[Federal Register Volume 87, Number 248 (Wednesday, December 28, 2022)]
[Rules and Regulations]
[Pages 79804-79806]
[FR Doc No: 2022-28163]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2022-0607]
RIN 1625-AA00

Safety Zone; Chinese Harbor, Santa Cruz Island, California

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The U.S. Coast Guard is establishing a temporary safety zone
for the navigable waters in Chinese Harbor of Santa Cruz Island,
California. This temporary safety zone is needed to protect personnel,
vessels, and the marine environment from potential hazards created by
ongoing oil recovery operations relating to the grounding of a 60-foot
fishing vessel in Chinese Harbor. Entry of persons or vessels into this
safety zone is prohibited unless specifically authorized by the Captain
of the Port Sector Los Angeles--Long Beach (COTP), or his designated
representative.

DATES: This rule is effective without actual notice from December 28,
2022 until January 4, 2023. For the purposes of enforcement, actual
notice will be used from December 21, 2022 until December 28, 2022.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type USCG-
2022-0607 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions about this rule,
call or email LCDR Maria Wiener, Waterways Management, U.S. Coast Guard
Sector Los Angeles--Long Beach; telephone<PHONE_NUMBER>, email [email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
E.O. Executive order
FR Federal Register
LLNR Light List Number
NPRM Notice of proposed rulemaking
Pub. L. Public Law
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    The Coast Guard is issuing this temporary rule without prior notice
and

opportunity to comment pursuant to authority under section 4(a) of the
Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision
authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM)
with respect to this rule because it is impracticable. This is an
emergency response to a vessel grounding and immediate action is needed
to respond to potential safety hazards associated with the emergency
oil recovery operations. It is impracticable to publish an NPRM because
we must establish this safety zone by December 21, 2022.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. Delaying the effective date of
this rule would be contrary to the public interest because immediate
action is needed to ensure the safety of persons, vessels, and the
marine environment in the vicinity of Chinese Harbor during emergency
oil recovery operations.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 46 U.S.C.
70034 (previously 33 U.S.C. 1231) and 46 U.S.C. 70011(b)(3). The
Captain of the Port Sector Los Angeles--Long Beach (COTP) has
determined that potential hazards associated with emergency oil
recovery operations will be a safety concern for anyone within a 4,000-
yard radius of the grounded fishing vessel in Chinese Harbor. This rule
is needed to protect personnel, vessels, and the marine environment in
the navigable waters within the safety zone while oil recovery
operations take place in the vicinity of Chinese Harbor.

IV. Discussion of the Rule

    This rule establishes a safety zone from December 21, 2022 until
January 4, 2023. The safety zone will cover all navigable waters from
the surface to the sea floor in and around Chinese Harbor from the
location of the commercial fishing vessel SPERANZA MARIE (Official
Number 643138), currently on the shoreline at 34[deg]01.59' N,
119[deg]36.32' W and extending out along a 4,000-yard radius from the
vessel. These coordinates are based on North American Datum of 1983. No
vessel or person will be permitted to enter the safety zone without
obtaining permission from the COTP or his designated representative.
Sector Los Angeles--Long Beach may be contacted on VHF-FM Channel 16 or
(310) 521-3801. The marine public will be notified of the safety zone
via Broadcast Notice to Mariners.
    A Designated representative means a Coast Guard a Coast Guard
coxswain, petty officer, or other officer operating a Coast Guard
vessel designated by or assisting the Captain of the Port Sector Los
Angeles-Long Beach (COTP) in the enforcement of the safety zone.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders (E.O.s) related to rulemaking. Below we summarize our
analyses based on a number of these statutes and E.O.s, and we discuss
First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. This rule has not been designated a ``significant
regulatory action,'' under Executive Order 12866. Accordingly, this
rule has not been reviewed by the Office of Management and Budget
(OMB).
    This regulatory action determination is based on the limited size
of the zone, which encompasses a two nautical mile radius at Chinese
Harbor and two week duration of the safety zone. Vessel traffic will be
able to safely transit around this safety zone, which will impact a
small, designated area of Chinese Harbor, Santa Cruz Island, CA.
Moreover, the Coast Guard will issue Broadcast Notice to Mariners via
VHF-FM marine channel 16 regarding the safety zone and the rule allows
vessels to seek permission to enter the zone.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
will not have a significant economic impact on a substantial number of
small entities.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A. above, this rule will not have a significant economic impact on
any vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
call or email the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

