Order on Rehearing in RM07-9-004

Federal Register / Vol. 76, No. 162 / Monday, August 22, 2011 / Rules and Regulations
made by a person or entity other than
the reporter shall be available at the
same rates, or no more than the actual
cost of duplication, whichever is higher.
*
*
*
*
*
■ 7. Amend § 3.45, by revising the
second and seventh full sentences of
paragraph (e) and the second and third
full sentences of paragraph (f) to read as
follows:
§ 3.45

In camera orders.

*

*
*
*
*
(e) * * * A complete version shall be
marked ‘‘In Camera’’ or ‘‘Subject to
Protective Order,’’ as appropriate, on
every page and shall be filed with the
Secretary and served by the party on the
other parties in accordance with the
rules in this part. * * * An expurgated
version of the document, marked
‘‘Public Record’’ on every page and
omitting the in camera and confidential
information and attachment that appear
in the complete version, shall be filed
with the Secretary within 5 days after
the filing of the complete version,
unless the Administrative Law Judge or
the Commission directs otherwise, and
shall be served by the party on the other
parties in accordance with the rules in
this part. * * *
(f) * * * A complete version shall be
marked ‘‘In Camera’’ or ‘‘Subject to
Protective Order,’’ as appropriate, on
every page and shall be served upon the
parties. The complete version will be
placed in the in camera record of the
proceeding. An expurgated version, to
be filed within 5 days after the filing of
the complete version, shall omit the in
camera and confidential information
that appears in the complete version,
shall be marked ‘‘Public Record’’ on
every page, shall be served upon the
parties, and shall be included in the
public record of the proceeding.***
*
*
*
*
*
■ 8. Amend § 3.52, by revising the
fourth sentence of paragraph (a)(1), the
first sentence of paragraph (a)(2), and
the fourth sentence of paragraph (b)(2)
to read as follows:

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§ 3.52

Appeal from initial decision.

(a) * * *
(1) * * * Unless the Commission
orders that there shall be no oral
argument, it will hold oral argument
within 10 days after the deadline for the
filing of any reply briefs. * * *
(2) If no objections to the initial
decision are filed, the Commission may
in its discretion hold oral argument
within 10 days after the deadline for the
filing of objection, * * *
(b) * * *
(2) * * * Unless the Commission
orders that there shall be no oral

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argument, it will hold oral argument
within 15 days after the deadline for the
filing of any reply briefs. * * *
*
*
*
*
*
■ 9. Amend § 3.83, by revising
paragraph (i) to read as follows:
§ 3.83 Procedures for considering
applicants.

*

*
*
*
*
(i) Judicial review. Judicial review of
final Commission decisions on awards
may be sought as provided in 5 U.S.C.
504(c)(2).
*
*
*
*
*
PART 4—MISCELLANEOUS RULES
■

1. The authority for part 4 remains:

Authority: 15 U.S.C. 46, unless otherwise
noted.

2. Amend § 4.2(b), by revising the last
sentence, to read as follows:

■

§ 4.2 Requirements as to form, and filing
of documents other than correspondence.

*

*
*
*
*
(b) * * * Every page of each such
document shall be clearly and
accurately labeled ‘‘Public’’, ‘‘In
Camera’’ or ‘‘Confidential’’.
*
*
*
*
*
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011–21019 Filed 8–19–11; 8:45 am]
BILLING CODE 6750–01–P

DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 260
[Docket No. RM07–9–004; Order No. 710–
C]

Revisions to Forms, Statements, and
Reporting Requirements for Natural
Gas Pipelines
Federal Energy Regulatory
Commission, DOE.
ACTION: Order on Rehearing.
AGENCY:

In this Order, the Federal
Energy Regulatory Commission
(Commission) generally denies
rehearing and reaffirms the findings
made in Order No. 710–B. The
Commission does, however, revise the
burden estimate to more accurately
account for initial start-up costs, grant
rehearing on the issue of whether to
include page 521d, and grant additional
time to comply with Order No. 710–B.
FOR FURTHER INFORMATION CONTACT:
SUMMARY:

