Petition for a Rulemaking of the Liquids Shippers Group, Airlines for America, and the National Propane Gas Association; Revisions to Indexing Policies and Page 700 of FERC Form No. 6, 11890-11893 [2020-04069]

Download as PDF 11890 Federal Register / Vol. 85, No. 40 / Friday, February 28, 2020 / Proposed Rules (8) The formal hearing procedures under this paragraph shall not impede or interfere with the interagency review process of the Office of Information and Regulatory Affairs for the proposed rulemaking. (c) Basis for rulemaking. When issuing a proposed or final regulation declaring a practice in air transportation or the sale of air transportation to be unfair or deceptive to consumers under the authority of 49 U.S.C. 41712(a), unless the regulation is specifically required by statute, the Department shall articulate the basis for concluding that the practice is unfair or deceptive to consumers as defined in § 399.79. ■ 3. Add § 399.79 to Subpart G to read as follows: Subpart G—Policies Relating to Enforcement jbell on DSKJLSW7X2PROD with PROPOSALS § 399.79 Policies relating to unfair and deceptive practices. (a) Applicability. This policy shall apply to the Department’s aviation consumer protection actions pursuant to 49 U.S.C. 41712(a). (b) Definitions. (1) A practice is ‘‘unfair’’ to consumers if it causes or is likely to cause substantial injury, which is not reasonably avoidable, and the harm is not outweighed by benefits to consumers or competition. (2) A practice is ‘‘deceptive’’ to consumers if it is likely to mislead a consumer, acting reasonably under the circumstances, with respect to a material matter. A matter is material if it is likely to have affected the consumer’s conduct or decision with respect to a product or service. (c) Intent. Proof of intent is not necessary to establish unfairness or deception for purposes of 49 U.S.C. 41712(a). (d) Specific regulations prevail. Where an existing regulation applies to the practice of an air carrier, foreign air carrier, or ticket agent, the terms of that regulation apply rather than the general definitions set forth in this section. (e) Informal Enforcement Proceedings. (1) Before any determination is made on how to resolve a matter involving a potential unfair or deceptive practice, the U.S Department of Transportation’s Office of Aviation Enforcement and Proceedings will provide an opportunity for the alleged violator to be heard and present relevant evidence, including but not limited to: (i) In cases where a specific regulation applies, evidence tending to establish that the regulation at issue was not violated and, if applicable, that mitigating circumstances apply; (ii) In cases where a specific regulation does not apply, evidence VerDate Sep<11>2014 17:07 Feb 27, 2020 Jkt 250001 tending to establish that the conduct at issue was not unfair or deceptive as defined in paragraph (b); and (iii) Evidence tending to establish that consumer harm was limited, or that the air carrier, foreign air carrier, or ticket agent has taken steps to mitigate consumer harm. (2) During this informal process, if the Office of Aviation Enforcement and Proceedings reaches agreement with the alleged violator to resolve the matter with the issuance of an order declaring a practice in air transportation or the sale of air transportation to be unfair or deceptive to consumers under the authority of 49 U.S.C. 41712(a), and when a regulation issued under the authority of section 41712 does not apply to the practice at issue, then the Department shall articulate in the order the basis for concluding that the practice is unfair or deceptive to consumers as defined in this section. (f) Formal Enforcement Proceedings. When there are reasonable grounds to believe that an airline or ticket agent has violated 49 U.S.C. 41712, and efforts to settle the matter have failed, the Office of Aviation Enforcement and Proceedings may issue a notice instituting an enforcement proceeding before an administrative law judge. After the issues have been formulated, if the matter has not been resolved through pleadings or otherwise, the administrative law judge will give the parties reasonable written notice of the time and place of the hearing as set forth in 14 CFR 302.415. Authority: 49 U.S.C. 41712; 49 U.S.C. 40113(a). Issued this 19h day of February 2020, in Washington, DC, under authority delegated in 49 CFR 1.27(n). Steven G. Bradbury, General Counsel. [FR Doc. 2020–03836 Filed 2–27–20; 8:45 am] BILLING CODE 4910–9X–P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Parts 342, 343, and 357 [Docket No. RM17–1–000; Docket No. RM15–19–000] Petition for a Rulemaking of the Liquids Shippers Group, Airlines for America, and the National Propane Gas Association; Revisions to Indexing Policies and Page 700 of FERC Form No. 6 Federal Energy Regulatory Commission, DOE. AGENCY: PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 Withdrawal of advance notice of proposed rulemaking; denial of petition for rulemaking. ACTION: The Federal Energy Regulatory Commission (Commission) is withdrawing its advance notice of proposed rulemaking (ANOPR) considering potential modifications to the Commission’s policies for evaluating oil pipeline indexed rate changes and certain additions to the annual reporting requirements in FERC Form No. 6, page 700. Additionally, the Commission denies the petition for rulemaking filed by certain shippers seeking changes to page 700 reporting requirements. SUMMARY: The ANOPR published on November 2, 2016, at 81 FR 76315 (2016) is withdrawn as of February 28, 2020. DATES: FOR FURTHER INFORMATION CONTACT: Adrianne Cook, (Technical Information), Office of Energy Market Regulation, 888 First Street NE, Washington, DC 20426, (202) 502– 8849. Monil Patel, (Technical Information), Office of Energy Market Regulation, 888 First Street NE, Washington, DC 20426, (202) 502–8296 Andrew Knudsen, (Legal Information), Office of the General Counsel, 888 First Street NE, Washington, DC 20426, (202) 502–6527. SUPPLEMENTARY INFORMATION: 1. On October 20, 2016, the Commission issued an advance notice of proposed rulemaking (ANOPR) in Docket No. RM17–1 seeking comment regarding potential modifications to the Commission’s policies for evaluating oil pipeline indexed rate changes and certain additions to the FERC Form No. 6, page 700 (page 700) annual reporting requirements.1 Prior to the ANOPR, on April 20, 2015, certain shippers filed a petition for rulemaking in Docket No. RM15–19 requesting that the Commission require oil pipelines to provide additional information on page 700. 2. For the reasons set forth below, we exercise our discretion to withdraw the ANOPR and to terminate the proceeding in Docket No. RM17–1. We also deny the shippers’ petition for rulemaking. 1 Revisions to Indexing Policies and Page 700 of FERC Form No. 6, 81 FR 76315 (Nov. 2, 2016), 157 FERC ¶ 61,047 (2016) (ANOPR). E:\FR\FM\28FEP1.SGM 28FEP1 Federal Register / Vol. 85, No. 40 / Friday, February 28, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS I. Background 3. In 2015, the Liquids Shippers Group,2 Airlines for America,3 and the National Propane Gas Association 4 (collectively, the Joint Shippers) filed a petition for rulemaking in Docket No. RM15–19 seeking to expand certain annual filing requirements related to the summary cost of service contained on page 700. Specifically, the Joint Shippers requested that the Commission require oil pipelines to disaggregate the total company data currently reported on page 700 and to file supplemental page 700s containing summary cost of service for (a) crude and product systems and (b) each ‘‘rate design’’ segment. The Joint Shippers’ proposal also requested that all interested parties be given access to the workpapers used to prepare page 700. Staff held a technical conference on July 30, 2015, to discuss the Joint Shippers’ petition with the petitioners, pipelines, and interested parties. The Commission received subsequent comments in September 2015 and October 2015.5 4. The October 2016 ANOPR resulted from the Commission’s ongoing assessment of its oil pipeline policies, including evaluation of page 700 reporting requirements following the Joint Shippers’ petition. In the ANOPR, 2 Liquids Shippers Group consists of the following crude oil or natural gas liquids producers: Anadarko Energy Services Company, Apache Corporation, Cenovus Energy Marketing Services Ltd., ConocoPhillips Company, Devon Gas Services, L.P., Encana Marketing (USA) Inc., Marathon Oil Company, Murphy Exploration and Production Company-USA, Noble Energy Inc., Pioneer Natural Resources USA, Inc., and Statoil Marketing & Trading (US) Inc. 3 Airlines for America is a trade association representing cargo and passenger airlines, including Alaska Airlines, Inc., American Airlines Group (American Airlines and US Airways), Atlas Air, Inc., Delta Air Lines, Inc., Federal Express Corporation, Hawaiian Airlines, JetBlue Airways Corp., Southwest Airlines Co., United Continental Holdings, Inc., and United Parcel Service Co. 4 The National Propane Gas Association is a national trade association of the propane industry with a membership of approximately 3,000 companies, including 38 affiliated state and regional associations representing members in all 50 states. 