F. Environment

    We have analyzed this proposed rule under Department of Homeland
Security Management Directive 023-01, Rev. 1, associated implementing
instructions, and COMDTINST 5090.1 (series), which guide the Coast
Guard in complying with the National Environmental Policy Act of 1969
(42 U.S.C. 4321-4370f), and have determined that this action is one of
a category of actions that do not individually or cumulatively have a
significant effect on the human environment. This rule involves a
safety zone encompassing an area extending 4,000 yards out from a
grounded vessel in vicinity of Chinese Harbor and will last only while
oil recovery operations are ongoing. It is categorically excluded from
further review under paragraph L60, in Appendix A, Table 1 of DHS
Instruction Manual 023-001-01, Rev. 1. A Record of Environmental
Consideration (REC) is not require for emergency operations, but will
be created if necessary.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority:  46 U.S.C. 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-
6, and 160.5; Department of Homeland Security Delegation No.
00170.1, Revision No. 01.2.

0
2. Add Sec.  165. T11-119 to read as follows:

Sec.  165. T11-119  Safety Zone; Chinese Harbor, Santa Cruz Island,
California.

    (a) Location. The following area is a safety zone: All navigable
waters from the surface to the sea floor in and around Chinese Harbor
from the vessel SPERANZA MARIE, currently on the shoreline at
34[deg]01.59' N, 119[deg]36.32' W, and extending out along a 4,000-yard
radius from the vessel. These coordinates are based on North American
Datum of 1983.
    (b) Definitions. As used in this section, Designated representative
means a Coast Guard a Coast Guard coxswain, petty officer, or other
officer operating a Coast Guard vessel designated by or assisting the
Captain of the Port Sector Los Angeles-Long Beach (COTP) in the
enforcement of the safety zone.
    (c) Regulations. (1) Under the general safety zone regulations in
subpart C of this part, you may not enter the safety zone described in
paragraph (a) of this section unless authorized by the COTP or the
COTP's designated representative.
    (2) To seek permission to enter, contact the COTP or the COTP's
representative by hailing Coast Guard Sector Los Angeles--Long Beach on
VHF-FM Channel 16 or calling at<PHONE_NUMBER>. Those in the safety
zone must comply with all lawful orders or directions given to them by
the COTP or the COTP's designated representative.
    (d) Enforcement period. This section will be enforced from December
21, 2022 through January 4, 2023. The marine public will be notified of
this safety zone via Broadcast Notice to Mariners. If the Captain of
the Port determines that the zone need not be enforced during this
entire period, the Coast Guard will announce via Broadcast Notice to
Mariners when the zone will no longer be subject to enforcement.

    Dated: December 21, 2022.
R.D. Manning,
Captain, U.S. Coast Guard, Captain of the Port Sector Los Angeles--Long
Beach.
[FR Doc. 2022-28163 Filed 12-27-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 76, Number 162 (Monday, August 22, 2011)]
[Rules and Regulations]
[Pages 52253-52259]
[FR Doc No: 2011-21353]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 260

[Docket No. RM07-9-004; Order No. 710-C]

Revisions to Forms, Statements, and Reporting Requirements for
Natural Gas Pipelines

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Order on Rehearing.

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

FOR FURTHER INFORMATION CONTACT:

Brian Holmes (Technical Information), Office of Enforcement, Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426. Telephone:<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>Robert Sheldon (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426. Telephone:<PHONE_NUMBER>, e-mail:
<EMAIL_ADDRESS>Gary D. Cohen (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426. Telephone:<PHONE_NUMBER>, e-mail:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer, Philip
D. Moeller, John R. Norris, and Cheryl A. LaFleur.