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Brian Holmes (Technical Information),
Office of Enforcement, Federal Energy
Regulatory Commission, 888 First
Street, NE., Washington, DC 20426.
Telephone: (202) 502–6008, e-mail:
[email protected].
Robert Sheldon (Technical Information),
Office of Energy Market Regulation,
Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426. Telephone:
(202) 502–8672, e-mail: robert.
[email protected].
Gary D. Cohen (Legal Information),
Office of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC
20426. Telephone: (202) 502–8321, email: [email protected].
SUPPLEMENTARY INFORMATION:
Before Commissioners: Jon Wellinghoff,
Chairman; Marc Spitzer, Philip D.
Moeller, John R. Norris, and Cheryl A.
LaFleur.
Order on Rehearing
Issued August 16, 2011
1. Earlier in this proceeding, the
Commission issued a Final Rule (Order
No. 710–B) revising its financial forms,
statements, and reports for natural gas
companies, contained in FERC Form
Nos. 2, 2–A, and 3–Q, to provide greater
transparency on fuel data by requiring
the reporting of functionalized fuel data
on pages 521a through 521c of those
forms, and to include on those forms the
amount of fuel waived, discounted or
reduced as part of a negotiated rate
agreement.1
2. In response to the Final Rule, the
Interstate Natural Gas Association of
America (INGAA) filed a request for
rehearing raising eleven separate
objections to the Final Rule. In this
order on rehearing, we generally deny
rehearing and reaffirm the findings we
made in Order No. 710–B. We do,
however, revise the burden estimate to
more accurately account for initial startup costs, grant rehearing on the issue of
whether to include page 521d and we
grant filers additional time before they
must begin filing Form Nos. 2, 2–A, and
3–Q in accordance with the
requirements established in Order No.
710–B and this rehearing order.
I. Background
3. This matter began in 2008, when
the Commission issued a Final Rule
(Order No. 710) revising its financial
forms, statements, and reports for
natural gas companies, contained in
1 Revisions to Forms, Statements, and Reporting
Requirements for Natural Gas Pipelines, Order No.
710–B, 76 FR 4516 (Jan. 26, 2011), 134 FERC
¶ 61,033 (2011) (Order No. 710–B or Final Rule).

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FERC Form Nos. 2, 2–A, and 3–Q, to
make the information reported in these
forms more useful by updating them to
reflect current market and cost
information relevant to interstate
natural gas pipelines and their
customers.2 The information provided
in these forms included data on fuel
use, but did not require these data to be
functionally disaggregated.
4. On rehearing, the American Gas
Association (AGA) argued that the fuel
data would be more useful if such data
were broken out by different pipeline
functions, including transportation,
storage, gathering, and exploration/
production, and should include, by
function, the amount of fuel waived,
discounted or reduced as part of a
negotiated rate agreement. This
argument was rejected in Order No.
710–A,3 but was reconsidered in a
Notice of Proposed Rulemaking issued
on June 17, 2010.4 AGA supported the
Commission’s proposal while INGAA
opposed it. After considering all the
comments and reply comments, the
Commission issued a Final Rule adding
additional transparency to the reporting
of fuel data. Specifically, the Final Rule
revised FERC Form Nos. 2, 2–A, and 3–
Q, revising pages 521a, 521b, and page
520, and adding page 521c to FERC
Form Nos. 2, 2–A, and 3–Q to include
functionalized fuel data, including the
amount of fuel waived, discounted or
reduced as part of a negotiated rate
agreement.5
5. In response to the Final Rule,
INGAA filed a request for rehearing
reiterating many of the concerns that it
raised earlier in the proceeding (in its
comments and reply comments on the
June 2010 NOPR).
II. Discussion

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A. Overview
6. INGAA raises eleven separate
objections to the Final Rule. First,
INGAA argues that Order No. 710–B
erred by finding that reporting of
functionalized fuel data by contract rate
category does not require tracking of
2 Revisions to Forms, Statements, and Reporting
Requirements for Natural Gas Pipelines, final rule,
Order No. 710, FERC Stats. & Regs. ¶ 31,267 (2008)
(Order No. 710).
3 Revisions to Forms, Statements, and Reporting
Requirements for Natural Gas Pipelines, order on
reh’g and clarification, Order No. 710–A, 123 FERC
¶ 61,278 (2008).
4 Revisions to Forms, Statements, and Reporting
Requirements for Natural Gas Pipelines, Notice of
Proposed Rulemaking, 75 FR 35700 (June 23, 2010),
FERC Stats. & Regs. ¶ 32,659 (June 17, 2010) (June
2010 NOPR).
5 Order No. 710–B, 134 FERC ¶ 61,033, at P 1, 7,
37. The Final Rule has a more complete discussion
of the procedural history of this case. We will not
reiterate that complete history here.

