[Federal Register Volume 69, Number 171 (Friday, September 3, 2004)]
[Rules and Regulations]
[Pages 53800-53801]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20084]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 342
[Docket No. RM93-11-002; Order No. 650]
Revisions to Oil Pipeline Regulations Pursuant to the Energy
Policy Act of 1992
Issued August 27, 2004.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Federal Energy Regulatory Commission is amending a certain
regulation following a judicial determination that the Commission acted
properly in establishing the oil pipeline rate index.
EFFECTIVE DATE: The rule will become effective September 3, 2004.
FOR FURTHER INFORMATION CONTACT: Harris Wood, Office of General
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426; (202) 502-8224.
SUPPLEMENTARY INFORMATION:
Before Commissioners: Pat Wood, III, Chairman; Nora Mead Brownell,
Joseph T. Kelliher, and Suedeen G. Kelly. Revisions to oil pipeline
regulations pursuant to the Energy Policy Act of 1992; Docket No. RM93-
11-002.
1. The Federal Energy Regulatory Commission (Commission) is
modifying a certain regulation pertaining to oil pipeline ratemaking
following a judicial determination upholding the Commission's
determination that the appropriate index for oil pipeline rate changes
is the Producer Price Index, from and after July 2001.
Background and Discussion
2. On October 22, 1993, in response to the requirements of Title
XVIII of the Energy Policy Act of 1992,\1\ the Commission issued Order
No. 561,\2\ in which the Commission comprehensively revised the
Commission's regulation of the oil pipeline industry. Among other
things, Order No. 561 established a price cap for oil pipeline rates,
to be adjusted annually based upon changes in the Producer Price Index
for Finished Goods (published each May by the U.S. Department of Labor,
Bureau of Labor Statistics) minus one percent (PPI-1). Order No. 561
recognized that its responsibilities under the Interstate Commerce
Act,\3\ to both shippers and pipelines, required monitoring of the
relationship between the change in the selected index and the actual
cost changes experienced by the industry. Therefore, the Commission
stated that it would review the choice of index every 5 years.\4\
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\1\ 42 U.S.C.A. 7172 note (West Supp. 1993). References to the
Energy Policy Act are to this note, indicating the section number of
the statute.
\2\ Revisions to Oil Pipeline Regulations Pursuant to the Energy
Policy Act of 1992, FERC Stats. & Regs. (Regs. Preambles, 1991-
1996), ] 30,985 (1993); order on reh'g., FERC Stats. & Regs. (Regs.
Preambles, 1991-1996) ] 31,000; aff'd., Association of Oil Pipe
Lines v. Federal Energy Regulatory Commission, 83 F.3d 1424 (D.C.
Cir. 1996).
\3\ 49 U.S.C. app. 1 (1988).
\4\ Order No. 561, ] 30,985 at 30,952.
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3. On July 27, 2000, the Commission issued a notice of inquiry in
Docket No. RM00-11-000 on its five-year review of the oil pricing
index.\5\ After receiving and considering comments of numerous parties,
the Commission affirmed that the PPI-1 index closely approximated the
actual cost changes in the oil pipeline industry as reported in FERC
Form No. 6, and concluded that this index continued to satisfy the
mandates of the Energy Policy Act of 1992.\6\ Review of this order was
sought by the Association of Oil Pipe Lines (AOPL), and on March 1,
2002, the U.S. Court of Appeals for the D.C. Circuit remanded the
proceeding to the Commission for further review and explanation,
particularly with respect to the choice of PPI-1 as the appropriate
index for future oil pipeline rate changes.\7\
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\5\ FERC Statutes & Regulations [Notices] ] 35,536 (2000).
\6\ 93 FERC ] 61,266 (2000).
\7\ Association of Oil Pipe Lines v. FERC, 281 F.3d 239 (D.C.
Cir. 2002).
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4. Two separate petitions for Commission action on the remand by
the Court were filed, one by AOPL, and the other jointly by Sinclair
Oil Corporation and Tesoro Refining and Marketing Company (Shippers).