Order on Rehearing

Issued August 16, 2011

    1. Earlier in this proceeding, the Commission issued a Final Rule
(Order No. 710-B) revising its financial forms, statements, and reports
for natural gas companies, contained in FERC Form Nos. 2, 2-A, and 3-Q,
to provide greater transparency on fuel data by requiring the reporting
of functionalized fuel data on pages 521a through 521c of those forms,
and to include on those forms the amount of fuel waived, discounted or
reduced as part of a negotiated rate agreement.\1\
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    \1\ Revisions to Forms, Statements, and Reporting Requirements
for Natural Gas Pipelines, Order No. 710-B, 76 FR 4516 (Jan. 26,
2011), 134 FERC ] 61,033 (2011) (Order No. 710-B or Final Rule).
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    2. In response to the Final Rule, the Interstate Natural Gas
Association of America (INGAA) filed a request for rehearing raising
eleven separate objections to the Final Rule. In this order on
rehearing, we generally deny rehearing and reaffirm the findings we
made in Order No. 710-B. We do, however, revise the burden estimate to
more accurately account for initial start-up costs, grant rehearing on
the issue of whether to include page 521d and we grant filers
additional time before they must begin filing Form Nos. 2, 2-A, and 3-Q
in accordance with the requirements established in Order No. 710-B and
this rehearing order.

I. Background

    3. This matter began in 2008, when the Commission issued a Final
Rule (Order No. 710) revising its financial forms, statements, and
reports for natural gas companies, contained in

FERC Form Nos. 2, 2-A, and 3-Q, to make the information reported in
these forms more useful by updating them to reflect current market and
cost information relevant to interstate natural gas pipelines and their
customers.\2\ The information provided in these forms included data on
fuel use, but did not require these data to be functionally
disaggregated.
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    \2\ Revisions to Forms, Statements, and Reporting Requirements
for Natural Gas Pipelines, final rule, Order No. 710, FERC Stats. &
Regs. ] 31,267 (2008) (Order No. 710).
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    4. On rehearing, the American Gas Association (AGA) argued that the
fuel data would be more useful if such data were broken out by
different pipeline functions, including transportation, storage,
gathering, and exploration/production, and should include, by function,
the amount of fuel waived, discounted or reduced as part of a
negotiated rate agreement. This argument was rejected in Order No. 710-
A,\3\ but was reconsidered in a Notice of Proposed Rulemaking issued on
June 17, 2010.\4\ AGA supported the Commission's proposal while INGAA
opposed it. After considering all the comments and reply comments, the
Commission issued a Final Rule adding additional transparency to the
reporting of fuel data. Specifically, the Final Rule revised FERC Form
Nos. 2, 2-A, and 3-Q, revising pages 521a, 521b, and page 520, and
adding page 521c to FERC Form Nos. 2, 2-A, and 3-Q to include
functionalized fuel data, including the amount of fuel waived,
discounted or reduced as part of a negotiated rate agreement.\5\
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    \3\ Revisions to Forms, Statements, and Reporting Requirements
for Natural Gas Pipelines, order on reh'g and clarification, Order
No. 710-A, 123 FERC ] 61,278 (2008).
    \4\ Revisions to Forms, Statements, and Reporting Requirements
for Natural Gas Pipelines, Notice of Proposed Rulemaking, 75 FR
35700 (June 23, 2010), FERC Stats. & Regs. ] 32,659 (June 17, 2010)
(June 2010 NOPR).
    \5\ Order No. 710-B, 134 FERC ] 61,033, at P 1, 7, 37. The Final
Rule has a more complete discussion of the procedural history of
this case. We will not reiterate that complete history here.
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    5. In response to the Final Rule, INGAA filed a request for
rehearing reiterating many of the concerns that it raised earlier in
the proceeding (in its comments and reply comments on the June 2010
NOPR).