5 Comments and reply comments were filed by the Association of Oil Pipe Lines (AOPL); Joint Shippers (National Propane Gas Association, Airlines for America, a consortium of major air carriers, and Valero Energy and Supply); the Liquids Shippers (Anadarko Energy Services Company, Apache Corporation, Cenovus Energy Marketing Services Ltd., ConocoPhillips Company, Devon Gas Services LP, Encana Marketing (USA) Inc., Marathon Oil Company, Murphy Exploration and Production Company USA, Noble Energy Inc., Pioneer Natural Resources USA Inc., and Statoil Marketing and Trading (US) Inc); Explorer Pipeline Company; Magellan Midstream Partners LP; Marathon Pipe Line LLC; Shell Pipeline Company LP; Plains Pipeline LP; SFPP L.P. (SFPP); NuStar Logistics LP; Enterprise Products Partners LP; and Buckeye Pipe Line Company, LP (Buckeye). VerDate Sep<11>2014 17:07 Feb 27, 2020 Jkt 250001 the Commission sought comment regarding potential modifications to its policies for reviewing protests and complaints against oil pipeline index rate filings. In addition, the Commission sought comment regarding potential modifications to the data reporting requirements reflected on page 700. Initial comments were filed in January 2017 6 and reply comments were filed in March 2017.7 II. Discussion 5. Upon review of the record developed in this proceeding, we are not persuaded to proceed with the changes considered in either the ANOPR or the Joint Shippers’ petition. 6. Regarding the Joint Shippers’ petition, the Commission previously identified concerns with the petition’s proposal for (a) requiring supplemental page 700s for different rate design segments 8 and (b) requiring pipelines to provide page 700 workpapers to shippers.9 We continue to believe that this information—which would effectively require every oil pipeline regulated by the Commission to file a detailed cost of service every year—is unnecessary and inconsistent with the purposes of the page 700 preliminary 6 Initial comments were filed by R. Gordon Gooch, Delek Logistics Partners, LP, Kinder Morgan, Inc., Buckeye Partners, L.P., Suncor Energy Marketing Inc., NuStar Logistics, L.P. and NuStar Pipeline Operating Partnership L.P., Shell Pipeline Company, LP, Enterprise Products Partners L.P., Magellan Midstream Partners L.P., The Texas Pipeline Association, Indicated Shippers, Marathon Pipe Line LLC, Plains All American, L.P., Colonial Pipeline Company, Enbridge Inc., Sinclair Oil Corporation, the Liquids Shippers Group, AOPL, APV Shippers (Airlines for America, National Propane Gas Association, and Valero Marketing and Supply Company), and the Canadian Association of Petroleum Producers (CAPP). 7 Reply comments were filed by Magellan Midstream Partners L.P., APV Shippers, Indicated Shippers, the Liquid Shippers Group, the Canadian Association of Petroleum Producers, AOPL Enbridge, Inc, Colonial Pipeline Company, and R. Gordon Gooch. 8 ANOPR, 157 FERC ¶ 61,047 at PP 31–33. 9 Id. P 48. In the ANOPR, the Commission also explained: ‘‘The current data on page 700 allows a shipper to compare (a) a pipeline’s revenues to its total cost of service and (b) changes to a pipeline’s total cost of service.’’ Id. This is the data needed to challenge an index rate as well as for a cost-ofservice challenge. The Commission also noted that requiring workpapers raised potential confidentiality concerns, including ‘‘(a) shipper information protected by section 15(13) of the ICA, which prohibits disclosure of an individual shipper’s movements and (b) the pipeline’s competitive business information.’’ Id. P 49. Although we decline to require workpapers, we note that page 700 includes additional data on lines 1–8 that provide significant detail regarding the pipeline’s cost of service. PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 11891 screen 10 in the Commission’s simplified and streamlined indexing regime.11 Whereas this proposal would provide some minimal benefit to shippers, under our simplified indexing regime, it would impose considerable industrywide cost upon pipelines.12 After carefully weighing these factors, and considering other avenues available to shippers, as discussed below, we reaffirm our earlier rejection of this proposal. 7. We also deny the Joint Shippers’ request for supplemental page 700s that separately report crude oil and product pipeline system cost-of-service data. After further consideration of this proposal as part of the ANOPR proceeding, we conclude that imposing such an annual cost-of-service reporting obligation is unnecessary for the purposes of a preliminary screen in the Commission’s simplified indexing regime. Segmentation of page 700 by crude and product would apply to a limited number of pipeline filers.13 Furthermore, shippers can use the data already on Form No. 6 14 and their 10 The Commission has stated that the total company data on page 700 merely serves as a preliminary screening tool to evaluate pipeline rates and that ‘‘[p]age 700 information alone is not intended to show what a just and reasonable rate should be.’’ Revisions to Page 700 of FERC Form No. 6, Order No. 783, 144 FERC ¶ 61,049, at P 4 (2013) (internal citations omitted). The level of the just and reasonable rate can be determined upon a subsequent investigation, most likely at hearing before an administrative law judge. 11 Indexing simplifies and streamlines ratemaking procedures by allowing a particular pipeline’s rates to deviate from its particular costs and by using a broad industry-wide inflationary measure as opposed to costly individual cost-of-service proceedings. Revisions to Oil Pipeline Regulations Pursuant to Energy Policy Act of 1992, Order No. 561, FERC Stats. & Regs. ¶ 30,985, at 30,948 (1993), order on reh’g and clarification, Order No. 561–A, FERC Stats. & Regs. ¶ 31,000 (1994), aff’d sub nom. Ass’n of Oil Pipe Lines v. FERC, 83 F.3d 1424 (D.C. Cir. 1996) (AOPL I). As the United States Court of Appeals for the District of Columbia Circuit has explained, requiring an individualized cost-ofservice evaluation for each pipeline would be inconsistent with the simplification mandated by the Energy Policy Act of 1992. Ass’n of Oil Pipe Lines v. FERC, 281 F.3d 239, 244 (D.C. Cir. 2002) (AOPL II). 12 Moreover, the burden associated with segmentation is not a one-time burden. In addition to the annual record-keeping requirements, as pipelines add capacity, spin-off assets, and otherwise evolve, the pipelines would need to reevaluate their rate design segments. 13 Our decision to deny the Joint Shippers’ request is supported by the fact that there are only a limited number of page 700 filers (6.9 percent or 15 total filers) that transport significant quantities (greater than 10 percent of total pipeline capacity) of both crude oil and petroleum products as reflected on Form No. 6, page 601. 14 Regarding cost-of-service complaints, Form No. 6 already provides separate crude and product data for several costs, transportation revenues, and throughput. Pages 302–303 of Form No. 6 include separate crude and product cost data for salary and E:\FR\FM\28FEP1.SGM Continued 28FEP1 11892 Federal Register / Vol. 85, No. 40 / Friday, February 28, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS knowledge of the pipeline system to support any cost-of-service complaints. The record does not support imposing this additional annual reporting requirement on pipelines. 