rates. The Commission also clarifies the 
reference in these paragraphs to rejection of the filing.
    69. Accordingly, the Commission removes the language following the 
word ``effective'' and substitutes the following language at the end of 
each paragraph: ``on the date proposed in the filing requesting 
approval unless the intrastate pipeline withdraws, amends, or modifies 
its filing or the filing is rejected pursuant to paragraph (g)(2) of 
this section.''

B. Section 284.123(g)(4)

1. The NOPR
    70. Proposed paragraph (g)(4) states that, in addition to the 
Commission's staff, ``any person'' may file a protest prior to the 60-
day protest deadline.
2. Comments
    71. Dominion believes that it would be problematic and conflict 
with the goals of certainty and streamlined processing, if an entity 
could fail to intervene timely but have the rights of a protester. 
Therefore, the Dominion suggests that the phrase ``any person'' in 
proposed paragraph (g)(4) be revised to read ``Any intervenor or the 
Commission's staff.''

[[Page 45860]]

3. Commission Determination
    72. The Commission rejects Dominion's request to revise paragraph 
(g)(4) of the proposed rule. Section 385.211(a)(1) of the Commission's 
Rules of Practice and Procedure, in part, allows ``any person'' to file 
a protest to any application or tariff or rate filing.\35\ Further, 
consistent with that provision, Sec.  157.205(e)(1) allows ``any 
person'' or the Commission staff to file a protest in the existing 
certificate prior notice procedures.\36\ Therefore, Dominion has not 
presented a sufficient basis to grant its request to limit the ability 
to file a protest under these proposed procedures.
---------------------------------------------------------------------------

    \35\ 18 CFR 385.211(a)(1) (2012).
    \36\ 18 CFR 205(e)(1) (2012).
---------------------------------------------------------------------------

C. Clarifications

    73. Paragraph (g)(1) is revised to remove the language after the 
word ``procedures'' in the second sentence which states ``on the first 
page of '' and replace it with the words ``in the.'' This revision is 
necessary to reflect the electronic filing requirements in Sec.  
284.123(f) which are applicable to all filings pursuant to Sec.  
284.123. The phrase ``of this chapter'' is added to paragraph (g)(6) 
after the reference to Sec.  385.216 and paragraph (g)(9)(i) after the 
reference to Sec.  154.313. Paragraph (g)(5) is revised to add the word 
``Commission'' before the word ``staff.'' Finally, Sec.  385.211(b)(1) 
of the Commission's regulations currently requires any protests which 
are filed to be served on the person against whom they are directed. 
Therefore, paragraph (g)(4)(i) is revised to remove as unnecessary the 
second sentence which required protests to filings pursuant to the 
optional notice procedures to be served on the Secretary of the 
Commission and the intrastate pipeline.

IX. Information Collection Statement

A. The NOPR

    74. In the NOPR, in accordance with the requirements of the Office 
of Management and Budget (OMB), the Commission estimated that the 
average annual public reporting burden imposed on the section 311 and 
Hinshaw intrastate pipelines of making filings for rate approval under 
Sec.  284.123 would not change. The preparation effort or the substance 
of a filing made pursuant to Sec.  284.123(g) would be the same as for 
a filing made pursuant to existing Sec. Sec.  284.123(b) and/or 
284.123(e). A requirement of a pipeline using the new optional filing 
procedures is that the pipeline make a new rate approval filing under 
Sec.  284.123 within five years of the date of the initial filing. 
Since the Commission has, as a matter of policy, routinely imposed that 
requirement on the section 311 industry in the context of individual 
rate cases, the Commission does not consider this a change in the 
burden being imposed.
    75. The Commission as a part of this Final Rule is changing its 
policy with respect to five-year periodic rate review requirement for 
pipelines whose rates are based upon a state rate election under Sec.  
284.123(b)(1). The Commission will only require a pipeline with state-
approved rates which have not changed since the previous five-year 
filing to certify that those rates continue to meet the requirements of 
Sec.  284.123(b)(1) on the same basis on which they were approved. 
Concomitant with this policy change, the Commission will now require a 
pipeline with rates that are based upon a state rate election under 
Sec.  284.123(b)(1) to file within thirty days of a change in its 
underlying state rates for approval of new rates under Sec.  284.123. 
The pipeline may not wait to do this in conjunction with a filing under 
its five-year periodic rate review requirement. The Commission has 
observed that generally most pipelines file to revise rates based upon 
a state rate election whenever there is a change. The Commission 
estimates that this change in policy may result in three additional 
filings on an annual basis.
    76. As noted in the NOPR, the Commission estimates that a single 
pipeline may, on an annual basis, use the new withdrawal filing 
requirements under Sec.  284.123(h). This may result in an increase in 
burden of 12 hours per year for the new withdrawal filing requirements.

