Federal Register Notice of Final Rule

63680

Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Rules and Regulations

PART 97—STANDARD INSTRUMENT
APPROACH PROCEDURES
1. The authority citation for part 97
continues to read as follows:

■

Authority: 49 U.S.C. 106(g), 40103, 40106,
40113, 40114, 40120, 44502, 44514, 44701,
44719, 44721–44722.
FDC date

State

City

Airport

ILS/DME, ISMLS, MLS/DME, MLS/
RNAV; § 97.31 RADAR SIAPs; § 97.33
RNAV SIAPs; and § 97.35 COPTER
SIAPs, Identified as follows:
* * * Effective Upon Publication

FDC
number

10/05/06
10/07/06
10/11/06
10/11/06
10/11/06
10/11/06
10/11/06

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WY
AL
AR
FL
IN
NY

Indianapolis .....................
Big Piney .........................
Mobile ..............................
Pine Bluff .........................
Boca Raton .....................
Evansville ........................
White Plains ....................

Indianapolis Intl ....................................
Big Piney-Marbleton .............................
Mobile Downtown .................................
Grider Field ..........................................
Boca Raton ..........................................
Evansville Regional ..............................
Westchester County .............................

6/2576
6/2781
6/3096
6/3054
6/3070
6/3059
6/3148

10/11/06
10/11/06
10/11/06
10/12/06
10/12/06
10/12/06
10/13/06
10/13/06
10/13/06
10/16/06
10/16/06
10/16/06
10/16/06
10/17/06
10/17/06
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10/17/06

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OH
PA
WV
WA
WA
WA
FM
FM
TN
CA
CA
CA
CA
NV
NV
NV
NV

Lorain/Elyria ....................
Meadville .........................
Huntington .......................
Spokane ..........................
Spokane ..........................
Spokane ..........................
Kosrae Island ..................
Kosrae Island ..................
Somerville ........................
Los Angeles ....................
Los Angeles ....................
Los Angeles ....................
Los Angeles ....................
Reno ................................
Reno ................................
Reno ................................
Reno ................................

Lorain County Regional .......................
Port Meadville ......................................
Tri-State/Milton J. Ferguson ................
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Spokane Intl .........................................
Spokane Intl .........................................
Kosrae ..................................................
Kosrae ..................................................
Fayette Co ...........................................
Los Angeles Intl ...................................
Los Angeles Intl ...................................
Los Angeles Intl ...................................
Los Angeles Intl ...................................
Reno/Tahoe Intl ...................................
Reno/Tahoe Intl ...................................
Reno/Tahoe Intl ...................................
Reno/Tahoe Intl ...................................

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FL
NY

Marathon .........................
Elmira/Corning Regional

The Florida Keys Marathon .................
Elmira ...................................................

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[FR Doc. E6–18085 Filed 10–30–06; 8:45 am]
BILLING CODE 4910–13–P

DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 157
[Docket No. RM06–7–000; Order No. 686]

Revisions to the Blanket Certificate
Regulations and Clarification
Regarding Rates
October 19, 2006.

Federal Energy Regulatory
Commission, DOE.
ACTION: Final rule.
AGENCY:

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2. Part 97 is amended to read as
follows:
By amending: § 97.23 VOR, VOR/
DME, VOR or TACAN, and VOR/DME
or TACAN; § 97.25 LOC, LOC/DME,
LDA, LDA/DME, SDF, SDF/DME;
§ 97.27 NDB, NDB/DME; § 97.29 ILS,

■

SUMMARY: The Federal Energy
Regulatory Commission (Commission) is
amending its blanket certification
regulations to expand the scope and
scale of activities that may be
undertaken pursuant to blanket
certificate authority. The Commission is
expanding the types of natural gas

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projects permitted under blanket
certificate authority and increasing the
cost limits that apply to blanket
projects. In addition, the Commission
clarifies that a natural gas company is
not necessarily engaged in an unduly
discriminatory practice if it charges
different customers different rates for
the same service based on the date that
customers commit to service. Rather
than rely on the more demanding
process of submitting an application
under section 7(c) of the Natural Gas
Act for certificate authorization for
every project, the revised regulations
will allow interstate natural gas
pipelines to employ the streamlined
blanket certificate procedures for larger
projects and for a wider variety of types
of projects, thereby increasing
efficiencies, and decreasing time and
costs, associated with the construction
and maintenance of the nation’s natural
gas infrastructure.
The rule will become effective
January 2, 2007.

DATES:

FOR FURTHER INFORMATION CONTACT:

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Subject
ILS or LOC Rwy 14 Amdt 5.
VOR Rwy 31, Amdt 3B.
RNAV (GPS) Rwy 18, Orig.
RNAV (GPS) Rwy 18 Orig.
RNAV (GPS) Rwy 5, Orig.
ILS or LOC Rwy 4, Amdt 1A.
This Notam Replaces FDC 6/
2223 Published in TL06–23.
ILS Rwy 34, Amdt 3B.
ILS Rwy 7, Amdt 6A.
LOC Rwy 25, Amdt 5.
ILS or LOC Rwy 12, Amdt 11A.
ILS or LOC Rwy 21, Amdt 20.
ILS Rwy 21 (Cat III), Amdt 20.
ILS Rwy 21(Cat II), Amdt 20.
RNAV (GPS) Rwy 5, Orig.
RNAV (GPS) Rwy 23, Orig.
NDB Rwy 19, Amdt 1.
ILS Rwy 6L, Amdt 11.
ILS or LOC Rwy 24R, Amdt 23.
ILS or LOC Rwy 25R, Amdt 15.
ILS or LOC Rwy 24L, Amdt 24.
ILS Rwy 16R, Amdt 10A.
LOC 2 Rwy 16R, Amdt 6B.
VOR or GPS–D, Amdt 6.
LOC/DME BC Rwy 34L, Amdt
1B.
NDB or GPS Rwy 7, Amdt 3A.
ILS Rwy 24, Amdt 18A.

Gordon Wagner, Office of the General
Counsel, Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426.
[email protected]. (202) 502–
8947.
Michael McGehee, Office of Energy
Projects, Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426.
[email protected]. (202) 502–
8962.
SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T. Kelliher,
Chairman; Suedeen G. Kelly, Marc
Spitzer, Philip D. Moeller, and Jon
Wellinghoff.

1. On June 16, 2006, the Federal
Energy Regulatory Commission
(Commission) issued a Notice of
Proposed Rulemaking (NOPR) in this
proceeding.1 In the NOPR, the
Commission proposed to amend its Part
157, Subpart F, regulations to expand
the scope and scale of activities that
1 71 FR 36276 (June 26, 2006); FERC Stats. & Regs.
¶ 32,606 (2006); 115 FERC ¶ 61,338 (2006).

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Rules and Regulations
may be undertaken pursuant to blanket
certificate authority and clarified that
existing Commission policies permit
natural gas companies to charge
different rates to different classes of
customers. This Final Rule considers
comments submitted in response to the
NOPR, and as a result, makes certain
relatively minor modifications to the
regulatory revisions described in the
NOPR, and affirms the clarification
regarding rate treatment described in the
NOPR.

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I. Background
2. A natural gas company must obtain
a certificate of public convenience and
necessity pursuant to section 7(c) of the
Natural Gas Act (NGA) to construct,
acquire, alter, abandon, or operate
jurisdictional gas facilities or to provide
jurisdictional gas services. Once issued
a case-specific NGA section 7(c)
certificate, a gas company may also
obtain a blanket certificate under NGA
section 7(c) and Part 157, Subpart F, of
the Commission’s regulations to
construct, acquire, alter, or abandon
certain types of facilities without the
need for further case-by-case certificate
authorization for each particular
project.2 Currently, blanket activities are
limited to a maximum cost of
$8,200,000 per project undertaken
without prior notice (also referred to as
self-implementing or automatic
authorization projects) and $22,700,000
per project undertaken subject to prior
notice.3 Blanket certificate authority
only applies to a restricted set of
facilities and services, and currently
does not extend to mainlines, storage
field facilities, and facilities receiving
gas from a liquefied natural gas (LNG)
plant or a synthetic gas plant.
3. This Final Rule expands the scope
of activities that can be undertaken
2 Certain activities are exempted from the
certificate requirements of NGA section 7(c). For
example, 18 CFR 2.55 in the Commission’s
regulations exempts auxiliary installations and the
replacement of physically deteriorated or obsolete
facilities, and Part 284, Subpart I, of the regulations
provides for the construction and operation of
facilities needed to alleviate a gas emergency.
3 These are the current cost limits for calendar
year 2006. Cost limits are adjusted annually. See 18
CFR 157.208(d), Table I (2006), as updated. As
noted in the NOPR, in response to the impacts of
hurricanes Katrina and Rita, these cost limits have
been temporarily doubled for blanket projects that
are built and placed into service between November
2005 and February 2007 to increase access to gas
supplies. In addition, blanket certificate authority
has been temporarily extended to cover facilities
that would otherwise require case-specific
authorization, namely, an extension of a mainline;
a facility, including compression and looping, that
alters the capacity of a mainline; and temporary
compression that raises the capacity of a mainline.
See Expediting Infrastructure Construction To
Speed Hurricane Recovery, 113 FERC ¶ 61,179
(2005) and 114 FERC ¶ 61,186 (2006).

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pursuant to blanket authority by (1)
increasing the project cost limit to
$9,600,000 for an automatic
authorization project and $27,400,000
for a prior notice project 4 and (2)
expanding the types of facilities that
may be acquired, constructed, modified,
replaced, abandoned, and operated
under blanket certificate authority to
include mainline facilities, certain LNG
and synthetic gas facilities, and certain
storage facilities. In addition, the
Commission clarifies that a natural gas
company is not necessarily engaged in
an unduly discriminatory practice if it
charges different customers different
rates for the same service based on the
date that customers commit to service.
II. Notice and Comment
A. Petition To Expand the Blanket
Certificate Program and Clarify Criteria
Defining Just and Reasonable Rates
4. On November 22, 2005, the
Interstate Natural Gas Association of
America (INGAA) and the Natural Gas
Supply Association (NGSA) jointly filed
a petition under § 385.207(a) of the
Commission’s regulations proposing
that the blanket certificate provisions be
expanded to include mainline facilities,
LNG takeaway facilities, and certain
underground storage field facilities
which are currently excluded from the
blanket certificate program, and that the
cost limits for all categories of blanket
projects be raised. Petitioners also argue
in favor of preferential rate treatment for
‘‘foundation shippers,’’ i.e., customers
that sign up early for firm service and
thereby establish the financial
foundation for a new project, and seek
assurance that providing customers that
commit early to a proposed project a
more favorable rate than customers that
seek service later will not be viewed as
unduly discriminatory.
5. Notice of the INGAA/NGSA
petition was published in the Federal
Register on December 9, 2005,5 and
comments on the petition were filed by
the American Gas Association (AGA);
American Public Gas Association
(APGA); Anadarko Petroleum
Corporation (Anadarko); Devon Energy
Corporation (Devon); Duke Energy Gas
Transmission Corporation (Duke);
Enstor Operating Company, LLC
(Enstor); Honeoye Storage Corporation
(Honeoye Storage); Illinois Municipal
Gas Agency (Illinois Municipal);
4 Upon the effective date of this Final Rule, these
higher project cost limits will be substituted for the
amounts that now appear for the current calendar
year in 18 CFR 157.208(d), Table I, with these
higher amounts then subject to the annual inflation
adjustment.
5 70 FR 73232 (Dec. 9, 2005).