8. We also decline to adopt the proposal contemplated in the ANOPR that pipelines file supplemental page 700s for non-contiguous and major rate design systems.15 As a general matter, such filings would not provide shippers with the information needed to evaluate each pipeline system on a cost-ofservice basis.16 However, despite providing limited benefits, these filings would involve some of the same complexity as full rate design segmentation, requiring the pipeline to allocate costs to different parts of its system either by direct assignment or via some other allocation method.17 Given this additional complexity, we conclude that requiring these supplemental page 700s filings would not be appropriate for the purposes of a preliminary screen in the Commission’s simplified indexing ratemaking regime that relies upon industry-wide costs and not the pipeline’s individual cost of service. 9. Finally, regarding the ANOPR’s proposal to disaggregate revenue and throughput data between cost and noncost based-rates,18 we find that this proposal would be overly complex, and therefore, not consistent the Commission’s simplified and streamlined indexing regime. Furthermore, the ANOPR’s proposal to disaggregate revenue and throughput data between cost and non-cost based rates could lead to misleading comparisons of the pipeline’s indexed rates on one portion of the pipeline system to the costs of the entire pipeline.19 Although the ANOPR sought wages, fuel and power, outside services, rentals, insurance, taxes, and depreciation. Pages 300–301 of Form No. 6 separate revenues associated with crude transportation from revenues associated with product transportation. 15 ANOPR, 157 FERC ¶ 61,047 at P 28 (defining major pipeline systems as ‘‘large pipeline systems (at least over 250 miles) that serve markets (either origin or destination) different from the remainder of the pipeline’s system’’ and ‘‘separate pipeline systems (even those below the 250-mile threshold) established by a final Commission order in a litigated rate case’’). 16 Much like the total company data, the partial segmentation proposals may commingle costs from multiple rate design systems or from parts of the system using different rate methodologies (such as indexed, market-based, and settlement rates). 17 See id. PP 35–42 (explaining how these proposals would require additional data on page 700 to address allocation issues); AOPL Initial Comments, Docket No. RM17–1, Van Hoecke Decl. at 25 (Jan. 18, 2017) (explaining allocation of costs). 18 ANOPR, 157 FERC ¶ 61,047 at PP 43–46. 19 For example, a contractual committed rate could apply to the newer part of the pipeline VerDate Sep<11>2014 17:07 Feb 27, 2020 Jkt 250001 to propose ways in which the data could nonetheless be useful,20 we conclude that the potential distortion caused by such an ‘‘apples to oranges’’ comparison supports not imposing this disaggregation of revenue and throughput data as an annual, industrywide reporting requirement. These issues are better addressed in individual cost-of-service complaint proceedings. 10. In declining to adopt these additional reporting obligations on page 700, we seek to preserve the intent of the Energy Policy Act of 1992 to ensure a simplified ratemaking regime. While these changes to page 700 would require pipelines to provide more cost-ofservice information in their annual filings, the Commission’s primary oil pipeline ratemaking regime is indexing, not cost of service.21 Since the Energy Policy Act of 1992, the Commission has periodically expanded the information that pipelines must report on page 700,22 and we are concerned about further expanding this reporting requirement in circumstances where, as here, we believe that it would provide minimal benefits to shippers while expanding the burden and complexity under our indexing regime. Rather than imposing another additional annual industry-wide reporting requirement, we prefer less burdensome and less complex options that are consistent with the Energy Policy Act of 1992’s mandate for simplified rate regulation. For example, as an alternative to establishing an industry-wide reporting requirement, under the Commission’s current policies, shippers are able to file system for which the rate base has not depreciated. In contrast, the cost-based rates may apply to older, legacy parts of the system in which the rate base has depreciated. Id. at n.65. In acknowledging this mismatch, the Commission specifically stated that it did not intend to use the disaggregated revenues under the Commission’s indexing regime, which is the primary regime for setting pipeline rates. Id. P 46. 20 Id. 21 AOPL II, 281 F.3d at 244. 22 As promulgated in 1994, page 700 included only four lines: (1) Total costs, (2) revenues, (3) barrels, and (4) barrel-miles. Cost-of-Service Reporting and Filing Requirements for Oil Pipelines, Order No. 571, FERC Stats. & Regs. ¶ 31,006, at 31,168–69 (1994), aff’d, AOPL I, 83 F.3d 1424 (D.C. Cir. 1996). Page 700 subsequently expanded to include depreciation expense, amortization of deferred earnings, rate base, rate of return, return on rate base, income tax allowance, and total cost of service. Revisions to and Electronic Filing of the FERC Form No. 6 and Related Uniform Systems of Account, Order No. 620, FERC Stats. & Regs. ¶ 31,115 (2000), reh’g denied, Order No. 620– A, 94 FERC ¶ 61,130 (2001). The third iteration of page 700 added additional information regarding rate base, rate of return, return on trended original cost rate base, and income tax allowance. Revisions to Page 700 of FERC Form No. 6, Order No. 783, 144 FERC ¶ 61,049, at PP 29–40 (2013), reh’g denied, Order No. 783–A, 148 FERC ¶ 61,235 (2014). PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 cost-of-service complaints and, once such a complaint is filed, an oil pipeline may be required to provide more specific data than the contents of page 700 upon a shipper’s complaint against the pipeline’s rates.23 Furthermore, in responding to a cost-of-service complaint, the Commission will consider arguments beyond the total company cost-of-service data on page 700, and this more expansive evaluation could include claims by shippers that the pipeline’s segments are obscuring over-recoveries. In such circumstances, the Commission will set such issues of material fact for hearing.24 We believe this approach more appropriately balances pipeline and shipper interests under our simplified indexing regime. 11. We also decline to adopt the proposals in the ANOPR for modifying the Commission’s policies for addressing protests and complaints against index rate increases. However, the Commission discusses some potential changes to these policies in our concurrent order in HollyFrontier.25 12. Accordingly, we exercise our discretion to withdraw the ANOPR and to terminate the proceeding in Docket No. RM17–1. Similarly, we also deny the Joint Shippers’ petition for rulemaking. We continue to monitor and evaluate the Commission’s oil pipeline policies, and value the comments filed by participants in these proceedings. This input will be considered in our ongoing effort to identify potential enhancements to our regulatory policies and processes. 23 See ConocoPhillips Co. v. SFPP, L.P., 137 FERC ¶ 61,005 (2011) (upon a cost-of-service complaint, requiring the pipeline to provide system-specific data prior to further investigation at hearing). Furthermore, if not available prior to the Commission’s investigation at hearing, the additional information sought by the Joint Shippers’ petition becomes available at an investigatory hearing as part of the discovery process. 24 The Commission applies a flexible standard when deciding whether to set a cost-of-service complaint for hearing. See, e.g., Epsilon Trading LLC v. Colonial Pipeline Co., 164 FERC ¶ 61,202, at PP 5, 50–51 (2018) (setting for hearing a cost-ofservice complaint where pipeline’s page 700 showed revenues exceeding costs by 2.5 percent, but the complainants alleged reasonable grounds to suggest that the cost components embedded in page 700 were not accurate). 