make such a filing by December 31, 2018, the Commission would not
initiate an NGA section 5 investigation of its rates prior to that
date.\228\
---------------------------------------------------------------------------

    \227\ Id. P 47.
    \228\ Id.
---------------------------------------------------------------------------

b. Comments
    207. Several commenters argue that pipelines that elect to file a
pre-packaged settlement or general NGA section 4 rate case should be
granted additional time to make such a filing.\229\ INGAA argues that
the proposed deadline of December 31, 2018 does not give pipelines
sufficient time after the filing of FERC Form No. 501-G to negotiate
uncontested rate settlements, and, if such negotiations do not succeed,
to prepare a general NGA section 4 rate case. Tallgrass Pipelines
contend that the December 31, 2018 deadline is unduly burdensome,
especially for companies that own and operate multiple jurisdictional
natural gas pipelines and shippers that ship on multiple
pipelines.\230\ EQT Midstream contends that a pipeline's deadline to
submit its FERC Form No. 501-G is directly tied to the date when a
Final Rule is issued and that a pipeline may only have a matter of
months to file an uncontested settlement agreement or a general NGA
section 4 rate case with the proposed static deadline of December 31,
2018.\231\ INGAA argues that the proposed deadline discourages
uncontested settlements because a pipeline may not want to allocate its
limited resources to negotiations and instead use those resources to
prepare a

general NGA section 4 rate case.\232\ Dominion Energy argues that
shippers are unlikely to be ready to negotiate until a pipeline's FERC
Form No. 501-G has been submitted.\233\ Commenters argue that, instead
of imposing a fixed December 31, 2018 filing deadline upon all
pipelines that elect option 2, the Commission should allow pipelines to
file pre-packaged uncontested settlements or general NGA section 4 rate
cases up to 180 days following their deadline for filing FERC Form No.
501-G, and that the Commission should also permit parties to request
waivers or extensions of the filing deadline for pre-packaged
uncontested settlements or rate cases if publically-announced
settlement discussions are underway but parties have not yet resolved
all issues.\234\ EQT Midstream argues that the Commission should
provide pipelines additional time to commit to filing a general NGA
section 4 rate case if pipelines choose to engage in publicly-noticed
prefiling settlement negotiations with shippers but fail to reach an
agreement by December 31, 2018.\235\
---------------------------------------------------------------------------

    \229\ INGAA Comments at 23-25; Dominion Comments at 12-14;
Southern Star Comments at 10; EQT Midstream Comments at 9-12;
Tallgrass Pipelines Comments at 13-15; Kinder Morgan Comments at 34-
35; Spectra Comments at 9.
    \230\ Tallgrass Pipelines Comments at 15.
    \231\ EQT Midstream Comments at 10.
    \232\ INGAA Comments at 23-25.
    \233\ Dominion Energy Comments at 13.
    \234\ INGAA Comments at 25; Dominion Energy Comments at 13; EQT
Midstream Comments at 11-12; Tallgrass Pipelines Comments at 14;
Kinder Morgan Comments at 34-35.
    \235\ EQT Midstream Comments at 11.
---------------------------------------------------------------------------

    208. Spectra asks for clarification regarding the December 31, 2018
deadline and whether that is the date pipelines should notify the
Commission whether they will file a pre-packaged settlement/general NGA
section 4 rate case or whether that is the date pipelines must make
those filings.\236\
---------------------------------------------------------------------------

    \236\ Spectra Comments at 9.
---------------------------------------------------------------------------

    209. Several commenters argue that the Commission should not
require prepackaged settlements to be uncontested.\237\ EQT Midstream
and Tallgrass Pipelines contend that prepackaged settlements submitted
pursuant to option 2 should be reviewed under the Commission's normal
standard for reviewing contested settlement filings and that
prepackaged settlements should not be automatically rejected because
they are not uncontested at the time the agreement is filed with the
Commission.\238\ Dominion Energy argues that requiring prepackaged
settlements to be completely uncontested is too high a bar and will
likely cause few pipelines and customers to attempt that option.\239\
---------------------------------------------------------------------------

    \237\ EQT Midstream Comments at 19; Dominion Energy Comments at
11-12; Tallgrass Pipelines Comments at 22-23.
    \238\ EQT Midstream Comments at 19; Tallgrass Pipelines Comments
at 22-23.
    \239\ Dominion Energy Comments at 12.
---------------------------------------------------------------------------

    210. Commenters also argue that the Commission should not allow
shippers with negotiated rates to withhold consent from an otherwise
uncontested prepackaged settlement.\240\ EQT Midstream argues that,
given that negotiated rate shippers are not impacted by a reduction to
a pipeline's recourse rate through an NGA section 4 or 5 filing,\241\
the Commission should clarify that shippers do not have the ability to
veto an otherwise unopposed settlement.\242\
---------------------------------------------------------------------------

    \240\ EQT Midstream Comments at 19; Tallgrass Pipelines Comments
at 23.
    \241\ EQT Midstream Comments at 19 (citing NOPR, FERC Stats. &
Regs. ] 32,725 at P 15).
    \242\ Id.
---------------------------------------------------------------------------

c. Discussion
    211. In the NOPR, the Commission stated that, if a pipeline commits
to file an uncontested prepackaged settlement or a general NGA section
4 rate case on or before December 31, 2018, the Commission would not
initiate an NGA section 5 rate investigation before that date. In other
words, the Commission proposed to grant all pipelines who make the
above described commitment a guaranteed safe harbor from an NGA section
5 rate investigation until December 31, 2018. A number of pipeline
commenters request that the Commission extend this guaranteed safe
harbor from the initiation of an NGA section 5 rate investigation until
a later date in order to give them more time to negotiate settlements
with their customers and others.
    212. We deny this request. We recognize that pipelines must expend
time and resources to reach a settlement or prepare an NGA section 4
rate case, but it is important to implement rate reductions as a result
of the Tax Cuts and Jobs Act and the United Airlines Issuances. The
proposed December 31, 2018 end of the guaranteed safe harbor is already
one year after the effective date of the Tax Cuts and Jobs Act. We also
note that pipelines need not wait until the FERC Form No. 501-G
deadline to begin discussions with customers or to begin preparing a
general NGA section 4 rate case. Indeed, the Commission encourages
pipelines to begin discussions with their customers immediately, if
those discussions have not already begun.
    213. However, we clarify that, if a pipeline is engaged in
productive settlement negotiations as the December 31, 2018 end of the
safe harbor period approaches, it may file a request for an extension
of the safe harbor period. The filing of such requests will give other
interested parties an opportunity to state whether they agree that
productive settlement negotiations are underway. In determining whether
to grant an extension, the Commission will consider whether other
interested parties support the request.
    214. Commenters argue that the Commission should not require
prepackaged settlements to be uncontested. The Commission notes that
prepackaged rate change filings typically do not contain all the
supporting documents as required by Sec.  154.312 of the Commission's
regulations. As such, there is likely no record evidence upon which the
Commission can approve a prepackaged settlement over the objections of
a protesting party. Although prepackaged tariff filings are not
technically settlements filed pursuant to Sec.  385.602 of the
Commission's regulations, the Commission typically applies Rule 602
standards in evaluating these filings. Under Rule 602 the Commission
``may decide the merits of the contested settlement issues, if the
record contains substantial evidence upon which to base a reasoned
decision. . . .'' \243\ Without substantial evidence upon which to base
a reasoned decision, and without additional procedures, the Commission
could not approve a protested prepackaged filing.
---------------------------------------------------------------------------

    \243\ 18 CFR 385.602(h)(1)(i); see also Mobil Oil Corp. v. FPC,
417 U.S. 283, 314 (1974).
---------------------------------------------------------------------------

    215. In regards to arguments that the Commission should not allow
shippers with negotiated rates to withhold consent from an otherwise
uncontested prepackaged settlement, we determine that the effect of
opposition by a negotiated rate customer can be considered on a case-
by-case basis.
3. Statement That No Adjustment in Rates Needed (Option 3)
a. NOPR
    216. In the NOPR, the Commission proposed that a pipeline could
include with its FERC Form No. 501-G a statement explaining why no
adjustment in its rates is needed. The Commission recognized that a
rate reduction may not be justified for a significant number of
pipelines for a number of reasons. For example, a number of pipelines
may currently have rates that do not fully recover their overall cost
of service. Therefore, a reduction in those pipelines' tax costs may
not cause their rates to be excessive. The Commission stated that the
proposed FERC Form No. 501-G would provide information as to whether an
interstate pipeline may fall into this category. The Commission stated
that the pipeline could provide a

full explanation of why, after accounting for its reduction in tax
costs, its rates do not over recover its overall cost of service and
therefore no rate reduction is justified. The pipeline would provide
this statement along with any additional supporting information it
deems necessary.
    217. The Commission also stated that an interstate pipeline might
explain that an existing rate settlement provides for a moratorium on
rate changes that applies to any rate changes that might result from
the Tax Cuts and Jobs Act or the United Airlines Issuances. The
Commission stated that interested parties would have an opportunity to
comment on any assertion by a pipeline that no adjustment to its rates
is needed, and the Commission would then determine whether further
action is needed with respect to that pipeline.\244\
---------------------------------------------------------------------------

    \244\ NOPR, FERC Stats. & Regs. ] 32,725 at PP] 49-50.
---------------------------------------------------------------------------

b. Comments
    218. Indicated Shippers argue that the Commission should thoroughly
examine any assertion by a pipeline that its rate case settlement
includes a rate moratorium preventing any rate change to reflect the
reduction in its tax expenses. Indicated Shippers assert that some
settlements state that the rate moratorium does not apply to industry-
wide Commission mandated changes to rates to account for tax cost
savings, and the Commission should require those pipelines to implement
rate changes to take into account the effects of the tax changes.\245\
---------------------------------------------------------------------------

    \245\ Indicated Shippers Comments at 14-15.
---------------------------------------------------------------------------

    219. Indicated Shippers also request that the Commission clarify
that any pipeline that is precluded from making rate changes due to a
settlement moratorium will be required to comply with the FERC Form No.
501-G filing requirement once the moratorium has expired. LDC Coalition
similarly argues that the Commission should clarify how it will
encourage pipelines with rate case filing moratoria but no requirement
to file a new rate case after the moratorium expires to reflect the
impact of the Tax Cuts and Jobs Act and the Revised Policy Statement on
its rates.\246\
---------------------------------------------------------------------------

    \246\ LDC Coalition Comments at 19-21.
---------------------------------------------------------------------------

    220. LDC Coalition asks the Commission to specify how soon a
pipeline must file a general NGA section 4 rate case in the context of
pipelines filing an explanatory statement using a comeback provision as
justification for why an adjustment to its rates is not needed.\247\
---------------------------------------------------------------------------

    \247\ Id. at 21.
---------------------------------------------------------------------------

    221. Direct Energy and Range argue that the Commission should
establish a process for requiring immediate rate reductions to reflect
the reduction in the corporate tax rate or tax allowance pursuant to
NGA section 5.\248\ Direct Energy argues that the Commission should
order an immediate proportional rate reduction under NGA section 5 for
pipelines with revenues so far in excess of their actual cost of
service that the rates are presumptively unjust and unreasonable under
NGA section 5 based on a review of the information provided in the FERC
Form No. 501-G.\249\
---------------------------------------------------------------------------