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fuel by individual contracts. Second,
INGAA argues that adding this level of
detail increases the reporting burden.
Third, INGAA argues that the
Commission erred by not adopting its
alternative proposal which it maintains
would have met the Commission’s
needs with a lesser burden to filers.
Fourth, INGAA claims that the
requirement to allocate lost and
unaccounted for gas (LAUF) among
negotiated, discounted and recourse
transportation customers ignores
fundamental nature of LAUF, forcing an
allocation that is meaningless. Fifth,
INGAA argues that the requirement to
disclose the disposition of excess gas or
gas acquired to meet deficiencies by
contract rate category also is
meaningless. Sixth, INGAA reiterates its
objection to reporting discounted rates
as a separate category, claiming that
disclosing this information does not
serve any regulatory purpose because
pipelines are prohibited from
discounting. Seventh, INGAA argues
that the Commission erred by not
granting the clarification requested by
MidAmerican 6 (that the rule should
only cover (1) contracts with discounted
and negotiated fuel rates and (2)
headings should be changed to be
‘‘discounted fuel rate’’ and ‘‘negotiated
fuel rate’’). INGAA argues this would be
less burdensome but would accomplish
the Commission’s stated goals. Eighth,
INGAA argues that the Commission
erred by assuming that MidAmerican’s
proposal would have excluded many
contracts that otherwise would be
reported. Ninth, INGAA argues that the
Final Rule orders the collection of data
too soon and that data under the new
categories should not be required to be
collected until calendar year 2012.
Tenth, INGAA requests clarification that
‘‘backhaul service offered under tariff’’
means that, if tariff does not include a
‘‘backhaul’’ rate schedule, then nothing
need be reported for this. Finally,
INGAA argues that the Commission
should keep blank page 521d, which
was included in the June 2010 NOPR
and omitted in the Final Rule. We will
now examine each of these arguments.
B. Does the Final Rule Require the
Tracking of Individual Contracts?
7. INGAA argues that Order No. 710–
B erred by finding that reporting of
functionalized fuel data by contract rate
category does not require the tracking of
fuel by individual contracts.
6 In this proceeding, we are referring to Northern
Natural Gas Company and Kern River Gas
Transmission Company, collectively, as
MidAmerican.

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8. INGAA states that, in Order No.
710–B, the Commission found that the
reporting of functionalized fuel data by
contract rate category does not require
the tracking of fuel by individual
contracts. INGAA disputes this finding
and argues that such tracking would be
necessitated, despite the Commission’s
finding to the contrary. We reject this
interpretation. As we stated in Order
No. 710–B, at paragraph 74:
In this Final Rule, the Commission is not
imposing any additional reporting
requirements that change how those
pipelines track fuel. Pipeline billings are
provided on an integrated basis, accounting
for sales based on whether the volumes are
negotiated, recourse, or discounted.
Moreover, contrary to INGAA’s assertions,
the Commission is not requiring pipelines to
track fuel by individual contracts, but merely
continuing the current practice of requiring
the assignment of fuel based on an allocation
of throughput or stated fuel rate. The
revisions to page 521a through 521c require
the same accounting mechanism for fuel,
enabling parties to better understand how
fuel use costs are assigned.

9. Thus, it can be seen that, if a
pipeline has twelve gas service
contracts, the Final Rule is not requiring
the pipeline to report the details of each
of those contracts. Instead, the Final
Rule is requiring the pipeline to report
the totals for fuel (for all twelve
contracts) by function which can be
determined on an allocation of
throughput or stated fuel rate. To
accomplish this, however, the pipelines
would need to continue their current
practice of assessing shippers for
services provided to each customer.
C. Reporting Burden
10. INGAA argues that adding the
level of detail required by the Final Rule
increases the reporting burden. In light
of INGAA’s concerns, we have further
reviewed the burden estimate contained
in the Final Rule and have determined
that we can improve the accuracy of our
burden estimate if we distinguish
between the initial start-up costs, which
include all of the work needed to
identify and create a mechanism to
report the information required to be
reported under the Final Rule, as
compared to the ongoing costs of
reporting the information required to be
reported under the Final Rule once the
reporting mechanism is in place. This
revised burden estimate is shown below
in the Information Collection Statement
that begins at paragraph 28 of this order.
D. INGAA’s Alternative Proposal
11. INGAA argues that the
Commission erred by not adopting its
alternative proposal which it maintains
would have met the Commission’s

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needs with a lesser burden to filers. The
Commission addressed this issue in
Order No. 710–B, where we stated:
We find that requiring the reporting of fuel
costs and revenues by rate structure broken
down by function will increase the ability of
the Commission and interested parties to
assess whether a pipeline’s existing shippers
are subsidizing the pipeline’s negotiated rate
program. Thus, we find that INGAA’s
proposal would effectively delete much of
the valuable information sought in the June
2010 NOPR.7
The revised forms also will now allow the
user to better determine where on the
pipeline system fuel costs are being incurred
and how they are being allocated. This added
transparency, which is supported by the
majority of the commenters, will ensure that
the Commission and pipeline customers have
sufficient information to be able to assess the
justness and reasonableness of pipeline rates.
The collection and public availability of this
information is consistent with our goal of
having sufficient information to allow the
Commission and pipeline customers to assess
the impact on pipeline rates of changing fuel
costs.8
By contrast, if we adopted INGAA’s
suggestion to limit the revisions to FERC
Form No. 2 to those originally proposed by
AGA, then the benefits of increased
transparency of rates, particularly within the
negotiated rate program, which are described
in the two preceding paragraphs, would not
be fully realized.9