B. Comments

    77. None of the parties commented on the burden estimates.

C. Commission Determination

    78. The Commission has reviewed the burdens imposed by this 
rulemaking. The Commission's review finds that the proposed changes 
will not affect the burden on section 311 intrastate and Hinshaw 
pipelines of making an initial filing seeking approval of proposed 
rates or operating conditions pursuant to Sec.  284.123. The 
preparation effort or the substance of a filing made pursuant to Sec.  
284.123(g) would be the same as for a filing made pursuant to existing 
Sec. Sec.  284.123(b) and/or 284.123(e).
    79. The Commission believes the change in policy to require a 
pipeline with rates that are based upon a state rate election to file 
for new rates within thirty days of a change in its underlying state 
rates would add only minimal burden to any intrastate pipeline.
    80. The Commission believes the change in policy requiring 
pipelines new withdrawal procedure for filings made prior to their 
approval would add only minimal burden to any intrastate pipeline 
making a withdrawal filing.
    81. The proposed changes will primarily affect the post-filing 
process and cost. The changes will reduce overall cost and delay for 
stakeholders; however that post-filing burden is beyond the scope of 
requirements of the Paperwork Reduction Act. The new optional 
procedures will provide both intrastate pipelines and their shippers 
greater regulatory certainty and a simpler process without any change 
in the upfront burden of preparing and making a filing.
    82. The Commission's revised burden estimate is shown below. The 
revision to the table included in the NOPR includes three additional 
rate filings that would result from the policy change requiring 
pipelines to update rates using a state rate election whenever there is 
a change.

----------------------------------------------------------------------------------------------------------------
                                                                            Burden hours  per
                                                             Number of       respondent  per      Total annual
          FERC-549 (OMB Control No. 1902-0086)              respondents      year (1 filing/      burden hours
                                                                                  year)
                                                                       (a)                (b)            (a x b)
----------------------------------------------------------------------------------------------------------------
                                               Existing Inventory:
----------------------------------------------------------------------------------------------------------------
Rates and Charges for Intrastate Pipelines (18 CFR                      67                 12                804
 284.123(b) and (e))...................................
----------------------------------------------------------------------------------------------------------------

[[Page 45861]]

 
                                           Final Rule in RM12-17-000:
----------------------------------------------------------------------------------------------------------------
Rates and Charges for Intrastate Pipelines (18 CFR                      70                 12                840
 284.123(b), (e) and (g))..............................
----------------------------------------------------------------------------------------------------------------
Withdrawal of Filing prior to Approval (18 CFR                           1                 12                 12
 284.123(h))...........................................
                                                        --------------------------------------------------------
    FERC-549 Total.....................................                 71                 12                854
----------------------------------------------------------------------------------------------------------------

X. Environmental Analysis

    83. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\37\ The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.\38\ The actions proposed to be taken here fall within 
categorical exclusions in the Commission's regulations for rules that 
are corrective, clarifying or procedural, for information gathering, 
analysis, and dissemination, and for sales, exchange, and 
transportation of natural gas that requires no construction of 
facilities.\39\ Therefore an environmental review is unnecessary and 
has not been prepared in this rulemaking.
---------------------------------------------------------------------------

    \37\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. 
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \38\ 18 CFR 380.4 (2012).
    \39\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), and 380.4(a)(27) 
(2012).
---------------------------------------------------------------------------

XI. Regulatory Flexibility Act

    84. The Regulatory Flexibility Act of 1980 (RFA) \40\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The Commission is not required to make such an analysis if proposed 
regulations would not have such an effect.\41\ Most companies regulated 
by the Commission do not fall within the RFA's definition of a small 
entity.\42\
---------------------------------------------------------------------------

    \40\ 5 U.S.C. 601-612 (2006).
    \41\ 5 U.S.C. 605(b) (2006).
    \42\ 5 U.S.C. 601(3) (citing section 3 of the Small Business 
Act, 15 U.S.C. 623 (2006)). Section 3 defines a ``small-business 
concern'' as a business which is independently owned and operated 
and which is not dominant in its field of operation.
---------------------------------------------------------------------------

    85. This Final Rule should have no significant negative impact on 
those entities, be they large or small, subject to the Commission's 
regulatory jurisdiction under the NGA. Most companies to which the 
Final Rule applies do not fall within the RFA's definition of small 
entities. In addition, the Commission has identified two small entities 
as respondents to the requirements in the NOPR.\43\ As explained above, 
the Commission estimates that the proposed Sec.  284.123(g) regulations 
will serve as a substitute for filings currently done pursuant to 
Sec. Sec.  284.123(b) and (e), and Sec.  284.123(h) provides regulatory 
certainty if a pipeline decides to withdraw its filing. The Commission 
estimates that intrastate pipelines will experience little if any 
change in regulatory burden associated with making their filings, and 
pipelines will be able to avoid certain costs and delays post-filing 
due to the new streamlined process. Accordingly, the Commission 
certifies that this rule will not have a significant impact on a 
substantial number of small entities and no regulatory flexibility 
analysis is required.
---------------------------------------------------------------------------