    \248\ Direct Energy Comments at 4-5, 8; Range Comments at 11-13.
    \249\ Direct Energy Comments at 8.
---------------------------------------------------------------------------

c. Discussion
    222. As explained in the NOPR, despite the reduction in the
corporate income tax and the change in policy concerning MLP tax
allowances, a rate reduction may not be justified for a significant
number of pipelines. For example, the pipeline's existing rates may not
fully recover its cost of service or a rate moratorium may prohibit
rate changes at this time. Pipelines may include with their filing of
the FERC Form No. 501-G a statement explaining why these or other
reasons justify their not changing their rates at this time.
    223. As discussed previously, the Commission will notice the filing
of each pipeline's FERC Form No. 501-G and permit interested persons to
file interventions, protests, and comments. If any person disagrees
with a pipeline's explanation of why it believes no rate change is
justified at this time, that person may intervene and protest the
pipeline's filing. For example, if a party that believes that a rate
case moratorium relied on by the pipeline should be interpreted as
permitting rate changes related to the Tax Cuts and Jobs Act and the
change in policy concerning MLP tax allowances, that party may provide
a full explanation of why it interprets the settlement as it does, and
the Commission will consider the views of both the pipeline and other
intervening parties in deciding what action to take with respect to
that pipeline.
    224. Indicated Shippers request that the Commission clarify that
any pipeline precluded from making changes to its rates by a settlement
moratorium will be required to file a FERC Form No. 501-G after the
settlement moratorium. LDC Coalition also suggests that the Commission
might continue the FERC Form No. 501-G process beyond the one-time
aspect of the proposed requirement for any pipeline with a settlement
rate moratorium that extends past the compliance filing dates. The
Commission rejects these requests. The Commission is adopting the FERC
Form No. 501-G process as a one-time filing requirement enabling the
Commission to consider what actions to take to address the rate effects
of the Tax Cuts and Jobs Act. All pipelines with cost-based, stated
rates are required to make their filings by the deadlines established
in the Implementation Guide. Pipelines with rate moratoria currently in
effect must comply with their applicable deadline and may include an
explanation of why their settlement moratorium prevents a rate change
at this time. If the Commission agrees that a rate moratorium prevents
a rate change at this time, there is no need to require the subject
pipeline to file another FERC Form No. 501-G at such time as the rate
moratorium expires. The Commission intends to continue its existing
practice of reviewing pipeline FERC Form No. 2 and 2-A filings every
year to determine whether to initiate rate investigations under NGA
section 5. Therefore, when a pipeline's rate moratorium expires, the
Commission will examine that pipeline's most recent FERC Form No. 2 and
2-A filings as of that date and all other relevant factors in order to
determine whether an NGA section 5 investigation of that pipeline's
rates is justified.
    225. In response to arguments by commenters that the Commission
should immediately reduce pipelines' rates pursuant to NGA section 5,
as explained in the NOPR, the Commission recognizes that some pipelines
need not change their rates at this time \250\ and, therefore, an
immediate reduction in all pipeline rates pursuant to NGA section 5
would not be appropriate. We also reject the request to immediately
reduce rates based on a review of the information provided in the FERC
Form No. 501-G. The FERC Form No. 501-G is only designed to estimate
the percentage reduction in the pipeline's cost of service resulting
from the Tax Cuts and Jobs Act and the United Airlines Issuances and
the pipeline's current ROEs before and after the reduction in corporate
income taxes and, if applicable, income tax allowance.\251\ However, as
discussed above, FERC Form No. 501-G cannot capture all the intricacies
of a fully developed cost of service, allocation and rate design for
all pipelines. The FERC Form No. 501-G does not provide enough
information by itself for the Commission to determine the just and

reasonable rate pursuant to NGA section 5.
---------------------------------------------------------------------------

    \250\ See NOPR, FERC Stats. & Regs. ] 32,725 at P 28.
    \251\ Id. P 32.
---------------------------------------------------------------------------

4. Take No Action (Option 4)
a. NOPR
    226. Upon filing FERC Form No. 501-G, a pipeline may choose to take
no action other than submitting FERC Form No. 501-G (Option 4).
b. Comments
    227. Some entities commented on this option,\252\ generally stating
that the Commission should require pipelines choosing this option to
include at least a statement of the basis for that decision.\253\
Indicated Shippers similarly comment that the Commission should combine
Option 4 with Option 3 and clarify that a pipeline electing the take no
action option must submit a notice that it will not be adjusting rates
with its FERC Form No. 501-G filing, including an explanation for why
the pipeline is doing nothing.\254\ NGSA suggests that the Commission
eliminate Option 4 altogether, stating that it provides pipelines with
an incentive to delay the process of providing rate relief to customers
and consumers.\255\
---------------------------------------------------------------------------

    \252\ Indicated Shipper Comments at 13; NGSA Comments at 6;
Southern Companies Comments at 5; Direct Energy Comments at 8-9.
    \253\ Southern Companies Comments at 5.
    \254\ Indicated Shippers Comments at 13.
    \255\ NGSA Comments at 6.
---------------------------------------------------------------------------

c. Discussion
    228. The Commission declines to provide the requested clarification
or to require statements of explanation as suggested by the commenters.
As stated in the NOPR, the ``no action'' option is consistent with the
fact that the Commission lacks authority to order an interstate
pipeline to file a rate change under NGA section 4.\256\ Although the
Commission is permitting interstate pipelines to voluntarily file a
limited NGA section 4 filing or commit to make a general NGA section 4
filing to modify their rates to reflect the reduction in the income tax
rates or elimination of the MLP pipeline income tax allowance, the
Commission is not requiring interstate pipelines to make such filings.
As the Commission also stated, however, based on the information
contained in the individual pipeline's FERC Form No. 501-G, and
comments by interested parties on that information, the Commission will
consider initiating an NGA section 5 investigation of a particular
pipeline's rates if it appears those rates may be unjust and
unreasonable.
---------------------------------------------------------------------------

    \256\ NOPR, FERC Stats. & Regs. ] 32,725 at P 51 & n.71 (citing
Pub. Serv. Comm. of New York v. FERC, 866 F.2d 487, 492 (D.C. Cir.
1989)).
---------------------------------------------------------------------------

D. Negotiated Rates

    229. In the NOPR, the Commission stated that it has granted most
interstate natural gas pipelines authority to negotiate rates with
individual customers that are not bound by the maximum and minimum
rates in the pipeline's tariff. The Commission noted that before it
permits a pipeline to implement a negotiated rate a pipeline must have
a cost-based recourse rate on file with the Commission, so that a
customer always has the option of entering into a contract at the cost-
based recourse rate rather than a negotiated rate if it chooses.\257\
---------------------------------------------------------------------------

    \257\ NOPR, FERC Stats. & Regs. ] 32,725 at P 14 (citing
Negotiated Rate Policy Statement, 104 FERC ] 61,134, order on reh'g
and clarification, 114 FERC ] 61,042, dismissing reh'g and denying
clarification, 114 FERC ] 61,304).
---------------------------------------------------------------------------

    230. The Commission stated that changes to a pipeline's recourse
rates occurring under NGA sections 4 and 5 would not affect a
customer's negotiated rate because that rate is negotiated as an
alternative to the customer taking service under the recourse
rate.\258\ By allowing the pipeline to negotiate individualized rates,
the Commission permitted pipelines, as a means of providing rate
certainty, to negotiate a fixed rate or rate formula that would
continue in effect regardless of changes in the pipeline's maximum
recourse rate.\259\ Therefore, the Commission found that, ``unless a
negotiated rate agreement expressly provides otherwise, the rates in
such agreements will be unaffected by any reduction in the pipeline's
maximum rate . . . resulting from the policies adopted in the
rulemaking proceeding, whether in a limited or general NGA section 4
rate proceeding or a subsequent NGA section 5 investigation.'' \260\
---------------------------------------------------------------------------

    \258\ Id. P 15.
    \259\ Id. P 45 (citing Columbia Gulf Transmission Co., 109 FERC
] 61,152, at P 13, reh'g denied, 111 FERC ] 61,338 (2005)). See also
Iberdrola Renewables, Inc. v. FERC, 597 F.3d 1299, 1305 (D.C. Cir.
2010).
    \260\ NOPR, FERC Stats. & Regs. ] 32,725 at P 45.
---------------------------------------------------------------------------

1. Comments
    231. Boardwalk argues that the Commission has specifically
recognized the role of negotiated rate agreements in providing rate
certainty to pipelines and their shippers,\261\ and maintains that the
Commission should not reduce any negotiated rates due to recent tax
policy changes (unless the agreement specifically requires such a
reduction).
---------------------------------------------------------------------------

    \261\ Boardwalk Comments at 17 (citing Columbia Gulf
Transmission Co., 109 FERC ] 61,152 at P 13 (``To the extent a
pipeline and its shipper want to obtain rate certainty by agreeing
to a rate that will remain in effect throughout the term of the
service agreement, the Commission provides them an opportunity to do
so by entering into a negotiated rate agreement.''), reh'g denied,
111 FERC ] 61,338, aff'd, Columbia Gulf Transmission Co. v. FERC,
477 F.3d 739 (D.C. Cir. 2007)).
---------------------------------------------------------------------------

    232. Boardwalk argues that this position is consistent with the
Mobile-Sierra doctrine,\262\ because the courts require that in order
to modify such contracts, the Commission must satisfy the Mobile-Sierra
standard, under which the Commission must ``presume that the rate set
out in a freely negotiated contract meets the just and reasonable
requirement imposed by law.'' \263\ Boardwalk asserts that the
Commission may only modify a contract under Mobile-Sierra if it
demonstrates ``that the contract seriously harms the public interest,''
which generally requires ``a finding that the existing rate might
impair the financial ability of [the pipeline] to continue its service,
or that the rate would cast upon other consumers an excessive burden,
or be unduly discriminatory, or that there are other circumstances of
unequivocal public necessity.'' \264\ Boardwalk maintains that a change
in the corporate tax rate or Commission policy cannot satisfy this high
threshold.
---------------------------------------------------------------------------

    \262\ Boardwalk Comments at 16 (citing Dominion Transmission v.
FERC, 533 F.3d 845, 852-53 (D.C. Cir. 2008) (citing United Gas Pipe
Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332 (1956); FPC v.
Sierra Pac. Power Co., 350 U.S. 348 (1956) (Mobile-Sierra))).
    \263\ Id. (citing Dominion Transmission, 533 F.3d at 853
(internal punctuation and citations omitted)).
    \264\ Id.
---------------------------------------------------------------------------

    233. Indicated Shippers argue that the Commission has the authority
to revise negotiated rate contracts under the Mobile-Sierra doctrine to
revise any contract if the public interest requires a modification
\265\ and therefore, the Commission should ensure that each negotiated
rate contract is examined. They assert that given the change in
circumstances related to reductions in income tax rates, as well as the
need to remove any unjust and unreasonable windfall for the natural gas
pipeline companies, the Commission could find that the public interest
requires such a finding.
---------------------------------------------------------------------------

    \265\ Indicated Shippers Comments at 6 (citing Mobile, 350 U.S.
332; Sierra, 350 U.S. 348).
---------------------------------------------------------------------------

    234. However, Indicated Shippers maintain that because many
pipelines have a Memphis clause \266\ in their

service agreements and individual negotiated rate agreements, the
Commission would only need to make a ``just and reasonable''
determination to revise negotiated rates.\267\ Indicated Shippers
maintain that the Commission should establish a process to review each
negotiated rate contract and examine the language set forth in each
negotiated rate agreement to determine whether that agreement contains
an explicit prohibition on rate reductions.
---------------------------------------------------------------------------

    \266\ Indicated Shippers Comments at 7 (citing United Gas Pipe
Line Co. v. Memphis Light, Gas, & Water Division, 358 U.S.103 (1958)
(Memphis)). In Williston Basin Pipeline Co. v. FERC, the Court
stated:
    The label ``Memphis clause'' derives from the Supreme Court's
decision in United Gas Pipe Line Co. v. Memphis Light, Gas & Water
Division, holding that a contract provision allowing a party to seek
a rate adjustment under a suitable provision of the Natural Gas Act
([section] 4 for the utility, [section] 5 for the customer) obviates
the need to apply Mobile-Sierra's ``public interest'' criterion. The
Memphis Court could see ``no tenable basis of distinction between
the filing of [a new rate under section 4 of the NGA] in the absence
of a contract and a similar filing under an agreement which
explicitly permits it.'' Thus, a Memphis clause simply entitles a
party to file for changes under an applicable provision of the NGA.
    519 F.3d 497, 499 (2008) (internal citations omitted).
    \267\ Indicated Shippers maintain that the Commission has a long
court and Commission precedent to follow to allow for negotiated
rate contracts to benefit from rate reduction through the
application of the Memphis clause, unless there is a specific
provision that explicitly prohibits changes to the negotiated rate
or the applicability of the Memphis clause. Indicated Shippers
Comments at 8 (citing Union Pac. Fuels v. FERC, 129 F.3d 157, 161
(D.C. Cir. 1997); Papago Tribal Util. Auth. v. FERC, 723 F.2d 950,
953 (D.C. Cir. 1983); Cost Recovery Mechanisms for Modernization of
Natural Gas Facilities, 151 FERC ] 61,047, at P 84 (2015)
(Modernization Policy Statement); Sea Robin Pipeline Co., LLC,
Opinion No. 516-A, 143 FERC ] 61,129, at PP 85-213 (2013)).
---------------------------------------------------------------------------