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63681

Independent Petroleum Association of
America (IPAA); Kinder Morgan
Interstate Gas Transmission, LLC
(Kinder Morgan); NiSource Inc.
(NiSource); Process Gas Consumers
Group (Process Gas Consumers); Public
Service Commission of New York
(PSCNY); and Sempra Global (Sempra).
B. Notice of Proposed Rulemaking
6. After consideration of the petition
and comments thereto, the Commission
issued a NOPR that (1) proposed
adopting the petitioners’ requested
regulatory revisions, with relatively
minor modifications, and (2) clarified
that the petitioners’ hypothetical tiered
rate structure for a new project could be
accepted under the Commission’s
current policies. Notice of the NOPR
was published in the Federal Register
on June 29, 2006.6 Comments on the
NOPR were filed by the AGA; APGA;
Boardwalk Pipeline Partners, LP
(Boardwalk); Consolidated Edison
Company of New York, Inc. (Con Ed)
jointly with Orange and Rockland
Utilities, Inc. (Orange and Rockland);
Dominion Transmission, Inc., Dominion
Cove Point LNG, LP, and Dominion
South Pipeline Company, LP
(Dominion); Duke; HFP Acoustical
Consultants Inc. (HFP Acoustical);
INGAA; IPAA; NGSA; Process Gas
Consumers; Sempra; and Williston
Basin Interstate Pipeline Company
(Williston). Further comments were
filed by INGAA jointly with NGSA, and
by AGA.
III. Discussion
7. The blanket certificate program was
designed to provide an administratively
efficient means to authorize a generic
class of routine activities, without
subjecting each minor project to a full,
case-specific NGA section 7 certificate
proceeding. In 1982, in instituting the
blanket certificate program, the
Commission explained the new program
as follows:
[T]he final regulations divide the various
actions that the Commission certificates into
several categories. The first category applies
to certain activities performed by interstate
pipelines that either have relatively little
impact on ratepayers, or little effect on
pipeline operations. This first category also
includes minor investments in facilities
which are so well understood as an
established industry practice that little
scrutiny is required to determine their
compatibility with the public convenience
and necessity. The second category of
activities provides for a notice and protest
procedure and comprises certain activities in
which various interested parties might have
a concern. In such cases there is a need to
6 71

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FR 36276 (June 26, 2006).

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Rules and Regulations

provide an opportunity for a greater degree
of review and to provide for possible
adjudication of controversial aspects.
Activities not authorized under the blanket
certificate are those activities which may
have a major potential impact on ratepayers,
or which propose such important
considerations that close scrutiny and casespecific deliberation by the Commission is
warranted prior to the issuance of a
certificate.7

8. The Commission continues to
apply the above criteria in an effort to
distinguish those types of activities that
may appropriately be constructed under
blanket certificate authority from those
projects that merit closer, case-specific
scrutiny due to their potentially
significant impact on rates, services,
safety, security, competing natural gas
companies or their customers, or on the
environment. The Commission believes
the regulatory revisions put in place by
this Final Rule are consistent with the
above-described rationale for and
constraints on the blanket certificate
program.
9. In addition, ‘‘[u]nder section 7 of
the NGA, pursuant to which the blanket
certificate rule is promulgated,’’ the
Commission has ‘‘an obligation to issue
certificates only where they are required
by the public convenience and
necessity. The blanket certificate rules
set out a class of transactions, subject to
specific conditions, that the
Commission has determined to be in the
public convenience and necessity.’’ 8 As
discussed in the NOPR, and as further
explained below, the Commission
believes that the class of blanket-eligible
transactions can be enlarged consistent
with its statutory obligation to affirm
that each new project or service is
required by the public convenience and
necessity.
A. Proposed Regulatory Revisions,
Comments, and Commission Response
10. The Commission proposes to
expand the scope of blanket certificate
activities to include facilities and
services that have heretofore been
excluded from the blanket program and
7 47

FR 24254 (June 4, 1982).
of Natural Gas Pipelines After Partial
Wellhead Decontrol, Order No. 436, 50 FR 42408
(Oct. 18, 1985), FERC Stats. & Regs. ¶ 30,665 at
31,554 (1985), vacated and remanded, Associated
Gas Distributors v. FERC, 824 F.2d 981 (D.C. Cir.
1987), cert. denied, 485 U.S. 1006 (1988), readopted
on an interim basis, Order No. 500, 52 FR 30334
(Aug. 14, 1987), FERC Stats. & Regs. ¶ 30,761
(1987), remanded, American Gas Association v.
FERC, 888 F.2d 136 (D.C. Cir. 1989), readopted,
Order No. 500–H, 54 FR 52344 (Dec. 21, 1989),
FERC Stats. & Regs. ¶ 30,867 (1989), reh’g granted
in part and denied in part, Order No. 500–I, 55 FR
6605 (Feb. 26, 1990), FERC Stats. & Regs. ¶ 30,880
(1990), aff’d in part and remanded in part,
American Gas Association v. FERC, 912 F.2d 1496
(D.C. Cir. 1990), cert. denied, 111 S.Ct. 957 (1991).

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8 Regulation

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to expand the scale of blanket certificate
activities by raising the current project
cost limits.
B. Expanding Blanket Authority to
Cover Currently Excluded Facilities
11. The Final Rule adds §§ 157.210,
.212, and .213 to include, respectively,
certain mainline, LNG and synthetic
gas, and storage facilities within the
blanket certificate program. As
discussed in the NOPR, these facilities
were initially barred from the blanket
program out of concern that their cost
and operation could adversely impact
existing customers’ rates and services.
These concerns remain valid, and in
addition, there has been increased
attention to the environmental, safety,
and security implications of all natural
gas facilities. To ensure these matters
receive appropriate review, all projects
involving the additional types of
facilities now permitted under the
expanded blanket certificate program
(with the exception of the remediation
and maintenance of underground
storage field facilities) will be subject to
the prior notice provisions of the
regulations regardless of their estimated
costs. As explained in the NOPR, the
Commission expects that by requiring
prior public notice for blanket projects
involving these previously excluded
facilities, and by providing for more
information to be included in notices to
affected landowners and the public, and
by providing additional time to assess
proposed blanket projects, the
Commission, affected landowners, and
others will be afforded a reasonable
opportunity to review the potential
impacts of proposed projects prior to
construction.
12. APGA asks that the Commission
affirm these measures will ensure
adequate staff review of prior notice
submissions. The Commission expects
that the revised regulations will enable
staff to make a meaningful assessment of
proposed blanket projects—and as
appropriate, protest pursuant to
§ 157.205(e) of the Commission’s
regulations—prior to a project going
forward.
1. Section 157.210, Mainline Natural
Gas Facilities
13. The Final Rule adds § 157.210 to
allow blanket certificate holders to
acquire, construct, modify, replace, and
operate mainline gas facilities. The
Final Rule makes the following
modifications. At the end of the first
sentence of this section, the phrase
‘‘natural gas mainline facilities,’’ is
qualified by adding ‘‘including
compression and looping, that are not
eligible facilities under

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§ 157.202(b)(2)(i).’’ This clarifies that
blanket certificate authority can be
employed for mainline projects that
include compression and loop line
facilities, and also clarifies, in response
to INGAA’s request, that this new
section does not displace, but is in
addition to, the existing provisions
which state that certain mainline
facilities are eligible to be replaced or
rearranged under blanket authority. In
addition, the reference in the NOPR to
the authority to ‘‘abandon’’ is removed,
since as Williston observes, blanket
abandonment provisions are described
in § 157.216 of the Commission’s
regulations. Instead, a cross-reference to
§ 157.210 will be added to § 157.216, so
that the blanket abandonment authority
and procedure now in place will be
extended to new mainline facilities and
services.
14. INGAA, Duke, and Dominion
insist there is no need for prior notice
for mainline projects that come under
the automatic authorization cost limit,
asserting that the Commission already
has the capability to monitor mainline
projects for adverse impacts, abuses,
and segmenting by means of a review of
annual reports and post-construction
audits. On the other hand, APGA and
IPAA argue in favor of prior notice for
all § 157.210 mainline activity,
regardless of cost.
15. Although the Commission is
comfortable with its capability to assess
and monitor the variety of activities
currently included within the blanket
certificate program, this Final Rule
draws into the blanket program facilities
which heretofore have been deliberately
excluded due to the expectation that the
limited regulatory oversight provided
under the blanket program would be
inadequate to properly review such
facilities. Oversight via review of annual
reports and post-construction audits, as
suggested in comments, would only
identify transgressions after the fact,
whereas prior notice functions as a
preventive measure. Given the
Commission’s lack of experience under
the blanket program in supervising
mainline, LNG and synthetic gas, and
storage facility projects, the NOPR
reasoned it would be prudent to provide
prior notice for all projects involving
these newly blanket-enfranchised
facilities. The Commission affirms that
reasoning here, with an exception
described below for certain storage
facilities.
16. In the NOPR, in response to a
query by Kinder Morgan Interstate Gas
Transmission, LLC (Kinder Morgan), the
Commission stated its expectation that
the proposed regulatory revisions would
provide certificate holders with the

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Rules and Regulations
option to construct mainline facilities
under blanket certificate authority. This
Final Rule does so. Accordingly, this
rule renders moot Kinder Morgan’s and
Northern Natural Gas Company’s joint
petition in Docket No. CP06–418–000
for a temporary waiver of the blanket
certificate program’s exclusion of
mainline facilities pending revision of
the blanket regulations to permit the
construction of mainline projects.9 As of
the effective date of this rule, mainline
facilities may be constructed pursuant
to a project sponsor’s blanket certificate
authority, provided the proposed
facilities comply with the cost limits
and other requirements of the blanket
certificate program.

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2. Section 157.212, LNG and Synthetic
Natural Gas Facilities
17. The Final Rule adds § 157.212 to
allow certificate holders to acquire,
construct, modify, replace, and operate
facilities used to transport LNG or
synthetic gas. The Final Rule removes
the reference in the NOPR to the
authority to ‘‘abandon,’’ and instead
adds a cross-reference to the blanket
abandonment authority described in
§ 157.216 of the Commission’s
regulations. In addition, § 157.212 will
be revised to clarify that it applies to
facilities that transport a mix of
synthetic and natural gas and to
facilities that transport exclusively
revaporized LNG.10
18. As was the case regarding the
issue of prior notice for mainline
facilities, comments both favor and
oppose applying prior notice to all LNG
and synthetic gas facilities that are now
newly subject to authorization under the
blanket program. In accord with the
above discussion regarding mainline
facilities, the Commission will retain
the prior notice requirement. In the
NOPR, the Commission added that
automatic authorization was unsuited to
LNG and synthetic gas facilities because
these projects raised fact-specific issues
of safety, security, and gas
interchangeability.
19. In opting for prior notice, INGAA
contends the Commission is being
‘‘unduly cautious,’’ since ‘‘LNG supplies
are not new to the natural gas industry
and have been flowing into the U.S. grid
for a long time now.’’ 11 INGAA’s
observation, while not wrong, overlooks
9 The Commission will issue a separate notice to
dismiss Kinder Morgan’s and Northern Natural Gas
Company’s petition in Docket No. CP06–418–000.
10 The Commission’s jurisdiction over the
interstate transportation of natural gas does not
extend to facilities that transport exclusively
synthetic gas. See, e.g., Henry v. FPC, 513 F.2d 395
(D.C. Cir. 1975).
11 INGAA’s Comments at 9 (Aug. 25, 2006).