    \43\ The U.S. Small Business Administration's (SBA) Table of 
Small Business Size Standards is found in 13 CFR 121.201. SBA's 
updated version of the size standards (effective March 26, 2012, and 
available at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf) defines a natural gas pipeline (contained in 
Subsector 486, Pipeline Transportation) as ``small'' when it has 
average annual receipts of $25,500,000 or less.
---------------------------------------------------------------------------

XII. Document Availability

    86. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (https://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5:00 
p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 
20426.
    87. From FERC's Home Page on the Internet, this information is 
available on eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    88. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

XIII. Effective Date and Congressional Notification

    89. The Commission did not propose a specific implementation 
schedule in the NOPR. The Commission will implement the new optional 
filing procedures 30 days from the date of OMB's approval of this Final 
Rule. The Secretary of the Commission will issue a revised list of Type 
of Filing Codes \44\ to pipelines for filings made pursuant to 
paragraph (g) and withdrawals made pursuant to paragraph (h).
---------------------------------------------------------------------------

    \44\ See 18 CFR 375.302(z) (2012). The Implementation Guide 
describes the Type of Filing contents. The Type of Filing Code list 
is posted on the Commission's Web site at https://www.ferc.gov/docs-filing/etariff/filing_type.csv.
---------------------------------------------------------------------------

    90. The Commission has determined, with the concurrence of the 
Administrator of the Office of Information and Regulatory Affairs of 
OMB, that this rule is not a ``major rule'' as defined in section 351 
of the Small Business Regulatory Enforcement Fairness Act of 1996.

List of Subjects in 18 CFR Part 284

    Natural gas, Reporting and recordkeeping requirement.

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission amends part 284, 
Chapter I, Title 18, Code of Federal Regulations, as follows:

[[Page 45862]]

PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE 
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES

0
1. The authority citation for part 284 continues to read as follows:

    Authority: 15 U.S.C. 717-717z, 3301-3432; 42 U.S.C. 7101-7352; 
43 U.S.C. 1331-1356.

0
2. Section 284.123 is amended by adding paragraphs (g) and (h) to read 
as follows:


Sec.  284.123  Rates and charges.

