FERC-501G, (Final Rule in RM18-11) Rate Changes Relating to Federal Corporate Income Tax Rate for Interstate Natural Gas Pipelines
New collection (Request for a new OMB Control Number)
No
Regular
Approved with change
09/12/2018
07/30/2018
In accordance with 5 CFR 1320, the information collection is approved for three years.
table that charts list comparision
Inventory as of this Action
Requested
Previously Approved
09/30/2021
36 Months From Approved
222
0
0
2,433
0
0
0
0
0
The Tax Cuts and Jobs Act of 2017 reduced tax levels applicable to corporate and individual income, effective January 1, 2018. Pipelines subject to cost of service regulation pursuant to Section 4 of the Natural Gas Act (NGA) and Section 311 of the Natural Gas Policy Act (NGPA) are permitted to include projected income taxes as part of the cost of service, and are permitted the opportunity to recover those costs through their rates. Pipelines are not required to reduce their rates to reflect reduced income taxes. Proposed FERC-501G is required to implement the statutory provisions governed by Section 4 of the NGA and Section 311 of the NGPA that the pipelinesâ currently effective rates remain just and reasonable (NGA) or fair and equitable (NGPA).
The Tax Cuts and Jobs Act of 2017 reduced tax levels applicable to corporate and individual income, effective January 1, 2018. Pipelines subject to cost of service regulation pursuant to Section 4 of the Natural Gas Act (NGA) and Section 311 of the Natural Gas Policy Act (NGPA) are permitted to include projected income taxes as part of the cost of service, and are permitted the opportunity to recover those costs through their rates. Pipelines are not required to reduce their rates to reflect reduced income taxes unless and until the Commission finds that a particular pipeline is over-recovering. FERC-501-G is required to implement the statutory provisions governed by Section 4 of the NGA and Section 311 of the NGPA that the pipelinesâ currently effective rates remain just and reasonable (NGA) or fair and equitable (NGPA).
Contemporaneous with the proposed rule, the Commission responded to a remand from the D.C. Circuit. In United Airlines, the D.C. Circuit held that the Commission failed to demonstrate that allowing SFPP, L.P., a master limited partnership (MLP) owned pipeline, to recover both an income tax allowance and the discounted cash flow methodology rate of return does not result in a double recovery of investorsâ tax costs. In response to that remand order, the Commission issued a Revised Policy Statement and Opinion No. 511-C, wherein the Commission found that permitting an income tax allowance for pass-through entities may no longer be appropriate. FERC Form No. 501-G proposed to collect information as to whether the pipeline was a pass-through entity.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
Changes to FERC Form 501-G.docx
07-19-18-chatterjeeRM18-11.pdf
NGPA section 311 and Hinshaw Pipelines with Cost-Based Rates