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the difficulties developers, producers,
pipelines, LDCs, and gas consumers
have encountered in trying to reach
consensus on national natural gas
quality and interchangeability
standards. The concerted effort by
representatives of these sectors of the
gas industry to establish such standards,
ongoing since 2004, was prompted by
the prospect of increasing supplies of
LNG, leading the industry and the
Commission to consider whether
revaporized LNG could contribute to the
physical deterioration of existing gas
lines and whether the substitution of
one gaseous fuel for another in a
combustion application could
materially change operational safety,
efficiency, performance, or air pollution
emissions. In June 2006, the
Commission denied an NGSA petition
to establish natural gas quality and
interchangeability standards 12 and
issued a policy statement declaring its
intent to address disputes over gas
quality and interchangeability on a caseby-case basis.13 Given the potential
impact that a change in the makeup of
a longstanding gas supply profile could
have, the Commission believes that to
the extent requiring prior notice for
§ 157.212 facilities may be characterized
as cautious, caution is in order. Thus,
the Commission will adopt the prior
notice requirement for all LNG and
synthetic gas facilities.14
20. The NOPR states that ‘‘blanket
certificate authority will not apply to
the outlet pipe of an LNG or synthetic
gas plant, but only to those facilities that
attach to the directly interconnected
pipe.’’ 15 APGA endorses this approach.
INGAA, NGSA, Duke, and Dominion do
not, and advocate extending blanket
certificate authority to include takeaway
lateral lines that connect directly to
existing LNG terminals. AGA seeks
clarification on this point. NGSA asserts
that if a new lateral from an existing
LNG terminal does not require
modifying the terminal to accommodate
the new lateral, the new lateral should
not be subject to the mandatory prefiling
specified in § 157.21 of the
Commission’s regulations. Dominion
goes further, and recommends enlarging
the blanket certificate program to
12 115

FERC ¶ 61,327 (2006).
FERC ¶ 61,325 (2006).
14 In view of the issues that have arisen in the
Commission proceeding regarding gas quality and
interchangeability standards, Duke is incorrect in
stating that ‘‘there are no construction,
environmental, operational, or safety considerations
that distinguish regasified LNG pipelines from other
natural gas pipelines.’’ Duke’s Comments at 9 (Aug.
25, 2006).
15 71 FR 36276 at 36279 (June 26, 2006); FERC
Stats. & Regs. ¶ 32,606 at 32,876 (2006); 115 FERC
¶ 61,338 at P 28 (2006).
13 115

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include improvements and
modifications to existing LNG terminals
and LNG storage facilities that do not
alter the facility’s capacity. Duke goes
further still, and claims that ‘‘if the
Commission continues to believe that it
is necessary to evaluate an LNG
terminal and take-away pipeline in
tandem, there is no reason why such
pipeline facilities could not be both
constructed pursuant to blanket
authority and evaluated in connection
with the construction of a new LNG
terminal or expansion of an existing
LNG terminal.’’ 16
21. The Commission views Duke’s
suggestion as incompatible with the
statutory and regulatory requirements
applicable to LNG terminal facilities. In
the NOPR, the Commission explained
that:
LNG plant facilities are not within the class
of minor, well-understood, routine activities
that the blanket certificate program is
intended to embrace; LNG plant facilities
necessarily require a review of engineering,
environmental, safety, and security issues
that the Commission believes only can be
properly considered on a case-by-case
basis.17 [Thus, b]ecause an LNG terminal and
the facilities that attach directly to it are
interdependent—inextricably bound in
design and operation—a terminal and its
takeaway facilities must be evaluated in
tandem; both merit a similar degree of
regulatory scrutiny.’’ 18

22. In view of the complexity of the
issues raised by LNG terminals, § 157.21
requires that proposals to construct a
new LNG terminal, or to make certain
modifications to an existing LNG
terminal, be subject to a mandatory 180day prefiling procedure. The 180-day
prefiling procedure conflicts with the
expedited nature of the blanket
certificate program. Thus, facilities
subject to mandatory prefiling cannot be
authorized under the blanket certificate
program.
23. For example, in the case of a
planned, but not yet authorized, LNG
terminal, if the facilities that attach
directly to the new terminal are ‘‘related
jurisdictional natural gas facilities,’’ as
defined by § 153.2(e)(1) of the
Commission’s regulations, they must be
considered in conjunction with the LNG
terminal in a 180-day mandatory
prefiling procedure. In the case of an
existing LNG terminal, if the
construction or modification of facilities
that attach directly to the terminal will
result in modifications to the terminal,
and those modifications to the terminal
16 Duke’s

Comments at 10 (Aug. 25, 2006).

17 71

FR 36276 at 36279–80 (June 26, 2006); FERC
Stats. & Regs. ¶ 32,606 at 32,877 (2006); 115 FERC
¶ 61,338 at PP 29–30 (2006).
18 Id.

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are subject to mandatory prefiling under
§ 157.21(e)(2), then the facilities that
attach directly to the terminal are
‘‘related jurisdictional natural gas
facilities’’ and must be considered along
with the terminal modifications as part
of a mandatory 180-day prefiling
procedure. Because ‘‘related
jurisdictional natural gas facilities’’ are
to be reviewed in tandem with LNG
terminals in a 180-day prefiling, these
facilities are excluded from the blanket
certificate program.
24. However, blanket certificate
authority can be applied to facilities that
attach directly to an existing LNG
terminal if the construction and
operation of the attached facilities will
not involve any modifications to the
terminal, or if there are modifications to
the terminal, they are not significant
modifications that trigger the 180-day
mandatory prefiling process. In view of
this latter category of facilities, the
Commission qualifies its description in
the NOPR on the applicability of the
blanket program. Provided the
construction and operation of facilities
that attach directly to an existing LNG
terminal do not involve modifications to
the terminal that result in a mandatory
prefiling process, blanket certificate
authority extends to such facilities.
25. Sempra complains that an existing
blanket certificate holder, in seeking to
build a pipeline to attach to an LNG
terminal, would have a competitive
advantage over a new entrant compelled
to seek case-specific authority. Sempra
asks the Commission to preclude any
project sponsor from using blanket
certificate authority to gain a timing
advantage over a new entrant in seeking
to serve the same LNG supply source or
market.
26. As discussed above, a new line to
a new LNG terminal could not be built
under the expanded blanket certificate
authority, and depending on
circumstances, neither could a new line
to an existing LNG terminal. That
notwithstanding, the Commission
acknowledges that, to the extent
proceeding under the blanket program
provides an expedited authorization
compared to a case-specific applicant,
new entrants could be placed at a
competitive disadvantage. However, the
Commission notes that any timingrelated advantage is diminished because
a blanket-eligible line interconnecting
directly with an LNG terminal will be
subject to prior notice, and thus to
protest, and an unresolved protest
would cause the prior notice blanket
application to be treated as an
application for case-specific NGA

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section 7(c) authorization.19 Further,
while this Final Rule increases cost
limits under the blanket certificate
regulations, the cost limits nevertheless
will continue to ensure that blanket
authority extends only to relatively
modest projects; hence, there would not
necessarily be a substantial disparity in
time in building under a blanket
certificate and obtaining case-specific
authorization for a modest proposal.
The Commission concludes that the
benefit the blanket certificate program
provides in terms of administrative
efficiency and cost savings outweigh
any accompanying market distortion.
Accordingly, Sempra’s request to
selectively revoke blanket certificate
authority is denied.
3. Section 157.213, Underground
Storage Field Facilities
27. The Final Rule adds § 157.213 to
allow certificate holders to acquire,
construct, modify, replace, and operate
certain underground storage facilities.
As with § 157.210 and § 157.212,
§ 157.213 is revised to remove the
reference in the NOPR to the authority
to ‘‘abandon,’’ and instead a crossreference is added to the blanket
abandonment authority described in
§ 157.216 of the Commission’s
regulations. The Commission will
further revise this section as described
below.
28. Comments again both favor and
oppose applying prior notice to all
underground storage projects. However,
in this instance, the Commission finds
it appropriate to permit automatic
authorization for certain types of storage
projects. Dominion contends that
automatic authorization should be
allowed for storage projects limited to
remediation and maintenance, on the
grounds that such activities have little
impact on customers or operations
compared to projects to improve a
storage facility. The Commission
concurs and will provide for automatic
authorization for storage remediation
and maintenance activities under
revised § 157.213(a).20
29. The NOPR states that ‘‘the
proposed expanded blanket certificate
authority is not intended to include
storage reservoirs that are still under
development or reservoirs which have
yet to reach their inventory and pressure
levels as determined from their original
19 See

18 CFR 157.205(f) (2006).
Commission consequently will modify 18
CFR 157.207 to include storage remediation and
maintenance as an activity subject to the annual
reporting requirements applicable to blanket
projects undertaken pursuant to automatic
authorization.
20 The

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certificated construction parameters.’’ 21
Dominion asks the Commission to
extend blanket certificate authority to
activities at existing storage reservoirs
that are not operated at their originally
certificated maximum inventory and
projected performance levels. Dominion
argues that unlike a new storage
reservoir, reliable operational data are
available for existing storage facilities,
even if an existing field has yet to reach
its certificated maximum capacity or
original projected performance.
30. The Commission disagrees. While
it may be true that reliable operational
data are available for some existing
fields that have yet to reach capacity,
this is not always the case. Thus, the
Commission does not believe that the
blanket program, which permits an
expedited and generic approval
following a limited prior notice period,
is the appropriate means to review and
approve such projects. As stated in the
NOPR, storage reservoirs that are still
under development or reservoirs which
have yet to reach their inventory:
May or may not have reliable information
available on geological confinement or
operational parameters via data gathered
throughout the life of a storage field, whereas
new storage zones lack data collected over
time on physical and operational aspects of
a field. Therefore, for such facilities, the
Commission finds it necessary to
individually examine each reservoir to
determine its potential operating parameters
(capacity, cushion and working gas,
operational limits, well locations, etc.) and to
review data essential to understand and
predict how modifications might affect the
integrity, safety, and certificated parameters
of the facility.22

31. Dominion questions whether the
Commission needs an inventory
verification study, shut-in reservoir
pressures, and cumulative gas-in-place
data, which would be required for
blanket projects under proposed
§§ 157.213(b)(7) and (8), since the
Commission does not currently require
submission of this information in casespecific NGA section 7(c) applications
for storage projects.23 Dominion
requests the Commission either remove
these information requirements or
require the data described in
§§ 157.213(c)(1) through (9) only to the
extent necessary to demonstrate that the
proposed project will not alter a storage
21 71 FR 36276 at 362782 (June 26, 2006); FERC
Stats. & Regs. ¶ 32,606 at 32,880 (2006); 115 FERC
¶ 61,338 at P 43 (2006).
22 Id.
23 Note the regulatory revisions proposed in the
NOPR as 18 CFR 157.213(b)(1) through (9), are
codified in this Final Rule, and referred to hereafter,
as 18 CFR 157.213(c)(1) through (9).

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reservoir’s total inventory, maximum
pressure, or buffer boundaries.
32. Dominion is correct in observing
that the information specified in
§§ 157.213(c)(1) through (9) is not now
required to be submitted under the
existing regulations for case-specific
certificate applications. However, the
Commission considers this information
necessary to make an informed decision
on storage projects. Therefore, when this
information is not included in a casespecific application, Commission staff,
as a matter of routine practice, will
request the data from the project
sponsor. Section 157.213(c)(1) through
(9) merely codifies this practice. Were
this information not included in a prior
notice filing, in all likelihood,
Commission staff would request this
data from the project sponsor, and in the
event the response was incomplete or
staff lacked time to assess the
information by the conclusion of the
prior notice period, staff could be
compelled to protest the filing. Thus, to
ensure the timely consideration of a
prior notice request for a storage project,
the filing must contain the information
specified in §§ 157.213(c)(1) through (9).
However, the Commission
acknowledges that not all the
information specified in §§ 157.213(c)(1)
through (9) will be relevant in all cases,
and will thus adopt Dominion’s
suggestion and qualify § 157.213(c) to
state that the information requirements
apply ‘‘to the extent necessary to
demonstrate that the proposed project
will not alter a storage reservoir’s total
inventory, reservoir pressure, reservoir
or buffer boundaries, or certificated
capacity, including injection and
withdrawal capacity.’’