    235. Indicated Shippers assert that one way for the Commission to
allow negotiated rate contracts to share in the subject cost reductions
would be to implement a negative surcharge, applicable to all volumes
on a particular system. Indicated Shippers assert that the Commission
has implemented positive surcharges in certain instances \268\ and many
pipelines already have mechanisms in place for the return of over-
collected amounts via a negative surcharge.
---------------------------------------------------------------------------

    \268\ Indicated Shippers assert that the Commission utilized
such a methodology for Account No. 858 costs, Natural Gas Pipeline
Co. of America, 70 FERC ] 61,317, at 61,967-61,968 (1995); and
hurricane-related costs, Sea Robin Pipeline Co., 128 FERC ] 61,286,
at PP 38-42 (2009), order on reh'g, 130 FERC ] 61,191, at PP 11-13
(2010), Sea Robin Pipeline Co., LLC, Opinion No. 516, 137 FERC ]
61,201 (2011), order on reh'g, Opinion No. 516-A, 143 FERC ] 61,129
at PP 146-151; High Island Offshore System, LLC, 145 FERC ] 61,155,
at PP 16-20 (2013).
---------------------------------------------------------------------------

    236. Range requests that the Commission find, under the Mobile-
Sierra doctrine, that existing jurisdictional contracts between
interstate pipelines and shippers including negotiated rate contracts
which do not reflect the subject reduction in the corporate tax rate,
are unjust and unreasonable under the NGA. Range states that the
dramatic reduction in pipeline tax rates provides one of the few
instances where the public interest requires the Commission to modify
the rates under all shipper/pipeline transportation contracts.
    237. If the Commission declines to make such a Mobile-Sierra
finding, Range argues that the Commission has not provided a valid
basis for excluding negotiated rate contracts from the Tax Cuts and
Jobs Act rate reduction. Range asserts that the Commission's reliance
on the Negotiated Rate Policy Statement to exclude negotiated rate
contracts from sharing in the Income Tax Reduction is misplaced. Range
states that although the Commission allowed pipelines to negotiate
individualized rates as a means of allowing the pipeline to provide
rate certainty by the negotiation of a fixed rate or rate formula that
would continue in effect regardless of changes in the pipeline's
maximum recourse rate, such permission does not support the
Commission's finding that a negotiated rate agreement will be
unaffected by any reduction in the pipeline's maximum rate reductions
resulting from the policies adopted in the instant rulemaking unless
the negotiated rate contract provides otherwise.'' \269\
---------------------------------------------------------------------------

    \269\ Range Comments at 10 (citing NOPR, FERC Stats. & Regs. ]
32,725 at P 45).
---------------------------------------------------------------------------

    238. Range states that the courts allow the Commission to exercise
``light-handed'' regulation, but asserts that such regulation still is
tied to the NGA and the ``just and reasonable'' standard. Range asserts
that in INGAA, the court held that the ``overarching criterion'' was
that such regulation based on other than only cost should be justified
by ``a showing that . . . the goals and purposes of the statute will be
accomplished,'' and to satisfy that standard, the court ``demanded that
the resulting rates be expected to fall within a `zone of
reasonableness, where [they] are neither less than compensatory nor
excessive.' '' \270\ Range states that INGAA also held that ``[w]hile
the expected rates' proximity to cost was a starting point for this
inquiry into reasonableness . . . `non-cost factors may legitimate a
departure from a rigid cost-based approach,' '' and that ``we said that
FERC must retain some general oversight over the system, to see if
competition in fact drives rates into the zone of reasonableness `or to
check rates if it does not.' '' \271\ Moreover, Range states that the
courts have held that competition normally provides a reasonable
assurance that rates will approximate cost, at least over the long
run.\272\ Range reasons that because the Commission assumes the
negotiated rates approximate competitive rates, it follows that such
rates must also approximate cost-based rates. Range alleges that the
Commission has failed to apply these principles in excluding negotiated
rate contracts from the tax reduction. Range asserts that this result
is discriminatory, arbitrary and capricious, and not based on
substantial evidence or reasoned decision-making.
---------------------------------------------------------------------------

    \270\ Id. (citing INGAA, 285 F.3d at 31 (quoting Farmers Union
Cent. Exch. v. FERC, 734 F.2d 1486, 1502 (D.C. Cir. 1984), cert.
denied, 469 U.S. 1034 (1984))).
    \271\ Id.
    \272\ Id. (citing Elizabeth Gas Co. v. FERC, 10 F.3d 866, 870
(D.C. Cir. 1993)).
---------------------------------------------------------------------------

    239. IOGA asserts that the Commission must review the language in
individual contracts and aggressively use its NGA section 5 power to
ensure that negotiated rates are just and reasonable. IOGA argues that
the Commission's suggestion in the NOPR that negotiated rate agreements
would be unaffected in an NGA section 5 investigation \273\ is
inconsistent with precedent and the presumption set out by the Mobile-
Sierra doctrine that such contracts are just and reasonable.\274\ IOGA
states that such a presumption can be overcome with a public interest
showing in an NGA section 5 proceeding. IOGA asserts that although the
public interest standard may pose a high bar, the Commission should
make clear in the Final Rule that it did not intend to suggest in the
NOPR that NGA section 5 relief was unavailable to negotiated rate
shippers.
---------------------------------------------------------------------------

    \273\ IOGA Comments at 7 (citing Dominion Transmission, Inc.,
135 FERC ] 61,239, at P 30 (2011)).
    \274\ Id. (citing Mobile, 350 U.S. 332; Sierra, 350 U.S. 348;
Morgan Stanley Capital Group, Inc. v. Public Utility District No. 1
of Snohomish County, Wash., 554 U.S. 527, 530 (FERC ``must presume
that the rate set out in a freely negotiated wholesale-energy
contract meets the `just and reasonable' requirement imposed by law.
The presumption may be overcome only if FERC concludes that the
contract seriously harms the public interest.''); Iberdrola
Renewables, Inc. v. FERC, 597 F.3d at 1301 (``[N]egotiated rate
customers are not left without redress if they think the rate has
become unjust and unreasonable over time. They can always challenge
the established rate under [S]ection 5. . . .'')).
---------------------------------------------------------------------------

    240. IOGA asserts that because not all shippers have equal
bargaining leverage and often there is no firm capacity available at
the recourse rate, the Commission should consider the context of the
negotiated rate bargain in determining whether above maximum negotiated
rates should be reduced like recourse rates. IOGA argues that although
the parties may have bargained for a fixed negotiated rate the pipeline
bargained for a rate that recovers its

federal income taxes and other costs that it recovers in the maximum
recourse rate, not a rate that over-recovers its costs. IOGA maintains
that it is neither just nor reasonable nor in the public interest for
the Commission to permit such over-collection. IOGA concludes that the
Commission should require any pipeline that declines to adjust
negotiated rates to explain why an adjustment is not needed.
    241. NGSA also argues that negotiated rate contract holders should
not be excluded from this tax reduction process because this would run
contrary to Commission policy that allows the application of surcharges
for extraordinary circumstances. NGSA argues that negotiated contracts
often contain language with surcharge provisions to capture unforeseen
items or special circumstances that are not part of the standard
ratemaking process.\275\ NGSA maintains that if shippers with
negotiated rate contracts are expected to share in costs incurred by
pipelines for special situations, such as hurricanes or modernizations,
then the Commission should also require that shippers share in cost
reductions received by pipelines in special situations.
---------------------------------------------------------------------------

    \275\ NGSA Comments at 8 (citing Sea Robin Pipeline Company,
LLC, 130 FERC ] 61,261 (2010); High Island Offshore Sys., L.L.C.,
138 FERC ] 61,114 (2012) as relying on the contracts containing a
Memphis clause to permit the pipelines to impose a surcharge on
fixed, negotiated rate contracts).
---------------------------------------------------------------------------

    242. NGSA requests that the Commission implement a negative
surcharge mechanism, as warranted, for shippers with negotiated rate
contracts. NGSA claims that this will ensure that all parties are
afforded the opportunity to appropriately share in the benefits of the
Tax Cuts and Jobs Act and Revised Policy Statement, and that pipeline
rates are just and reasonable.
    243. AGA requests that the Commission confirm that where the
pipeline required that the rate for capacity awarded under a negotiated
rate agreement be no less than the pipeline's otherwise applicable
tariff rate, such that the negotiated rate is now equal to the
otherwise applicable tariff rate, and the tariff rate is reduced
pursuant to proceedings related to the Tax Cuts and Jobs Act, any such
negotiated rate be similarly reduced.
    244. CAPP argues that the use of negotiated rates does not warrant
the continuation of excessive recourse rates. CAPP argues that the
rationale for this rate review extends to all pipelines, irrespective
of the prevalence of negotiated rates on the pipeline. CAPP asserts
that the fundamental purposes for which recourse rates are maintained
is to provide an alternative to negotiated rates and a check on the
exercise of market power. Therefore, CAPP argues that if a pipeline
experiences a decline in income tax expense that warrants a reduction
in its tariff rates, the use of negotiated rates and the impact of such
contracting practices on its revenues has no impact on the
justification for re-computing maximum tariff rates.
2. Discussion
    245. The Commission declines to establish a process under which it
would review every currently effective negotiated rate contract in
order to determine whether that contract can and should be modified to
reflect the pipeline's reduced tax costs as a result of the Tax Cuts
and Jobs Act or the elimination of MLP tax allowances. For the reasons
discussed below, the Commission believes that, as a general matter,
such contracts should be allowed to remain in effect without change.
However, an individual shipper under such a contract is free to file a
complaint pursuant to NGA section 5 presenting evidence as to why its
negotiated contract is unjust and unreasonable or contrary to the
public interest and must be modified. Alternatively, if a shipper
believes that the terms of its negotiated contract provide for a
reduction in the negotiated rate to reflect the pipeline's reduced tax
costs and the pipeline has failed to comply with the contract, the
shipper may file a complaint or seek to enforce the contract in a
court.
    246. As the Commission has explained, the negotiated rate program
allows ``pipelines to negotiate individualized rates that [are] not
constrained by the maximum and minimum rates in the pipeline's tariff.
. . . Additionally, it permit[s] pipelines as a means of providing rate
certainty, to negotiate a fixed rate that would continue in effect
regardless of changes in the pipeline's maximum rate.'' \276\ In the
Negotiated Rate Policy Statement establishing the negotiated rate
program, the Commission explained that the program ``would dispense
with cost of service regulation for an individual shipper when mutually
agreed upon by the pipeline and its shipper,'' and ``a recourse service
found in the pipeline's tariff would be available for those shippers
preferring traditional cost of service rates.'' \277\ Indeed, as the
court found in Iberdrola, the:
---------------------------------------------------------------------------

    \276\ Northern Natural Gas Co., 105 FERC ] 61,299 at PP 15-16.
See also Columbia Gulf Transmission Co., 109 FERC ] 61,152, at P 13,
reh'g denied, 111 FERC ] 61,338, emphasizing that:
    To the extent a pipeline and its shipper want to obtain rate
certainty by agreeing to a rate that will remain in effect
throughout the term of the service agreement, the Commission
provides them an opportunity to do so by entering into a negotiated
rate agreement.