25 See HollyFrontier Ref. & Mktg. LLC v. SFPP, L.P., v 170 FERC ¶ 61,133 (2020). Among other things, that order, explains that the substantially exacerbate test (which was one of the issues discussed in the ANOPR) is arguably inconsistent with the objectives of indexing, and proposes to eliminate the substantially exacerbate test and replace it with the percentage comparison test. We also plan to initiate a separate, generic proceeding in which we will be requesting briefing from industry participants on (a) the proposal to process complaints against index rate increases using the percentage comparison test and to eliminate the substantially exacerbate test and (b) the use of the 10 percent threshold level when applying the percentage comparison test to complaints. E:\FR\FM\28FEP1.SGM 28FEP1 11893 Federal Register / Vol. 85, No. 40 / Friday, February 28, 2020 / Proposed Rules By direction of the Commission. Commissioner Glick is dissenting with a separate statement attached. Issued: February 20, 2020. Kimberly D. Bose, Secretary. United States of America Federal Energy Regulatory Commission Docket No. Revisions to Indexing Policies and Page 700 of FERC Form No. 6 .................................................................................................. Petition for a Rulemaking of the Liquids Shippers Group, Airlines for America, and the National Propane Gas Association .......... jbell on DSKJLSW7X2PROD with PROPOSALS GLICK, Commissioner, dissenting: I am dissenting from today’s order withdrawing the Advance Notice of Proposed Rulemaking (ANOPR) and denying shippers’ petition for rulemaking, because the Commission must do more to ensure shippers and the Commission have the information necessary to protect against unjust and reasonable oil pipeline rates.26 It is especially critical to provide shippers with adequate transparency into pipeline costs, given that the Commission has chosen to rely solely on shippers to ensure that pipeline rates are just and reasonable, as required by the Interstate Commerce Act (ICA).27 The Commission has the statutory authority to initiate its own cost-of-service investigations into pipeline rates but has for decades chosen not to do so.28 Instead of summarily terminating this proceeding, the Commission should have proceeded with a Notice of Proposed Rulemaking aimed at enhancing pipelines’ data reporting requirements, so that the information available to shippers and the public is useful both in the evaluation of index filings and for cost-of-service rate challenges. The Commission is responsible for ensuring that the rates oil pipelines charge are just and reasonable. Through the ANOPR, the Commission sought to enhance the transparency of information reported on FERC Form No. 6, page 700, to ensure the public can effectively assess the reasonableness of oil pipeline rates and so that the Commission can ‘‘better fulfill its statutory obligations under the ICA.’’ 29 As the Commission explained, a pipeline’s costs associated with providing one service may be ‘‘fundamentally different’’ from the costs of providing another service.30 Because the 26 Revisions to Indexing Policies and Page 700 of FERC Form No. 6, 170 FERC ¶ 61,134 (2020) (Withdrawal Order). 27 49 App. U.S.C. 1(5) (1988). 28 As the Commission explained in Order No. 561, the Commission retains the responsibility to ensure rates are just and reasonable under the ICA, and for this reason it ‘‘will not promulgate an explicit bar to Commission-initiated rate investigations.’’ Revisions to Oil Pipeline Regulations Pursuant to the Energy Policy Act of 1992, Order No. 561, FERC Stats. & Regs. ¶ 30,985, at 30,967 (1993). Nonetheless, the Commission explained that, while it ‘‘believes it is advisable to retain the authority to investigate a rate on its own motion, it should make clear that it does not contemplate invoking such authority except in the most unusual circumstances.’’ Id. 29 Revisions to Indexing Policies and Page 700 of FERC Form No. 6, 157 FERC ¶ 61,047, at P 5 (2016) (ANOPR Order). 30 Id. P 27. VerDate Sep<11>2014 17:07 Feb 27, 2020 Jkt 250001 Commission’s regulations only require pipelines to report company-wide data, the information currently available to shippers is at best, a rough approximation of the costs underlying a particular shipper’s rates. In the ANOPR, the Commission proposed to require pipelines to report more granular data, so that shippers could use the information to compare the rate they are being charged ‘‘with costs that are more closely associated with that particular rate.’’ 31 The Commission stated that this information ‘‘would be useful both in the evaluation of index filings . . . and for costof-service rate challenges to oil pipeline rates.’’ 32 However, in today’s order, the Commission does a complete about-face, withdrawing its proposal on grounds that it is ‘‘unnecessary and inconsistent’’ with the purposes of a ‘‘preliminary screen.’’ 33 The Commission fails to explain how the information currently available to shippers is adequate for purposes of monitoring and challenging the justness and reasonableness of oil pipeline rates, except to say that shippers can use ‘‘their knowledge of the pipeline system to support any cost-ofservice complaints.’’ 34 Moreover, while the Commission notes the potential cost impact this ANOPR proposal may have on oil pipeline companies, it appears to give scant consideration to the benefit this additional information would have for ratepayers and the public. Absent greater transparency into the costs underlying a specific rate, shippers are left with no more than a pitiable choice between the rate charged and a costly fishing expedition to obtain the information they need to challenge the rate in the first place. In light of the Commission’s historic practice of relying on shippers to challenge rates rather than initiate its own investigations where the rates charged may no longer be just and reasonable, it is imperative that the Commission ensure shippers have access to the information they need to carry out this essential check. In today’s order, the Commission fails to fulfill its last remaining responsibility to ensure oil pipeline rates remain just and reasonable. For these reasons, I respectfully dissent. Richard Glick. Commissioner. [FR Doc. 2020–04069 Filed 2–27–20; 8:45 am] BILLING CODE 6717–01–P 31 Id. 32 Id. 33 Withdrawal 34 Id. PO 00000 Order, 170 FERC ¶ 61,134 at P 6. P 7. Frm 00028 Fmt 4702 Sfmt 4702 RM17–1–000 RM15–19–000 DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Parts 1, 11, 16, and 129 [Docket No. FDA–2019–N–3325] RIN 0910–AH31 Laboratory Accreditation for Analyses of Foods; Extension of Comment Period AGENCY: Food and Drug Administration, HHS. Proposed rule; extension of comment period for the proposed rule and for its information collection provisions. ACTION: The Food and Drug Administration (FDA or we) is extending the comment period for the proposed rule, and for the information collection related to the proposed rule, entitled ‘‘Laboratory Accreditation for Analyses of Foods’’ that appeared in the Federal Register of November 4, 2019. We are taking this action in response to a request for an extension to allow interested persons additional time to consider the proposal. We also are taking this action to keep the comment period for the information collection provisions associated with the rule consistent with the comment period for the proposed rule. DATES: FDA is extending the comment period on the proposed rule published November 4, 2019 (84 FR 59452). Submit either electronic or written comments on the proposed rule by April 6, 2020. Submit comments on information collection issues under the Paperwork Reduction Act of 1995 (PRA) by April 6, 2020 (see the ‘‘Paperwork Reduction Act of 1995’’ section). ADDRESSES: You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before April 6, 2020. The https://www.regulations.gov electronic filing system will accept comments until 11:59 p.m. Eastern Time at the end of April 6, 2020. Comments SUMMARY: E:\FR\FM\28FEP1.SGM 28FEP1