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4. Blanket Project Cost Limits
33. The NOPR proposes raising the
blanket certificate program’s 2006 cost
limits from $8,200,000 to $9,600,000 for
each automatic authorization project
and from $22,700,000 to $27,400,000 for
each prior notice project. AGA, APGA,
Con Ed, and Orange and Rockland urge
the Commission not to raise the cost
limits, cautioning that permitting more
expensive projects would risk
transforming the nature of the blanket
program from one intended to cover
small and routine construction activities
into a program under which projects
with potentially significant rate and
environmental impacts could be built.24
24 AGA stresses that if a certificate holder with a
relatively modest rate base relies on blanket
certificate authority to undertake additional
construction, then even a project that falls well
within the blanket cost limits has the potential to
alter existing customers’ rates. AGA, Con Ed, and
Orange and Rockland speculate that in the case of

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On the other hand, INGAA, NGSA, and
pipelines propose to raise the cost limits
to $16,000,000 for an automatic
authorization project and $50,000,000
for a prior notice project, repeating the
claim that construction costs have risen
faster than the overall rate of inflation,
and noting that these higher cost limits
have been in effect since November
2005, as a post-hurricane relief measure,
with no apparent adverse impact.
34. While gas project costs, including
environmental compliance and public
outreach, have trended up since 1982,
so have the blanket program cost limits,
almost doubling since 1982.25 Since
1982, the Commission has relied on the
Department of Commerce’s GDP
implicit price deflator as a measure to
make annual adjustments to the blanket
cost limits. In the NOPR, the
Commission applied an alternative price
tracker that is focused more narrowly on
gas utility construction costs,26 and as a
result proposed to raise the cost limits
to account for the discrepancy between
the two different inflation indicators.
The comments do not propose any
alternative criteria or methodology for
affirming or altering the blanket project
cost limits.
35. INGAA and NGSA propose
making permanent the doubled project
a large company, a blanket project could have a
disproportionate impact if project costs are assigned
to a limited number of customers, e.g., customers
in a single rate zone. The Commission expects such
concerns to be raised in protest to the notice of a
proposed blanket project. If concerns regarding
disproportionate rate impacts are not resolved, the
proposed project and its rate impacts would then
be treated as a case-specific NGA section 7(c)
certificate proceeding. For blanket projects which
qualify for automatic authorization, and as a result,
do not require public notice prior to construction,
concerns about rate treatment can be raised when
the certificate holder seeks to roll in the cost of the
automatically authorized project in a future NGA
section 4 rate proceeding.
25 In considering how to gauge project costs over
time, the NOPR observed that recently ‘‘certain
project components—notably the price of steel
pipe—have risen far faster than any measure of
overall inflation. However, although steel prices
have run up over the past several years, in looking
back to 1982, there were periods during which steel
prices fell substantially. Further, changing
regulatory requirements and construction
techniques, to which Petitioners attribute cost
increases, do not always add to project costs, and
may well contribute to cost reductions and
efficiencies.’’ 71 FR 36276 at 36283 (June 26, 2006);
FERC Stats. & Regs. ¶ 32,606 at 32,884 (2006); 115
FERC ¶ 61,338 at P 57 (2006).
26 The Commission employed the HandyWhitman Index of Public Utility Construction Costs,
Trends of Construction Costs, Bulletin No. 162,
1912 to July 1, 2005. In doing so, the Commission
cautioned, and reiterates here, that even if it were
possible to mirror 1982 costs to costs today, the
dollar amounts would not reflect proportionate
impacts on pipeline customers’ rates, since in 1982
the commodity cost of gas was a significant portion
of pipeline customers’ merchant service rate,
whereas today, gas sales costs are no longer
bundled with transportation service costs.

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cost limits that are currently in place
temporarily.27 However, the currently
effective cost limits for the blanket
certificate program were put in place
temporarily to expedite construction of
projects that would increase access to
gas supply to respond to the damage to
gas production, processing, and
transportation brought about by
hurricanes Katrina and Rita. In
temporarily doubling blanket project
cost limits, the Commission did not
assess alternative inflation trackers or
the costs associated with construction.
Rather, the decision to expand the
blanket program was based on the
Commission’s assessment of the damage
done by the hurricanes and the
magnitude of the effort that would be
required to recover. There was no
expectation that the temporary
expansion of the blanket certificate
program might be made permanent. If
the blanket certificate program were
expanded by approximately doubling
the project cost limits as requested, the
nature of the program would be changed
such that the Commission could not be
confident that far more expensive and
extensive projects would not have
adverse impacts on existing customers,
existing services, competitors,
landowners, or the environment.
Accordingly, the Commission adopts an
increase to $9,600,000 for each
automatic authorization project and
$27,400,000 for each prior notice
project, and denies requests for a further
increase at this time, other than annual
inflation adjustments as provided for
under § 157.208(d) of the Commission’s
regulations.
5. Rate Treatment for Blanket Project
Costs
36. Blanket services are provided at a
certificate holder’s existing Part 284
rates, and blanket project costs are
afforded the presumption that they will
qualify for rolled-in rate treatment in a
future NGA section 4 proceeding. Since
blanket costs are presumed to be so
small as to have no more than a de
minimis rate impact, the proposal to
increase cost limits calls this
presumption into question. Therefore,
the NOPR sought comment on whether
to permit project sponsors the option of
requesting an incremental rate for a
particular blanket certificate project.
37. Commenters generally support
this option, and note that applying an
incremental rate to blanket projects
would address the worry that existing
customers might be made to subsidize
new projects. INGAA argues that
27 The current temporary increase in blanket cost
limits expires on February 28, 2007.

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because most incremental rate proposals
are consensual, there is no need for the
Commission to review an agreed-upon
rate. To preclude existing customers
from making unwarranted contributions
to cover the costs of blanket projects,
NGSA suggests requiring a project
sponsor to file a tariff sheet in a limited
NGA section 4 filing proposing an
incremental rate, which the Commission
will then act on as a normal tariff matter
by accepting, rejecting, or suspending
the rate at the end of the 30-day tariff
notice period. In considering an
incremental rate for a proposed blanket
project, AGA, Con Ed, and Orange and
Rockland urge the Commission to verify
that each project will be consistent with
the Policy Statement on New
Facilities.28
38. Commenters present no
compelling reason to modify the current
practice of presuming, initially, that
blanket project costs will qualify for
rolled-in rate treatment, then evaluating
the validity of this presumption,
subsequently, in an NGA section 4 rate
proceeding. Accordingly, for the time
being, the Commission will continue to
apply a presumption that blanket costs
will qualify for rolled-in rate treatment.
However, the Commission will revisit
this question if there is evidence that
the enlargement of the blanket
certificate program to permit additional
facilities and higher cost limits
materially alters the manner in which
project sponsors employ their blanket
certificate authority or otherwise
undermines the basis for the
presumption of rolled-in rate treatment.
Absent any such indication, the
Commission hesitates to put in place a
procedure to assess and approve initial
rates for proposed blanket projects,
since the additional time necessary to
complete such a review will inevitably
stretch the span between notice of a
project and commencement of
construction. To the extent practicable,
the Commission aims to retain the
benefit of an expedited project
authorization available under the
current blanket certificate program.
39. Emphasizing that revised blanket
certificate regulations do not require
project sponsors to demonstrate that a
proposal conforms to the Policy
Statement on New Facilities, Con Ed
and Orange and Rockland request that
the Commission (1) require that the
prior notice of a proposed blanket
project quantify impacts on existing
customers and verify that the project
28 Certification

of New Interstate Natural Gas
Pipeline Facilities, 88 FERC ¶ 61,227 (1999), orders
clarifying statement of policy, 90 FERC ¶ 61,128 and
92 FERC ¶ 61,094 (2000), order further clarifying
statement of policy, 92 FERC ¶ 61,094 (2000).

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will be fully functional without any
additional construction; (2) allow
protests to a blanket project that raise
legitimate rate-related issues to be
resolved in a case-specific proceeding;
(3) extend the presumption of rolled-in
rate treatment to a blanket project’s
costs only if the blanket project sponsor
demonstrates the project will be fully
subscribed or provide benefits to
existing customers; and (4) find that the
presumption favoring rolled-in rate
treatment is rebutted if a blanket project
is subsequently determined to be a
segmented portion of a larger
undertaking. Sempra suggests requiring
project sponsors that undertake blanket
storage projects and that have an
existing cost-based recourse rate to
discuss the rate implications of a
proposed project in the prior notice of
the project in order to demonstrate that
existing customers will not subsidize
the new facilities.
40. The Commission believes that the
existing blanket certificate regulations
are adequate to address the matters Con
Ed, Orange and Rockland, and Sempra
raise. The existing prohibition against
segmentation is intended to preclude
projects that would not be functional
without additional construction. The
rate impacts of a blanket project, while
not now reviewed in advance, are
considered in a future rate proceeding—
and in the rate proceeding, the issues of
subsidization and system benefits can
be addressed. The regulations permit
any interested person to protest a
blanket project subject to the prior
notice provisions; each protest, whether
rate related or otherwise, will be
considered on its merits on a case-bycase basis.
41. Con Ed, Orange and Rockland
complain that the presumption favoring
rolling in blanket costs is rarely
rebutted.29 APGA contends certificate
29 The parties assert that the Commission is
reluctant to reverse a presumption in favor of
rolled-in rate treatment, citing Transcontinental Gas
Pipe Line Corp. (Transco), 106 FERC ¶ 61,299
(2004) and 112 FERC ¶ 61,170 (2005). Transco did
not focus on blanket project costs, but on the impact
of a change in Commission rate policy, and how the
changed policy should apply in an NGA section 4
proceeding to case-specific expansion projects built
under the Commission’s prior rate policy regime. In
Transco, and in its policy statements, the
Commission discussed its aspiration to provide as
much up-front assurance as possible of how an
expansion would be priced so that the pipeline and
prospective shippers could make informed
investment decisions. This holds true regardless of
whether a project is constructed under blanket or
case-specific authority; consequently, the
Commission is reluctant to reverse either a
predetermination or a presumption regarding future
rate treatment. Nevertheless, in a subsequent NGA
section 4 rate proceeding, the Commission may
determine that its initial, provisional assessment of
what the appropriate rate treatment would be was

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holders resist filing rate cases ‘‘due
primarily to the fact that they are
permitted under the current regime to
over-recover their costs with impunity,
[thus] by the time that most pipelines do
file for increased rates, the cumulative
dollar impact of the numerous no-notice
and prior notice projects will be quite
substantial, with no viable customer
recourse.’’ 30 APGA requests the
Commission compel certificate holders
to file rate cases regularly, suggesting a
three-year cycle.
42. The Commission acknowledges
that in the vast majority of rate
proceedings, the outcome affirms the
presumption favoring rolling in blanket
costs. The Commission notes that in rate
proceedings, there is rarely any effort to
rebut the presumption, which the
Commission takes to be an indication of
the legitimacy of the presumption. The
Commission recognizes that a certificate
holder is likely to weigh its own self
interest when considering whether to
initiate an NGA section 4 rate
proceeding. However, if a company fails
to initiate a rate proceeding in a timely
manner, such that distortions over time
have rendered its rates unjust and
unreasonable, a complaint can be filed
under NGA section 5.
C. Changes in the Notice Procedures,
Environmental Compliance Conditions,
and Reporting Requirements
43. In initiating the blanket certificate
program in 1982, the Commission
explained that § 157.206(a)(1) was
intended to ‘‘reserve the Commission’s
right to amend Subpart F so as to add,
delete or modify the standard
conditions and any procedural
requirements * * * if changing
circumstances or experience so
warrant.’’ 31 In this case, increasing the
scope and scale of the blanket certificate
program increases the odds that projects
authorized under the expanded blanket
certificate program could have
significant adverse impacts on the
quality of the human environment. In
view of this, the Commission proposed
in the NOPR, and is adopting in this
Final Rule, additional procedures and
mitigation measures to adequately
ensure against the potential for adverse
environmental impacts due to the
enlargement of the blanket certificate
program. The current environmental
requirements described in § 157.206(b),
and the revisions to the environmental
requirements implemented by this Final
in error, and so reverse the predetermination or
presumption.
30 APGA’s Comments at 8 (Aug. 25, 2006).
31 Interstate Pipeline Certificates for Routine
Transactions, Order No. 234–A, 47 FR 38871 (Sept.
3 1982); FERC Stats. & Regs. ¶ 30,389 (1982).

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Rule, apply to all projects authorized
under the blanket certificate program.
1. Notification Requirements
a. Content of Landowner Notification
44. The NOPR proposed revising
§ 157.203(d)(2)(iv) to state that in the
notice to affected landowners of a
proposed project, the project sponsor
include the most recent edition of the
Commission pamphlet titled ‘‘An
Interstate Natural Gas Facility on My
Land? What Do I Need to Know?’’
INGAA and Williston point out that the
current edition of the pamphlet
describes the Part 157, Subpart A, casespecific certificate process generally, but
does not describe the Part 157, Subpart
F, blanket program specifically, and
suggest the pamphlet be revised or a
separate pamphlet be prepared to cover
the blanket certificate procedures. The
Commission will adopt the latter
approach, and to enhance
administrative efficiency and ensure
information remains up-to-date, rather
than a pamphlet, the Commission will
require that notice include blanketspecific information that will be
available on the Commission’s Web site.
Accordingly, § 157.203(d)(2)(iv) of the
Commission’s regulations is revised to
read as follows: ‘‘A general description
of the blanket certificate program and
procedures, as posted on the
Commission’s website at the time the
landowner notification is prepared, and
the link to the information on the
Commission’s website.’’
45. In response to Williston, the
Commission clarifies that the
information requirements stated in
§ 157.203(d)(1), including the additional
requirements of revised
§ 157.203(d)(1)(iii), are applicable to
landowner notification for proposed
blanket certificate projects that qualify
for automatic authorization. The
information requirements stated in
§ 157.203(d)(2), including the additional
requirements of revised
§ 157.203(d)(2)(i), (ii), (iv), (v), and (vii),
are applicable to public notice for
proposed blanket certificate projects
that do not qualify for automatic
authorization.