    \277\ Alternatives to Traditional Cost-of-Service Ratemaking for
Natural Gas Pipelines and Regulation of Negotiated Transportation
Services of Natural Gas Pipelines; Statement of Policy and Request
for Comments, 74 FERC ] 61,076, at 61,225-226 (1996), order on
clarification, 74 FERC ] 61,194 (1996), order on reh'g, 75 FERC ]
61,024, reh'g denied, 75 FERC ] 61,066, reh'g dismissed, 75 FERC ]
61,291 (1996), petition denied sub nom. Burlington Res. Oil & Gas
Co. v. FERC, 172 F.3d 918 (D.C. Cir 1998).
---------------------------------------------------------------------------

premise of the negotiated rate regime is that FERC will not review
freely negotiated rates, which are presumed to be reasonable when a
recourse rate is also offered.\278\

    \278\ Iberdrola Renewables, Inc. v. FERC, 597 F.3d at 1304.
---------------------------------------------------------------------------

    247. Thus, when a shipper enters into a negotiated rate agreement,
it should be aware that it is agreeing to a rate that is not based on
traditional cost of service regulation and will not be reduced simply
because the pipeline's maximum recourse rate may, at some future date,
be lower than the negotiated rate. Because the shipper's negotiated
rate is not based on cost of service regulation, there is no reason why
a reduction in the pipeline costs, including a reduction in its tax
costs, should necessarily lead to a reduction in the negotiated rate.
Indeed, the Commission's consistent practice in pipeline rate
proceedings, whether conducted under NGA section 4 or 5, has been to
address only the pipeline's recourse rates and not make any
modifications in any shipper's negotiated rate. In these circumstances,
the Commission finds it reasonable to presume that a shipper's freely
negotiated rate contract continues to meet the just and reasonable
requirement in the NGA, regardless of a reduction in the pipeline's tax
costs, absent a particular shipper filing a complaint that presents
compelling reasons to initiate an NGA section 5 investigation.\279\
---------------------------------------------------------------------------

    \279\ Dominion Transmission, Inc. v. FERC, 533 F.3d 845, 852-53
(D.C. Cir. 2008) (noting that FERC must ``presume that the rate set
out in a freely negotiated . . . contract meets the `just and
reasonable' requirement imposed by law.'' See also Marathon Oil Co.
v. Trailblazer Pipeline Co., 111 FERC ] 61,236, at P 64 (2005)
(``Absent a compelling reason, the Commission does not believe it
should second-guess the business and economic decisions between
knowledgeable business entities when they enter into negotiated rate
contracts.'').
---------------------------------------------------------------------------

    248. Commenters take various positions on whether, if a complaint
is filed, the Mobile-Sierra ``public interest'' presumption would apply
to the negotiated rate agreement. Indicated Shippers assert that
because many pipelines have Memphis clauses in their

service agreements and individual negotiated rate agreements, the
Commission would only need to make a ``just and reasonable''
determination to revise negotiated rates for such negotiated rates.
IOGA and other shippers state that the Mobile-Sierra public interest
standard would apply, but suggest that the public interest standard may
be satisfied in the context of changes in law such as the Tax Cuts and
Jobs Act.
    249. The Commission need not resolve these issues in this Final
Rule. Rather, the Commission will address these issues, as relevant, in
the context of an individual complaint that may be filed.

E. Miscellaneous Clarifications

    250. Boardwalk comments that the Commission should recognize the
effects of competition on the natural gas industry and the Commission's
rate making policies. Boardwalk asserts that pipelines have had no
choice but to discount their transportation service rates to attract
retail shippers in the face of competition. Thus, in Boardwalk's view,
such pipelines are already in a state of cost under-recovery. Boardwalk
states that the NOPR and its contemplated approach of having
transportation rates set arithmetically based on the content of FERC
Form No. 501-G have exacerbated this problem and affected the
pipelines' ability to attract capital.\280\ It also claims that
although customers receive the benefit of competition in discounted
rates, the pipelines, under the referenced NOPR approach, do not
receive a commensurate benefit when the market propels rates upward.
Boardwalk claims that this imbalance between pipelines and their
investors and customers and consumers is ``out of step'' with the
competitive market intended by the Commission's policies, and that the
NOPR worsens this imbalance by favoring one set of affected parties. It
also claims that the processes contemplated by the NOPR are
inconsistent with the Commission's prohibition on single issue
ratemaking. Accordingly, Boardwalk states that the Commission should
expressly state that the ``same processes offered here to adjust rates
in light of the [Tax Cuts and Jobs Act] and revised Policy Statement
will also be available to pipelines should there be a change to future
tax policy, or any other policy affecting a key component of
ratemaking.'' \281\
---------------------------------------------------------------------------

    \280\ Boardwalk Comments at 10-13.
    \281\ Id. at 13.
---------------------------------------------------------------------------

    251. The Commission declines to speculate on future potential
actions, or what measures it may take should there be a future increase
in the federal corporate tax rate. However, the Commission recognizes
the importance of market issues and the potential for under-
recoveries.\282\ The Commission takes the financial impact of its
policies very seriously. The Commission will continue to consider the
issues raised by Boardwalk as such issues arise in specific proceedings
and as part of the Commission's ongoing reevaluation of its policies.
---------------------------------------------------------------------------

    \282\ See Composition of Proxy Groups for Determining Gas and
Oil Pipeline Return on Equity, 123 FERC ] 61,048, at PP 3, 47 (2008)
(citing Fed. Power Comm'n v. Hope Natural Gas Co., 320 U.S. 591
(1944)); see also Williston Basin Interstate Pipeline Co., 110 FERC
] 61,210 (2000) (balancing the Commission's pro-competitive policies
with the pipeline's ability to focus discounts on less utilized
parts of the system), and El Paso Natural Gas Co., 163 FERC ]
61,078, at PP 128-137 (2018) (Order No. 538-B) (rejecting request to
design pipeline's rates so as to require it to share in the costs of
its discounting).
---------------------------------------------------------------------------

    252. Further, regarding this Final Rule, the Commission recognizes
that it cannot simply require a pipeline to reduce its rates consistent
with a known reduction in a single cost component of a cost-based rate,
but rather must consider other factors, including whether the pipeline
is over-recovering its cost of service on an overall basis. The
Commission, in deciding whether to exercise its discretion to initiate
an NGA section 5 action, will take into account whether a rate
reduction may not be justified because a pipeline's rates do not over-
recover its cost of service on an overall basis.
    253. Southern Star comments that the Commission should allow
pipelines to reinvest any monetary savings resulting from the Tax Cuts
and Jobs Act into their respective systems and infrastructure instead
of flowing through the benefits to customers and consumers.\283\
Southern Star claims that rate reductions provided to ultimate
consumers as a result of the tax reduction will be nominal, and that it
would be a better use of those savings to permit pipelines to invest
those dollars in infrastructure improvements that would benefit
customers and ratepayers, and would obviate the need for the FERC Form
No. 501-G filings. Southern Star asserts that such reinvestment would
be consistent with the underlying purpose of the Tax Cuts and Jobs Act,
namely to make more products in the United States and to ``bring back
our companies.''
---------------------------------------------------------------------------

    \283\ Southern Star Comments at 11-12.
---------------------------------------------------------------------------

    254. The Commission rejects Southern Star's proposal. As noted, the
purpose of the Final Rule is to provide a process for considering
whether to initiate NGA section 5 investigations of the cost-based
recourse rates of interstate natural gas pipelines that do not
voluntarily reduce those rates to reflect the reduction in the federal
corporate tax rate or elimination of MLP tax allowances, in accordance
with our obligation under the NGA to ensure that natural gas pipeline
rates are just and reasonable. Contrary to Southern Star's suggestion
that it would be more efficient to reinvest these dollars in pipeline
infrastructure than to return them to customers and consumers, a just
and reasonable cost-based rate must be designed to provide the pipeline
an opportunity to recover its cost of service, including a reasonable
return on equity.\284\ The Commission lacks the authority to approve
recourse rates that would allow pipelines to over-recover their cost of
service. Pipelines are, of course, free to invest in additional
pipeline facilities. If they do so, they may propose to adjust their
rates to recover the costs of the new investment as part of their NGA
section 7 initial rate proposal or in an NGA section 4 filing, and that
rate adjustment could offset a rate reduction related to the pipeline's
reduced tax costs under the Tax Cuts and Jobs Act.
---------------------------------------------------------------------------

    \284\ Alabama Elec. Coop v. FERC, 684 F2d 20, 27 (D.C. Cir.
1982) (``[R]ates should be based on the costs of providing service
to the utility's customers, plus a just and fair return on
equity.'').
---------------------------------------------------------------------------

    255. AGA and LDC Coalition comment that the Commission should
clarify that the FERC Form No. 501-G filing, or any other limited NGA
section 4 actions by a pipeline pursuant to the Final Rule, does not
constitute a ``recent rate review'' sufficient for the purposes of the
Commission's Modernization Policy Statement on cost recovery mechanisms
for modernization of natural gas facilities.\285\ The commenters state
that the Modernization Policy Statement requires a pipeline seeking a
modernization cost tracker to demonstrate that its current base rates
are just and reasonable and reflect the pipeline's current costs and
revenues. LDC Coalition notes that the Modernization Policy Statement
provides that the rate review condition may be satisfied in different
ways--an NGA section 4 rate case or a collaborative effort between a
pipeline and its customers. They also comment that the Commission left
open the possibility that pipelines could justify their existing rates
through ``alternative

approaches.'' \286\ Thus, they seek clarification that a pipeline's
FERC Form No. 501-G filing would not be considered among the
alternative approaches that the Commission would consider sufficient
for a pipeline to justify its existing rates for purposes of the
Modernization Policy Statement. Commenters argue that the information
to be included in the FERC Form No. 501-G filings is abbreviated cost
and revenue information that would not allow for the ``full exchange of
information'' regarding existing rates between the pipeline and its
customers required for a modernization cost surcharge.
---------------------------------------------------------------------------

    \285\ AGA Comments at 2 (citing Modernization Policy Statement,
151 FERC ] 61,047 (Modernization Policy Statement)); LDC Coalition
Comments at 13.
    \286\ AGA Comments at 7.
---------------------------------------------------------------------------

    256. The Commission provides the following clarification. Above,
the Commission, in response to several pipeline comments, clarified
that FERC Form No. 501-G is not an NGA section 4 filing and that the
indicated cost of service and estimated ROE are not NGA section 5
findings. The Commission has noted the statutory limits upon which the
data collection is based, and acknowledges the limitations inherent in
a form designed to collect data from a large number of pipelines with
many unique cost of service, allocation and rate design factors
underlying their currently effective rates. Thus, by the same token,
these same limitations will hinder a pipeline from using its FERC Form
No. 501-G filing, designed to look at a pipeline's overall non-gas cost
of service, to demonstrate that its modernization surcharges are just
and reasonable. We also clarify that a limited NGA section 4 filing
made pursuant to the Final Rule does not constitute a ``recent rate
review'' sufficient for the purposes of the Commission's Modernization
Policy Statement on cost recovery mechanisms for modernization of
natural gas facilities. The Modernization Policy Statement established
certain standards a pipeline would have to satisfy for the Commission
to approve a proposed modernization cost tracker or surcharge including
a requirement for ``a review of the pipeline's existing base rates by
means of an NGA general section 4 rate proceeding, a cost and revenue
study, or through a collaborative effort between the pipeline and its
customers.'' \287\ As described in the NOPR and the Final Rule, the
limited NGA section 4 filing option is intended to allow interstate
pipelines to reduce their rates to reflect the reduced income tax rates
and elimination of the MLP pipeline income tax allowance on a single-
issue basis, without consideration of any other cost or revenue
changes. Due to the limited nature of this single-issue rate filing, it
does not meet the rate review requirement described in the
Modernization Policy Statement.
---------------------------------------------------------------------------

    \287\ Modernization Policy Statement, 151 FERC ] 61,047 at P 31.
---------------------------------------------------------------------------

    257. LDC Coalition also seeks clarification that processes proposed
in the NOPR do not obviate a pipeline's settlement obligation to file
an NGA general section 4 rate case.\288\ Specifically, they argue that
any Final Rule should make clear that a pipeline cannot use the FERC
Form No. 501-G filing, coupled with a limited NGA section 4 rate
reduction filing, to satisfy a come-back obligation under a Commission-
approved settlement. LDC Coalition asserts that the limited cost and
revenue information in FERC Form No. 501-G, and the limited NGA section
4 process, are not valid substitutes for a general NGA section 4 rate
case filing, which provides parties the opportunity to review all the
components of the pipeline's cost of service. LDC Coalition comments
further that such ``come-back'' provisions are ``often hard-fought
settlement components critical to garnering support from customer
parties.'' \289\ Thus, it requests that the Commission clarify that a
pipeline that ``has committed to file a general NGA section 4 rate case
as a negotiated component of a Commission-approved settlement must
fulfill that settlement commitment.'' \290\
---------------------------------------------------------------------------

    \288\ LDC Coalition Comments at 15-16.
    \289\ Id. at 16.
    \290\ Id.
---------------------------------------------------------------------------

    258. The Commission declines to make the broad clarification sought
by LDC Coalition. As LDC Coalition points out, the terms and details
regarding a pipeline's obligation to make future filings are likely
provisions negotiated between the parties to the settlement, and as
such are governed by the settlement itself. Thus, we will not make a
general clarification that may inhibit or impinge on negotiated
provisions of Commission approved settlements.
    259. LDC Coalition also states that the Commission should
incorporate the FERC Form No. 501-G Implementation Guide into the Final
Rule and into proposed regulation Sec.  260.402.\291\ It asserts that
such inclusion is necessary to ensure that Commission staff and
interested parties are able to access the information necessary to
adequately assess the pipeline's report. LDC Coalition asserts that
incorporation of the Implementation Guide into the Final Rule and
Regulation, rather than just a reference to it in the proposed
regulations, ``would make clear that the Commission intends for
customers and interested stakeholders to have access to the [report],
and would help ensure compliance with the Commission's desired filing
processes.'' \292\
---------------------------------------------------------------------------

    \291\ Id.
    \292\ Id. at 18.
---------------------------------------------------------------------------

    260. The Commission will not incorporate the FERC Form No. 501-G
Implementation Guide into the Final Rule or into the proposed
regulation or regulatory text. As LDC Coalition points out, the
Commission included a Microsoft Excel version of the FERC Form No. 501-
G and a proposed Implementation Guide as attachments to the NOPR, and
thus made those files available in elibrary. The Commission intends to
do the same for the Final Rule, and finds that the processes set forth
in the guide, and data to be provided in the reports, will be
adequately accessible to any interested parties in that manner.