II. Discussion

A. Overview

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

    7. INGAA argues that Order No. 710-B erred by finding that
reporting of functionalized fuel data by contract rate category does
not require the tracking of fuel by individual contracts.
    8. INGAA states that, in Order No. 710-B, the Commission found that
the reporting of functionalized fuel data by contract rate category
does not require the tracking of fuel by individual contracts. INGAA
disputes this finding and argues that such tracking would be
necessitated, despite the Commission's finding to the contrary. We
reject this interpretation. As we stated in Order No. 710-B, at
paragraph 74:

    In this Final Rule, the Commission is not imposing any
additional reporting requirements that change how those pipelines
track fuel. Pipeline billings are provided on an integrated basis,
accounting for sales based on whether the volumes are negotiated,
recourse, or discounted. Moreover, contrary to INGAA's assertions,
the Commission is not requiring pipelines to track fuel by
individual contracts, but merely continuing the current practice of
requiring the assignment of fuel based on an allocation of
throughput or stated fuel rate. The revisions to page 521a through
521c require the same accounting mechanism for fuel, enabling
parties to better understand how fuel use costs are assigned.

    9. Thus, it can be seen that, if a pipeline has twelve gas service
contracts, the Final Rule is not requiring the pipeline to report the
details of each of those contracts. Instead, the Final Rule is
requiring the pipeline to report the totals for fuel (for all twelve
contracts) by function which can be determined on an allocation of
throughput or stated fuel rate. To accomplish this, however, the
pipelines would need to continue their current practice of assessing
shippers for services provided to each customer.

C. Reporting Burden

    10. INGAA argues that adding the level of detail required by the
Final Rule increases the reporting burden. In light of INGAA's
concerns, we have further reviewed the burden estimate contained in the
Final Rule and have determined that we can improve the accuracy of our
burden estimate if we distinguish between the initial start-up costs,
which include all of the work needed to identify and create a mechanism
to report the information required to be reported under the Final Rule,
as compared to the ongoing costs of reporting the information required
to be reported under the Final Rule once the reporting mechanism is in
place. This revised burden estimate is shown below in the Information
Collection Statement that begins at paragraph 28 of this order.

D. INGAA's Alternative Proposal

    11. INGAA argues that the Commission erred by not adopting its
alternative proposal which it maintains would have met the Commission's

needs with a lesser burden to filers. The Commission addressed this
issue in Order No. 710-B, where we stated:

    We find that requiring the reporting of fuel costs and revenues
by rate structure broken down by function will increase the ability
of the Commission and interested parties to assess whether a
pipeline's existing shippers are subsidizing the pipeline's
negotiated rate program. Thus, we find that INGAA's proposal would
effectively delete much of the valuable information sought in the
June 2010 NOPR.\7\
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    \7\ Order No. 710-B, 134 FERC ] 61,033 at P 37.
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    The revised forms also will now allow the user to better
determine where on the pipeline system fuel costs are being incurred
and how they are being allocated. This added transparency, which is
supported by the majority of the commenters, will ensure that the
Commission and pipeline customers have sufficient information to be
able to assess the justness and reasonableness of pipeline rates.
The collection and public availability of this information is
consistent with our goal of having sufficient information to allow
the Commission and pipeline customers to assess the impact on
pipeline rates of changing fuel costs.\8\
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    \8\ Id. P 38.
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    By contrast, if we adopted INGAA's suggestion to limit the
revisions to FERC Form No. 2 to those originally proposed by AGA,
then the benefits of increased transparency of rates, particularly
within the negotiated rate program, which are described in the two
preceding paragraphs, would not be fully realized.\9\
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    \9\ Id. P 39.

    12. INGAA's rehearing reiterates arguments it advanced earlier in
this proceeding that, for the reasons quoted above, the Commission
rejected in Order No. 710-B. We reaffirm those findings and reject
INGAA's proposal.