Agencies

[Federal Register Volume 85, Number 40 (Friday, February 28, 2020)]
[Proposed Rules]
[Pages 11890-11893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04069]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 342, 343, and 357

[Docket No. RM17-1-000; Docket No. RM15-19-000]


Petition for a Rulemaking of the Liquids Shippers Group, Airlines 
for America, and the National Propane Gas Association; Revisions to 
Indexing Policies and Page 700 of FERC Form No. 6

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Withdrawal of advance notice of proposed rulemaking; denial of 
petition for rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
withdrawing its advance notice of proposed rulemaking (ANOPR) 
considering potential modifications to the Commission's policies for 
evaluating oil pipeline indexed rate changes and certain additions to 
the annual reporting requirements in FERC Form No. 6, page 700. 
Additionally, the Commission denies the petition for rulemaking filed 
by certain shippers seeking changes to page 700 reporting requirements.

DATES: The ANOPR published on November 2, 2016, at 81 FR 76315 (2016) 
is withdrawn as of February 28, 2020.

FOR FURTHER INFORMATION CONTACT:

Adrianne Cook, (Technical Information), Office of Energy Market 
Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-8849.
Monil Patel, (Technical Information), Office of Energy Market 
Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-8296
Andrew Knudsen, (Legal Information), Office of the General Counsel, 888 
First Street NE, Washington, DC 20426, (202) 502-6527.

SUPPLEMENTARY INFORMATION:
    1. On October 20, 2016, the Commission issued an advance notice of 
proposed rulemaking (ANOPR) in Docket No. RM17-1 seeking comment 
regarding potential modifications to the Commission's policies for 
evaluating oil pipeline indexed rate changes and certain additions to 
the FERC Form No. 6, page 700 (page 700) annual reporting 
requirements.\1\ Prior to the ANOPR, on April 20, 2015, certain 
shippers filed a petition for rulemaking in Docket No. RM15-19 
requesting that the Commission require oil pipelines to provide 
additional information on page 700.
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    \1\ Revisions to Indexing Policies and Page 700 of FERC Form No. 
6, 81 FR 76315 (Nov. 2, 2016), 157 FERC ] 61,047 (2016) (ANOPR).
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    2. For the reasons set forth below, we exercise our discretion to 
withdraw the ANOPR and to terminate the proceeding in Docket No. RM17-
1. We also deny the shippers' petition for rulemaking.

[[Page 11891]]

I. Background

    3. In 2015, the Liquids Shippers Group,\2\ Airlines for America,\3\ 
and the National Propane Gas Association \4\ (collectively, the Joint 
Shippers) filed a petition for rulemaking in Docket No. RM15-19 seeking 
to expand certain annual filing requirements related to the summary 
cost of service contained on page 700. Specifically, the Joint Shippers 
requested that the Commission require oil pipelines to disaggregate the 
total company data currently reported on page 700 and to file 
supplemental page 700s containing summary cost of service for (a) crude 
and product systems and (b) each ``rate design'' segment. The Joint 
Shippers' proposal also requested that all interested parties be given 
access to the workpapers used to prepare page 700. Staff held a 
technical conference on July 30, 2015, to discuss the Joint Shippers' 
petition with the petitioners, pipelines, and interested parties. The 
Commission received subsequent comments in September 2015 and October 
2015.\5\
---------------------------------------------------------------------------

    \2\ Liquids Shippers Group consists of the following crude oil 
or natural gas liquids producers: Anadarko Energy Services Company, 
Apache Corporation, Cenovus Energy Marketing Services Ltd., 
ConocoPhillips Company, Devon Gas Services, L.P., Encana Marketing 
(USA) Inc., Marathon Oil Company, Murphy Exploration and Production 
Company-USA, Noble Energy Inc., Pioneer Natural Resources USA, Inc., 
and Statoil Marketing & Trading (US) Inc.
    \3\ Airlines for America is a trade association representing 
cargo and passenger airlines, including Alaska Airlines, Inc., 
American Airlines Group (American Airlines and US Airways), Atlas 
Air, Inc., Delta Air Lines, Inc., Federal Express Corporation, 
Hawaiian Airlines, JetBlue Airways Corp., Southwest Airlines Co., 
United Continental Holdings, Inc., and United Parcel Service Co.
    \4\ The National Propane Gas Association is a national trade 
association of the propane industry with a membership of 
approximately 3,000 companies, including 38 affiliated state and 
regional associations representing members in all 50 states.
    \5\ Comments and reply comments were filed by the Association of 
Oil Pipe Lines (AOPL); Joint Shippers (National Propane Gas 
Association, Airlines for America, a consortium of major air 
carriers, and Valero Energy and Supply); the Liquids Shippers 
(Anadarko Energy Services Company, Apache Corporation, Cenovus 
Energy Marketing Services Ltd., ConocoPhillips Company, Devon Gas 
Services LP, Encana Marketing (USA) Inc., Marathon Oil Company, 
Murphy Exploration and Production Company USA, Noble Energy Inc., 
Pioneer Natural Resources USA Inc., and Statoil Marketing and 
Trading (US) Inc); Explorer Pipeline Company; Magellan Midstream 
Partners LP; Marathon Pipe Line LLC; Shell Pipeline Company LP; 
Plains Pipeline LP; SFPP L.P. (SFPP); NuStar Logistics LP; 
Enterprise Products Partners LP; and Buckeye Pipe Line Company, LP 
(Buckeye).
---------------------------------------------------------------------------