F. Implementation Schedule for Informational Filings

1. NOPR
    261. In the NOPR, the Commission proposed a staggered filing
schedule. The Commission identified 133 interstate natural gas
pipelines with cost-based rates that would be required to file the FERC
Form No. 501-G, and divided them into four groups. The Commission
proposed that the due date for the first group be 28 days from the
effective date of any Final Rule in this proceeding, and the due date
for each subsequent group be 28 days from the previous group's due
date. The NOPR stated that pipelines may file their FERC Form No. 501-G
earlier than the proposed dates and respondents may include with this
filing, as appropriate, an Addendum explaining why no adjustment in
their rates is needed, or their commitment to make a general NGA
section 4 rate case filing in lieu of a limited NGA section 4 filing as
permitted by Sec.  154.404.\293\
---------------------------------------------------------------------------

    \293\ NOPR, FERC Stats. & Regs. ] 32,725 at P 62.
---------------------------------------------------------------------------

2. Comments
    262. Some commenters advocate for a delayed schedule. EQT Midstream
urges the Commission to delay the FERC Form No. 501-G filing deadline
for the first group of pipelines. EQT Midstream argues that the NOPR
and Revised Policy Statement have made it unclear how to apply several
ratemaking principles. EQT Midstream also argues that the 28 day
deadline is not conducive to promoting settlements, as some parties may
be wary to settle ``knowing that a Commission order addressing ADIT and
the Revised Policy

Statement may subsequently be issued and may upset any agreed-to
terms.'' \294\
---------------------------------------------------------------------------

    \294\ EQT Midstream Comments at 5.
---------------------------------------------------------------------------

    263. Other commenters advocate for an accelerated schedule. The
Oklahoma AG requests that the Commission reduce the time period between
FERC Form No. 501-G filings, then moving forward the final due date for
filing rate cases.\295\ Process Gas requests that the Commission
require all pipelines to file FERC Form No. 501-G within 28 days of the
effective date of the Final Rule, rather than using a staggered
schedule. Similarly, Range requests that the Commission require all
pipelines to file FERC Form No. 501-G within 30 days of the effective
date of the Final Rule, rather than using a staggered schedule.
---------------------------------------------------------------------------

    \295\ Oklahoma AG Comments at 5.
---------------------------------------------------------------------------

    264. Process Gas states that it is not aware of any reason why any
pipeline would need more than the 28 days allowed for the first group
of pipelines to complete the form, especially since the 2017 FERC Form
No. 2 data was due to be filed April 18, 2018. Range notes that
pipelines have been planning for their filings ever since the issuance
of the NOPR. Process Gas and Range concede that Commission staff may
need time to process all of the filings, but argue that the solution is
to stagger the issuance of the final orders, not the receipt of the
filings. They argue all parties would benefit from having the FERC Form
No. 501-G posted promptly. For those pipelines planning to voluntarily
reduce their rates, Process Gas and Range argue, an earlier filing date
would provide their customers with the benefit of lower rates as soon
as possible. For those pipelines planning not to voluntarily reduce
their rates, Process Gas argues, an earlier filing date would provide
earlier insight into the pipeline's rationale, allowing customers and
Commission Staff more time to evaluate the filing and prepare an
appropriate response.\296\
---------------------------------------------------------------------------

    \296\ Process Gas Comments at 7; Range Comments at 14.
---------------------------------------------------------------------------

3. Discussion
    265. The Commission adopts the implementation schedule proposed in
the NOPR, with one modification. The Commission has determined to
combine the third and fourth groups of pipelines into a single group
and require all those pipelines to file their FERC Form No. 501-Gs
within 28 days after the deadline for the second group of pipelines.
This will allow the filing of all the FERC Form No. 501-Gs to be
completed by early December of this year, rather than having the filing
process extend into next year. We see no compelling reason to make any
other changes in the implementation schedule. The Final Rule does not
take effect instantly, but rather after a delay of 45 days after
publication in the Federal Register, and the first set of pipeline
filings is not due until 28 days after that. As a practical matter,
then, pipelines in the initial filing group have over two months from
the Commission's approval of the Final Rule to prepare.
    266. We also decline to accelerate the filing schedule for the
three pipeline groups. Commenters raise valid points in favor of
requiring all pipelines to file simultaneously and instead staggering
the target dates for final orders. We find, however, that the modified
staggered schedule described above will allow the Commission to process
the filings in a more efficient and orderly manner. We note that
pipelines may file their FERC Form No. 501-G earlier than the proposed
dates, and we especially encourage them to do so in instances where an
early filing would ease the process of reaching a rate settlement with
their customers.

G. NGPA Section 311 and Hinshaw Pipelines

1. NOPR
    267. In the NOPR, the Commission found that its existing
regulations and policy concerning the rates charged by NGPA section 311
and Hinshaw pipelines are generally sufficient to provide shippers
reasonable rate reductions with respect to the Tax Cuts and Jobs Act
and the Revised Policy Statement. Accordingly, the Commission did not
propose requiring NGPA section 311 and Hinshaw pipelines to file the
FERC Form No. 501-G or make any other immediate filing. Instead, the
Commission proposed a separate method for updating NGPA section 311 and
Hinshaw pipelines' rates, in keeping with their history of light-handed
regulation.
    268. Under pre-existing policy, the Commission reviews the rates of
each NGPA section 311 and Hinshaw pipeline every five years.\297\ The
Commission proposed using this five-year rate review process as the
primary mechanism to consider changes to reflect the Tax Cuts and Jobs
Act.
---------------------------------------------------------------------------

    \297\ Order No. 735, FERC Stats. & Regs. ] 31,310 at P 96.
Pipelines using state-approved rates pursuant to Sec.  284.123(b)(1)
may certify that those rates continue to meet the requirements of
Sec.  284.123(b)(1) on the same basis on which they were approved.
---------------------------------------------------------------------------

    269. The Commission proposed to act ahead of this five-year
schedule only when a state regulatory agency requires any of these
pipelines to reduce their intrastate rates to reflect the decreased
income tax. Under pre-existing policy, any pipeline that elected to use
state-derived rates pursuant to Sec.  284.123(b)(1) is already required
to file with the Commission a new rate election 30 days after a state
regulatory agency adjusts its intrastate rates.\298\ In the NOPR, the
Commission proposed, for the purposes of the Tax Cuts and Jobs Act
only, to expand this requirement to include intrastate pipelines that
use Commission-established cost-based rates pursuant to Sec.
284.123(b)(2), as well as pipelines that use state-derived rates
pursuant to Sec.  284.123(b)(1). Accordingly, the Commission proposed a
new Sec.  284.123(i) requiring that, if an intrastate pipeline's rates
on file with a state regulatory agency are reduced to reflect the
reduced income tax rates adopted in the Tax Cuts and Jobs Act, the
intrastate pipeline must file a new rate election within 30 days after
the reduced intrastate rate becomes effective. The Commission reasoned
that this requirement would give the same rate reduction benefit to any
interstate shippers on those pipelines as the intrastate shippers
receive, thereby ensuring that the two groups of shippers are treated
similarly.
---------------------------------------------------------------------------

    \298\ 18 CFR 284.123(g)(9)(iii). See also Lobo Pipeline Co.
L.P., 145 FERC ] 61,168, at P 5 (2013) and Atmos Pipeline--Texas,
156 FERC ] 61,094, at P 8 (2016).
---------------------------------------------------------------------------

2. Comments
    270. The Texas Railroad Commission, NiSource LDCs, and AGA
commented on the portion of the NOPR affecting NGPA section 311 and
Hinshaw pipelines. The Texas Railroad Commission, which is the state
regulatory agency in Texas having jurisdiction over intrastate pipeline
rates, supports this portion of the NOPR. The Texas Railroad Commission
states that its experience with NGPA section 311 and Hinshaw rates ``is
substantially the same as the Commission's experience described in the
. . . [NOPR].'' \299\ The Texas Railroad Commission notes that almost
all intrastate contracts under Texas Railroad Commission jurisdiction
are based on market conditions, and result in rates substantially lower
than the maximum lawful rate. The Texas Railroad Commission states that
it has already begun adjusting intrastate rates on local distribution
systems. For transportation pipelines, the Texas Railroad Commission
states that it intends to follow a process similar to

that described in the NOPR, revising existing rates as they are
reviewed in the ordinary course of business.
---------------------------------------------------------------------------

    \299\ Texas Railroad Commission Comments at 2 (citing NOPR, FERC
Stats. & Regs. ] 32,725 at PP 58, 61).
---------------------------------------------------------------------------

    271. NiSource LDCs state that two of its affiliates are Hinshaw
pipelines providing interstate transportation service under limited
jurisdiction certificates issued by the Commission under Sec.  284.224
of its regulations. NiSource LDCs agrees with the assessment in the
NOPR that decisions on whether to reduce those rates to reflect the
effects of the Tax Cuts and Jobs Act are ``in the hands of the state
regulatory agency.'' \300\ NiSource LDCs states that, if a state
commission requires a reduction in such intrastate rates to reflect the
impact of the Tax Cuts and Jobs Act, Sec.  284.123(b) requires the
company to make a corresponding rate filing with FERC within 30 days
after the reduced intrastate rate becomes effective, and notes that it
has already made one such filing with the Commission.\301\ NiSource
``urge[s] the Commission to adopt this procedure with respect to
companies holding limited jurisdiction certificates that have elected
to charge state-approved transportation rates.'' \302\
---------------------------------------------------------------------------

    \300\ NiSource LDCs Comments at 5 (quoting NOPR, FERC Stats. &
Regs. ] 32,725 at P 57).
    \301\ Columbia Gas of Maryland, Inc., Docket No. PR18-40-000
(filed April 3, 2018).
    \302\ NiSource LDCs Comments at 5.
---------------------------------------------------------------------------

    272. AGA, whose members own or operate numerous Hinshaw pipelines,
requests clarification of several points in the NOPR. AGA states that
it ``supports the efforts in the NOPR to obtain the information
necessary'' to ensure that interstate pipeline rates are just and
reasonable,\303\ but argues that ``any final rule should be consistent
with the Commission's focus on reducing regulatory burdens on [Hinshaw
pipelines] not subject to full Commission-jurisdiction.'' \304\ AGA
argues that Hinshaw services are generally very small in relation to
interstate services, and that the Final Rule should, correspondingly,
impose lesser requirements on Hinshaw services than on interstate
services.
---------------------------------------------------------------------------

    \303\ AGA Comments at 4.
    \304\ Id. at 11.
---------------------------------------------------------------------------

    273. AGA requests clarification of what action by a state
commission triggers the obligation for an intrastate pipeline to file a
new rate election under proposed Sec.  284.123(i). AGA asks whether a
pipeline must file with the Commission if the adjusted state-approved
rate is not comparable, or if the applicable state-approved rate
references the Commission-established rate. AGA also notes that
proposed new Sec.  284.123(i) refers to ``intrastate'' pipelines, and
asks whether ``the proposed text of paragraph (i) could be read to
exclude Sec.  284.224 certificate holders--Hinshaw pipelines and other
local distribution companies--although it appears in the NOPR that the
Commission intends to apply its requirements to intrastate pipelines
and Hinshaw pipelines.'' \305\ AGA also asks that the Commission limit
new Sec.  284.123(i) to only apply to pipelines with Sec.
284.123(b)(2) Commission-established cost-based rates, reasoning that
pipelines with Sec.  284.123(b)(1) rates already must file within 30
days after a change in state rates.
---------------------------------------------------------------------------

    \305\ Id. at 13.
---------------------------------------------------------------------------