E. Allocations of Fuel Used in Compressor Stations, LAUF, and Fuel Used
in Operations

    13. INGAA argues that Order No. 710-B suggests that fuel consumed
in compressor stations, LAUF and fuel used in operations, which are all
drawn from a commingled and fungible gas stream, can be traced back to
individual shipper contracts. INGAA further argues that the requirement
to allocate LAUF among negotiated, discounted and recourse
transportation customers ignores fundamental nature of LAUF, forcing an
allocation that is meaningless. INGAA also argues that, except in some
limited and unique circumstances, such tracing is impractical, if not
impossible.\10\
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    \10\ INGAA states that ``[p]ipelines do track or allocate fuel
consumed separately for incremental rate services in which the
Commission in its orders has required the pipeline to keep the
incremental rate customers' fuel costs and revenues separate. Other
than for such very limited incremental rate purposes, however,
pipelines are not required to allocate or track fuel used by
individual contract even in general section 4 rate proceedings. In
its orders approving pipelines' negotiated rate contracts, the
Commission requires pipelines to separately account for the
negotiated rate transaction's volumes, revenues, billing
determinants, rate components and surcharges. But, the Commission
does not require that fuel used, or any other cost for that matter,
associated with negotiated rate transactions be separately accounted
for.'' INGAA Rehearing at n.1. As discussed further in paragraph 21
below, this contention is incorrect because fuel use is a rate
component.
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    14. The reporting requirements established in the Final Rule do not
require fuel use to be traced back to individual shipper contracts.\11\
The information reported on pages 521a and 521b--even before issuance
of the Final Rule--already included a requirement for pipelines to
report monthly fuel use by Dth. The Final Rule added the requirement
for pipelines (on lines 1-65 on pages 521a and 521b) to allocate these
totals among discounted rates, negotiated rates, and recourse rates.
The Final Rule did not impose a requirement that these allocations be
made based on a review of individual contracts. One reasonable approach
would be to take the total volume of throughput and allocate it among
the three contract categories (i.e., contracts with discounted rates,
contracts with negotiated rates, and contracts with recourse rates)
based on the percentage of gas transported for each contract type,
which is already known and available to a pipeline for invoicing
shippers on a monthly basis. For example, if, hypothetically, a
pipeline has a monthly transportation volume of 1000 Dth and 5 percent
of its volume is associated with contracts with discounted rates, 10
percent is associated with negotiated rates contracts, and 85 percent
associated with recourse rate contracts, then the pipeline could
develop an allocation of fuel used at compressor stations, LAUF, and
gas used in operations based on a ratio of the throughput. Such an
allocation could be used for all the various allocations needed to
complete pages 521a and 521b. Thus, it is evident that we are not
requiring pipelines to assess individual contracts to make this
allocation.
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    \11\ The Commission does not expect pipelines to develop and
administer a process by which the fuel in each compressor, as it is
burned, is assigned in some manner among individual shipper
contracts.
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    15. In addition, while admittedly imperfect, allocating costs by
function is a standard practice for pipelines for numerous cost
categories. The allocation of fuel consumed in compressor stations,
LAUF and fuel used in operations, and among negotiated, discounted and
recourse transportation customers are a few, among many, of such cost
allocations. The allocation of costs is a standard practice for
pipeline companies to bill their customers for services rendered. The
fact that such allocations are not 100 percent precise does not negate
the necessity for such allocations being made. Pipelines collect fuel
(including LAUF) from customers and the Final Rule requires the
reporting of how that fuel is assigned.
    16. INGAA's position is that the allocation of fuel costs required
by this rule is ``meaningless'' given the nature of LAUF as gas that is
lost and unaccounted for.\12\ We disagree. In our view, allowing
customers to see exactly how fuel costs are assigned to various
customers groups is important because it allows customers to assure
themselves that the fuel costs being assigned to them are reasonable
and do not cross-subsidize other customer groups. Thus, we find that
making such allocations transparent is extremely meaningful.
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    \12\ INGAA Rehearing at 3 & 8-9.
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F. Disclosure of Disposition of Excess Gas or Gas Acquired To Meet
Deficiency by Contract Rate Category

    17. INGAA raises the same objections to the reporting of the
disposition of excess gas or the reporting of gas acquired to meet
deficiencies that it raised regarding the reporting of the allocation
of fuel used in compressor stations, LAUF, and fuel used in operations.
Specifically, INGAA argues that,

    [t]he reporting of disposition of excess gas or the reporting of
gas acquired to meet deficiencies on pages 521b and 521c (lines 38-
65) by contract rate category would provide little benefit. A
pipeline does not track disposition or acquisition of gas by
categories of transportation contracts. Assignment to contract rate
categories could be accomplished by utilizing an arbitrary
allocation methodology. However, the allocation of a pipeline's
system gas dispositions or acquisitions would not yield any
meaningful information. Only the reporting of total dispositions or
total acquisitions of system gas would produce a cogent result.
Accordingly, INGAA requests rehearing and asks the Commission to
allow pipelines to report total disposition or total acquisitions of
system gas on pages 521b and 521c.\13\
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    \13\ INGAA Rehearing at 8.