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Summary of Rights
46. Revised § 157.203(d)(2)(v) requires
that in the notice to affected landowners
of a proposed project, the project
sponsor include a brief summary of the
rights the landowner has in Commission
proceedings and in proceedings under
the eminent domain rules of the
relevant state(s). INGAA contends
affected landowners will perceive any
discussion of eminent domain ‘‘as a

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threat that their property will be
condemned if they do not consent to an
easement agreement,’’ an interpretation
that ‘‘could cause more harm than
good,’’ 32 and comments that the
description of state eminent domain
rules may prove misleading if a project
sponsor proceeds with condemnation
actions under federal eminent domain
law. Duke worries discussing landowner
rights would ‘‘constitute the provision
of legal advice in most jurisdictions,’’
and because ‘‘[m]any bar associations
prohibit lawyers from giving advice to
unrepresented third parties,’’ this could
create a ‘‘potential legal conflict for
natural gas companies.’’ 33 Duke
recommends the contents of the notice
be limited to informing affected
landowners of their right to obtain local
counsel.
47. As INGAA recognizes, discussions
concerning the potential to acquire
property rights by means of eminent
domain can be disconcerting to affected
landowners. It has been the
Commission’s experience that such
discussions are most prone to be
perceived as threatening when the
initial contact with landowners is made
in person by a project sponsor’s
representative seeking physical access
to the property. The Commission
believes a far less provocative means to
inform affected landowners is to present
them with a brief, clear, and candid
description of the eminent domain
process in written form. Landowners
cannot be expected to engage in
negotiations and reach decisions
regarding their property without such
information. The Commission concurs
with INGAA’s apprehension that
landowners may be confused by a
description of state condemnation if
federal condemnation is employed;
accordingly, § 157.203(d)(2)(v) of the
Commission’s regulations is revised to
omit the reference to state proceedings
and to instead require a ‘‘brief summary
of the rights the landowner has in
Commission proceedings and in
proceedings under the relevant eminent
domain rules.’’
48. The Commission agrees with
Duke’s observation that affected
landowners ought to be informed of
their right to obtain counsel, and this
fact should be included in the required
summary of landowner rights. In
response to Duke’s concern that
complying with § 157.203(d)(2)(v) could
constitute the practice of law or place
project sponsors with an ethical
quandary, the Commission clarifies that
the required brief summary of rights and
32 INGAA’s
33 Duke’s

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Comments at 15 (Aug. 25, 2006).

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procedures is descriptive, not
interpretative. Project sponsors are
expected to summarize or recite
applicable law, and no more. Not only
need no advice be proffered, none
should be. Finally, the Commission
notes similar arguments were presented
when the original landowner
notification rule was instituted in
1999;34 subsequently, there has been no
evidence of significant difficulties in
complying with the requirements of the
rule.
c. Landowner Contact
49. As proposed, § 157.203(d)(1)(B)
requires that in a notice to affected
landowners of a proposed project, the
project sponsor include a local contact
to call first with problems or concerns.
INGAA points out that for certain
projects, the personnel best able to
respond to problems or concerns may be
remotely located, e.g., at a company’s
central office. Therefore, INGAA asks
that the ‘‘local’’ specification be
removed, and in its place, project
sponsors be required to include the tollfree telephone number of a company
representative responsible for
responding to affected landowners. The
Commission accepts INGAA’s argument
that its alternative procedure will
provide the same protections for
landowners. Therefore,
§ 157.203(d)(1)(B) of the Commission’s
regulations is revised to read as follows:
‘‘Provide a local or toll-free phone
number and a name of a specific person
to be contacted by landowners and with
responsibility for responding to
landowner problems and concerns, and
who will indicate when a landowner
should expect a response.’’
2. Notification Times
50. Currently, under § 157.203(d)(1) of
the Commission’s regulations, before
commencing construction of an
automatically authorized blanket
project, project sponsors are required to
give affected landowners 30 days notice
in advance of construction. For blanket
projects that do not qualify for
automatic authorization, under
§ 157.203(d)(2), project sponsors are
required to provide a 45-day prior
notice to the public, during which any
person, or the Commission, can protest
the proposal. The Final Rule extends
each of these time frames by 15 days.
INGAA, NGSA, and pipelines object to
offering additional notice time, arguing
that (1) the proposed increase in project
34Landowner Notification, Expanded Categorical
Exclusions, and Other Environmental Filing
Requirements, Order No. 609, 64 FR 57374 (Oct. 25,
1999); FERC Stats. & Regs. ¶31,082 (1999).

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costs should not change the nature of
the projects undertaken pursuant to
blanket authority; (2) there is no
evidence the current notice periods are
too short; and (3) affected landowners
and the public should be able to reach
a decision on whether to protest well
within the current notice periods.35
51. The NOPR stated:
In view of the proposed expanded scope
and scale of blanket certificate authority,
which can be expected to increase the
number of automatic authorization projects
undertaken and the number of people
impacted, an additional 15 days offers greater
assurance that there will be adequate time for
landowners to state their concerns and for
project sponsors and the Commission to
respond * * * [T]he additional time will
provide the Commission with a more
reasonable period of time to conduct and
conclude its environmental assessment (EA)
of a proposal. This NOPR contemplates an
increase in the number, extent, kind, and
complexity of facilities subject to blanket
certificate authority, yet even for the types of
projects currently permitted, 45 days has
proved to be, on occasion, an unrealistically
short time for the consultation and analysis
required to complete an EA. The additional
time will ensure the Commission is not
forced to protest a prior notice project merely
as a means to gain time to finish an EA. The
Commission does not expect the extended
landowner and public notice periods to
unduly delay blanket certificate projects,
since natural gas companies, in large part,
can dictate when a blanket certificate project
may begin construction by when the
company elects to initiate the notice process.

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52. It is not only the increase in
project costs, i.e., an expansion in scale
of blanket authorized activities, it is also
the far wider range in the types of
projects permitted under the blanket
authority that warrant adding time to
allow for adequate consideration of
what the Commission anticipates will
be blanket proposals that are both more
complex and more numerous. The
Commission notes that to the extent
issues raised by a prior notice proposal
cannot be addressed in the time
provided, a protest is the probable
outcome, which if not resolved, would
result in the proposal being treated as a
case-specific NGA section 7(c)
application necessitating the
preparation and issuance of a
Commission order on the merits. The
Commission affirms the need to add 15
35 As an alternative, Williston proposes that
blanket projects that qualify for automatic
authorization retain a 30-day landowner
notification time period, with only larger, prior
notice projects subject to a 45-day notice. Williston
claims its suggestion will ensure that those parties
affected by major projects, which are more likely to
raise landowner concerns, will be afforded
additional time, while minor and routine projects
will be permitted to move forward faster.

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days to the notice periods, for the
reasons stated in the NOPR.

4. Environmental Conditions

3. Annual Report on Automatic
Authorization Projects

(1). Compressor Station Site Property
Boundary

53. Revised §§ 157.208(e)(4)(ii) and
(iii) require that the annual report filed
for automatic authorization projects
document the progress toward
restoration and discuss problems or
unusual construction issues and
corrective actions. INGAA, Duke, and
Williston contend that providing this
information will be burdensome,
especially for large pipelines that might
rely on automatic authorization for
numerous projects each year, and may
require placing additional personnel on
site to monitor progress on each project.
54. The Commission has a different
perspective. Certificate holders are
currently required to comply with all
the conditions in § 157.206(b) of the
Commission’s blanket certificate
regulations. Section 157.206(b), in
addition to setting forth specific
conditions, makes blanket certificate
activities subject to the conditions in
§ 380.15 of the Commission’s
regulations implementing NEPA, as well
as requiring that all blanket certificate
activities be consistent with all
applicable law implementing the Clean
Water Act, the Clean Air Act, and other
statutes relating to environmental
concerns. Consequently, in order to
satisfy all the conditions applicable to
blanket certificate activities, it is already
necessary for project sponsors (1) to
have plans and procedures in place to
ensure compliance with environmental
conditions, and (2) to have
environmental inspectors in place to
record a project’s construction’s
compliance with environmental
conditions. Hence, the Commission
does not view the new § 157.208(e)(4)(ii)
and (iii) requirements as asking
companies to gather and report new
information, but rather, as having
companies submit information that they
are already obliged to compile.
Similarly, to the extent project sponsors
find they have to place personnel at
construction sites to monitor a project’s
progress, this does not constitute a new
requirement, but rather, is a means to
fulfill an ongoing obligation to verify
that projects are built in accord with all
applicable environmental conditions.
Consequently, the Commission adopts
the expanded annual reporting
requirements.

55. Revised § 157.206(b)(5)(i) states
that noise attributable to a compressor
station ‘‘must not exceed a day-night
level (Ldn) of 55 dBA at the site property
boundary.’’ In contrast, the current
regulations specify that noise
attributable to a compressor station is to
be measured ‘‘at any pre-existing noisesensitive area.’’
56. Duke contends this new noise
criterion could compel companies to
expand compressor site boundaries,
which would add to the cost of new or
additional compression and, potentially,
an increase in environmental impacts
associated with adding acreage to
existing and new sites. INGAA argues
that compressors were installed in
anticipation of meeting noise level
requirements as measured at the nearest
noise sensitive area, and that it is
inequitable to institute this change and
compel ratepayers to bear the cost of
compliance. Boardwalk objects to the
revision. HFP Acoustical asks if
compressor noise is to be measured as
an average of noise levels at several
spots on the perimeter of the property
line or if every point on a site’s property
boundary must meet the 55 dBA
standard. HFP Acoustical seeks
clarification on whether there will be
any acknowledgment of existing sources
of noise unrelated to compressor
operations.
57. The Commission clarifies that this
new noise measurement criterion only
applies to facilities placed in service
after the effective date of this rule;36
thus, existing compressor stations
continue to be required to meet the 55
dBA standard as measured at preexisting noise-sensitive areas, not at the
site’s property boundary. However, any
increase in noise due to additions or
modifications to an existing compressor
station undertaken subsequent to the
effective date of this rule will require
that the noise attributable to additions
or modifications be measured at the
site’s boundary. The Commission
further clarifies that when measuring
noise at new stations, the 55 dBA
standard must be met at every point on

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(a). Noise Levels

36 In enacting the blanket certificate program, the
Commission expressed its expectation that any
‘‘amendments would most likely not affect facilities
constructed or service undertaken before the
effective date of an amendment, but would apply
prospectively.’’ Order No. 234–A, 47 FR 38871
(Sept. 3, 1982); FERC Stats. & Regs. ¶ 30,389; 20
FERC ¶ 61,271 (1982).

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Rules and Regulations
a site’s property boundary.37 Finally,
with respect to existing noise levels at
the property boundary, the certificate
holder will only be responsible for
taking measures to reduce noise in
excess of the 55 dBA standard that is
attributable to the operation of the
compressor station.
58. Although existing compressor
stations are grandfathered, the
Commission concurs with comments
that anticipate the new standard may
compel companies to extend existing
compressor station boundaries if
additions or modifications are made that
increase noise at the site boundary.
However, while this may entail
additional costs, the Commission does
not view it as adding to adverse
environmental impacts. Indeed, overall
environmental impacts may diminish,
since land within a station boundary is
frequently set aside for benign
environmental use. Further, the
Commission does not accept the
contention that this revision will induce
the development of new compressor
stations, since the cost to mitigate noise
attributable to adding compression at an
existing site is likely to be less than
acquiring a new site.