    274. AGA also raises several timing issues. AGA notes that proposed
new Sec.  284.123(i) would require entities to file a new rate election
with the Commission ``not later than 30 days after the reduced
intrastate rate becomes effective.'' AGA notes that this may cause
confusion for any intrastate pipelines whose reduced rates at the state
level become effective before the Commission issues a Final Rule. AGA
also argues that local distribution companies are likely to need more
time to prepare and file the new rate election with the Commission, and
therefore proposes that the deadline in new Sec.  284.123(i) instead
read: ``not less than ninety (90) days after the latter of: the
effective date of the final rule; or the effective date of the reduced
intrastate rate (if effective after the effective date of a final
rule).'' \306\ AGA also requests that any LDC that is subject to
multiple state jurisdictions be permitted to wait until all
jurisdictions have reviewed its rates before filing with the
Commission. Finally, AGA states that the NOPR does not provide clear
guidance to intrastate pipelines who have had rates approved in 2017 or
2018, who have currently pending proceedings, or who are due to make
five-year rate review filings in the near future before the Final Rule
takes effect.
---------------------------------------------------------------------------

    \306\ Id. at 14.
---------------------------------------------------------------------------

    275. Similarly, AGA notes that the NOPR does not address whether
filings to address the Tax Cuts and Jobs Act will re-set the five-year
review period. AGA requests that the Commission confirm in any Final
Rule that the filing of a rate election filing under Sec.  284.123(i)
would re-set the currently applicable five-year review.
    276. Finally, AGA notes that the NOPR is unclear in terms of
whether the Commission expects Hinshaw pipelines to file a fully
updated cost and revenue study. AGA argues that unless it is made in
the context of a regular five-year review, Hinshaw pipelines should
have the option to simply re-file their rates on the limited issue of
the Tax Cuts and Jobs Act impact. AGA also proposes that the Commission
waive the filing fee for such filings.
3. Discussion
    277. Noting the support for the NOPR as it applies to NGPA section
311 and Hinshaw pipelines, we generally adopt the NOPR's proposal
concerning those pipelines in this Final Rule, but also provide
additional guidance on the points raised by AGA.
    278. First, new Sec.  284.123(i) applies to Sec.  284.224
certificate holders. As Sec.  284.224(a)(3) states, Hinshaw pipelines
and other local distribution companies, by accepting a certificate, are
regulated ``to the same extent that and in the same manner that
intrastate pipelines are. . . .'' \307\ Therefore, the reference in new
Sec.  284.123(i) to ``intrastate pipelines'' in no way excludes Hinshaw
pipelines and other local distribution companies that hold Sec.
284.224 certificates. Moreover, the use of ``intrastate pipelines'' in
Sec.  284.123(i) is consistent with the remainder of Sec.  284.123,
which refers to ``intrastate pipelines'' throughout.
---------------------------------------------------------------------------

    \307\ 18 CFR 284.224(a)(3).
---------------------------------------------------------------------------

    279. Second, we decline to revise new Sec.  284.123(i) to exclude
Sec.  284.123(b)(1) state-derived rates. Although it is current
Commission policy to include in orders approving an intrastate
pipeline's state-derived rates a requirement that the pipeline must
file a new rate election whenever the state-approved rate used in the
rate election is changed, the Commission may not have included such a
requirement in every such currently approved state-derived rate.
Accordingly, we find that Sec.  284.123(i) should apply to both Sec.
284.123(b)(1) state-derived rates and Sec.  284.123(b)(2) Commission-
established cost-based rates so as to ensure that, if the intrastate
pipeline's rates on file with the state regulatory agency are reduced
to reflect the reduced income tax rates adopted in the Tax Cuts and
Jobs Act, the intrastate pipeline will file a new rate election for its
interstate rates. However, we are revising proposed Sec.  284.123(i) in
several respects in order to clarify how Sec.  284.123(i) applies to
these two different types of intrastate rates for interstate service.
    280. AGA requests that we clarify what type of rate change by a
state regulatory agency triggers the Sec.  284.123(i) filing
requirement. Under current Commission policy, an intrastate pipeline
using state-derived rates under Sec.  284.123(b)(1) must file a new
rate election whenever the state-approved rate used for its election is

changed. Consistent with that policy, we clarify that Sec.  284.123(i)
only requires such pipelines to make a new rate election when the state
regulatory agency reduces the state-approved rate used for its rate
election to reflect the reduced income taxes adopted in the Tax Cuts
and Jobs Act. However, we find that a change by a state regulatory
agency to the rate for any intrastate service due to the Tax Cuts and
Jobs Act will trigger the Sec.  284.123(i) filing requirement for
intrastate pipelines whose existing interstate rates are Commission-
established cost-based rates pursuant to Sec.  284.123(b)(2).
Interstate rates approved under Sec.  284.123(b)(2) are not based on
any particular state-approved rate. In these circumstances, we find it
reasonable for intrastate pipelines with Sec.  284.123(b)(2) interstate
rates to reduce those rates if the state regulatory agency reduces
their rates for any intrastate service to reflect the reduced income
taxes resulting from the Tax Cuts and Jobs Act. This ensures that
interstate shippers receive a similar rate reduction as those
intrastate customers whose rates are reduced and avoids the need to
consider whether the intrastate rates reduced by the state regulatory
agency are for an intrastate service comparable to the interstate
service of the intrastate pipeline.
    281. AGA asks whether new Sec.  284.123(i) applies to any
intrastate pipeline whose reduced intrastate rates ``become effective
before the Commission issues a final rule.'' \308\ This is indeed the
case. However, the Commission cannot impose a rule that has not yet
gone into effect. Accordingly, in this Final Rule we modify proposed
Sec.  284.123(i) to clarify that the deadline for the required rate
reduction filings will be 30 days after the later of (1) the effective
date of the new Sec.  284.123(i) or (2) the effective date of the
reduction in the pipeline's intrastate rates.
---------------------------------------------------------------------------

    \308\ AGA Comments at 13.
---------------------------------------------------------------------------

    282. AGA proposes that NGPA section 311 and Hinshaw pipelines
should have 90 days from the effective date of the reduced intrastate
rate to file with the Commission instead of 30 days. AGA also proposes
that any local distribution companies subject to multiple state
jurisdictions be permitted to wait until the last state government
finishes its rate review before filing. We reject these proposals.
Although individual pipelines are free to seek waiver if good cause
exists, AGA's proposals would only serve to delay the implementation of
fair and equitable NGPA section 311 and Hinshaw rates. A 90-day filing
requirement in new Sec.  284.123(i) would also create an unjustifiable
difference in how the Commission treats pipelines with Sec.
284.123(b)(2) rates versus pipelines with Sec.  284.123(b)(1) rates,
the latter of which already must file within 30 days after a change in
state rates.
    283. AGA states that the NOPR does not provide clear guidance to
parties who have had rates approved in 2017 or 2018, who have currently
pending rate proceedings, or who are due to make five-year rate review
filings in the near future before the Final Rule takes effect.
Consistent with our policy that an intrastate pipeline whose existing
interstate rates are based on Sec.  284.123(b)(1) must file a new rate
election whenever the state-approved rate used for the election is
changed, those interstate pipelines will have to file a new rate
election if their state regulatory agency reduces the state-approved
rate used for their rate election, regardless of the pendency of, or
Commission approval of, any prior rate filing by that intrastate
pipeline. However, the Commission is revising proposed Sec.  284.123(i)
to provide that the requirement to file a new rate election in that
section does not apply to intrastate pipelines using Commission-
established cost-based rates under Sec.  284.123(b)(2), if the
Commission has approved revised rates for that pipeline after December
22, 2017 or that pipeline already has a rate case pending before the
Commission as of the date reduced intrastate rates become effective.
Since the enactment of the Tax Cuts and Jobs Act on December 22, 2017,
the Commission has not approved revised interstate rates for any
intrastate pipeline under Sec.  284.123(b)(2) without ensuring that the
revised rates reflect the reduced income taxes adopted in the Tax Cuts
and Jobs Act, and the Commission will continue to do so in all pending
and future rate filings by such pipelines. Accordingly, there is no
need for intrastate pipelines whose interstate rates are based on Sec.
284.123(b)(2) to file a new rate election in these circumstances.
    284. AGA also notes that the NOPR does not address whether filings
to address the Tax Cuts and Jobs Act will re-set the five-year review
period. The Commission intends for new Sec.  284.123(i) and the
traditional five-year review policy to work in tandem. Accordingly, an
accepted filing under Sec.  284.123(i) will reset the clock on the
pipeline's next five-year filing. Finally, AGA requests clarification
regarding the filing fees, and content, of any filings addressing the
Tax Cuts and Jobs Act. We clarify that the Commission has not changed
its rules regarding filing fees, nor has the Commission changed its
rules regarding the content of five-year review filings. Finally, we
reject AGA's proposal to permit anyone filing under Sec.  284.123(i) to
submit a single-issue filing on the limited issue of the Tax Cuts and
Jobs Act impact. Although we are permitting interstate natural gas
pipelines regulated under the NGA to make such limited section 4
filings, as described above the interstate pipeline limited section 4
filings are based on financial information in the FERC Form No. 501-G,
which is largely derived from FERC Form Nos. 2 and 2-A. Intrastate
pipelines do not file such reports. Moreover, intrastate pipelines with
cost-based interstate rates established by the Commission pursuant to
Sec.  284.123(b)(2) generally resolve their rate proceedings through
black box settlements. As a result, it would be difficult, if not
impossible, to determine how to adjust those rates solely to reflect
reduced income taxes under the Tax Cuts and Jobs Act. State-derived
rates adopted pursuant to Sec.  284.123(b)(1) would be changed
consistent with whatever changes the state regulatory agency requires
to reflect the income tax reductions in the Tax Cuts and Jobs Act.
Accordingly, if the state regulatory agency approves a change in the
relevant intrastate rate that is limited to reflecting the income tax
reduction in the Tax Cuts and Jobs Act, the intrastate pipeline may
make a similar rate reduction in its Sec.  284.123(b)(1) interstate
rate. However, if the state regulatory agency revises the relevant
intrastate rates based on a full review of all the intrastate pipelines
costs and revenues, the interstate pipeline would have to make a
similar change in its Sec.  284.123(b)(1) interstate rate.

H. Request for Commission Action

    285. We dismiss the Petitioners' request for Commission action in
Docket No. RP18-415-000 in light of the Commission's actions in this
rulemaking proceeding.

V. Regulatory Requirements

A. Information Collection Statement

    286. The Office of Management and Budget (OMB) regulations require
that OMB approve certain reporting, record keeping, and public
disclosure requirements (information collection) imposed by an
agency.\309\ Upon approval of a collection of information, OMB will
assign an OMB control number and an expiration date. Respondents
subject to the filing requirements of a rule will not be

penalized for failing to respond to the collection of information
unless the collection of information displays a valid OMB control
number.
---------------------------------------------------------------------------

    \309\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    287. The Commission is submitting these reporting and recordkeeping
requirements to OMB for its review and approval under section 3507(d)
of the Paperwork Reduction Act (PRA). Comments are solicited on the
Commission's need for this information, whether the information will
have practical utility, the accuracy of the provided burden estimate,
ways to enhance the quality, utility, and clarity of the information to
be collected, and any suggested methods for minimizing the respondent's
burden, including the use of automated information techniques.
    288. Public Reporting Burden: The Commission initially identified
133 interstate natural gas pipelines with cost-based rates that will be
required to file the adopted FERC Form No. 501-G. That figure was based
upon a review of the pipeline tariffs on file with the Commission.
However, the number has been reduced to 129 interstate natural gas
pipelines, as the Commission removed Hampshire Gas Company as discussed
above, Questar Southern Trails Pipeline Company, whom the Commission
permitted to abandon its certificate to operate as a pipeline,\310\
MoGas, who filed a general NGA section 4 rate case, and Granite State,
who filed a prepackage uncontested settlement.\311\ Interstate natural
gas pipelines have four options as to how to address the results of the
formula contained in FERC Form No. 501-G. Each option has a different
burden profile and a different cost per response. Companies will make
their own business decisions as to which option they will select, thus
the estimate for the number of respondents for each option as shown in
the table below is just an estimate.
---------------------------------------------------------------------------

    \310\ Questar Southern Trails Pipeline Co., 163 FERC ] 62,086
(2018).
    \311\ Additional pipelines have chosen to file NGA section 4
rate filings before this Final Rule is effective; those pipelines
will not be required to file the FERC Form No. 501-G. Because the
number of pipelines choosing to make NGA section 4 filings may
continue to change (correspondingly reducing the number of filers of
the FERC Form No. 501-G), we are retaining a conservative estimate
of 129 pipelines who may be required to file the FERC Form No. 501-
G.
---------------------------------------------------------------------------

    289. The number of NGPA section 311 and Hinshaw pipelines that will
be required to file a rate case pursuant to proposed Sec.  284.123(i)
is a function of state actions outside of the control of the
Commission. Thus, the estimate for the number of respondents for NGPA
section 311 and Hinshaw pipelines filing a rate case in compliance with
adopted Sec.  284.123(i) as shown in the table below is an estimate.
    290. Based on these assumptions, we estimate the one-time burden
and cost \312\ for the information collection requirements as follows.
---------------------------------------------------------------------------

    \312\ The estimated average hourly cost of $83.97 (rounded)
assumes equal time is spent by an accountant, management, lawyer,
and office and administrative support. The average hourly cost
(salary plus benefits) is: $56.59 For accountants (occupation code
13-2011), $94.28 for management (occupation code 11-0000), $143.68
for lawyers (occupation code 23-0000), and $41.34 for office and
administrative support (occupation code 43-0000). (The wage figures
are taken from the Bureau of Labor Statistics [BLS], for May 2017,
figures at https://www.bls.gov/oes/current/naics3_221000.htm. BLS
information on benefits for December 2017 was issued on March 20,
2018, at https://www.bls.gov/news.release/ecec.nr0.htm.)