12. INGAA’s rehearing reiterates
arguments it advanced earlier in this
proceeding that, for the reasons quoted
above, the Commission rejected in
Order No. 710–B. We reaffirm those
findings and reject INGAA’s proposal.
E. Allocations of Fuel Used in
Compressor Stations, LAUF, and Fuel
Used in Operations
13. INGAA argues that Order No. 710–
B suggests that fuel consumed in
compressor stations, LAUF and fuel
used in operations, which are all drawn
from a commingled and fungible gas
stream, can be traced back to individual
shipper contracts. INGAA further argues
that the requirement to allocate LAUF
among negotiated, discounted and
recourse transportation customers
ignores fundamental nature of LAUF,
forcing an allocation that is
meaningless. INGAA also argues that,
except in some limited and unique
circumstances, such tracing is
impractical, if not impossible.10
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7 Order

No. 710–B, 134 FERC ¶ 61,033 at P 37.
P 38.
9 Id. P 39.
10 INGAA states that ‘‘[p]ipelines do track or
allocate fuel consumed separately for incremental
rate services in which the Commission in its orders
has required the pipeline to keep the incremental
rate customers’ fuel costs and revenues separate.
Other than for such very limited incremental rate
purposes, however, pipelines are not required to
8 Id.

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14. The reporting requirements
established in the Final Rule do not
require fuel use to be traced back to
individual shipper contracts.11 The
information reported on pages 521a and
521b—even before issuance of the Final
Rule—already included a requirement
for pipelines to report monthly fuel use
by Dth. The Final Rule added the
requirement for pipelines (on lines 1–65
on pages 521a and 521b) to allocate
these totals among discounted rates,
negotiated rates, and recourse rates. The
Final Rule did not impose a requirement
that these allocations be made based on
a review of individual contracts. One
reasonable approach would be to take
the total volume of throughput and
allocate it among the three contract
categories (i.e., contracts with
discounted rates, contracts with
negotiated rates, and contracts with
recourse rates) based on the percentage
of gas transported for each contract type,
which is already known and available to
a pipeline for invoicing shippers on a
monthly basis. For example, if,
hypothetically, a pipeline has a monthly
transportation volume of 1000 Dth and
5 percent of its volume is associated
with contracts with discounted rates,
10 percent is associated with negotiated
rates contracts, and 85 percent
associated with recourse rate contracts,
then the pipeline could develop an
allocation of fuel used at compressor
stations, LAUF, and gas used in
operations based on a ratio of the
throughput. Such an allocation could be
used for all the various allocations
needed to complete pages 521a and
521b. Thus, it is evident that we are not
requiring pipelines to assess individual
contracts to make this allocation.
15. In addition, while admittedly
imperfect, allocating costs by function is
a standard practice for pipelines for
numerous cost categories. The
allocation of fuel consumed in
compressor stations, LAUF and fuel
used in operations, and among
negotiated, discounted and recourse
transportation customers are a few,
among many, of such cost allocations.
allocate or track fuel used by individual contract
even in general section 4 rate proceedings. In its
orders approving pipelines’ negotiated rate
contracts, the Commission requires pipelines to
separately account for the negotiated rate
transaction’s volumes, revenues, billing
determinants, rate components and surcharges. But,
the Commission does not require that fuel used, or
any other cost for that matter, associated with
negotiated rate transactions be separately accounted
for.’’ INGAA Rehearing at n.1. As discussed further
in paragraph 21 below, this contention is incorrect
because fuel use is a rate component.
11 The Commission does not expect pipelines to
develop and administer a process by which the fuel
in each compressor, as it is burned, is assigned in
some manner among individual shipper contracts.