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(2). Noise Attributable to Drilling
59. In § 157.206(5)(ii), the
Commission establishes the goal that
perceived noise from drilling in
between 10 p.m. and 6 a.m. be kept at
or below 55dBA in any preexisting
noise-sensitive area. INGAA contends
adherence to this goal would be
impractical and costly. In particular,
INGAA contends that suspending a
horizontal directional drill (HDD) at
night to adhere to noise restrictions
would be a poor engineering practice,
creating a substantial risk of failure.
INGAA asks that the Commission (1)
clarify the 55 dBA standard only applies
if ambient noise at night is below that
level; (2) clarify that where the existing
noise level is 55 dBA or more, the noise
standard be that a new project produces
no appreciable increase in the ambient
noise; and (3) clarify that mitigation
measures may be employed to meet the
55 dBA noise level, such as temporarily
relocating occupants of a noise sensitive
area.
60. HFP Acoustical asks the
Commission to clarify (1) whether the
nighttime noise constraint impacts
daytime drilling noise standards; (2)
whether recirculation or other
stabilizing activities could proceed at
37 As

a practical matter, the Commission expects
noise readings to be taken at the boundary closest
to the compressors or where noise is estimated to
be loudest and at the site’s ordinal points.

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night; and (3) whether the reference to
nighttime as from 10 p.m. to 6 a.m.
should be changed to 10 p.m. to 7 a.m.
to conform to the period during which
a 10 dBA penalty currently applies. HFP
Acoustical suggests that if the
Commission intends to set a nighttime
noise level limit, it state the limit in
terms of the Leq night or Ln value, rather
than the Ldn value, which covers a 24hour period.
61. In response to a request by
Williston, the Commission clarifies that
the noise standard for drilling at night
is a goal, not a regulatory requirement.
The Commission also clarifies that the
§ 157.206(5)(ii) reference to ‘‘perceived
noise from the drilling’’ has the same
meaning as the § 157.206(5)(i) reference
to ‘‘noise attributable to’’ compression.
Consequently, where the existing
ambient noise level at night is below 55
dBA, and drilling activity boosts it
above that threshold, the goal is to
reduce the level down to 55 dBA; where
the ambient noise level at night is above
55 dBA, and drilling activity causes that
level to rise, the goal to take action to
bring noise back to its pre-drilling level.
As an alternative to reducing the noise
from drilling, the Commission agrees
that appropriate mitigation measures
can include temporarily relocating or
compensating people residing in areas
affected by drilling activities.
62. The Commission acknowledges
that reaching the stated goal may
involve incurring additional costs, and
recognizes that at times the goal may be
impractical. Further, reaching the goal
should not be achieved at the expense
of adding to a project’s risk. For
example, the Commission does not
necessarily expect an ongoing HDD to
be suspended at night if the interruption
could cause the drill to fail, but does
expect project sponsors to explore
mitigation measures, such as erecting
barriers so that continuous drilling can
meet the 55 dBA goal. In response to
HFP Acoustical, the Commission
clarifies that all activities associated
with drilling, such as recirculation or
other stabilizing activities, are subject to
the noise level goal; the Commission
leaves it to the project sponsor’s
discretion when, during a 24-hour cycle,
to undertake a particular activity. The
Commission will adopt HFP
Acoustical’s suggestion and clarify that
the nighttime noise goal will apply
between the hours of 10 p.m. and 7 a.m.,
and will be expressed as a nighttime
level, Ln, of 55 dBA.
b. Environmental Inspector Report
63. Revised § 157.208(c)(10) requires
the project sponsor to commit to have
the Environmental Inspector’s report

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63689

filed weekly with the Commission for
prior notice projects. INGAA, Duke, and
Williston maintain this is unnecessary
given blanket projects’ relatively short
construction time, and is impractical
given that inspectors may not be on site
on a weekly basis. INGAA proposes
compliance be ensured by having a
completion report filed within 30 days
of a project’s in-service date. INGAA
believes this is adequate since the
Commission ‘‘hotline’’ is available
during construction to resolve
allegations of improprieties. Williston
suggests weekly reporting only be
required when the Commission
determines a particular blanket project
merits such scrutiny.
64. The Commission does not believe
that it can judge whether a particular
project merits weekly reporting before
the fact, or that its hotline can serve as
a means to monitor ongoing
construction progress, or that an afterthe-fact summary can identify, prevent,
or remedy irregularities in construction.
The only practical means to monitor
compliance with environmental
requirements is to monitor progress
during construction, hence the existing
requirement that an Environmental
Inspector be on site during a project’s
construction. The Commission views
revised § 157.208(c)(10) as a
clarification of how certificate holders
are to verify their fulfillment of this
existing obligation. Neither the
additional cost or inconvenience of
having an inspector available to review
construction at multiple small project
sites, nor the length of the construction
phase of a project, has any bearing on
the need for the regulatory requirement
that a project sponsor have an inspector
present. The Commission notes that an
Environmental Inspector need not be an
additional individual brought in to
review a construction site; this function
can be performed by someone on site,
provided that individual has been
properly trained and charged with
inspecting and reporting on compliance
with environmental plans and
procedures and can perform all the
Environmental Inspector’s
responsibilities.
D. Different Rates for Different
Customers for the Same Service
65. In the NOPR, the Commission
expressed the belief that its existing
policies permit a project sponsor to offer
a rate incentive as an inducement to get
customers to commit to a proposed
project early (i.e., ‘‘foundation
shippers’’), while offering a less
favorable rate to customers that commit
later. Few comments take issue with the
Commission’s conclusion.

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66. However, Process Gas Consumers
stress the need for procedural fairness,
e.g., that all prospective customers
receive the same notice of a proposal, so
as to preclude parties from making
private bi-lateral agreements in advance
of a public offer of new capacity.
Boardwalk asks that pipelines be
permitted to set rules for open seasons,
provided there is no discrimination in
the announcement and application of
the rules. The Commission affirms that
there must be no discrimination in
announcing an open season for new
capacity and in accepting bids—all
potential customers must have an equal
opportunity to obtain firm capacity.
Provided this condition holds, a project
sponsor has the flexibility to set the
parameters of the open season.
67. In the NOPR, the Commission
observed that:
[u]nder the Petitioners’ proposal, the rate
incentives a project sponsor offers to obtain
early commitments to a project will be based
solely on the timing of each shipper’s
contractual commitment to the project.
However, the Commission can envision that
different project sponsors may prefer to offer
rate incentives based on something other
than the timing of contractual commitments.
Because Commission policies permit rate
differentials among customers based on a
number of grounds—including differing
elasticities of demand, volumes to be
transported, and length of service
commitments—a project sponsor might wish
to offer preferential rates to shippers who
contract for larger volumes of service.38

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APGA challenges the Commission’s
conclusion that it is appropriate to
permit project sponsors to offer
preferential rates to customers willing to
commit to greater capacity. APGA
argues this is unfair because ‘‘a large
LDC that gets a preferential rate can, for
example, compete for new loads by
offering lower delivery rates than the
smaller LDC despite that fact that both
entities committed for capacity at the
same time.’’39
68. The Commission stresses that the
foregoing discussion in the NOPR
regarding rates constitutes a statement
of the Commission’s existing policies
and practices and this rulemaking
proceeding does not contemplate
altering existing policies, practices, or
regulations affecting rates. Indeed, with
respect to rates, the Commission
emphasized it did not intend to disturb
the status quo, stating that:
[g]iven the variety of rate incentives that
might be offered consistent with Commission
38 71 FR 36276 at 36289 (June 26, 2006); FERC
Stats. & Regs. ¶ 32,606 at 32,894 (2006); 115 FERC
61,338 at P 101 (2006) (footnote omitted). See, e.g.,
Rockies Express Pipeline LLC, 116 FERC ¶ 61,272 at
P 69–73 (2006).
39 APGA’s Comments at 12 (Aug. 25, 2006).

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policy, the Commission believes it would be
premature to go beyond our general finding
above and seek to itemize every rate
incentive that might be offered in an open
season without risk of undue discrimination.
Instead, the Commission prefers to review
different rate incentives on a case-by-case
basis.40

Thus, in the NOPR, the Commission
made no determination beyond its
general observation that currently there
are a variety of rate incentives available
to project sponsors to induce potential
customers to commit to a new proposal.
As one such incentive, quantity can be
a legitimate basis for awarding new
capacity at a lower rate during an open
season. When a project sponsor is
weighing market conditions in order to
determine whether to invest in the
construction of a new pipeline or
storage field, a lower rate bid by a
potential customer can nevertheless
represent a significant incentive for the
company to go forward with the project
if the customer is willing to commit at
an early stage to a large quantity.
69. Given the fact-specific
circumstances associated with a
particular project proposal, the
Commission stated its intent to review
rate incentives on a case-by-case basis.
If APGA believes a project sponsor has
employed an unduly discriminatory rate
preference in a particular case, APGA
may raise this issue in the case in
question, and the Commission will
address the merits of the matter in the
context of that case.
70. As a general observation, a project
sponsor can diminish its risk of being
charged with undue discrimination if its
announcement of an open season clearly
specifies the parameters of the bidding
provisions and the available rate options
so that all potential customers have an
equal opportunity to sign up for new
service. For example, in their petition,
INGAA and NGSA describe the
eligibility standard for Group I
foundation shippers variously as (1) the
date established in the open season for
executing contracts or (2) the date the
project sponsor makes a ‘‘go/no go’’
decision for the project. The first date
would appear to involve less risk of
discrimination, since it would be
announced and set at the start of the
open season, whereas the second date
appears to give the project sponsor
considerable discretion as to when to
terminate eligibility for Group I.
E. Additional Regulatory Revisions
71. To implement the above revisions,
the Commission will make the following
40 71 FR 36276 at 36289 (June 26, 2006); FERC
Stats. & Regs. ¶ 32,606 at 32,894 (2006); 115 FERC
¶ 61,338 at P 102 (2006).

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minor conforming revisions: (1)
§ 157.203(b) of the Commission’s
regulations is expanded to reference
automatically authorized storage
remediation and maintenance projects
under § 157.213(a); (2) § 157.203(c) of
the Commission’s regulations is
expanded to reference prior notice
blanket projects under §§ 157.210, .212.
and 213(b); 41 (3) § 157.205(a) of the
Commission’s regulations is expanded
to reference prior notice blanket projects
under §§ 157.210, .212. and 213(b); (4)
§ 157.207 of the Commission’s
regulations is expanded to reference
automatically authorized storage
remediation and maintenance projects
under § 157.213(a); and (5) § 157.216 of
the Commission’s regulations is
expanded to provide for abandonment
of facilities described by the expanded
blanket certificate authority.
IV. Information Collection Statement
72. The Office of Management and
Budget (OMB) regulations require that
OMB approve certain reporting, record
keeping, and public disclosure
requirements (collections of
information) imposed by an agency.42
Therefore, the Commission is providing
notice of its information collections to
OMB for review in accordance with
section 3507(d) of the Paperwork
Reduction Act of 1995.43 Upon approval
of a collection of information, OMB will
assign an OMB control number and an
expiration date. The only entities
affected by this rule would be the
natural gas companies under the
Commission’s jurisdiction. The
information collection requirements in
this Final Rule are identified as follows:
73. FERC–537, ‘‘Gas Pipeline
Certificates: Construction, Acquisition
and Abandonment,’’ identifies the
Commission’s information collections
relating to Part 157 of its regulations,
which apply to natural gas facilities for
which authorization under NGA section
7 is required, and includes all blanket
certificate projects.
74. FERC–577, ‘‘Gas Pipeline
Certificates: Environmental Impact
Statements,’’ identifies the
Commission’s information collections
relating to the requirements set forth in
NEPA and Parts 2, 157, 284, and 380 of
the Commission’s regulations.
Applicants have to conduct appropriate
studies which are necessary to
determine the impact of the
construction and operation of proposed
41 The revisions to 18 CFR 157.203 clarify, in
response to a question raised by Dominion, that all
the provisions of this section apply to projects
proceeding under 18 CFR 157.210, .212. and .213.
42 5 CFR 1320.11 (2006).
43 44 U.S.C. 3507(d) (2005).