                                                                        FERC-501G
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Responses                   Average      Average
                                                            Respondents      per         Total      burden hour    cost per   Total burden   Total cost
                                                                          respondent   responses   per response    response       hours          ($)
                                                                    (1)          (2)  (1) * (2) =           (4)          (5)   (3) * (4) =   (3) * (5) =
                                                                                (3)                                      (6)           (7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Interstate Natural Gas Pipelines With Cost-Based Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
FERC Form No. 501-G, One-time Report \313\...............           129            1          129             9         $756         1,161       $97,524
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Optional Response
--------------------------------------------------------------------------------------------------------------------------------------------------------
No Response..............................................            51            0            0             0            0             0             0
Case for no change.......................................            62            1           62             5          420           310        26,040
Limited Sec 4 filing \314\...............................            15            1           15             6          504            90         7,560
General Sec. 4 filing \315\..............................             1            1            1     \316\ 512       42,968           512        42,968
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              NGPA section 311 and Hinshaw Pipelines With Cost-Based Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
NGPA rate filing \317\...................................      \318\ 15            1           15            24        2,015           360        30,225
--------------------------------------------------------------------------------------------------------------------------------------------------------
    TOTAL................................................     \319\ 144  ...........          222  ............  ...........         2,433       204,317
--------------------------------------------------------------------------------------------------------------------------------------------------------

    291. The Report and any tariff filing option that an NGA natural
gas company may choose or an NGPA pipeline company may be required to
file must be filed using the Commission's eTariff filing format. This
format requires the use of software that all respondents currently have
or purchase on a per-use basis. For companies that do not have their
own software and must contract for the service, the Commission
estimates a cost of $300 per filing. We estimate approximately 40 of
the NGA and NGPA pipeline company respondents will contract for eTariff
filing services at an estimated total cost of $12,000. Therefore the
total cost of the Final Rule is $216,317.
---------------------------------------------------------------------------

    \313\ 18 CFR 260.402 (as revised).
    \314\ 18 CFR 154.404 (as revised).
    \315\ 18 CFR 154.312.
    \316\ The estimate for hours is based on the estimated average
hours per response for the FERC-545 (OMB Control No. 1902-0154),
with general NGA section 4, 18 CFR 154.312 filings weighted at a
ratio of 20 to one.
    \317\ 18 CFR 284.123(i) (as revised).
    \318\ Estimate of number of respondents assumes that states will
act within one year to reduce NGPA section 311 and Hinshaw pipeline
rates to reflect the Tax Cuts and Jobs Act.
    \319\ Number of unique respondents = (One-time Report) + (NGPA
rate filing).
---------------------------------------------------------------------------

    292. The Commission does not expect any mandatory or voluntary
reporting requirements other than those listed above.
    Action: Proposed information collection, FERC-501G (Rate Changes
Relating to Federal Corporate Income Tax Rate for Interstate Natural
Gas Pipelines).
    OMB Control No.: 1902-0302.
    Respondents: Interstate natural gas pipelines with cost-based
rates, and

certain NGPA section 311 and Hinshaw pipelines.
    Frequency of Information: One-time, for each indicated reporting
requirement.
    Necessity of Information: The Commission requires information in
order to determine the effect of the Tax Cuts and Jobs Act on the rates
of natural gas pipelines to ensure those rates continue to be just and
reasonable.
    Internal Review: The Commission has reviewed the adopted
information collection requirements and has determined that they are
necessary. These requirements conform to the Commission's need for
efficient information collection, communication, and management within
the energy industry. The Commission has specific, objective support for
the burden estimates associated with the information collection
requirements.
    Interested persons may obtain information on the reporting
requirements or submit comments by contacting the Federal Energy
Regulatory Commission, 888 First Street NE, Washington, DC 20426
(Attention: Ellen Brown, Office of the Executive Director, (202) 502-
8663, or email [email protected]). Comments may also be sent to
the Office of Management and Budget (Attention: Desk Officer for the
Federal Energy Regulatory Commission), by email at
[email protected].

B. Environmental Analysis

    293. 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.\320\ The
actions taken here fall within categorical exclusions in the
Commission's regulations for rules regarding information gathering,
analysis, and dissemination, and for rules regarding sales, exchange,
and transportation of natural gas that require no construction of
facilities.\321\ Therefore, an environmental review is unnecessary and
has not been prepared in this rulemaking.
---------------------------------------------------------------------------

    \320\ Regulations Implementing the National Environmental Policy
Act, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987) (cross-
referenced at 41 FERC ] 61,284.
    \321\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5) and 380.4(a)(27).
---------------------------------------------------------------------------

C. Regulatory Flexibility Act

    294. The Regulatory Flexibility Act of 1980 (RFA) \322\ generally
requires a description and analysis of Final Rules that will have
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \322\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    295. As noted in the above Information Collection Statement,
approximately 129 interstate natural gas pipelines, both large and
small, are respondents subject to the requirements adopted by this
rule. In addition, the Commission estimates that another 59 NGPA
natural gas pipelines may be required to file restated rates pursuant
to proposed Sec.  284.123(i). However, the actual number of NGPA
section 311 and Hinshaw pipelines that will be required to file is a
function of actions taken at the state level. The Commission estimates
that only 15 of the 59 NGPA natural gas pipelines will file a rate case
pursuant to proposed Sec.  284.123(i).
    296. Most of the natural gas pipelines regulated by the Commission
do not fall within the RFA's definition of a small entity,\323\ which
is currently defined for natural gas pipelines as a company that, in
combination with its affiliates, has total annual receipts of $27.5
million or less.\324\ For the year 2016 (the most recent year for which
information is available), only five of the 129 interstate natural gas
pipeline respondents had annual revenues in combination with their
affiliates of $27.5 million or less and therefore could be considered a
small entity under the RFA. This represents 3.9 percent of the total
universe of potential NGA respondents that may have a significant
burden imposed on them. For NGPA section 311 and Hinshaw pipelines,
three of the 59 potential respondents could be considered a small
entity, or 5.1 percent. However, it is not possible to predict whether
any of these small companies may be required to make a rate filing. The
estimated cost for respondents is expected to vary from $756 to
$42,968.\325\ In view of these considerations, the Commission certifies
that this final rule's amendments to the regulations will not have a
significant impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \323\ See 5 U.S.C. 601(3) (citing section 3 of the Small
Business Act, 15 U.S.C. 623). Section 3 of the SBA defines a ``small
business concern'' as a business which is independently owned and
operated and which is not dominant in its field of operation.
    \324\ 13 CFR 121.201 (Subsector 486--Pipeline Transportation;
North American Industry Classification System code 486210; Pipeline
Transportation of Natural Gas) (2017). ``Annual Receipts'' are total
income plus cost of goods sold.
    \325\ The estimated $756 is for respondents who file the One-
time Report and choose to take no optional response. Only one
respondent who files the One-time Report and then chooses to make a
general NGA section 4 filing is estimated to have a one-time cost of
$42,968. These figures do not include the estimated cost of $300 per
filing for approximately 40 filers for the use of software to make
these filing in the eTariff format.
---------------------------------------------------------------------------

D. Document Availability

    297. 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 the Commission's Home Page www.ferc.gov and in the
Commission's Public Reference Room during normal business hours (8:30
a.m. to 5:00 p.m. Eastern time) at 888 First Street NE, Room 2A,
Washington, DC 20426.
    298. From the Commission's Home Page on the internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits in the docket number
field.
    299. User assistance is available for eLibrary and the Commission's
website during normal business hours from FERC Online Support at (202)
502-6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
[email protected].

E. Effective Date and Congressional Notification

    300. These regulations are effective September 13, 2018. The
Commission has determined, with the concurrence of the Administrator of
the Office of Information and Regulatory Affairs of OMB, that this rule
is not a ``major rule'' as defined in section 351 of the Small Business
Regulatory Enforcement Fairness Act of 1996.

List of Subjects

Part 154

    Natural gas, Pipelines, Reporting and recordkeeping requirements.

Part 260

    Natural gas, Reporting and recordkeeping requirements,

Part 284

    Continental shelf, Natural gas, Reporting and recordkeeping
requirements.

    By the Commission. Commissioners LaFleur and Glick are
concurring with a separate statement attached.

    Issued: July 18, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission amends parts 154,
260, and 284, Chapter I, Title 18, Code of Federal Regulations, as
follows:

PART 154--RATE SCHEDULES AND TARIFFS

0
1. The authority citation for part 154 continues to read as follows:

     Authority:  15 U.S.C. 717-717w; 31 U.S.C. 9701; 42 U.S.C. 7102-
7352.

0
2. Add Sec.  154.404 to subpart E to read as follows:

Sec.  154.404  Tax Cuts and Jobs Act rate reduction.

    (a) Purpose. The limited rate filing permitted by this section is
intended to permit:
    (1) A natural gas company subject to the Federal corporate income
tax to reduce its maximum rates to reflect the decrease in the federal
corporate income tax rate pursuant to the Tax Cuts and Jobs Act of
2017; and
    (2) A natural gas company organized as a pass-through entity
either:
    (i) To eliminate any income tax allowance and accumulated deferred
income taxes reflected in its current rates; or
    (ii) To reduce its maximum rates to reflect the decrease in the
Federal income tax rates applicable to partners pursuant to the Tax
Cuts and Jobs Act of 2017.
    (b) Applicability. (1) For purposes of paragraph (a)(1) of this
section, a natural gas company organized as a pass-through entity all
of whose income or losses are consolidated on the Federal income tax
return of its corporate parent is considered to be subject to the
Federal corporate income tax.
    (2) Except as provided in paragraph (b)(3) of this section, any
natural gas company with cost-based, stated rates may submit the
limited rate filing permitted by this section.
    (3) If a natural gas company has a rate case currently pending
before the Commission in which the change in the Federal corporate
income tax rate can be reflected, the public utility may not use this
section to adjust its rates.
    (c) Determination of rate reduction. A natural gas company
submitting a filing pursuant to this section shall reduce:
    (1) Its maximum reservation rates for firm service, and
    (2) Its usage charge that includes fixed costs, and
    (3) Its one-part rates that include fixed costs, by
    (4) The percentage calculated consistent with the instructions to
FERC Form No. 501-G prescribed by Sec.  260.402 of this chapter.
    (d) Timing. Any natural gas company filing to reduce its rates
pursuant to this section must do so no later than the date that it
files its FERC Form No. 501-G pursuant to Sec.  260.402 of this
chapter.
    (e) Hearing issues. (1) The only issues that may be raised by
Commission staff or any intervenor under the procedures established in
this section are:
    (i) Whether or not the natural gas company may file under this
section,
    (ii) Whether or not the percentage reduction permitted in paragraph
(c)(4) has been properly applied, and
    (iii) Whether or not the correct information was used in that
calculation.
    (2) Any other issue raised will be severed from the proceeding and
dismissed without prejudice.

PART 260--STATEMENTS AND REPORTS (SCHEDULES)

0
3. The authority citation for part 260 continues to read as follows:

    Authority:  15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.

0
4. Add Sec.  260.402 to read as follows:

Sec.  60.402  FERC Form No. 501-G. One-time Report on Rate Effect of
the Tax Cuts and Jobs Act.