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

among which classes of shippers over and under recoveries of fuel are
occurring (i.e., recourse, negotiated, or discounted customers). For
example, recourse rate shippers could provide more fuel than necessary
and negotiated rate shippers could have a capped fuel rate such that
recourse shippers may be subsidizing negotiated rate shippers. The
recourse rate shippers should be in a position to fully understand
whether over recovered fuel for recourse rate contracts is being used
to make up a deficiency of fuel for negotiated rate contracts.
Similarly, shippers should be aware to the extent a pipeline is
purchasing gas associated with a fuel deficiency attributable to
negotiated rate contracts. Additionally, while generally more
applicable to pipelines with stated fuel rates, shippers should be in a
position to know whether the disposition of excess fuel is being sold
or if the gas is used for imbalances such that pipelines are recovering
the cost through periodic imbalance cashout reports. We find that
reporting this information provides useful transparency regarding the
amount of fuel used to operate compressor stations, the disposition of
excess gas and how the deficiency was acquired, and how fuel costs and
LAUF are allocated among customers. Consequently, we deny rehearing of
this issue.

G. Discounted Rates as a Separate Category and Negotiated Rates as a
Separate Category

    20. INGAA reiterates its objection to reporting fuel assigned to
discounted rates as a separate category, claiming that disclosing this
information does not serve any regulatory purpose, because pipelines
are prohibited from discounting fuel. Fuel expenses constitute a
significant portion of the total expenses recovered by natural gas
rates. Obscuring this information makes it harder for entities to track
the reasonableness of these expenses. Contrary to INGAA's arguments,
pipelines are not prohibited from discounting fuel under all
circumstances.\14\ In addition, the additional transparency provided by
this Final Rule serves the important regulatory objective of assuring
that rates are just and reasonable. If a pipeline is not discounting
fuel then it should simply report zero in Column (K), Volume (in Dth)
Not Collected. This approach provides an affirmative confirmation that
fuel is not being discounted. Combining the discount rate category with
negotiated rates would eliminate this confirmation. Consequently, we
will retain the separate discount rate category.
---------------------------------------------------------------------------

    \14\ For example, in Transwestern Pipeline Company, 54 FERC ]
61,319, at 62,007 (1991), the Commission approved Transwestern's
proposal to provide fuel discounts, provided that the minimum rate
would not be lower than actual fuel costs, if any.
---------------------------------------------------------------------------

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

    \15\ See, e.g., NorAm Gas Transmission Company, 75 FERC ]
61,322, at 62,029 (1996); Texas Eastern Transmission, LP, 133 FERC ]
61,220, at P 19 (2010); Gulf Crossing Pipeline Company LLC, 123 FERC
] 61,100, at P 87 (2008).
---------------------------------------------------------------------------

H. MidAmerican's Requested Clarification

    22. INGAA argues that the Commission erred by not granting the
clarification requested by MidAmerican (that the rule should only cover
(1) Contracts with discounted and negotiated fuel rates and (2)
headings should be changed to be ``discounted fuel rate'' and
``negotiated fuel rate''). INGAA argues this approach would be less
burdensome but would accomplish the Commission's stated goals.
    23. As we stated in Order No. 710-B,\16\ the proposal to limit the
scope of the rule to only require the reporting of fuel costs in
contracts that include a specific provision for discounted or
negotiated fuel would elevate form over substance and would omit
contracts with negotiated and discounted rates, unless they include a
specific provision covering discounted or negotiated fuel. This is
contrary to the objective of the Final Rule of enhancing the
transparency of fuel costs and we deny rehearing. Also, given our
finding on the required reporting of gas contracts with discounted or
negotiated fuel, we affirm our finding on the appropriate headings to
be used.\17\
---------------------------------------------------------------------------