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The allocation of costs is a standard
practice for pipeline companies to bill
their customers for services rendered.
The fact that such allocations are not
100 percent precise does not negate the
necessity for such allocations being
made. Pipelines collect fuel (including
LAUF) from customers and the Final
Rule requires the reporting of how that
fuel is assigned.
16. INGAA’s position is that the
allocation of fuel costs required by this
rule is ‘‘meaningless’’ given the nature
of LAUF as gas that is lost and
unaccounted for.12 We disagree. In our
view, allowing customers to see exactly
how fuel costs are assigned to various
customers groups is important because
it allows customers to assure themselves
that the fuel costs being assigned to
them are reasonable and do not crosssubsidize other customer groups. Thus,
we find that making such allocations
transparent is extremely meaningful.
F. Disclosure of Disposition of Excess
Gas or Gas Acquired To Meet Deficiency
by Contract Rate Category
17. INGAA raises the same objections
to the reporting of the disposition of
excess gas or the reporting of gas
acquired to meet deficiencies that it
raised regarding the reporting of the
allocation of fuel used in compressor
stations, LAUF, and fuel used in
operations. Specifically, INGAA argues
that,
[t]he reporting of disposition of excess gas
or the reporting of gas acquired to meet
deficiencies on pages 521b and 521c (lines
38–65) by contract rate category would
provide little benefit. A pipeline does not
track disposition or acquisition of gas by
categories of transportation contracts.
Assignment to contract rate categories could
be accomplished by utilizing an arbitrary
allocation methodology. However, the
allocation of a pipeline’s system gas
dispositions or acquisitions would not yield
any meaningful information. Only the
reporting of total dispositions or total
acquisitions of system gas would produce a
cogent result. Accordingly, INGAA requests
rehearing and asks the Commission to allow
pipelines to report total disposition or total
acquisitions of system gas on pages 521b and
521c.13

18. As discussed above in paragraph
14, the allocations required by the Final
Rule do not require an analysis of
individual contracts. Moreover, while
the allocations required by this rule may
not be precise, few allocations are, and
these allocations are routinely made for
customer billing purposes.
19. The information reported in lines
38–65 would be useful in determining
12 INGAA
13 INGAA

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among which classes of shippers over
and under recoveries of fuel are
occurring (i.e., recourse, negotiated, or
discounted customers). For example,
recourse rate shippers could provide
more fuel than necessary and negotiated
rate shippers could have a capped fuel
rate such that recourse shippers may be
subsidizing negotiated rate shippers.
The recourse rate shippers should be in
a position to fully understand whether
over recovered fuel for recourse rate
contracts is being used to make up a
deficiency of fuel for negotiated rate
contracts. Similarly, shippers should be
aware to the extent a pipeline is
purchasing gas associated with a fuel
deficiency attributable to negotiated rate
contracts. Additionally, while generally
more applicable to pipelines with stated
fuel rates, shippers should be in a
position to know whether the
disposition of excess fuel is being sold
or if the gas is used for imbalances such
that pipelines are recovering the cost
through periodic imbalance cashout
reports. We find that reporting this
information provides useful
transparency regarding the amount of
fuel used to operate compressor
stations, the disposition of excess gas
and how the deficiency was acquired,
and how fuel costs and LAUF are
allocated among customers.
Consequently, we deny rehearing of this
issue.
G. Discounted Rates as a Separate
Category and Negotiated Rates as a
Separate Category
20. INGAA reiterates its objection to
reporting fuel assigned to discounted
rates as a separate category, claiming
that disclosing this information does not
serve any regulatory purpose, because
pipelines are prohibited from
discounting fuel. Fuel expenses
constitute a significant portion of the
total expenses recovered by natural gas
rates. Obscuring this information makes
it harder for entities to track the
reasonableness of these expenses.
Contrary to INGAA’s arguments,
pipelines are not prohibited from
discounting fuel under all
circumstances.14 In addition, the
additional transparency provided by
this Final Rule serves the important
regulatory objective of assuring that
rates are just and reasonable. If a
pipeline is not discounting fuel then it
should simply report zero in Column
(K), Volume (in Dth) Not Collected. This
14 For

example, in Transwestern Pipeline
Company, 54 FERC ¶ 61,319, at 62,007 (1991), the
Commission approved Transwestern’s proposal to
provide fuel discounts, provided that the minimum
rate would not be lower than actual fuel costs, if
any.

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approach provides an affirmative
confirmation that fuel is not being
discounted. Combining the discount
rate category with negotiated rates
would eliminate this confirmation.
Consequently, we will retain the
separate discount rate category.
21. Additionally, based on its
contention that there is no cross-subsidy
in instances where a negotiated rate
customer pays the same fuel rate as a
recourse rate customer, INGAA argues
that there is no need to separate the
reporting of recourse and negotiated rate
contracts. The Commission has long
required pipelines to separately account
for rate components associated with
negotiated rates.15 We are not persuaded
to modify that policy in this rule.
Moreover, while INGAA points to
certain circumstances where it argues
that no cross-subsidy would occur, the
reporting requirements of this rule
apply to all negotiated rate contracts
and thus INGAA’s example does not
suffice to contradict the need for this
provision.