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jurisdictional facilities on human and
natural resources, and the measures
which may be necessary to protect the
values of the affected area. These
information collection requirements are
mandatory.
75. Because the expansion of the
blanket certificate program will permit
projects that are now processed under
the case-specific NGA section 7(c)
procedures to go forward under the
streamlined blanket certificate program,
although the burden under the

expanded blanket certificate program
will increase, the overall burden on the
industry will decrease. The Commission
estimates that the total annual hours for
the blanket certificate program burden
will increase by 7,727, whereas the total
annual hours associated with casespecific application projects will
decrease by 11,997. This represents an
overall reduction of 4,270 hours. The
Commission did not receive specific
comments concerning the burden
estimates in the NOPR, and uses the
Number of
respondents

Data collection

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FERC–537 (Part 157) ......................................................................................
FERC–577 (Part 380) ......................................................................................

Information Collection Costs: The
above hours reflect the total blanket
certificate program reporting burden as
expanded. Because of the regional
differences and the various staffing
levels that will be involved in preparing
the documentation (legal, technical and
support) the Commission is using an
hourly rate of $150 to estimate the costs
for filing and other administrative
processes (reviewing instructions,
searching data sources, completing and
transmitting the collection of
information). The estimated cost is
anticipated to be $2,748,900, an amount
that is $640,500 less than the current
estimated cost.
Title: FERC–537 and FERC–577.
Action: Proposed Data Collection.
OMB Control Nos.: 1902–0060 and
1902–0128.
Respondents: Natural gas pipeline
companies.
Frequency of Responses: On occasion.
Necessity of Information: Submission
of the information is necessary for the
Commission to carry out its NGA
statutory responsibilities and meet the
Commission’s objectives of expediting
appropriate infrastructure development
to ensure sufficient energy supplies
while addressing landowner and
environmental concerns fairly. The
information is expected to permit the
Commission to meet the request of the
natural gas industry, as expressed in the
INGAA and NGSA petition, to improve
the industry’s ability to ensure adequate
infrastructure is added in time to meet
increased market demands. By
expanding the scope and scale of the
blanket certificate program, the industry
is provided a streamlined means to
build new and maintain existing
infrastructure.
76. Interested persons may obtain
information on the reporting

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V. Environmental Analysis
77. The Commission is required to
prepare an environmental assessment
(EA) or an environmental impact
statement (EIS) for any action that may
have a significant adverse effect on the
human environment.44 In 1982, in
promulgating the blanket certificate
program, the Commission prepared an
EA in which it determined that, subject
to compliance with the standard
environmental conditions, projects
under the blanket program would not
have a significant environmental
impact. As a result, the Commission
determined that automatic authorization
projects would be categorically
excluded from the need for an EA or EIS
under § 380.4 of the Commission’s
regulations. However, the Commission
specified that prior notice projects
should be subject an EA to ensure each
individual project would be
environmentally benign. For the reasons
set forth below, the Commission
continues to believe this would be the
44 Regulations Implementing the National
Environmental Policy Act, Order No. 486, 52 FR
47897 (Dec. 17, 1987), FERC Stats. & Regs. ¶ 30,783
(1987).

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same estimates in this Final Rule.
Several commenters did indicate that
providing information for the Annual
Report on Automatic Authorization
Projects would be burdensome.
However, as explained herein, the
Commission believes that much of this
information is already required to be
compiled and therefore to report it to
the Commission will not result in
additional burdens to certificate
holders.
Number of
responses/
filings

76
76

requirements or submit comments by
contacting the Federal Energy
Regulatory Commission, 888 First
Street, NE., Washington, DC 20426
(Attention: Michael Miller, Office of the
Executive Director, 202–502–8415, or by
e-mail to [email protected]).
Comments may also be sent to the Office
of Management and Budget (Attention:
Desk Officer for the Federal Energy
Regulatory Commission, by fax to 202–
395–7285, or by e-mail to
[email protected].) (Re:
OMB control nos. 1902–0060 and 1902–
0128.)

63691

206
¥62

Number of
hours per
response
¥42.02
193.50

Total annual
hours
7,727
¥11,997

case under the blanket certificate
program as modified by this rule.
78. First, the monetary limits on
projects are simply being adjusted to
account for inflationary effects which
were not completely captured under the
mechanism specified in the regulations
(the gross domestic product implicit
price deflator as determined by the
Department of Commerce). As a result,
the scale of projects which will be
within the new cost limits will be
comparable to those projects that were
allowed when the blanket program was
first created. Second, but for certain
storage remediation and maintenance
projects, all the additional types of
projects permitted under the expanded
blanket program will be subject to the
prior notice provisions and will be
subject to an EA. Finally, this Final Rule
strengthens the standard environmental
conditions applicable to all blanket
projects. Therefore, the rule does not
constitute a major federal action that
may have a significant adverse effect on
the human environment.
VI. Regulatory Flexibility Act Analysis
79. The Regulatory Flexibility Act of
1980 (RFA) 45 generally requires a
description and analysis of regulations
that will have significant economic
impact on a substantial number of small
entities. The Commission is not
required to make such an analysis if
regulations would not have such an
effect.46 Under the industry standards
used for purposes of the RFA, a natural
gas pipeline company qualifies as ‘‘a
small entity’’ if it has annual revenues
of $6.5 million or less. Most companies
regulated by the Commission do not fall
45 5
46 5

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U.S.C. 601–612 (2005).
U.S.C. 605(b) (2005).

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within the RFA’s definition of a small
entity.47
80. The procedural modifications
should have no significant economic
impact on those entities—be they large
or small—subject to the Commission’s
regulatory jurisdiction under NGA
section 3 or 7, and no significant
economic impact on state agencies.
Accordingly, the Commission certifies
that the revised regulations will not
have a significant economic impact on
a substantial number of small entities.
VII. Document Availability
81. 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 print the contents of this
document via the Internet through
FERC’s Home Page (http://www.ferc.gov)
and in FERC’s Public Reference Room
during normal business hours (8:30 a.m.
to 5 p.m. Eastern time) at 888 First
Street, NE., Room 2A, Washington DC
20426. From FERC’s Home Page on the
Internet, this information is available in
the Commission’s document
management system, eLibrary. The full
text of this document is available in
eLibrary in PDF and Microsoft Word
format for viewing, printing, and
downloading. To access this document
in eLibrary, type RM06–7 in the docket
number field.
82. User assistance is available for
eLibrary and the Commission’s Web site
during normal business hours at (202)
502–8222 or the Public Reference Room
at (202) 502–8371 Press 0, TTY (202)
502–8659. E-Mail the Public Reference
Room at [email protected].
VIII. Effective Date and Congressional
Notification

cprice-sewell on PROD1PC66 with RULES

This Final Rule will take effect
January 2, 2007. The Commission has
determined with the concurrence of the
Administrator of the Office of
Information and Regulatory Affairs,
Office of Management and Budget, that
this rule is not a major rule within the
meaning of section 251 of the Small
Business Regulatory Enforcement
Fairness Act of 1996.48 The Commission
will submit this Final Rule to both
houses of Congress and the Government
Accountability Office.49
47 5 U.S.C. 601(3) (2005) citing to section 3 of the
Small Business Act, 15 U.S.C. 623 (2005). Section
3 of the Small Business Act defines a ‘‘smallbusiness concern’’ as a business which is
independently owned and operated and which is
not dominant in its field of operation.
48 See 5 U.S.C. 804(2) (2005).
49 See 5 U.S.C. 801(a)(1)(A) (2005).

VerDate Aug<31>2005

15:23 Oct 30, 2006

Jkt 211001

List of Subjects in 18 CFR Part 157
Administrative practice and
procedure, Natural gas, Reporting and
recordkeeping requirements
By the Commission.
Magalie R. Salas,
Secretary.

In consideration of the foregoing, the
Commission amends part 157, Chapter I,
Title 18, Code of Federal Regulations, as
follows:

■

PART 157—APPLICATIONS FOR
CERTIFICATES OF PUBLIC
CONVENIENCE AND NECESSITY AND
FOR ORDERS PERMITTING AND
APPROVING ABANDONMENT UNDER
SECTION 7 OF THE NATURAL GAS
ACT
1. The authority citation for part 157
continues to read as follows:

■

Authority: 15 U.S.C. 717–717w.

2. In § 157.6, paragraph (d)(2)(i) is
revised to read as follows:

■

§ 157.6 Applications; general
requirements.

*

*
*
*
*
(d) * * *
(2) * * *
(i) Is directly affected (i.e., crossed or
used) by the proposed activity,
including all facility sites (including
compressor stations, well sites, and all
above-ground facilities), rights of way,
access roads, pipe and contractor yards,
and temporary workspace;
*
*
*
*
*
■ 3. In § 157.203,
■ a. In paragraph (b), the phrase
‘‘§ 157.213(a),’’ is added immediately
after the phrase ‘‘§ 157.211(a)(1),’’;
■ b. In paragraph (c), the phrase
‘‘§ 157.210,’’ is added immediately after
the phrase ‘‘§ 157.208(b),’’ and the
phrase ‘‘§ 157.212, § 157.213(b),’’ is
added immediately after the phrase
‘‘§ 157.211(a)(2),’’;
■ c. In paragraph (d)(1) introductory
text, the phrase ‘‘30 days’’ is removed
and the phrase ‘‘45 days’’ is added in its
place, and the phrase ‘‘30-day’’ is
removed and the phrase ‘‘45-day’’ is
added in its place;
■ d. In paragraph (d)(1)(ii), the phrase ‘‘;
and’’ is removed and a semi-colon is
added in its place;
■ e. Paragraph (d)(1)(iii) is redesignated
as paragraph (d)(1)(iv) and a new
paragraph (d)(1)(iii) is added;
■ f. Paragraphs (d)(2)(i) and (d)(2)(ii) are
revised;
■ g. In paragraph (d)(2)(iii), the word
‘‘and’’ is removed;
■ h. Paragraph (d)(2)(iv) is redesignated
as paragraph (d)(2)(vi), and the phrase

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‘‘45 days’’ is removed and the phrase
‘‘60 days’’ is added its place, and the
final period is removed and the phrase
‘‘; and’’ is added in its place;
■ i. Paragraphs (d)(2)(iv) and (d)(2)(v)
are added; and
■ j. A new paragraph (d)(2)(vii) is added
to read as follows:
§ 157.203

Blanket certification.

*

*
*
*
*
(d) * * *
(1) * * *
(iii) A description of the company’s
environmental complaint resolution
procedure that must:
(A) Provide landowners with clear
and simple directions for identifying
and resolving their environmental
mitigation problems and concerns
during construction of the project and
restoration of the right-of way;
(B) Provide a local or toll-free phone
number and a name of a specific person
to be contacted by landowners and with
responsibility for responding to
landowner problems and concerns, and
who will indicate when a landowner
should expect a response;
(C) Instruct landowners that if they
are not satisfied with the response, they
should call the company’s Hotline; and
(D) Instruct landowners that, if they
are still not satisfied with the response,
they should contact the Commission’s
Enforcement Hotline.
*
*
*
*
*
(2) * * *
(i) A brief description of the company
and the proposed project, including the
facilities to be constructed or replaced
and the location (including a general
location map), the purpose, and the
timing of the project and the effect the
construction activity will have on the
landowner’s property;
(ii) A general description of what the
company will need from the landowner
if the project is approved, and how the
landowner may contact the company,
including a local or toll-free phone
number and a name of a specific person
to contact who is knowledgeable about
the project;
*
*
*
*
*
(iv) A general description of the
blanket certificate program and
procedures, as posted on the
Commission’s Web site at the time the
landowner notification is prepared, and
the link to the information on the
Commission’s Web site;
(v) A brief summary of the rights the
landowner has in Commission
proceedings and in proceedings under
the relevant eminent domain rules; and
*
*
*
*
*
(vii) The description of the company’s
environmental complaint resolution

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Rules and Regulations
procedure as described in paragraph
(d)(1)(iii) of this section.
*
*
*
*
*
■ 4. In § 157.205:
■ a. In paragraph (a) introductory text,
the phrase ‘‘§ 157.210,’’ is added
immediately after the phrase
‘‘§ 157.208(b),’’ and the phrase
‘‘§ 157.212, § 157.213(b),’’ is added
immediately after the phrase
‘‘§ 157.211(a)(2),’’and
■ b. In paragraph (d)(1), the phrase ‘‘45
days’’ is removed and the phrase ‘‘60
days’’ is added in its place.
■ 5. In § 157.206, paragraph (b)(5) is
revised to read as follows:
§ 157.206

Standard conditions.