    \16\ Order No. 710-B, 134 FERC ] 61,033 at P 55.
    \17\ Id. P 56.
---------------------------------------------------------------------------

I. Excluded Contracts

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

    \18\ Id. P 53.
    \19\ Id. P 55.
---------------------------------------------------------------------------

J. Start Date for New Data Collections

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

required to be reported for the Q4 period of 2011 but, if an extension
is granted, the due date for the filing of this information may be
extended past the April 18, 2012 filing deadline. Pipeline companies
seeking an extension must provide a detailed explanation of why (for
example, an additional analysis of data is needed, or allocation
factors are still being developed) they cannot meet the filing
deadline. The Commission will evaluate these requests on a case-by-case
basis, based on the facts presented.

K. Requested Clarification of Reported Backhaul Service

    26. INGAA requests clarification that ``backhaul service offered
under tariff'' means that, if the tariff does not include a
``backhaul'' rate schedule, then nothing need be reported for this.\20\
A review of gas tariffs shows that many tariffs recover a charge for
backhaul service, but do not necessarily provide for a separate
backhaul rate schedule for that service. In many instances, the
forwardhaul tariff permits backhaul service at or below the forwardhaul
rate, with no separate backhaul rate schedule.\21\ If we exclude these
backhaul volumes, then total backhaul volumes would be understated for
these transactions. Thus, we reject the argument that information on
backhauls should be limited to those instances when the tariff includes
a separate backhaul rate schedule. INGAA's requested clarification
would keep needed information hidden and could encourage tariffs to be
drafted in a manner to avoid the reporting of this information. We note
that the discussion in Order No. 710-B at paragraph 52 was addressing
the narrow instances, such as with reticulated gas systems, where it is
not possible to clearly determine what is a backhaul and what is a
forwardhaul. We did not intend this to restrict the reporting of
backhauls in systems where the gas flow path can be determined. Put
differently, if the pipeline is unable to determine whether the volume
is forwardhaul or backhaul, then the volume can be reported entirely as
forwardhaul. Accordingly, we affirm the findings we made on this
subject at paragraphs 50-52 of Order No. 710-B and deny the requested
clarification.
---------------------------------------------------------------------------

    \20\ In Order No. 710-B, the Commission added lines 66-68 to
page 521. The lines request a separation of forwardhaul and backhaul
throughput volumes in Dths for the quarter.
    \21\ See Trailblazer Pipeline Co., 39 FERC ] 61,103, at 61,324
(1987), where we stated that, as backhaul volumes are included
within the definition of transportation in section 284.1(a) of the
Commission's regulations (18 CFR 284.1(a)), Trailblazer may perform
backhaul service pursuant to its firm and interruptible rate
schedules and we did not require Trailblazer to adopt a separate
backhaul rate in that proceeding. We also note that, for example,
the Iroquois Gas Transmission System, L.P., FERC Gas Tariff, at
Section 13 of the General Terms and Conditions, Second Revised Sheet
No. 76, provides for backhaul transportation service to be provided
pursuant to the firm transportation service rate schedule and not
under a separate backhaul rate schedule.
---------------------------------------------------------------------------

L. Need for Page 521d

    27. Finally, INGAA argues that the Commission should retain the
blank page 521d that we proposed in the June 2010 NOPR but omitted in
Order No. 710-B. This omission was an oversight and we agree with INGAA
that a filer would need this page to properly complete the Forms. Thus,
we will correct this oversight and will include page 521d on the
various forms.\22\ We, likewise, are including pages 521a-d in the FERC
Form Nos. 2/2-A/3-Q Submission Software System.
---------------------------------------------------------------------------

    \22\ This page is shown as an attachment to this order.
---------------------------------------------------------------------------

III. Information Collection Statement

    28. The Office of Management and Budget's (OMB) regulations require
approval of certain information collection requirements imposed by
agency rules.\23\ Previously, the Commission submitted to OMB the
information collection requirements arising from Order No. 710-B and
OMB approved those requirements.\24\ In this order, the Commission is
making no substantive changes to the content of the forms and the
information that is required to be submitted. However, by adding in
blank page 521d and re-estimating the reporting burden arising from
Order No. 710-B, the Commission finds it necessary to make a formal
submission to OMB for review and approval under section 3507(d) of the
Paperwork Reduction Act of 1995.\25\
---------------------------------------------------------------------------