AOPL argued for the use of the PPI, while Shippers urged the Commission
to reaffirm its decision to use PPI-1, as the appropriate index to
measure cost changes in the oil pipeline industry. On February 24,
2003, the Commission issued its order on remand, determining after
further cost data analysis that the appropriate oil pricing index for
the current five year period should be the PPI.\8\ Review of this order
was sought by the Shippers, and on April 9, 2004, the Court affirmed
the Commission.\9\
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\8\ 102 FERC ] 61,195 (2003).
\9\ Flying J Inc., et al. v. Federal Energy Regulatory
Commission, 363 F. 3d 495 (D.C. Cir. 2004).
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5. In view of the Court's finding that the Commission had acted
properly in establishing the PPI as the appropriate oil pricing index,
the Commission amends 18 CFR part 342, section 342.3(d)(2) by deleting
``, and then subtracting 0.01'' from the end of that section.
Information Collection Statement
6. There is no need for Office of Management and Budget review \10\
under section 3507(d) of the Paperwork Reduction Act of 1995,\11\ since
this final rule does not affect information collection and
recordkeeping requirements.
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\10\ 5 CFR 1320.11.
\11\ 44 U.S.C. 3507(d).
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Environmental Analysis
7. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\12\
However, the Commission has categorically excluded certain actions from
this requirement as not having a significant effect on the human
environment.\13\ The clarifying and corrective nature of the change
here promulgated qualifies for such an exclusion.\14\
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\12\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. &
Regs. Preambles 1986-1990 ] 30,783 (1987).
\13\ 18 CFR 380.4.
\14\ 18 CFR 380.4(a)(2)(ii).
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Regulatory Flexibility Act Certification
8. The Regulatory Flexibility Act of 1980 (RFA) \15\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
Inasmuch as the change here promulgated reduces the complexity of oil
pipeline ratemaking, the change will have no significant economic
impact on a substantial number of small entities.
[[Page 53801]]
Accordingly, no regulatory flexibility analysis is required.
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\15\ 5 U.S.C. 601-612
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Document Availability
9. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through FERC's home page (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.
The full text of this document is available on the FERC's Home Page at
the eLibrary link. To access this document in eLibrary, type the docket
number excluding the last three digits of this document in the docket
number field and follow other directions on the search page.
10. User assistance is available for eLibrary and other aspects of
the FERC's Web site during normal business hours. For assistance,
contact FERC Online Support at [email protected], or call
toll-free at (866) 208-3676, or for TTY, contact (202) 502-8659.
Effective Date
11.These regulations are effective immediately, pursuant to 5
U.S.C. 533(b), upon the date of publication in the Federal Register.
The Commission is issuing this as a final rule without a period for
public comment, because under 5 U.S.C. 533(b), notice and comment
procedures are unnecessary where a rulemaking concerns only agency
procedure and practice or where the agency finds notice and comment
unnecessary. Inasmuch as the change promulgated in this proceeding is
consistent with a court remand and subsequent affirmance of the
Commission's order on remand, and because substantial public comments
have already been made on the substance of the change, the Commission
finds that further notice and comment are unnecessary. The provisions
of 5 U.S.C. 801 regarding Congressional review of Final Rules does not
apply to this Final Rule, because the rule concerns agency procedure
and practice and will not substantially affect the rights of non-agency
parties.
Congressional Notification
12. The Commission has determined with the concurrence of the
Administrator of the Office of Information and Regulatory Affairs of
the 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.\16\ The Commission will submit the
Final Rule to both Houses of Congress and the General Accounting
Office.\17\
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\16\ See 5 U.S.C. 804(2)(2000).
\17\ See 5 U.S.C. 801(a)(1)(A)(2000).
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List of Subjects in 18 CFR Part 342
Reporting and recordkeeping requirements.
By the Commission.
Magalie R. Salas,
Secretary.
0
In consideration of the foregoing, the Commission amends part 342,
chapter I, title 18, Code of Federal Regulations, as follows:
SUBCHAPTER P--REGULATIONS UNDER THE INTERSTATE COMMERCE ACT
PART 342--OIL PIPELINE RATE METHODOLOGIES AND PROCEDURES
Sec. 342.3 [Amended]
0
1. Part 342, section 342.3(d)(2) is amended by removing the words '',
and then subtracting 0.01''.
[FR Doc. 04-20084 Filed 9-2-04; 8:45 am]
BILLING CODE 6717-01-P