    (a) Prescription. The form for the One-time Report on Rate Effect
of the Tax Cuts and Jobs Act of 2017, designated herein as FERC Form
No. 501-G is prescribed.
    (b) Filing requirement--(1) Who must file. (i) Except as provided
in paragraph (b)(1)(ii) of this section, every natural gas company that
is required under this part to file a Form No. 2 or 2-A for 2017 and
has cost-based, stated rates for service under any rate schedule that
was filed electronically pursuant to part 154 of this chapter, must
prepare and file with the Commission a FERC Form No. 501-G pursuant to
the definitions and instructions set forth in that form and the
Implementation Guide.
    (ii) A natural gas company whose rates are being examined in a
general rate case under section 4 of the Natural Gas Act or in an
investigation under section 5 of the Natural Gas Act as of the deadline
for it to file the FERC Form No. 501-G need not file FERC Form No. 501-
G. In addition, a natural gas company that files an uncontested
settlement of its rates pursuant to Sec.  385.207(a)(5) of this chapter
after March 26, 2018, and before the deadline for it file the FERC Form
No. 501-G need not file FERC Form No. 501-G.
    (2) FERC Form No. 501-G must be filed as prescribed in Sec.
385.2011 of this chapter as indicated in the instructions set out in
the form and Implementation Guide, and must be properly completed and
verified. Each natural gas company must file FERC Form No. 501-G
according to the schedule set forth in the Implementation Guide set out
in that form. Each report must be prepared in conformance with the
Commission's form and guidance posted and available for downloading
from the FERC website (http://www.ferc.gov). One copy of the report
must be retained by the respondent in its files.

PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES

0
5. The authority citation for part 284 continues to read as follows:

    Authority:  15 U.S.C. 717-717z, 3301-3432; 42 U.S.C. 7101-7352;
43 U.S.C. 1331-1356.

0
6. In Sec.  284.123, add paragraph (i) to read as follows:

Sec.  284.123  Rates and charges.

* * * * *
    (i) If an intrastate pipeline's rates on file with the appropriate
state regulatory agency are reduced to reflect the reduced income tax
rates adopted in the Tax Cuts and Jobs Act of 2017, the intrastate
pipeline must file a new rate election pursuant to paragraph (b) of
this section in the following circumstances:
    (1) If the intrastate pipeline's existing rates for interstate
service are based on paragraph (b)(1) of this section, the intrastate
pipeline must file a new rate election, if the state-approved rate used
for its current rate election is changed to reflect the reduced income
tax rates adopted in the Tax Cuts and Jobs Act.
    (2) If the intrastate pipeline's existing rates for interstate
service are based on paragraph (b)(2) of this section, the intrastate
pipeline must file a new rate election, if any of its rates on file
with the appropriate state regulatory agency are reduced to reflect the
reduced income tax rates adopted in the Tax Cuts and Jobs Act, unless
the Commission has approved revised interstate rates for that pipeline
after December 22, 2017, or it has filed revised interstate rates that
are pending before the Commission on the effective date of the reduced
intrastate rates.
    (3) Any rate election required by this paragraph must be filed on
or before the later of October 15, 2018 or 30 days after

the reduced intrastate rate becomes effective.

    Note:  The following attachments and appendix will not be
published in the Code of Federal Regulations:

Attachments

    The Attachments (FERC Form No. 501-G and the Implementation Guide)
will not be published in the Federal Register or the Code of Federal
Regulations. The Attachments will be available in the Commission's
eLibrary and website.
    The following appendix will not appear in the Code of Federal
Regulations.

Appendix A

------------------------------------------------------------------------
            Commenter                           Short name
------------------------------------------------------------------------
American Gas Association........  AGA.
American Public Gas Association.  APGA.
Berkshire Hathaway Energy         Berkshire Hathaway.
 Pipeline Group; Northern
 Natural Gas Company and Kern
 River Gas Transmission Company.
Boardwalk Pipeline Partners, LP.  Boardwalk.
Canadian Association of           CAPP.
 Petroleum Producers.
Dominion Energy Cove Point LNG,   Cove Point.
 LP.
Direct Energy Business            Direct Energy.
 Marketing, LLC and Interstate
 Gas Supply, Inc.
Dominion Energy Transmission,     Dominion Energy.
 Inc.; Dominion Energy Carolina
 Gas Transmission, LLC; Dominion
 Energy Questar Pipeline, LLC;
 Dominion Energy Overthrust
 Pipeline, LLC; and Questar
 Southern Trails Pipeline
 Company.
Eastern Shore Natural Gas         Eastern Shore.
 Company.
Enable Mississippi River          Enable Interstate Pipelines
 Transmission, LLC and Enable
 Gas Transmission, LLC..
EQT Midstream Partners, LP......  EQT Midstream.
Hampshire Gas Company...........  Hampshire.
Hess Corporation................  Hess.
Industrial Energy Consumers of    IECA.
 America.
Aera Energy, LLC, Anadarko        Indicated Shippers.
 Energy Services Company; Apache
 Corporation; BP Energy Company;
 ConocoPhillips Company;
 Occidental Energy Marketing,
 Inc.; Petrohawk Energy
 Corporation; and XTO Energy,
 Inc.
Interstate Natural Gas            INGAA.
 Association of America.
Independent Oil & Gas             IOGA.
 Association of West Virginia,
 Inc..
Natural Gas Pipeline Company of   Kinder Morgan.
 America LLC; Tennessee Gas
 Pipeline Company, L.L.C.;
 Southern Natural Gas Company,
 L.L.C.; Colorado Interstate Gas
 Company, L.L.C.; Wyoming
 Interstate Company, L.L.C.; El
 Paso Natural Gas Company,
 L.L.C.; Mojave Pipeline
 Company, L.L.C.; Bear Creek
 Storage Company, L.L.C.;
 Cheyenne Plains Gas Pipeline
 Company, L.L.C.; Elba Express
 Company, L.L.C.; Kinder Morgan
 Louisiana Pipeline LLC;
 Southern LNG Company, L.L.C.;
 and TransColorado Gas
 Transmission Company LLC.
New York State Electric & Gas     NYSEG.
 Corporation and Rochester Gas
 and Electric Corporation.
Millennium Pipeline Company,      Millennium.
 L.L.C.
National Fuel Gas Supply          National Fuel.
 Corporation and Empire
 Pipeline, Inc.
Natural Gas Supply Association..  NGSA.
Bay State Gas Company d/b/a       NiSource LDCs.
 Columbia Gas of Massachusetts;
 Columbia Gas of Kentucky, Inc.;
 Columbia Gas of Maryland, Inc.;
 Columbia Gas of Ohio, Inc.;
 Columbia Gas of Pennsylvania,
 Inc.; Columbia Gas of Virginia,
 Inc.; and Northern Indiana
 Public Service Company LLC.
Mike Hunter, Oklahoma Attorney    Oklahoma AG.
 General.
Process Gas Consumers Group and   Process Gas.
 American Forest and Paper
 Association.
Railroad Commission of Texas....  Texas Railroad Commission.
Range Resources-Appalachia, LLC.  Range.
Southern Company Services, Inc.;  Southern Companies.
 Alabama Power Company; Georgia
 Power Company; Gulf Power
 Company; Mississippi Power
 Company and Southern Power
 Company.
Southern Star Central Gas         Southern Star.
 Pipeline, Inc.
Spectra Energy Partners, LP       Spectra.
 (SEP), Algonquin Gas
 Transmission, LLC; Big Sandy
 Pipeline, LLC; East Tennessee
 Natural Gas, LLC; Market Hub
 Partners Holding, LLC; Ozark
 Gas Transmission, L.L.C.;
 Saltville Gas Storage Company
 L.L.C.; and Texas Eastern
 Transmission, LP. SEP also has
 ownership interests in
 Gulfstream Natural Gas System,
 L.L.C.; Maritimes & Northeast
 Pipeline, L.L.C.; Sabal Trail
 Transmission, LLC; and
 Southeast Supply Header, LLC.
Trailblazer Pipeline Company,     Tallgrass Pipelines.
 LLC; Tallgrass Interstate Gas
 Transmission, LLC; and Rockies
 Express Pipeline LLC.
TransCanada Corporation.........  TransCanada.
The Williams Companies, Inc.....  Williams.
Xcel Energy Services Inc.;        LDC Coalition.
 Northern States Power Company,
 a Minnesota corporation;
 Northern States Power Company,
 a Wisconsin corporation; Public
 Service Company of Colorado;
 and Southwestern Public Service
 Company. Also Alliant Energy
 Corporate Services; Wisconsin
 Power and Light Company and
 Interstate Power and Light
 Company.
------------------------------------------------------------------------

Concurring Statement

LaFLEUR, Commissioner, and GLICK, Commissioner, concurring:

    In companion orders issued today, the Commission (1) affirms the
Revised Policy Statement on Treatment of Income Taxes (Revised
Policy Statement) issued in response to the decision of the United
States Court of Appeals for the District of Columbia Circuit (D.C.
Circuit) in United Airlines; \1\ (2) provides guidance regarding the
treatment of Accumulated Deferred Income Taxes (ADIT) where the
income tax allowance is eliminated from cost-of-service rates under
the Commission's post-United Airlines policy; and (3) issues a Final
Rule that establishes procedures for the Commission to determine
which jurisdictional natural gas pipelines may be collecting unjust
and unreasonable rates in light of the income tax reductions
provided by the Tax Cuts and Jobs Act and the Commission's revised
policy and precedent concerning tax allowances to

address the double recovery issue identified by United Airlines.
These are significant orders, and we write separately to provide
some additional thoughts regarding these decisions.
---------------------------------------------------------------------------

    \1\ United Airlines, Inc. v. FERC, 827 F.3d 122 (D.C. Cir.
2016).
---------------------------------------------------------------------------

    First, with respect to the ADIT guidance issued today, we
confess to some frustration that the rate benefits that customers
and shippers would otherwise receive from the Revised Policy
Statement may be significantly reduced by the treatment of ADIT
announced in today's orders. As a matter of equity, we believe that
the arguments for applying previously-accrued ADIT balances to
reduce future rate base where a tax allowance is eliminated are
compelling. However, based on the arguments presented in this docket
regarding the Commission's authority to mandate those reductions on
a generic basis, it appears that such a directive would run afoul of
the rule against retroactive ratemaking, as interpreted by the D.C.
Circuit in Public Utilities Commission of State of California v.
FERC.\2\ Nonetheless, we note that today's order is simply guidance,
and to the extent that customers or shippers in individual
proceedings argue that such a reduction is legal in specific cases,
we will consider those arguments on the appropriate record.
---------------------------------------------------------------------------

    \2\ 894 F.2d 1372 (DC Cir. 1990).
---------------------------------------------------------------------------

    Second, we believe that today's Final Rule sharply highlights
the need for a legislative fix to the lack of refund authority in
Section 5 of the Natural Gas Act (NGA).\3\ Under current law, the
Commission's ability to protect natural gas customers against unjust
and unreasonable rates is compromised by its inability to set a
refund date. We believe that current law provides a perverse
incentive for protracted litigation and creates an asymmetry of
leverage between pipelines seeking a rate increase under Section 4
of the NGA and complainants or the Commission under Section 5.
---------------------------------------------------------------------------

    \3\ Commissioner LaFleur has been on record in support of
Section 5 reform for several years. Northern Natural Gas Co., 133
FERC ] 61,111 (2010) (LaFleur, Comm'r, dissenting).
---------------------------------------------------------------------------

    With respect to the Final Rule, we believe that our lack of
refund authority affected the balance the Commission was able to
strike in today's order. It is a clear tenet of cost-of-service
ratemaking that tax savings should flow through to ratepayers, and
the Commission is rightly pursuing that goal in the Final Rule.
However, because our Section 5 ``stick'' under the NGA cannot
effectively deliver timely relief to customers, the Final Rule
proffers a series of ``carrots'' in the hope that pipelines will
exercise their Section 4 filing rights to quickly flow those tax
benefits back to their customers. While we think the balance struck
in the Final Rule is reasonable in light of our limited refund
authority, we believe that the Commission would be better equipped
to protect customers if the law were amended.
    Accordingly, we respectfully concur.

Cheryl A. LaFleur,
Commissioner.

Richard Glick,
Commissioner.

[FR Doc. 2018-15786 Filed 7-27-18; 8:45 am]
 BILLING CODE 6717-01-P