    4. The October 2016 ANOPR resulted from the Commission's ongoing 
assessment of its oil pipeline policies, including evaluation of page 
700 reporting requirements following the Joint Shippers' petition. In 
the ANOPR, the Commission sought comment regarding potential 
modifications to its policies for reviewing protests and complaints 
against oil pipeline index rate filings. In addition, the Commission 
sought comment regarding potential modifications to the data reporting 
requirements reflected on page 700. Initial comments were filed in 
January 2017 \6\ and reply comments were filed in March 2017.\7\
---------------------------------------------------------------------------

    \6\ Initial comments were filed by R. Gordon Gooch, Delek 
Logistics Partners, LP, Kinder Morgan, Inc., Buckeye Partners, L.P., 
Suncor Energy Marketing Inc., NuStar Logistics, L.P. and NuStar 
Pipeline Operating Partnership L.P., Shell Pipeline Company, LP, 
Enterprise Products Partners L.P., Magellan Midstream Partners L.P., 
The Texas Pipeline Association, Indicated Shippers, Marathon Pipe 
Line LLC, Plains All American, L.P., Colonial Pipeline Company, 
Enbridge Inc., Sinclair Oil Corporation, the Liquids Shippers Group, 
AOPL, APV Shippers (Airlines for America, National Propane Gas 
Association, and Valero Marketing and Supply Company), and the 
Canadian Association of Petroleum Producers (CAPP).
    \7\ Reply comments were filed by Magellan Midstream Partners 
L.P., APV Shippers, Indicated Shippers, the Liquid Shippers Group, 
the Canadian Association of Petroleum Producers, AOPL Enbridge, Inc, 
Colonial Pipeline Company, and R. Gordon Gooch.
---------------------------------------------------------------------------

II. Discussion

    5. Upon review of the record developed in this proceeding, we are 
not persuaded to proceed with the changes considered in either the 
ANOPR or the Joint Shippers' petition.
    6. Regarding the Joint Shippers' petition, the Commission 
previously identified concerns with the petition's proposal for (a) 
requiring supplemental page 700s for different rate design segments \8\ 
and (b) requiring pipelines to provide page 700 workpapers to 
shippers.\9\ We continue to believe that this information--which would 
effectively require every oil pipeline regulated by the Commission to 
file a detailed cost of service every year--is unnecessary and 
inconsistent with the purposes of the page 700 preliminary screen \10\ 
in the Commission's simplified and streamlined indexing regime.\11\
---------------------------------------------------------------------------

    \8\ ANOPR, 157 FERC ] 61,047 at PP 31-33.
    \9\ Id. P 48. In the ANOPR, the Commission also explained: ``The 
current data on page 700 allows a shipper to compare (a) a 
pipeline's revenues to its total cost of service and (b) changes to 
a pipeline's total cost of service.'' Id. This is the data needed to 
challenge an index rate as well as for a cost-of-service challenge. 
The Commission also noted that requiring workpapers raised potential 
confidentiality concerns, including ``(a) shipper information 
protected by section 15(13) of the ICA, which prohibits disclosure 
of an individual shipper's movements and (b) the pipeline's 
competitive business information.'' Id. P 49. Although we decline to 
require workpapers, we note that page 700 includes additional data 
on lines 1-8 that provide significant detail regarding the 
pipeline's cost of service.
    \10\ The Commission has stated that the total company data on 
page 700 merely serves as a preliminary screening tool to evaluate 
pipeline rates and that ``[p]age 700 information alone is not 
intended to show what a just and reasonable rate should be.'' 
Revisions to Page 700 of FERC Form No. 6, Order No. 783, 144 FERC ] 
61,049, at P 4 (2013) (internal citations omitted). The level of the 
just and reasonable rate can be determined upon a subsequent 
investigation, most likely at hearing before an administrative law 
judge.
    \11\ Indexing simplifies and streamlines ratemaking procedures 
by allowing a particular pipeline's rates to deviate from its 
particular costs and by using a broad industry-wide inflationary 
measure as opposed to costly individual cost-of-service proceedings. 
Revisions to Oil Pipeline Regulations Pursuant to Energy Policy Act 
of 1992, Order No. 561, FERC Stats. & Regs. ] 30,985, at 30,948 
(1993), order on reh'g and clarification, Order No. 561-A, FERC 
Stats. & Regs. ] 31,000 (1994), aff'd sub nom. Ass'n of Oil Pipe 
Lines v. FERC, 83 F.3d 1424 (D.C. Cir. 1996) (AOPL I). As the United 
States Court of Appeals for the District of Columbia Circuit has 
explained, requiring an individualized cost-of-service evaluation 
for each pipeline would be inconsistent with the simplification 
mandated by the Energy Policy Act of 1992. Ass'n of Oil Pipe Lines 
v. FERC, 281 F.3d 239, 244 (D.C. Cir. 2002) (AOPL II).
---------------------------------------------------------------------------

    Whereas this proposal would provide some minimal benefit to 
shippers, under our simplified indexing regime, it would impose 
considerable industry-wide cost upon pipelines.\12\ After carefully 
weighing these factors, and considering other avenues available to 
shippers, as discussed below, we reaffirm our earlier rejection of this 
proposal.
---------------------------------------------------------------------------

    \12\ Moreover, the burden associated with segmentation is not a 
one-time burden. In addition to the annual record-keeping 
requirements, as pipelines add capacity, spin-off assets, and 
otherwise evolve, the pipelines would need to re-evaluate their rate 
design segments.
---------------------------------------------------------------------------

    7. We also deny the Joint Shippers' request for supplemental page 
700s that separately report crude oil and product pipeline system cost-
of-service data. After further consideration of this proposal as part 
of the ANOPR proceeding, we conclude that imposing such an annual cost-
of-service reporting obligation is unnecessary for the purposes of a 
preliminary screen in the Commission's simplified indexing regime. 
Segmentation of page 700 by crude and product would apply to a limited 
number of pipeline filers.\13\ Furthermore, shippers can use the data 
already on Form No. 6 \14\ and their

[[Page 11892]]

knowledge of the pipeline system to support any cost-of-service 
complaints. The record does not support imposing this additional annual 
reporting requirement on pipelines.
---------------------------------------------------------------------------

    \13\ Our decision to deny the Joint Shippers' request is 
supported by the fact that there are only a limited number of page 
700 filers (6.9 percent or 15 total filers) that transport 
significant quantities (greater than 10 percent of total pipeline 
capacity) of both crude oil and petroleum products as reflected on 
Form No. 6, page 601.
    \14\ Regarding cost-of-service complaints, Form No. 6 already 
provides separate crude and product data for several costs, 
transportation revenues, and throughput. Pages 302-303 of Form No. 6 
include separate crude and product cost data for salary and wages, 
fuel and power, outside services, rentals, insurance, taxes, and 
depreciation. Pages 300-301 of Form No. 6 separate revenues 
associated with crude transportation from revenues associated with 
product transportation.
---------------------------------------------------------------------------