22. INGAA argues that the
Commission erred by not granting the
clarification requested by MidAmerican
(that the rule should only cover (1)
Contracts with discounted and
negotiated fuel rates and (2) headings
should be changed to be ‘‘discounted
fuel rate’’ and ‘‘negotiated fuel rate’’).
INGAA argues this approach would be
less burdensome but would accomplish
the Commission’s stated goals.
23. As we stated in Order No. 710–
B,16 the proposal to limit the scope of
the rule to only require the reporting of
fuel costs in contracts that include a
specific provision for discounted or
negotiated fuel would elevate form over
substance and would omit contracts
with negotiated and discounted rates,
unless they include a specific provision
covering discounted or negotiated fuel.
This is contrary to the objective of the
Final Rule of enhancing the
transparency of fuel costs and we deny
rehearing. Also, given our finding on the
required reporting of gas contracts with
discounted or negotiated fuel, we affirm
our finding on the appropriate headings
to be used.17
15 See, e.g., NorAm Gas Transmission Company,
75 FERC ¶ 61,322, at 62,029 (1996); Texas Eastern
Transmission, LP, 133 FERC ¶ 61,220, at P 19
(2010); Gulf Crossing Pipeline Company LLC, 123
FERC ¶ 61,100, at P 87 (2008).
16 Order No. 710–B, 134 FERC ¶ 61,033 at P 55.
17 Id. P 56.

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24. INGAA argues that the
Commission erred by assuming that
MidAmerican’s proposal would have
excluded many contracts that otherwise
would be reported. As we stated in
Order No. 710–B, MidAmerican
commented that, to its knowledge, very
few discounted and negotiated rate
agreements include a provision for
discounted and negotiated fuel.18 We
concluded that, if this were true or if
future contracts are written to make it
true, then excluding the reporting of
contracts not including a specific
provision identifying discounted and
negotiated fuel would be problematic.19
INGAA argues that we erred in relying
on MidAmerican’s statement, but in no
way rebuts it. Moreover, we were
concerned that, even if contracts are not
currently drafted in this fashion, future
contracts could be rewritten to achieve
this end and we do not wish to open
this possibility. Accordingly, we deny
INGAA’s request for rehearing on this
issue.
J. Start Date for New Data Collections

H. MidAmerican’s Requested
Clarification

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I. Excluded Contracts

25. INGAA argues that the Final Rule
orders the collection of data to begin too
soon and that data under the new
categories should not be required to be
collected until calendar year 2012. We
agree with INGAA that pipelines may
not have the accounting systems in
place to make the allocations of
functionalized fuel by contract rate type
required by the Final Rule and they may
need to develop systems for making
such allocations. We recognize some
pipelines may not currently have in
place the required accounting systems
necessary to allocate fuel costs to
negotiated, discounted and recourse
transportation customers. In light of
these considerations, we will grant
rehearing and further delay the
commencement of implementation of
the filing requirements of the Final Rule
until the fourth quarter period (‘‘Q4’’) of
2011. Thus, the data must be reported
in the new format starting with the
quarterly period October 1 through
December 31, 2011 in Annual Report
Forms 2 and 2–A with a due date of
April 18, 2012. This should allow
sufficient time for filers to develop the
necessary data and perform the needed
allocations. Individual pipeline
companies may apply to the
Commission for further extensions,
based on their individual
circumstances. Even if an extension is
granted, the information will still be
18 Id.
19 Id.

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Federal Register / Vol. 76, No. 162 / Monday, August 22, 2011 / Rules and Regulations
required to be reported for the Q4
period of 2011 but, if an extension is
granted, the due date for the filing of
this information may be extended past
the April 18, 2012 filing deadline.
Pipeline companies seeking an
extension must provide a detailed
explanation of why (for example, an
additional analysis of data is needed, or
allocation factors are still being
developed) they cannot meet the filing
deadline. The Commission will evaluate
these requests on a case-by-case basis,
based on the facts presented.

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K. Requested Clarification of Reported
Backhaul Service
26. INGAA requests clarification that
‘‘backhaul service offered under tariff’’
means that, if the tariff does not include
a ‘‘backhaul’’ rate schedule, then
nothing need be reported for this.20 A
review of gas tariffs shows that many
tariffs recover a charge for backhaul
service, but do not necessarily provide
for a separate backhaul rate schedule for
that service. In many instances, the
forwardhaul tariff permits backhaul
service at or below the forwardhaul rate,
with no separate backhaul rate
schedule.21 If we exclude these
backhaul volumes, then total backhaul
volumes would be understated for these
transactions. Thus, we reject the
argument that information on backhauls
should be limited to those instances
when the tariff includes a separate
backhaul rate schedule. INGAA’s
requested clarification would keep
needed information hidden and could
encourage tariffs to be drafted in a
manner to avoid the reporting of this
information. We note that the
discussion in Order No. 710–B at
paragraph 52 was addressing the narrow
20 In Order No. 710–B, the Commission added
lines 66–68 to page 521. The lines request a
separation of forwardhaul and backhaul throughput
volumes in Dths for the quarter.
21 See Trailblazer Pipeline Co., 39 FERC ¶ 61,103,
at 61,324 (1987), where we stated that, as backhaul
volumes are included within the definition of
transportation in section 284.1(a) of the
Commission’s regulations (18 CFR 284.1(a)),
Trailblazer may perform backhaul service pursuant
to its firm and interruptible rate schedules and we
did not require Trailblazer to adopt a separate
backhaul rate in that proceeding. We also note that,
for example, the Iroquois Gas Transmission System,
L.P., FERC Gas Tariff, at Section 13 of the General
Terms and Conditions, Second Revised Sheet No.
76, provides for backhaul transportation service to
be provided pursuant to the firm transportation
service rate schedule and not under a separate
backhaul rate schedule.