* * * * *
    (g) Election of Notice Procedures. (1) Applicability. An intrastate 
pipeline filing for approval of rates, a statement of operating 
conditions, and any amendments or modifications thereto pursuant to 
this section may use the notice procedures in this paragraph. Any 
intrastate pipeline electing to use these notice procedures for a 
filing must clearly state its election to use these procedures in the 
filing. Such filing is approved and the rates deemed fair and equitable 
and not in excess of the amount that an interstate pipeline would be 
permitted to charge for similar transportation service if the 
requirements in paragraph (g)(8) of this section have been fulfilled.
    (2) Rejection of filing. The Director of the Office of Energy 
Market Regulation or his designee shall reject within 7 days of the 
date of filing a request which patently fails to comply with the 
provisions of paragraph (e) or (f) of this section, without prejudice 
to the intrastate pipeline refiling a complete application. If such 
filing was required by this section, that filing must be refiled within 
14 days of the date of the rejection.
    (3) Publication of notice of filing. The Secretary of the 
Commission shall issue a notice of the filing within 10 days of the 
date of the filing, which will then be published in the Federal 
Register. The notice shall designate a deadline for filing 
interventions, initial comments, final comments, and protests to the 
filing. The deadline for interventions and initial comments shall be 21 
days after the date of the filing or such other date established by the 
Secretary of the Commission. The deadline for final comments and 
protests shall be 60 days after the date of the filing or such other 
date established by the Secretary of the Commission.
    (4) Protests. (i) Any person or the Commission's staff may file a 
protest prior to the deadline for protests.
    (ii) Protests shall be filed with the Commission in the form 
required by Part 385 of this chapter including a detailed statement of 
the protestor's interest in the filing and the specific reasons and 
rationale for the objection and whether the protestor seeks to be an 
intervenor.
    (5) Effect of protest. If a protest is filed in accordance with 
paragraph (g)(4) of this section, then the intrastate pipeline, the 
person who filed the protest, any intervenors and Commission staff 
shall have 30 days from the deadline for filing protests established by 
the Secretary of the Commission in accordance with paragraph (g)(3) of 
this section, to resolve the protest, and to file a withdrawal of the 
protest pursuant to paragraph (g)(6) of this section. Informal 
settlement conferences may be convened by the Director of the Office of 
Energy Market Regulation or his designee during this 30 day period. If 
a protest is not withdrawn or dismissed by end of that 30 day period, 
the filing shall not be deemed approved pursuant to this paragraph. 
Within 60 days from the deadline for filing protests established by the 
Secretary of the Commission in accordance with paragraph (g)(3) of this 
section the Commission will establish procedures to resolve the 
proceeding.
    (6) Withdrawal of protests. The protestor may withdraw a protest by 
submitting written notice of withdrawal to the Secretary of the 
Commission pursuant to Sec.  385.216 of this chapter and serving a copy 
on the intrastate pipeline, any intervenors, and any person who has 
filed a motion to intervene in the proceeding.
    (7) Amendments or modifications to tariff records prior to 
approval. An intrastate pipeline may file to amend or modify a tariff 
record contained in the initial filing pursuant to the procedures under 
this paragraph (g) which has not yet been approved pursuant to 
paragraph (g)(8) of this section. Such filing will toll the notice 
period established in paragraph (g)(3) of this section and the 
Secretary of the Commission will issue a notice establishing new 
deadlines for comments and protests for the entire filing pursuant to 
paragraph (g)(3).
    (8) Final approval. (i) If no protest is filed within the time 
allowed by the Secretary of the Commission under paragraph (g)(3) of 
this section, the filing by the intrastate pipeline is approved, 
effective on the date proposed in the filing requesting approval unless 
the intrastate pipeline withdraws, amends, or modifies its filing or 
the filing is rejected pursuant to paragraph (g)(2) of this section.
    (ii) If any protest is filed within the time allowed by the 
Secretary of the Commission under paragraph (g)(3) of this section and 
is subsequently withdrawn before the end of the 30-day reconciliation 
period provided by paragraph (g)(5) of this section, the filing by the 
intrastate pipeline is approved effective on the date proposed in the 
filing requesting approval unless the intrastate pipeline withdraws, 
amends, or modifies its filing or the filing is rejected pursuant to 
paragraph (g)(2) of this section.
    (9) Periodic rate review. Rates of pipelines approved by the 
Commission pursuant to this paragraph are required to be periodically 
reviewed.
    (i) Any intrastate pipeline with rates so approved must file an 
application for rate approval under this section on or before the date 
five years following the date it filed the application for 
authorization of rates pursuant to this paragraph. Any Hinshaw pipeline 
that has been a granted a blanket certificate under Sec.  284.224 of 
this chapter and with rates approved pursuant to this paragraph must on 
or before the date five years following the date it filed the 
application for authorization of the rates pursuant to this paragraph 
either file under this section cost, throughput, revenue and other 
data, in the form specified in Sec.  154.313 of this chapter, to allow 
the Commission to determine whether any change in rates is required 
pursuant to section 5 of the Natural Gas Act or an application for rate 
authorization pursuant to this section.
    (ii) An intrastate pipeline with rates approved pursuant to the 
rate election in paragraph (b)(1) of this section that remain unchanged 
during the five-year review period which were approved based on then 
effective state rates may file a certification with the Commission 
pursuant to this paragraph (g) that the rates continue to comply on the 
same basis with the requirements set forth in paragraph (b)(1) of this 
section. Such certification of rates will meet the periodic rate review 
requirement set forth in this paragraph (g)(9) unless the Commission 
determines that further proceedings concerning the rates are 
appropriate.
    (iii) If the state rate used pursuant to paragraph (b)(1) of this 
section for approval of a rate pursuant to this paragraph (g) is 
changed, not later than 30 days after that changed rate becomes 
effective, the intrastate pipeline must file a new rate election 
pursuant to paragraph (b) of this section.
    (10) Withdrawal of filing prior to approval. A pipeline may, 
pursuant to paragraph (h) of this section, withdraw in its entirety a 
filing made pursuant to paragraph (g) that has not been approved by 
filing a withdrawal motion with the Commission. A filing that is

[[Page 45863]]

withdrawn will not fulfill the requirements under paragraph (g)(8) of 
this section.
    (h) Withdrawal of filing. A pipeline may withdraw in its entirety a 
filing pursuant to this section that has not been approved by filing a 
withdrawal motion with the Commission.
    (1) The withdrawal motion must state that any amounts collected 
subject to refund in excess of the rates authorized the Commission will 
be refunded with interest calculated and a refund report filed with the 
Commission in accordance with Sec.  154.501 of this chapter. The 
refunds must be made within 60 days of the date the withdrawal motion 
becomes effective.
    (2) The withdrawal motion will become effective, and the filing 
will be deemed withdrawn at the end of 15 days from the date of filing 
of the withdrawal motion, if no order disallowing the motion is issued 
within that period. If an answer in opposition is filed within the 15-
day period, the withdrawal is not effective until an order accepting 
the withdrawal is issued.

[FR Doc. 2013-17822 Filed 7-29-13; 8:45 am]
BILLING CODE 6717-01-P