    8. We also decline to adopt the proposal contemplated in the ANOPR 
that pipelines file supplemental page 700s for non-contiguous and major 
rate design systems.\15\ As a general matter, such filings would not 
provide shippers with the information needed to evaluate each pipeline 
system on a cost-of-service basis.\16\ However, despite providing 
limited benefits, these filings would involve some of the same 
complexity as full rate design segmentation, requiring the pipeline to 
allocate costs to different parts of its system either by direct 
assignment or via some other allocation method.\17\ Given this 
additional complexity, we conclude that requiring these supplemental 
page 700s filings would not be appropriate for the purposes of a 
preliminary screen in the Commission's simplified indexing ratemaking 
regime that relies upon industry-wide costs and not the pipeline's 
individual cost of service.
---------------------------------------------------------------------------

    \15\ ANOPR, 157 FERC ] 61,047 at P 28 (defining major pipeline 
systems as ``large pipeline systems (at least over 250 miles) that 
serve markets (either origin or destination) different from the 
remainder of the pipeline's system'' and ``separate pipeline systems 
(even those below the 250-mile threshold) established by a final 
Commission order in a litigated rate case'').
    \16\ Much like the total company data, the partial segmentation 
proposals may commingle costs from multiple rate design systems or 
from parts of the system using different rate methodologies (such as 
indexed, market-based, and settlement rates).
    \17\ See id. PP 35-42 (explaining how these proposals would 
require additional data on page 700 to address allocation issues); 
AOPL Initial Comments, Docket No. RM17-1, Van Hoecke Decl. at 25 
(Jan. 18, 2017) (explaining allocation of costs).
---------------------------------------------------------------------------

    9. Finally, regarding the ANOPR's proposal to disaggregate revenue 
and throughput data between cost and non-cost based-rates,\18\ we find 
that this proposal would be overly complex, and therefore, not 
consistent the Commission's simplified and streamlined indexing regime. 
Furthermore, the ANOPR's proposal to disaggregate revenue and 
throughput data between cost and non-cost based rates could lead to 
misleading comparisons of the pipeline's indexed rates on one portion 
of the pipeline system to the costs of the entire pipeline.\19\ 
Although the ANOPR sought to propose ways in which the data could 
nonetheless be useful,\20\ we conclude that the potential distortion 
caused by such an ``apples to oranges'' comparison supports not 
imposing this disaggregation of revenue and throughput data as an 
annual, industry-wide reporting requirement. These issues are better 
addressed in individual cost-of-service complaint proceedings.
---------------------------------------------------------------------------

    \18\ ANOPR, 157 FERC ] 61,047 at PP 43-46.
    \19\ For example, a contractual committed rate could apply to 
the newer part of the pipeline system for which the rate base has 
not depreciated. In contrast, the cost-based rates may apply to 
older, legacy parts of the system in which the rate base has 
depreciated. Id. at n.65. In acknowledging this mismatch, the 
Commission specifically stated that it did not intend to use the 
disaggregated revenues under the Commission's indexing regime, which 
is the primary regime for setting pipeline rates. Id. P 46.
    \20\ Id.
---------------------------------------------------------------------------

    10. In declining to adopt these additional reporting obligations on 
page 700, we seek to preserve the intent of the Energy Policy Act of 
1992 to ensure a simplified ratemaking regime. While these changes to 
page 700 would require pipelines to provide more cost-of-service 
information in their annual filings, the Commission's primary oil 
pipeline ratemaking regime is indexing, not cost of service.\21\ Since 
the Energy Policy Act of 1992, the Commission has periodically expanded 
the information that pipelines must report on page 700,\22\ and we are 
concerned about further expanding this reporting requirement in 
circumstances where, as here, we believe that it would provide minimal 
benefits to shippers while expanding the burden and complexity under 
our indexing regime. Rather than imposing another additional annual 
industry-wide reporting requirement, we prefer less burdensome and less 
complex options that are consistent with the Energy Policy Act of 
1992's mandate for simplified rate regulation. For example, as an 
alternative to establishing an industry-wide reporting requirement, 
under the Commission's current policies, shippers are able to file 
cost-of-service complaints and, once such a complaint is filed, an oil 
pipeline may be required to provide more specific data than the 
contents of page 700 upon a shipper's complaint against the pipeline's 
rates.\23\ Furthermore, in responding to a cost-of-service complaint, 
the Commission will consider arguments beyond the total company cost-
of-service data on page 700, and this more expansive evaluation could 
include claims by shippers that the pipeline's segments are obscuring 
over-recoveries. In such circumstances, the Commission will set such 
issues of material fact for hearing.\24\ We believe this approach more 
appropriately balances pipeline and shipper interests under our 
simplified indexing regime.
---------------------------------------------------------------------------

    \21\ AOPL II, 281 F.3d at 244.
    \22\ As promulgated in 1994, page 700 included only four lines: 
(1) Total costs, (2) revenues, (3) barrels, and (4) barrel-miles. 
Cost-of-Service Reporting and Filing Requirements for Oil Pipelines, 
Order No. 571, FERC Stats. & Regs. ] 31,006, at 31,168-69 (1994), 
aff'd, AOPL I, 83 F.3d 1424 (D.C. Cir. 1996). Page 700 subsequently 
expanded to include depreciation expense, amortization of deferred 
earnings, rate base, rate of return, return on rate base, income tax 
allowance, and total cost of service. Revisions to and Electronic 
Filing of the FERC Form No. 6 and Related Uniform Systems of 
Account, Order No. 620, FERC Stats. & Regs. ] 31,115 (2000), reh'g 
denied, Order No. 620-A, 94 FERC ] 61,130 (2001). The third 
iteration of page 700 added additional information regarding rate 
base, rate of return, return on trended original cost rate base, and 
income tax allowance. Revisions to Page 700 of FERC Form No. 6, 
Order No. 783, 144 FERC ] 61,049, at PP 29-40 (2013), reh'g denied, 
Order No. 783-A, 148 FERC ] 61,235 (2014).
    \23\ See ConocoPhillips Co. v. SFPP, L.P., 137 FERC ] 61,005 
(2011) (upon a cost-of-service complaint, requiring the pipeline to 
provide system-specific data prior to further investigation at 
hearing). Furthermore, if not available prior to the Commission's 
investigation at hearing, the additional information sought by the 
Joint Shippers' petition becomes available at an investigatory 
hearing as part of the discovery process.
    \24\ The Commission applies a flexible standard when deciding 
whether to set a cost-of-service complaint for hearing. See, e.g., 
Epsilon Trading LLC v. Colonial Pipeline Co., 164 FERC ] 61,202, at 
PP 5, 50-51 (2018) (setting for hearing a cost-of-service complaint 
where pipeline's page 700 showed revenues exceeding costs by 2.5 
percent, but the complainants alleged reasonable grounds to suggest 
that the cost components embedded in page 700 were not accurate).
---------------------------------------------------------------------------