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instances, such as with reticulated gas
systems, where it is not possible to
clearly determine what is a backhaul
and what is a forwardhaul. We did not
intend this to restrict the reporting of
backhauls in systems where the gas flow
path can be determined. Put differently,
if the pipeline is unable to determine
whether the volume is forwardhaul or
backhaul, then the volume can be
reported entirely as forwardhaul.
Accordingly, we affirm the findings we
made on this subject at paragraphs 50–
52 of Order No. 710–B and deny the
requested clarification.
L. Need for Page 521d
27. Finally, INGAA argues that the
Commission should retain the blank
page 521d that we proposed in the June
2010 NOPR but omitted in Order No.
710–B. This omission was an oversight
and we agree with INGAA that a filer
would need this page to properly
complete the Forms. Thus, we will
correct this oversight and will include
page 521d on the various forms.22 We,
likewise, are including pages 521a–d in
the FERC Form Nos. 2/2–A/3–Q
Submission Software System.
III. Information Collection Statement
28. The Office of Management and
Budget’s (OMB) regulations require
approval of certain information
collection requirements imposed by
agency rules.23 Previously, the
Commission submitted to OMB the
information collection requirements
arising from Order No. 710–B and OMB
approved those requirements.24 In this
order, the Commission is making no
substantive changes to the content of the
forms and the information that is
required to be submitted. However, by
adding in blank page 521d and reestimating the reporting burden arising
from Order No. 710–B, the Commission
finds it necessary to make a formal
submission to OMB for review and
approval under section 3507(d) of the
Paperwork Reduction Act of 1995.25
22 This page is shown as an attachment to this
order.
23 5 CFR 1320.11.
24 OMB approved the information collections
prescribed in Order No. 710–B on May 16, 2011 for
FERC Form No. 2 (OMB Control No. 1902–0028,
ICR# 201101–1902–001), FERC Form No. 2–A
(OMB Control No. 1902–0030, ICR# 201101–1902–
003) and FERC Form No. 3–Q (OMB Control No.
1902–0205, ICR# 201101–1902–004).
25 44 U.S.C. 3507(d).

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52257

29. This order affects the following
existing data collections:
Title: FERC Form No. 2, ‘‘Annual
Report for Major Natural Gas
Companies’’; FERC Form No. 2–A,
‘‘Annual Report for Nonmajor Natural
Gas Companies.
Action: Proposed information
collection.
OMB Control Nos. 1902–0028 (FERC
Form No. 2); 1902–0030 (FERC Form
No. 2–A).
Respondents: Businesses or other for
profit.
Frequency of responses: Annually
(FERC Form Nos. 2 and 2–A).
Necessity of the information: The
information maintained and collected
under the requirements of 18 CFR 260.1
and 18 CFR 260.2 is essential to the
Commission’s oversight duties. The data
previously reported in the forms did not
provide sufficient information to the
Commission and the public to permit an
evaluation of the filers’ jurisdictional
rates. Since the triennial restatement of
rates requirement was abolished and
pipelines are no longer required to
submit this information, the need for
current and relevant data is greater than
in the past.
30. Without the information required
in Order No. 710–B, it is difficult for the
Commission and the public to perform
an assessment of pipeline costs, and
thereby help to ensure that rates are just
and reasonable. Order No. 710–B
accounts for the possibility that
multiple pipelines may be required to
develop and implement new procedures
in order to provide the data in the
revised forms. In any event, we believe
the additional information required in
Order No. 710–B will allow the
Commission and form users to better
analyze pipeline fuel costs, an
important component in assessing the
justness and reasonableness of
pipelines’ rates.
Burden Statement: As indicated in the
above discussion, INGAA contends that
the Commission underestimated the
burden associated with implementing
the changes mandated in Order No.
710–B. In light of INGAA’s arguments,
the Commission acknowledges that
some filers may have to modify existing
systems in order to collect the necessary
data. To account for this, the
Commission estimates a one-time
burden of 80 hours per filer. This will
increase the burden as follows:

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Federal Register / Vol. 76, No. 162 / Monday, August 22, 2011 / Rules and Regulations

Number of
respondents

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Data collection form26

One-time filing
per
respondent

One-time
additional
hours for
this form

Filings per
year

FERC Form No. 2 ............................................................................................
FERC Form No. 2–A .......................................................................................