    \23\ 5 CFR 1320.11.
    \24\ OMB approved the information collections prescribed in
Order No. 710-B on May 16, 2011 for FERC Form No. 2 (OMB Control No.
1902-0028, ICR<PHONE_NUMBER>-001), FERC Form No. 2-A (OMB
Control No. 1902-0030, ICR<PHONE_NUMBER>-003) and FERC Form
No. 3-Q (OMB Control No. 1902-0205, ICR<PHONE_NUMBER>-004).
    \25\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

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

----------------------------------------------------------------------------------------------------------------
                                                                                One-time
                                                     Number of       One-time       Filings per     additional
            Data collection form\26\                respondents     filing per         year          hours for
                                                                    respondent                       this form
----------------------------------------------------------------------------------------------------------------
FERC Form No. 2.................................              84              80               1           6,720
FERC Form No. 2-A...............................              44              80               1           3,520
                                                 ---------------------------------------------------------------
    Totals......................................  ..............  ..............  ..............          10,240
----------------------------------------------------------------------------------------------------------------

    Information Collection Costs: 10,240 hours at $120/hour=
$1,228,800.
---------------------------------------------------------------------------

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

    31. Internal Review: The Commission has reviewed the proposed
changes and has determined that the changes are necessary. These
requirements conform to the Commission's need for efficient information
collection, communication, and management within the energy industry.
The Commission has assured itself, by means of internal review, that
there is specific, objective support associated with the information
requirements.
    32. Interested persons may obtain information on the reporting
requirements by contacting: Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426 [Attention: Ellen Brown, Office
of the Executive Director, e-mail<EMAIL_ADDRESS>phone (202)
502-8663, fax:<PHONE_NUMBER>]. For submitting comments concerning the
collections of information and the associated burden estimates, please
submit comments to FERC in this Docket No. and to the Office of
Information and Regulatory Affairs, Office of Management and Budget,
725 17th Street, NW., Washington, DC 20503 [Attention: Desk Officer for
the Federal Energy Regulatory Commission, phone:<PHONE_NUMBER>, fax:
(202) 395-7285]. Due to security concerns, comments should be sent
electronically to the following e-mail address<EMAIL_ADDRESS>Please refer to OMB Control Nos. 1902-0028
(FERC Form No. 2), and 1902-0030 (FERC Form No. 2-A), and the docket
number of this Final Rule in your submission.

IV. Regulatory Flexibility Act

    33. The Regulatory Flexibility Act of 1980 (RFA)\27\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small
entities.\28\ However, the RFA does not define ``significant'' or
``substantial.'' Instead, the RFA leaves it up to an agency to
determine the effect of its regulations on small entities.
---------------------------------------------------------------------------

    \27\ 5 U.S.C. 601-612.
    \28\ The RFA definition of ``small entity'' refers to the
definition provided in the Small Business Act, which defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. 15
U.S.C. 632. The Small Business Size Standards component of the North
American Industry Classification System defines a small natural gas
pipeline company as one whose total annual revenues, including its
affiliates, are $6.5 million or less. 13 CFR parts 121, 201.
---------------------------------------------------------------------------

    34. In Order No. 710-B the Commission certified that the additional
reporting requirements would not have a significant economic impact on
a substantial number of small entities.\29\ With the understanding that
a one-time burden has now been added, the Commission affirms that the
certification provided in Order No. 710-B remains accurate and no
further justification is needed under the RFA.
---------------------------------------------------------------------------

    \29\ Order No. 710-B, 134 FERC ] 61,033 at P 89-91.
---------------------------------------------------------------------------

    The Commission orders:
    (A) INGAA's request for rehearing is hereby denied in part and
granted in part, as discussed in the body of this order.
    (B) This order shall be published in the Federal Register.

By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

[GRAPHIC] [TIFF OMITTED] TR22AU11.054

[FR Doc. 2011-21353 Filed 8-19-11; 8:45 am]
BILLING CODE 6717-01-P