*

*
*
*
*
(b) * * *
(5)(i) The noise attributable to any
new compressor station, compression
added to an existing station, or any
modification, upgrade or update of an
existing station, must not exceed a daynight level (Ldn) of 55 dBA at the site
property boundary.
(ii) Any horizontal directional drilling
or drilling of wells which will occur
between 10 p.m. and 7 a.m. local time
must be conducted with the goal of
keeping the perceived noise from the
drilling at any pre-existing noisesensitive area (such as schools,
hospitals, or residences) at or below a
night level (Ln) of 55 dBA.
*
*
*
*
*
■ 6. In § 157.207, paragraphs (c), (d), (e),
(f), (g), and (h) are redesignated,
respectively, as paragraphs (d), (e), (f),
(g), (h), and (i), and a new paragraph (c)
is added to read as follows:
§ 157.207

General reporting requirements.

cprice-sewell on PROD1PC66 with RULES

*

*
*
*
*
(c) For each underground natural gas
storage facility remediation and
maintenance activity authorized under
§ 157.213(a), the information required
by § 157.213(d);
*
*
*
*
*
■ 7. In § 157.208,
■ a. Paragraph (c)(9) is revised;
■ b. Paragraph (c)(10) is added;
■ c. In paragraph (d), Table I, ‘‘Year
2006,’’ in column 1, titled ‘‘Automatic
project cost limit,’’ the phrase
‘‘8,200,000’’ is removed and the phrase
‘‘9,600,000’’ is added in its place, and in
column 2, titled ‘‘Prior notice project
cost limit,’’ the phrase ‘‘22,700,000’’ is
removed and the phrase ‘‘27,400,000’’ is
added in its place; and
■ d. Paragraph (e)(4) is redesignated as
(e)(4)(i) and paragraphs (e)(4)(ii) through
(e)(4)(iv) are added to read as follows:

VerDate Aug<31>2005

15:23 Oct 30, 2006

Jkt 211001

§ 157.208 Construction, acquisition,
operation, replacement, and miscellaneous
rearrangement of facilities.

*

*
*
*
*
(c) * * *
(9) A concise analysis discussing the
relevant issues outlined in § 380.12 of
this chapter. The analysis must identify
the existing environmental conditions
and the expected significant impacts
that the proposed action, including
proposed mitigation measures, will
cause to the quality of the human
environment, including impact
expected to occur to sensitive
environmental areas. When compressor
facilities are proposed, the analysis
must also describe how the proposed
action will be made to comply with
applicable State Implementation Plans
developed under the Clean Air Act. The
analysis must also include a description
of the contacts made, reports produced,
and results of consultations which took
place to ensure compliance with the
Endangered Species Act, National
Historic Preservation Act and the
Coastal Zone Management Act. Include
a copy of the agreements received for
compliance with the Endangered
Species Act, National Historic
Preservation Act, and Coastal Zone
Management Act, or if no written
concurrence is issued, a description of
how the agency relayed its opinion to
the company. Describe how drilling for
wells or horizontal direction drilling
would be designed to meet the goal of
limiting the perceived noise at NSAs to
an Ldn of 55 dBA or what mitigation
would be offered to landowners.
(10) A commitment to having the
Environmental Inspector’s report filed
every week.
*
*
*
*
*
(e) * * *
(4) * * *
(ii) Documentation, including images,
that restoration of work areas is
progressing appropriately;
(iii) A discussion of problems or
unusual construction issues, including
those identified by affected landowners,
and corrective actions taken or planned;
and
(iv) For new or modified compression,
a noise survey verifying compliance
with § 157.206(b)(5).
*
*
*
*
*
■ 8. Section 157.210 is added to read as
follows:
§ 157.210

Mainline natural gas facilities.

Subject to the notice requirements of
§§ 157.205(b) and 157.208(c), the
certificate holder is authorized to
acquire, construct, modify, replace, and
operate natural gas mainline facilities,

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63693

including compression and looping, that
are not eligible facilities under
§ 157.202(b)(2)(i). The cost of a project
may not exceed the cost limitation
provided in column 2 of Table I of
§ 157.208(d). The certificate holder must
not segment projects in order to meet
this cost limitation.
■ 9. Sections 157.212 and 157.213 are
added to read as follows:
§ 157.212 Synthetic and liquefied natural
gas facilities.

Subject to the notice requirements of
§§ 157.205(b) and 157.208(c), the
certificate holder is authorized to
acquire, construct, modify, replace, and
operate natural gas facilities that are
used to transport either a mix of
synthetic and natural gas or exclusively
revaporized liquefied natural gas and
that are not ‘‘related jurisdictional
natural gas facilities’’ as defined in
§ 153.2(e) of this chapter. The cost of a
project may not exceed the cost
limitation provided in column 2 of
Table I in § 157.208(d). The certificate
holder must not segment projects in
order to meet this cost limitation.
§ 157.213
facilities.

Underground storage field

(a) Automatic authorization. If the
project cost does not exceed the cost
limitations provided in column 1 of
Table I in § 157.208(d), the certificate
holder may acquire, construct, modify,
replace, and operate facilities for the
remediation and maintenance of an
existing underground storage facility,
provided the storage facility’s
certificated physical parameters—
including total inventory, reservoir
pressure, reservoir and buffer
boundaries, and certificated capacity
remain unchanged—and provided
compliance with environmental and
safety provisions is not affected. The
certificate holder must not alter the
function of any well that is drilled into
or is active in the management of the
storage facility. The certificate holder
must not segment projects in order to
meet this cost limitation.
(b) Prior Notice. Subject to the notice
requirements of §§ 157.205(b) and
157.208(c), the certificate holder is
authorized to acquire, construct,
modify, replace, and operate natural gas
underground storage facilities, provided
the storage facility’s certificated
physical parameters—including total
inventory, reservoir pressure, reservoir
and buffer boundaries, and certificated
capacity, including injection and
withdrawal capacity, remain
unchanged—and provided compliance
with environmental and safety
provisions is not affected unchanged.

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The cost of a project may not exceed the
cost limitation provided in column 2 of
Table I in § 157.208(d). The certificate
holder must not segment projects in
order to meet this cost limitation.
(c) Contents of request. In addition to
the requirements of §§ 157.206(b) and
157.208(c), requests for activities
authorized under paragraph (b) of this
section must contain, to the extent
necessary to demonstrate that the
proposed project will not alter a storage
reservoir’s total inventory, reservoir
pressure, reservoir or buffer boundaries,
or certificated capacity, including
injection and withdrawal capacity:
(1) A description of the current
geological interpretation of the storage
reservoir, including both the storage
formation and the caprock, including
summary analysis of any recent crosssections, well logs, quantitative porosity
and permeability data, and any other
relevant data for both the storage
reservoir and caprock;
(2) The latest isopach and structural
maps of the storage field, showing the
storage reservoir boundary, as defined
by fluid contacts or natural geological
barriers; the protective buffer boundary;
the surface and bottomhole locations of
the existing and proposed injection/
withdrawal wells and observation wells;
and the lengths of open-hole sections of
existing and proposed injection/
withdrawal wells;
(3) Isobaric maps (data from the end
of each injection and withdrawal cycle)
for the last three injection/withdrawal
seasons, which include all wells, both
inside and outside the storage reservoir
and within the buffer area;
(4) A detailed description of present
storage operations and how they may
change as a result of the new facilities
or modifications. Include a detailed
discussion of all existing operational
problems for the storage field, including
but not limited to gas migration and gas
loss;
(5) Current and proposed working gas
volume, cushion gas volume, native gas
volume, deliverability (at maximum and
minimum pressure), maximum and
minimum storage pressures, at the
present certificated maximum capacity
Local agency

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2.21

We took direct final action to approve
this rule because we determined that it
complied with the relevant CAA
requirements and we did not expect
adverse public comment. Our direct

15:23 Oct 30, 2006

[FR Doc. E6–18027 Filed 10–30–06; 8:45 am]

Jkt 211001

ACTION:

Final rule.

SUMMARY: EPA is finalizing approval of
revisions to the Yolo-Solano Air Quality
Management District (YSAQMD)
portion of the California State
Implementation Plan (SIP). These
revisions were proposed in the Federal
Register on February 1, 2006 and
concern volatile organic compound
(VOC) emissions from organic liquid
storage and transfer facilities. We are
approving YSAQMD Rule 2.21 that
regulates these emission sources under
the Clean Air Act as amended in 1990
(CAA or the Act).
EFFECTIVE DATE: This rule is effective on
November 30, 2006.

EPA has established docket
number EPA–R09–OAR–2005–0557e for
this action. The index to the docket is
available electronically at
www.regulations.gov and in hard copy
at EPA Region IX, 75 Hawthorne Street,
San Francisco, California. While all
documents in the docket are listed in
the index, some information may be
publicly available only at the hard copy
location (e.g., copyrighted material), and
some may not be publicly available in
either location (e.g., CBI). To inspect the
hard copy materials, please schedule an
appointment during normal business
hours with the contact listed in the FOR
FURTHER INFORMATION CONTACT section.
ADDRESSES:

Jerry
Wamsley, EPA Region IX, at either (415)
947–4111, or [email protected].

FOR FURTHER INFORMATION CONTACT:

SUPPLEMENTARY INFORMATION:

BILLING CODE 6717–01–P

Throughout this document, ‘‘we,’’ ‘‘us’’
and ‘‘our’’ refer to EPA.
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R09–OAR–2005–0557e; FRL–8225–7]

Revisions to the California State
Implementation Plan, Yolo-Solano Air
Quality Management District

I. Proposed Action
On February 1, 2006 (71 FR 5172),
EPA took direct final action with a
concurrent proposal to approve the
following rule into the California SIP.

Environmental Protection
Agency (EPA).

AGENCY:

Rule

YSAQMD ....................................

VerDate Aug<31>2005

or pressure, with volumes and rates in
MMcf and pressures in psia;
(6) The latest field injection/
withdrawal capability studies including
curves at present and proposed working
gas capacity, including average field
back pressure curves and all other
related data;
(7) The latest inventory verification
study for the storage field, including
methodology, data, and work papers;
(8) The shut-in reservoir pressures
(average) and cumulative gas-in-place
(including native gas) at the beginning
of each injection and withdrawal season
for the last 10 years; and
(9) A detailed analysis, including data
and work papers, to support the need
for additional facilities (wells, gathering
lines, headers, compression,
dehydration, or other appurtenant
facilities) for the modification of
working gas/cushion gas ratio and/or to
improve the capability of the storage
field.
■ 10. In § 157.216:
■ a. Paragraph (a)(2) is amended by
adding the phrase ‘‘or § 157.213(a)’’
immediately after the phrase
‘‘§ 157.211’’;
■ b. Paragraph (b)(2) is amended by
adding the phrase ‘‘or a facility
constructed under § 157.210, § 157.212,
or § 157.213(b),’’ immediately after the
phrase ‘‘paragraph (a)(2) of this
section,’’; and
■ c. Paragraph (c)(5) is amended by
adding, at the end, the phrase ‘‘and a
concise analysis discussing the relevant
issues outlined in § 380.12 of this
chapter.’’

Rule title

Adopted

Organic Liquid Storage & Transfer ................................................

final action contains more information
on this rule and our evaluation.
However, we did receive adverse
public comments on our direct final
approval action. Consequently, we
withdrew our direct final action on

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09/14/05

Submitted
10/20/05

April 11, 2006 (see 71 FR 18219). Our
February 1, 2006 concurrent proposed
action (see 71 FR 5211) provides the
basis for today’s final action.

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