84
44

80
80

1
1

6,720
3,520

Totals ........................................................................................................

........................

........................

........................

10,240

Information Collection Costs: 10,240
hours at $120/hour= $1,228,800.
31. Internal Review: The Commission
has reviewed the proposed changes and
has determined that the changes are
necessary. These requirements conform
to the Commission’s need for efficient
information collection, communication,
and management within the energy
industry. The Commission has assured
itself, by means of internal review, that
there is specific, objective support
associated with the information
requirements.
32. Interested persons may obtain
information on the reporting
requirements by contacting: Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426
[Attention: Ellen Brown, Office of the
Executive Director, e-mail:
[email protected], phone (202)
502–8663, fax: (202) 273–0873]. For
submitting comments concerning the
collections of information and the

associated burden estimates, please
submit comments to FERC in this
Docket No. and to the Office of
Information and Regulatory Affairs,
Office of Management and Budget, 725
17th Street, NW., Washington, DC 20503
[Attention: Desk Officer for the Federal
Energy Regulatory Commission, phone:
(202) 395–4638, fax: (202) 395–7285].
Due to security concerns, comments
should be sent electronically to the
following e-mail address:
[email protected]. Please
refer to OMB Control Nos. 1902–0028
(FERC Form No. 2), and 1902–0030
(FERC Form No. 2–A), and the docket
number of this Final Rule in your
submission.

26 The FERC Form No. 3–Q (OMB Control No.
1902–0205) is not directly affected by the one-time
burden increase because the filers will be making
this one-time change in preparation for filing the
FERC Form Nos. 2 and 2A in April 2012. It is
expected that well before the date of the next FERC
Form No. 3Q filing the one-time burden will have
already been expended. However, the Commission

intends to submit the FERC Form No. 3–Q to OMB
for informational purposes.
27 5 U.S.C. 601–612.
28 The RFA definition of ‘‘small entity’’ refers to
the definition provided in the Small Business Act,
which defines a ‘‘small business concern’’ as a
business that is independently owned and operated
and that is not dominant in its field of operation.

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IV. Regulatory Flexibility Act
33. The Regulatory Flexibility Act of
1980 (RFA)27 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities.28 However, the RFA does not

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define ‘‘significant’’ or ‘‘substantial.’’
Instead, the RFA leaves it up to an
agency to determine the effect of its
regulations on small entities.
34. In Order No. 710–B the
Commission certified that the additional
reporting requirements would not have
a significant economic impact on a
substantial number of small entities.29
With the understanding that a one-time
burden has now been added, the
Commission affirms that the
certification provided in Order No. 710–
B remains accurate and no further
justification is needed under the RFA.
The Commission orders:
(A) INGAA’s request for rehearing is
hereby denied in part and granted in
part, as discussed in the body of this
order.
(B) This order shall be published in
the Federal Register.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

15 U.S.C. 632. The Small Business Size Standards
component of the North American Industry
Classification System defines a small natural gas
pipeline company as one whose total annual
revenues, including its affiliates, are $6.5 million or
less. 13 CFR parts 121, 201.
29 Order No. 710–B, 134 FERC ¶ 61,033 at P 89–
91.

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Federal Register / Vol. 76, No. 162 / Monday, August 22, 2011 / Rules and Regulations

[FR Doc. 2011–21353 Filed 8–19–11; 8:45 am]

DEPARTMENT OF THE TREASURY

BILLING CODE 6717–01–P

52259

Final regulations and removal of
temporary regulations.

ACTION:

Internal Revenue Service
This document contains final
regulations regarding the suspension of
interest, penalties, additions to tax, or
additional amounts under section
6404(g) of the Internal Revenue Code.
The final regulations explain the general
rules for suspension and exceptions to
those general rules, and incorporate a
special rule from Notice 2007–93, 2007–
48 IRB 1072, regarding the effective date
of the changes to section 6404(g) made
by the Small Business and Work
Opportunity Tax Act of 2007. The final

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[TD 9545]
RIN 1545–BG75

Interest and Penalty Suspension
Provisions Under Section 6404(g) of
the Internal Revenue Code
Internal Revenue Service (IRS),
Treasury.

AGENCY:

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ER22AU11.054

SUMMARY:

26 CFR Part 301