    11. We also decline to adopt the proposals in the ANOPR for 
modifying the Commission's policies for addressing protests and 
complaints against index rate increases. However, the Commission 
discusses some potential changes to these policies in our concurrent 
order in HollyFrontier.\25\
---------------------------------------------------------------------------

    \25\ See HollyFrontier Ref. & Mktg. LLC v. SFPP, L.P., v 170 
FERC ] 61,133 (2020). Among other things, that order, explains that 
the substantially exacerbate test (which was one of the issues 
discussed in the ANOPR) is arguably inconsistent with the objectives 
of indexing, and proposes to eliminate the substantially exacerbate 
test and replace it with the percentage comparison test. We also 
plan to initiate a separate, generic proceeding in which we will be 
requesting briefing from industry participants on (a) the proposal 
to process complaints against index rate increases using the 
percentage comparison test and to eliminate the substantially 
exacerbate test and (b) the use of the 10 percent threshold level 
when applying the percentage comparison test to complaints.
---------------------------------------------------------------------------

    12. Accordingly, we exercise our discretion to withdraw the ANOPR 
and to terminate the proceeding in Docket No. RM17-1. Similarly, we 
also deny the Joint Shippers' petition for rulemaking. We continue to 
monitor and evaluate the Commission's oil pipeline policies, and value 
the comments filed by participants in these proceedings. This input 
will be considered in our ongoing effort to identify potential 
enhancements to our regulatory policies and processes.

[[Page 11893]]

    By direction of the Commission. Commissioner Glick is dissenting 
with a separate statement attached.

    Issued: February 20, 2020.
Kimberly D. Bose,
Secretary.

United States of America Federal Energy Regulatory Commission

------------------------------------------------------------------------
                                                            Docket No.
------------------------------------------------------------------------
Revisions to Indexing Policies and Page 700 of FERC Form      RM17-1-000
 No. 6..................................................
Petition for a Rulemaking of the Liquids Shippers Group,     RM15-19-000
 Airlines for America, and the National Propane Gas
 Association............................................
------------------------------------------------------------------------

    GLICK, Commissioner, dissenting:
    I am dissenting from today's order withdrawing the Advance 
Notice of Proposed Rulemaking (ANOPR) and denying shippers' petition 
for rulemaking, because the Commission must do more to ensure 
shippers and the Commission have the information necessary to 
protect against unjust and reasonable oil pipeline rates.\26\ It is 
especially critical to provide shippers with adequate transparency 
into pipeline costs, given that the Commission has chosen to rely 
solely on shippers to ensure that pipeline rates are just and 
reasonable, as required by the Interstate Commerce Act (ICA).\27\ 
The Commission has the statutory authority to initiate its own cost-
of-service investigations into pipeline rates but has for decades 
chosen not to do so.\28\ Instead of summarily terminating this 
proceeding, the Commission should have proceeded with a Notice of 
Proposed Rulemaking aimed at enhancing pipelines' data reporting 
requirements, so that the information available to shippers and the 
public is useful both in the evaluation of index filings and for 
cost-of-service rate challenges.
---------------------------------------------------------------------------

    \26\ Revisions to Indexing Policies and Page 700 of FERC Form 
No. 6, 170 FERC ] 61,134 (2020) (Withdrawal Order).
    \27\ 49 App. U.S.C. 1(5) (1988).
    \28\ As the Commission explained in Order No. 561, the 
Commission retains the responsibility to ensure rates are just and 
reasonable under the ICA, and for this reason it ``will not 
promulgate an explicit bar to Commission-initiated rate 
investigations.'' Revisions to Oil Pipeline Regulations Pursuant to 
the Energy Policy Act of 1992, Order No. 561, FERC Stats. & Regs. ] 
30,985, at 30,967 (1993). Nonetheless, the Commission explained 
that, while it ``believes it is advisable to retain the authority to 
investigate a rate on its own motion, it should make clear that it 
does not contemplate invoking such authority except in the most 
unusual circumstances.'' Id.
---------------------------------------------------------------------------

    The Commission is responsible for ensuring that the rates oil 
pipelines charge are just and reasonable. Through the ANOPR, the 
Commission sought to enhance the transparency of information 
reported on FERC Form No. 6, page 700, to ensure the public can 
effectively assess the reasonableness of oil pipeline rates and so 
that the Commission can ``better fulfill its statutory obligations 
under the ICA.'' \29\ As the Commission explained, a pipeline's 
costs associated with providing one service may be ``fundamentally 
different'' from the costs of providing another service.\30\ Because 
the Commission's regulations only require pipelines to report 
company-wide data, the information currently available to shippers 
is at best, a rough approximation of the costs underlying a 
particular shipper's rates.
---------------------------------------------------------------------------

    \29\ Revisions to Indexing Policies and Page 700 of FERC Form 
No. 6, 157 FERC ] 61,047, at P 5 (2016) (ANOPR Order).
    \30\ Id. P 27.
---------------------------------------------------------------------------

    In the ANOPR, the Commission proposed to require pipelines to 
report more granular data, so that shippers could use the 
information to compare the rate they are being charged ``with costs 
that are more closely associated with that particular rate.'' \31\ 
The Commission stated that this information ``would be useful both 
in the evaluation of index filings . . . and for cost-of-service 
rate challenges to oil pipeline rates.'' \32\ However, in today's 
order, the Commission does a complete about-face, withdrawing its 
proposal on grounds that it is ``unnecessary and inconsistent'' with 
the purposes of a ``preliminary screen.'' \33\ The Commission fails 
to explain how the information currently available to shippers is 
adequate for purposes of monitoring and challenging the justness and 
reasonableness of oil pipeline rates, except to say that shippers 
can use ``their knowledge of the pipeline system to support any 
cost-of-service complaints.'' \34\ Moreover, while the Commission 
notes the potential cost impact this ANOPR proposal may have on oil 
pipeline companies, it appears to give scant consideration to the 
benefit this additional information would have for ratepayers and 
the public. Absent greater transparency into the costs underlying a 
specific rate, shippers are left with no more than a pitiable choice 
between the rate charged and a costly fishing expedition to obtain 
the information they need to challenge the rate in the first place.
---------------------------------------------------------------------------

    \31\ Id.
    \32\ Id.
    \33\ Withdrawal Order, 170 FERC ] 61,134 at P 6.
    \34\ Id. P 7.
---------------------------------------------------------------------------

    In light of the Commission's historic practice of relying on 
shippers to challenge rates rather than initiate its own 
investigations where the rates charged may no longer be just and 
reasonable, it is imperative that the Commission ensure shippers 
have access to the information they need to carry out this essential 
check. In today's order, the Commission fails to fulfill its last 
remaining responsibility to ensure oil pipeline rates remain just 
and reasonable.
    For these reasons, I respectfully dissent.

Richard Glick.
Commissioner.

[FR Doc. 2020-04069 Filed 2-27-20; 8:45 am]
 BILLING CODE 6717-01-P
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